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October 30, 2012

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BT London

Krugman on serious people like 'in the black Labour':

http://krugman.blogs.nytimes.com/2012/10/21/an-elite-obsession/

FromArseToElbow

Ed Balls's reference to zero-based budgeting will be commonly understood to mean "everything is up for grabs", i.e. we don't just assume that prior commitments will continue. That said, his claim that "every pound" will be assessed on its individual merits is specious. Large parts of public spending are mandated by statute, so they're beyond the scope of any budgetary discretion short of new legislation. Other parts are inter-dependent. We can't keep spending on rifles but refuse to spend on bullets.

ZBB is a useful technique if you have poor cost control - i.e. you're not sure what you're spending money on. It surfaces wasteful expenditure that traditional incremental budgeting tends to obscure. To this extent, ZBB might be helpful for micro-budgets in the public sector, but at the macro level of Whitehall it is meaningless. A ZBB pledge by Balls now is just a way of deferring discussion on specific commitments.

As for better childcare, the compelling case for this is likely to be the need to expand the working population, by getting more mothers to work, so growing the economy to offset an ageing population and increasing care costs. The Guardian today reports the Commission on Living Standards' proposal for improved childcare with the comment: "The commission is remarkable for reaching such a consensus on the long-term structural problems facing the UK economy, as it is made up of a diverse group of leading bankers, industrialists, trade unionists and economists." There's nothing remarkable about this. All parties have an interest in growing the working population. Some may be more interested in growing the quantum of tax receipts, while others see benefits in repressing wages, but the end result is consensus: more working mums, please.

Paul Cotterill's point is not that childcare lacks support, but that a commitment to improve it will be used as justification for cuts elsewhere, i.e. a quid pro quo approach. As we no longer hypothecate debt for specific programmes, deficit spending will always be cast in terms of the "least valued" spending by government - i.e. subsidies to skivers rather than strivers.

Tim Newman

"The case for spending on childcare is that, as James Heckman has shown (pdf), it is a great investment."

Much of this would depend on how this extra money was spent. Providing better childcare might well be a great investment, but it does not necessarily follow that increased government spending in this area will result in better childcare.

gastro george

Yet the French seem to manage it ...

It's a poor argument that we shouldn't spend because it might not be spent well. I *might* walk under a bus tomorrow, but that doesn't stop me getting up. The point is to develop policy and infrastructure that ensures that it's spent well.

Tim Newman

"It's a poor argument that we shouldn't spend because it might not be spent well."

Which may be a reason why nobody, at least on this thread, is making it.

gastro george

Uh?

"... but it does not necessarily follow that increased government spending in this area will result in better childcare."

Please expand.

Churm Rincewind

"...it does not necessarily follow that increased government spending in this rea will result in better childcare."

Apart from anything else, this is because there is no clear evidence and no consensus that subcontracting the care of one's children to individuals or institutions outside the family circle amounts to "better" childcare than conventional home parenting.

Obviously home parenting is often not an option, but it could no doubt be argued by its advocates that an increase in Goverment expenditure might be better directed towards further financial support for parents rather than in the direction of the professional childcare sector.

This is a highly contentious question, and there are no easy answers.

gastro george

OK, I see, you talking about childcare in the generic sense rather than publicly-provided childcare. Well, I guess we differ about that. It's noticeable that the more successful European nations provide a more comprehensive level of public childcare, and have a higher proportion of women in the workplace and in high-powered jobs. Quite a waste to lose that resource ...

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