DAN ATKINSON: Return of the bloated post-war bugbear

By Dan Atkinson, Mail on Sunday Economics Editor

Local councillors, it seems, must be given a piece of the action in terms of running the National Health Service, in return for Liberal Democrat support for NHS reforms.

Given the roaring success that these same councillors have made of the school system, it may be prudent to put up crowd-control barriers in Harley Street, to stem the flood of patients fleeing to private medicine.

For many years now, it has been taken as read that the public sector has to become more like the private sector, indeed that it has already become so.

A train pulling into a station

Increase: The railways have seen a 45 per cent rise in the payroll since 2001

And this has been the case, certainly in terms of mandarins spouting management-speak and giving themselves titles such as chief executive.

But there has also been a less-noticed movement the other way, with the back offices of big private companies increasingly resembling branches of local or central government, employing large numbers of the same sort of people in vaporous, box-ticking roles to do with diversity, outreach, health and safety and so on.

The net result, as I expect will be confirmed on Wednesday with the latest labour market numbers, is, to put it bluntly, that the private sector is overstaffed.

Now, the conventional view is that such excess capacity, in private companies, at least, was eliminated in the Eighties. Well, in some areas, maybe – in car plants for example, or the printing industry, not to mention the lavishly staffed television crews of yesteryear.

But across the board, a careful study of the figures would suggest that overstaffing, the curse of Britain's post-war economy, is back.

Between 2001 and 2010, the number of 'legal professionals' jumped by nearly 25 per cent, while health service managers rose by 54 per cent.

On the supposedly private railways, despite labour-saving advances, there has been a 45 per cent rise in the payroll – an awful lot of extra people in fluorescent bibs, shouting at the passengers.

Public service administrative professionals have risen by nearly seven per cent while there has been a 20 per cent jump in security guards.

And to return to where we started, with the seeping of public sector norms into the private sector, the number of personnel, training and human resources managers across the board has increased by 19 per cent.

On their own, none of these figures proves that overstaffing is rife.

But put together with the dismal productivity numbers in last week's quarterly inflation report from the Bank of England, it is clear that the bugbear of the 30 years after 1945 has returned, not least because all the red tape that Ministers keep (falsely) pledging to cut back has to be enforced by someone.

The axe will be swung one day. But Wednesday will not be it.


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