How much money will be saved by public sector job cuts?
Discussion
I am all in favour of public sector job cuts, for idealogical as well as economic reasons, but I do wonder if we will save as much money as expected. A typical £40k salary will mean a take home pay of about £30k, so £10k goes straight back to the exchequer in taxes, then of the £30k take home there will be council tax, VAT, fuel duty, insurance tax, and a whole load of other taxes, plus the money spent in the shops will potentially contribute to other businesses making a profit and paying taxes.
The people losing their jobs will become eligible for a range of benefits (in theory at least, in my experience middle class people get no help at all when they need it), so there will still be a cost to the country. I wonder just how much money will actually be saved, maybe £10k from a £40k salary?
The people losing their jobs will become eligible for a range of benefits (in theory at least, in my experience middle class people get no help at all when they need it), so there will still be a cost to the country. I wonder just how much money will actually be saved, maybe £10k from a £40k salary?
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
tinman0 said:
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
Don't misunderstand me, I am all for cuts, the more the better imo, I am just questioning how much of the headline saving will become a real saving. Desks, chairs, staplers, printer, computer etc are all sunk costs, the money was spent on those long ago. Maybe paper as a consumable, but there isn't much cost there. The same argument will apply to support costs, and the lower the wage of the support staff the higher the likelihood of their benefit entitlement (including housing benefit) outweighing a large amount of the salary saving.this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
tinman0 said:
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
The first six are taken care of by 'smarter working', the seventh by secured printing. I'll give you the last one , but a/. they are bought in massive bulk at near cost and b/. I cant see any shiny new hardware appearing in the public sector soon, can you? and support staff will never reduce pro rata to the staff they support.
You might not want to hear this, but this is what will happen.
Every single publc sector manager will *right now* be looking at ways to punt every single private sector consultant/contractor. This idea started at least two years ago when we were told to cease employing agency staff.
Most departments in many councils employ a core staff level for a given function, with the rest of the work farmed out into the private sector via PM's
Do you really think a public sector director will sack/lay off staff (with the resultant costs) when they can simply stop using the more expensive private sector option?
jules_s said:
tinman0 said:
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
The first six are taken care of by 'smarter working', the seventh by secured printing. I'll give you the last one , but a/. they are bought in massive bulk at near cost and b/. I cant see any shiny new hardware appearing in the public sector soon, can you? and support staff will never reduce pro rata to the staff they support.
You might not want to hear this, but this is what will happen.
Every single publc sector manager will *right now* be looking at ways to punt every single private sector consultant/contractor. This idea started at least two years ago when we were told to cease employing agency staff.
Most departments in many councils employ a core staff level for a given function, with the rest of the work farmed out into the private sector via PM's
Do you really think a public sector director will sack/lay off staff (with the resultant costs) when they can simply stop using the more expensive private sector option?
Are you saying dont cut these
s? Or keep them as it makes so little difference that the saving isnt worth it?Or are you saying that the self serving
s that justify their jobs by filling in all the right red tape will go for the easy win and cut the private sector productive people and look after Ken in accounts who has worked for 13 days in the last 2 months? (productivity speaking)Look forward to the answer for clarification....
ps - Not meant to be confrontational so please dont take it as so...
I think you’re probably right, especially with regards to ripping out the multiplier effect and the savings not being that great. I too am ideologically in favour of the small state, but I would rather have seen more aggressive cuts to welfare spending, and greater structural changes to local government. It certainly all feels like a step in the right direction though. I just hope that the consequences of the cuts are not as bad as some fear they might be, otherwise the other lot will be back in come five years time.
Slaav said:
Please forgive me but where are you coming from?
Are you saying dont cut theses? Or keep them as it makes so little difference that the saving isnt worth it?
Or are you saying that the self servings that justify their jobs by filling in all the right red tape will go for the easy win and cut the private sector productive people and look after Ken in accounts who has worked for 13 days in the last 2 months? (productivity speaking)
Look forward to the answer for clarification....
ps - Not meant to be confrontational so please dont take it as so...
Happy to do so.Are you saying dont cut these
s? Or keep them as it makes so little difference that the saving isnt worth it?Or are you saying that the self serving
s that justify their jobs by filling in all the right red tape will go for the easy win and cut the private sector productive people and look after Ken in accounts who has worked for 13 days in the last 2 months? (productivity speaking)Look forward to the answer for clarification....
ps - Not meant to be confrontational so please dont take it as so...
Consider an essential task needs doing....emptying bins, grass cutting whatever.
The council has two (or more choices)
1/. Employ one manager direct (on s
tty money) who manages X amount of employees on minimum wage.Or
2/. Employ a private company to do the same job, the public sector manager will remain to manage it, there will be a private sector manager managing the private sector staff, and of course there will be some profit built in to the deal make it worthwhile for the private sector business to even bother tendering the job.
So...it's either
A/.One public sector manager on the cheap employing staff on minimum wage
Or
B/.Two managers, employing private sector staff on above minimum wage with some profits that you pay for to boot.
I'll opt for option A please.
RYH64E said:
tinman0 said:
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
Don't misunderstand me, I am all for cuts, the more the better imo, I am just questioning how much of the headline saving will become a real saving. Desks, chairs, staplers, printer, computer etc are all sunk costs, the money was spent on those long ago. Maybe paper as a consumable, but there isn't much cost there. The same argument will apply to support costs, and the lower the wage of the support staff the higher the likelihood of their benefit entitlement (including housing benefit) outweighing a large amount of the salary saving.this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
tinman0 said:
RYH64E said:
tinman0 said:
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
Don't misunderstand me, I am all for cuts, the more the better imo, I am just questioning how much of the headline saving will become a real saving. Desks, chairs, staplers, printer, computer etc are all sunk costs, the money was spent on those long ago. Maybe paper as a consumable, but there isn't much cost there. The same argument will apply to support costs, and the lower the wage of the support staff the higher the likelihood of their benefit entitlement (including housing benefit) outweighing a large amount of the salary saving.this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
Smarter working on a VPN and your costs start going down dramatically.
The public sector has embraced that for years, why are you trying to say otherwise?
jules_s said:
Slaav said:
Please forgive me but where are you coming from?
Are you saying dont cut theses? Or keep them as it makes so little difference that the saving isnt worth it?
Or are you saying that the self servings that justify their jobs by filling in all the right red tape will go for the easy win and cut the private sector productive people and look after Ken in accounts who has worked for 13 days in the last 2 months? (productivity speaking)
Look forward to the answer for clarification....
ps - Not meant to be confrontational so please dont take it as so...
Happy to do so.Are you saying dont cut these
s? Or keep them as it makes so little difference that the saving isnt worth it?Or are you saying that the self serving
s that justify their jobs by filling in all the right red tape will go for the easy win and cut the private sector productive people and look after Ken in accounts who has worked for 13 days in the last 2 months? (productivity speaking)Look forward to the answer for clarification....
ps - Not meant to be confrontational so please dont take it as so...
Consider an essential task needs doing....emptying bins, grass cutting whatever.
The council has two (or more choices)
1/. Employ one manager direct (on s
tty money) who manages X amount of employees on minimum wage.Or
2/. Employ a private company to do the same job, the public sector manager will remain to manage it, there will be a private sector manager managing the private sector staff, and of course there will be some profit built in to the deal make it worthwhile for the private sector business to even bother tendering the job.
So...it's either
A/.One public sector manager on the cheap employing staff on minimum wage
Or
B/.Two managers, employing private sector staff on above minimum wage with some profits that you pay for to boot.
I'll opt for option A please.
I would also like to believe your rather simple model works in practice but the truth is somewhere along (I imagine) 4 managers, 2 at work, 1 being trained and one off long term sick to manage a bunch of half arsed work shy cretins who are unionised and untouchable. This would be vs the private sector solution whereby one, more senior manager, manages the relationship and there are fewer net employees and no juicy DB pension schemes to pay for? And if the private sector solution involves employing Eastern Europeans who will do the s
tty jobs for less, then that is further indictment on the st state this country is in?Interesting argument/discussion and I can see what you are trying to say but dont think it is anywhere near as simple as you state....
RYH64E said:
tinman0 said:
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
Don't misunderstand me, I am all for cuts, the more the better imo, I am just questioning how much of the headline saving will become a real saving. Desks, chairs, staplers, printer, computer etc are all sunk costs, the money was spent on those long ago. Maybe paper as a consumable, but there isn't much cost there. The same argument will apply to support costs, and the lower the wage of the support staff the higher the likelihood of their benefit entitlement (including housing benefit) outweighing a large amount of the salary saving.this in turn leads to:
no hr staff, no it staff, no cleaners, no janitors, no canteen, no canteen staff, no security.
so fire one person, and you get to fire a whole host of people who support that one person in their non job as well. if that person is paid £40k, (10k tax leaving £30k), you will also lose another £20-30k of support costs as well.
If a company/govt wants to cut £1m of costs, it doesn't mean it is going to sack 10 people earning £100k. It has already calculated that it needs to remove a whole lot more than that to achieve the savings.
I think you're misunderstanding the concept.(though I see where you're coming from)
Perhaps what the OP was driving at is, when you've totted up all the money saved in salaries, and deskas and paper etc, does that need to be balanced against the loss to the private sector from 500k people becoming unemployed and stopping spending?
If a person is employed that pay, say 30% tax. Generally spend the rest in the private sector, on which they pay tax. PS employs someone as a result of spending, pays tax, employee earns, pays tax, spends the rest, creating jobs, pays tax on it, saves some, pays tax on it and it's called the economy.
Not justifing no cuts but there's a less obvious, and, at least by me, incalculable loss to the priv sec and tax revenues if the brakes are put on too hard.
If a person is employed that pay, say 30% tax. Generally spend the rest in the private sector, on which they pay tax. PS employs someone as a result of spending, pays tax, employee earns, pays tax, spends the rest, creating jobs, pays tax on it, saves some, pays tax on it and it's called the economy.
Not justifing no cuts but there's a less obvious, and, at least by me, incalculable loss to the priv sec and tax revenues if the brakes are put on too hard.
From what I've experienced of public sector workers worldwide, one can cut at least 30% of all staff without there being any reduction in services provided the others step up to the mark. BUT the problem is that they're inherantly lazy as they've never had to work for their bread and butetr compared with the industrial sector.
What we need is an efficiency based salary , run by the private sector to get these lazy shysters back working efficiently, and ensuring that communist unions such as Unite and RMT are smashed permanently.
We could start by bringing in a law that when 3rd parties are negatively affected by union action that the union is legally liable for all damages they cause to 3rd parties. i.e. air passengers could claim from Unites illegal slush fund paid to them by Gordon the Moron Broon.....
What we need is an efficiency based salary , run by the private sector to get these lazy shysters back working efficiently, and ensuring that communist unions such as Unite and RMT are smashed permanently.
We could start by bringing in a law that when 3rd parties are negatively affected by union action that the union is legally liable for all damages they cause to 3rd parties. i.e. air passengers could claim from Unites illegal slush fund paid to them by Gordon the Moron Broon.....
jules_s said:
tinman0 said:
no office, no desk, no office chairs, no staplers, no staples, no paper, no printer, no computer.
The first six are taken care of by 'smarter working', the seventh by secured printing. I'll give you the last one , but a/. they are bought in massive bulk at near cost and b/. I cant see any shiny new hardware appearing in the public sector soon, can you? and support staff will never reduce pro rata to the staff they support.
You might not want to hear this, but this is what will happen.
Every single publc sector manager will *right now* be looking at ways to punt every single private sector consultant/contractor. This idea started at least two years ago when we were told to cease employing agency staff.
Most departments in many councils employ a core staff level for a given function, with the rest of the work farmed out into the private sector via PM's
Do you really think a public sector director will sack/lay off staff (with the resultant costs) when they can simply stop using the more expensive private sector option?
[/quote}
Doesn't matter. As far as it does matter the 'private sector' workers you refer to are basically the Public Sector to all intents and purposes. Let them go.
You will still have a redundant pool of 'managers' who can also be pruned.
Face it: This Country neither needs or wants the massive waste in the Public Sector that we have seen over the past decade or so. It has to go.
When more than 1/2 of a Country's GDP is being spent on Government 'services' only an idiot would not think twice.
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