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New economics versus old thinking

November 17, 2015

 

The thing about stereotypes is that it’s hard to see past them. Take for example the public sector which has long been the butt of jokes about sleepy tea-drinkers sitting around all day.

 

That perception is now being challenged.

 

As I recently reported to a business group, the combined input of our two universities, the health board and local housing associations will inject £2.2 billion capital investment into the regional economy over the next five years. That is on top of the £4.5 billion they already put into local salaries, purchasing and the like each year.

 

When you add the potential dividend likely to come out of securing the City Deal which the Swansea Bay City Region is currently chasing then you can see how public bodies are not just setting out the strategy but also delivering on it.

 

The new economic reality is that the public sector is no longer a fragmented collection of institutions playing a supporting role. They are innovative, forward-thinking and able to attract massive amounts of external funding.

 

The spin-offs are self-evident. Show me any sizeable public body and I‘ll show you a small army of private-sector suppliers and service providers all making a living via the public purse.

 

The idea however that you can do all this on a shoestring and pay top managers peanuts is a fallacy. As in everything else in life, you get what you pay for. Like it or not, high-flyers and big-earners are now part of the deal.

 

Of course there are those who disapprove of this approach.

 

Top of the list is the so-called Tax Payers Alliance. This right-wing lobbying outfit recently launched a media assault on what it called a ‘rich list’ of public sector salaries. The details were unsurprisingly gobbled up by the press.

 

Of course the sector has it inefficiencies. We’ve also seen questionable practices over pension deals and other shady instances. Even so, I’d say fingers are generally pointing in the wrong direction.

 

Last year, the bailed-out Royal Bank of Scotland gave its 10 top executives shares worth a total of £3.5m using a new pay scheme designed to dodge EU rules. Chief executive Ross McEwan missed out that one. Not to worry though, he received shares instead worth almost £1.5m as part of a £3m signing-on deal. His basic pay and benefits stretch to £1.3m.

 

This is the same bank that is 81% owned by the government after a £45bn taxpayer bailout. It has reported seven consecutive annual losses and just been hit by a further £1.2bn of new misconduct and litigation charges.

 

Oddly though, there was not a murmur about “extravagance” from the Tax Payers Alliance on that one.

 

Then again it’s not so long ago that TPA research director Alex Wild told a Conservative Party conference fringe meeting in Manchester that ministers should cut pensioner benefits now because they would probably "not be around" at the 2020 general election or “might even have forgotten by then”.

 

Call me biased but I think I know which kind of public interest I prefer.

 

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War has no boundaries

 

I’ve visited Paris many times, mostly as a tourist and occasionally on business. It’s one of those places, like London and New York, which feels like it belongs to everyone - not just inhabitants.

 

Each city offers visitors a special experience. Yet each has also seen senseless human tragedy unfold at the hands of ruthless terrorists.

 

Last Friday confirmed our fears that the warfare waged in our name 2000 miles away in Syria and Iraq is now creating large scale casualties on our own streets.

 

Our world has become so much smaller and consequently so much more dangerous. The question is how allied nations deal with that.

 

This escalation of hostilities requires our leaders, both past and present, to look again at foreign policies that once made sense but now no longer fit emerging geo-political realities.

 

There are no simple answers. I believe that recognising this fact must be the first step.

 

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Revisiting the backyard

 

The accusation of being a NIMBY carries heinous connotations these days. Yet there are still quite a lot of us about. No more so, I’m guessing, than when it comes to the issue of selecting gypsy traveller sites.

 

The proposal by Council leader Rob Stewart to pencil in the possibility of an enlarged site within draft planning policies makes more sense that the previous ‘objective’ selection process which has now been abandoned.

 

No matter how well intentioned, the idea that a new site could be determined without political direction was ill-considered. You can’t pass on significant policy choices to professional officers and call it leadership.

 

What’s more, it felt to many as though the decision had been made beforehand and supporting arguments were being constructed accordingly, no matter how implausible.

 

The proposal to enlarge the Ty Gwyn site is in the best interests of respective communities. Let’s allow things to move forward constructively.

 

 

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