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Executive lays out plans for assault on public services 

JM Thorn 

4 November 2007

The recently unveiled programme and draft budget of the Executive have demonstrated in the most detailed terms the degree to which it is pursuing a neo-liberal agenda.  This orientation has been evident from its inception, but it has now stepped up a gear. Finance minister Peter Robinson made this clear when he premised his budget speech on the claim that it represented “a clear break with the past and a new direction for the future”. 

While there is undoubtedly some hype and exaggeration around the new executive’s first budget and programme, and while the policies pursued are not dramatically different from those of direct rule ministers, it does represent an intensification of the efforts to reduce the role of the public sector in the North.  The basic argument underpinning this strategy is that the public sector, by soaking up labour and resources, is stifling business growth and barring the path to prosperity.  Therefore, Government policy must be directed to reducing the number of people employed in the public sector and the amount of money spent directly by the state.  Privatisations, PFIs, outsourcing, structural reforms (such as the RPA), redundancies and attracting foreign investment are all means to achieve this aim.  The parties in the Executive are all in agreement on the broad objective and the means through to achieve it.  It should be no surprise that the budget and programme for government should win their endorsement.

Budget

The main objective of Peter Robinson’s budget is to dramatically reduce the number of people employed in the public sector.   This was dressed up in the usual populist rhetoric of promoting efficiency and value for money and of freeing up resources for front line services.  He told the assembly that he was “determined to take the drive for greater efficiency in public services to a new level” and to challenge “over-staffing, absenteeism, poor working practices and a resistance to radical change in the way we go about delivering services.”  To this end he set targets of year on year cash savings of 3% and an annual 5% reduction in administration costs within each department.  He expects this to raise an additional £790 million by 2010-2011.  While he did not make it explicit, saying that it was up to each department on how the cost reductions were achieved, this is a programme for mass redundancies within the public sector.  In the immediate period all departments saw their allocation of public finance rise, but the increase for health and housing, two of the most pressing social needs in the North, were modest.  The health budget is left so short that the gap between NHS provision in the North and Britain will widen even further.  It is estimated that the health service needs £800m over the next three years to raise standards to UK levels.  The £400 million gap is threatening plans for mental health, drugs against MS and cancer, and bowel screening.  The big winners were enterprise and tourism, reflecting the greater emphasis on attracting foreign investment.  There were concessions to local business with the announcement that industrial rates will be capped at its current 30% level.  The only relief for householders was a three year freeze in the regional rates, although this is largely to soften the blow of additional water charges.  Overall, the Executive budget is highly regressive, promoting mass redundancies, and a shift of resources from the public to the private, from the poorest to the wealthiest in society.  By endorsing this budget the parties in the executive have put themselves to the right of Gordon Brown!

Programme for Government 

It should be no surprise that the programme that is underpinned by the budget should reflect its neo-liberal character. Most of this focuses on boosting economic growth.  So we have objectives such as halving the private sector productivity gap with the UK average and increasing the employment rate from 70% to 75% by 2020.  This means getting people off benefits, but in a low wage economy such as the North, people are often better off on benefits than in employment. In an attempt to address this, and in what is probably the most ambitious element of its programme, the Executive aims to attract inward investment that would create over 6500 new jobs by 2011.  It is also expected that at least 75% of these would provide salaries above the local private sector average. 

The major problem with such an ambition, to attract thousands of highly skilled and waged jobs to the North , is that it has no foundation.  The North’s private sector economy is largely low skilled and low waged.  Indeed, that is the basis on which it is sold to potential investors.  Yet, even these conditions, along with generous state grants, are not enough to attract and hold foreign capital in the North .  This was cruelly exposed a few days after the unveiling of the programme when US technology firm Seagate announced that was closing its factory in Limavady with the loss of one thousand jobs.  By shifting production to Malaysia the company could generate additional annual profits of £15 million.  Nothing that the Executive can offer can offset such an incentive.  Yet, attracting firms like Seagate to the North is the centrepiece of the Executive’s economic strategy!  Its dramatic failure in Limavady really shows how precarious such a strategy is.  To address the low level of skills in the economy the Executive aims to increase by 90,000 the number of adult learners achieving a qualification in literacy, numeracy and ICT skills by 2015.  However, this is just a half measure that will fail to tackle address the inequities in an education system which results on a quarter of pupils leaving schools functionally illiterate and innumerate.  Throwing some money at adult education is not going to address this underachievement.  Also by retaining selection the Executive will ensure that the endemic inequality and underachievement continue. 

Attached to the main economic element of the programme are attached are a thin sprinkling of policies designed to “promoting tolerance, inclusion and health and well-being”.  These include reducing child poverty by 50% by 2010 and eradicating it by 2020.  As child poverty is defined as the number of children living in household on less than 60% of the median income, a reduction would require a rise on the incomes of the poorest households.  But many of the policies in the budget and the programme, such as getting people off benefits, cutting public spending and reducing the number of public sector workers, militate against this.    There is an aim for 30% of school leavers to obtain 5 or more GCSE passes at grades A* to C level by 2011.  But again this is impossible without the fundamental reform of the education system that the Executive has rejected.  All that is left are a few populist gestures such as the extension of free public transport for everyone aged 60 and over during 2008, and more funding for regeneration projects (many of these projects are part of the process of incorporating loyalists and republicans and have very little value in term of community development). 
Investment strategy

The third element of the Executives strategy is investment in infrastructure.  Under this investment strategy. The Executive is will spend £18 billion over the next 10 years into key projects, such as the building of schools, hospitals and roads.   By spending £5.6 billion of this in the first three years the Executive is hoping to generate a minor economic boom around the construction sector.  However, as this money will be spent on capital projects over a set time period its affects will be limited.  Also the spending of this money is conditional on it being linked into PFIs.  This again is a means of moving public money into the private sector. In the longer term, given the liabilities and debts associated with PFI, the upgrading of infrastructure is likely to drain away money from other public services. 
Reaction 

The most fulsome praise for the Programme for Government and the budget came from Sinn Fein’s Martin McGuinness. He said that it made a clear statement that “this place is truly under new management”.   In reality, it demonstrated that the North remains completely dependent on Britain.  Even more ludicrous was his claim that the Programme placed “equality and rights at the heart of government”.   The fact is that the policies it sets out, by diminishing the public sector, will actually increase inequality.   Just consider at the facts that public sector workers earn on average one third more than those in the private sector, and that the gender pay gap is considerably smaller in the public sector than the private.  Of course these are not the measurements of equality that McGuinness has in mind.  For Sinn Fein the measurement of equality is a communal one.  They are the representatives of the Catholics and their objective is to get a slice of sectarian privileges for “their community”. Although, with a DUP majority, this will be a minor slice.  The sole Sinn Fein policy is to stay in government at all costs.  To do this they will endorse almost anything the DUP brings forward.  The only dissent from within the Executive came from the health minister Michael McGimpsey who accused Peter Robinson of    “dabbling with the health service budget in a manner akin to Thatcherism”. 

Being a minority party within the Executive the UUP, like the SDLP, can engage in the odd bout of populist rhetoric.  But it doesn’t amount to much.  The trade union movement for its part was completely silent on the budget and programme.  But what could it say?  Being an enthusiastic supporter of the Assembly and Executive it could hardly complain. Its whole policy is for partnership with government and bosses and it has expended huge amounts on lobbying exercises at Stormont that are supposed to convince local reactionaries to defend the workers!.  The fact that Seagate based itself in Limavady for years without any union representation speaks volumes. Trade union support for the local administration, and the illusions it engenders within workers, makes the task of mounting a defense against the assault on public services more difficult. 

However, the illusions of workers are already in the process of being dispelled.  The task of socialist and trade union activists is to build a grassroots movement within the unions and working class communities that can defend our public services and a basic standard of living. 

 

 


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