So the economy’s recovering, unemployment is falling and cautious optimism is everywhere. Is that it, then – the worst recession in 60 years, all finished? Not quite.
Downturn part two: nightmare in Cathays Park will begin when the Welsh Assembly Government and Westminster start cutting spending – probably this year. And some hard decisions will have to be made. Just how hard was brought home to me at a recent dinner hosted by Wales in London, the networking group. Liberal Democrat leader Nick Clegg was talking about his pledge to lift millions of low-paid workers out of the tax system. “What will happen,” asked one questioner, “to the Revenue & Customs staff who formerly dealt with the tax affairs of the low-paid workers?”
Your instinctive answer may be “Who cares?” Public spending needs to be reduced, so stop paying people to do jobs that don’t need to be done. But “who cares?” is unlikely to go down well with the workers concerned. They won’t fancy their job prospects with unemployment still more than 120,000. Public sector unions will fight hard on their behalf. We might not notice a few striking bureaucrats, but what happens when the planning officers come out, or the guys who mend the roads?
Political leaders need to make a clear distinction between front line employees such as teachers and doctors, whose jobs still need to be done, and office-based managers whose roles are more esoteric. Education minister Leighton Andrews seems to have grasped this with his review of spending on schools and universities, which talks about “moving resources to front line services”. But the recent reorganisation of health boards in Wales seems to have missed a similar opportunity.
There’s an opening here for companies that can provide services at lower cost than the public sector. But it needs to be done subtly and sensitively, as councils and the Assembly have their employees and voters to answer to. It’s another example of the “glass half full” motif that runs through this magazine – companies can benefit from an economy like this, provided what they do is relevant and useful. Hopefully public and private sectors can both drink to that.
Douglas Friedli, editor
Also in: February 2010
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Half empty – or half full?
Economists predict a slow recovery at best over the next few years. But, find Douglas Friedli and Geoff Wright, certain sectors and approaches to business should yield better-than-average results. Here’s to the upside.
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Team towns
The Assembly Government is trying to coordinate economic development with Strategic Regeneration Areas, so is it working, asks John Sanders.
