Questioning the unquestionable

Indeed, at the time of writing, Rishi Sunak and Liz Truss are seeking to discredit each other in order to replace the joke that is Boris Johnson as prime minister of the UK, while Labour leader Kier Starmer causes ructions with the ultra-left by proposing an all-out focus on ‘growth’, whatever that means, while eschewing the mass nationalisation of utilities.

All this takes place as the country seeks to recover from a pandemic, Russia continues to wage war in Ukraine, the EU copes with an energy (and maybe bond) crisis, the Chinese housing market notably wobbles and the Fed, like the BoE, seeks to demonstrate it is still relevant when it comes to inflation.

Quite why anyone would wish to be prime minister of the UK, noting the Northern Ireland Protocol and Scottish independence poll shenanigans, the good lord only knows. However, either Sunak or Truss will likely be PM for a couple of years at least, until the December 2024 election. While there is so much talk of inflation, tax rates, the national debt and lack of growth, there is one blind spot in the debate – indeed, arguably an unquestionable issue these days.

That unquestionable issue is the return that the taxpayer and society receives from its public services. Now, in an advanced society, public services are important and need to be valued. As such, all of society should pay towards them as all society benefits. Many public servants feel far from valued, while trade unions understandably take advantage of an exceptionally tight labour market. A summer of discontent is upon us.

While many public servants deserve to be respected through their pay, the output of what they do is under considerable question by society: real crime rockets; teaching standards weaken; and access to a GP is a weekly sport.

Indeed, the best-performing folks within the public sector are often more frustrated with mismanagement of their segment of the economy than anyone else. Indeed, such is the frustration that many of the best are leaving their vocation.

Cultural change is vital

So, the UK has a major problem that needs to be addressed. That major problem is the culture and capabilities of Whitehall, and the devolved administrations as well, and the calibre of senior management in so many public bodies. Indeed, few if any in public authority effectively question the structures that deliver public services, with many senior managers simply not incentivised to deliver value to the taxpayer or society.

While not an easy subject to face into, the will to structurally change public sector performance for the better does not exist. Service levels, management costs and bureaucracy fail to improve because that would be turkeys for Christmas. Hence so much high-paid mediocrity that does not teach another child, visit another patient or arrest another criminal.

The time needs to come when we move on from just pouring more resources into public services, so expanding national debt, to finding better mechanisms to deliver the vital resources we need for an effective economy and society.

Depressingly, there is no indication of a will on the left or right to improve the productivity and performance we see at the front end of public service delivery. As a help to thinking, it needs massive cultural change in Whitehall (different people), simplification of process, structural deregulation and a cull of management layers and bureaucracy.

Clive Black is head of research at financial services firm Shore Capital Markets