They’re right. It’s especially hard to cut waste if you try to do so by top-down management. I say this for two generic reasons, which are central to understanding any organization.
1. Bounded knowledge. Any sentient being who works in the public sector could identify some waste - an inefficient process, a malingering colleague. There is, therefore, vast knowledge of government waste. But this is fragmentary and dispersed. Top-down management doesn’t gather it. And workers have little incentive to offer it - for fear of rocking the boat, being identified as a trouble-maker by their boss, or simply not wishing to grass up a co-worker.
The upshot of this is that government doesn’t know what’s waste and what’s not. To them, public spending is like the old joke about advertising spending; half of it is wasted, but we haven’t a clue which half.
2. Bureaucratic capture. If government asks departmental managers to identify waste, guess what? They’ll never say that management is wasteful. The people who’ll lose their jobs under “efficiency savings” aren’t the ones who are useless, but the ones who are powerless.
There are, therefore, severe limits on how far top-down, command-and-control management can cut “waste.”
So what’s the alternative? One is to cut genuine functions: ID cards, Trident, big military or IT projects, corporate welfare. Another might be to apply (maybe Draconian) rough-and-ready rules; how about: “sack anyone whose job title contains the word ‘strategy’”?
There is, though, another possibility - to abandon top-down managerialism. One alternative is “systems thinking“. Another, relatedly, would be a systematic decentralization of government functions. In giving power to workers rather than management, we would stand a chance of exploiting their dispersed knowledge of waste, whilst slashing back the costly box-tickers, supervisors and hangers-on that have so expensively disfigured the public sector.
As Nick rightly says, this would require a revolution in government. And I confess to not being at all sure how, technically, it could be achieved; it’s the details that matter.
What does seem clear, though, is that cutting waste and empowering public sector workers are not substitutes. They go together.