Public sector efficiency savings - is there no-one in the Conservative Party paying attention?

Listening to David Cameron this morning on the Today Programme, it suddenly dawned on me why he keeps George Osborne as his Shadow Chancellor. It's because he knows less about finance than even George does. His bumbling efforts to justify how he was going to find £6 billion made the back of the envelope job that George uses to justify the NIC non-rise (it isn't a cut, might I make it clear) look like an IMF report.

So, for the benefit of Conservatives everywhere, and for any journalists keen to actually probe Conservative fiscal policy, here are a few points to be borne in mind;

1. Most of the Civil Service is now covered by multi-year pay deals. Most of them aren't exactly generous, with some Departments already having a pay freeze in place.
2. Most of the paybill increases go towards those junior staff whose salaries are further down the pay scale, i.e. they're being paid less than their colleagues for doing the same job.
3. Many departments have severely curtailed recruitment in recent years, for example, HM Revenue & Customs is in the middle of cutting 25,000 jobs over six years whilst avoiding compulsory redundancies - until now, that is.
4. If you lose staff through natural wastage, they may very well not be the people you want to lose - after all, it's the ambitious and the more highly-skilled who attract most offers of alternative employment.
5. Rates of natural wastage are lowest during a recession and in the period shortly thereafter - government jobs are seen as more secure.
6. Any alteration to NIC rates would impact upon a whole year's income, whereas the impact of natural wastage disproportionately falls in the later part of the fiscal year.

But I come back to a point that I've made in the past, the most effective way to deal with the size of government is to decide what you want it to do, then staff it accordingly. Making changes on the hoof stretches out the inefficiencies caused by process changes, demoralises staff - making them less efficient and less motivated - and tends to create waste as the level of monitoring increases to justify the changes made.

There is another point too. The Conservatives have made it clear that they will protect some areas of government activity at the expense of others. What that means is that they will have to recruit new staff in some areas, or transfer staff from one Department to another. The former is a breach of their declared policy, the latter is expensive, with excess fares, grants for house moves, and all the rest of it.

Significant savings are to be found from the Government estates, by transferring them to the private sector, from retrenchment. Interestingly, the fact that there might be leasehold agreements appears to have been overlooked. And given that this was the week in which the House of Commons Public Accounts Committee published its report into the impact of the transfer of the Inland Revenue estate to Mapeley, an off-shore tax avoidance device (was that embarassing or what?). What that demonstrated was that public sector organisations aren't great at managing such contracts, and that ability isn't going to develop overnight.

All in all, the notion that there are efficiency savings to be had isn't a nonsensical one. The problem is, in the rush for 'quick wins', much that will be done will be negative in the medium and long term. Over an economic cycle, the rewards for getting it right are potentially huge. In the short term, that might mean upfront investment, and there are no signs that the Conservatives understand that...