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Employment: Public Sector

Volume 715: debated on Monday 7 December 2009

Question

Asked By

To ask Her Majesty’s Government what is their response to the report by the Office for National Statistics that the number in public employment in the second quarter of 2009 (including employees of the partly nationalised banks) had increased to 6.04 million, representing 10 per cent of the United Kingdom’s population.

The main factor influencing the recent public sector employment growth reported by the ONS has been the temporary reclassification of certain banking employees to the public sector. Growth other than this has largely been a result of the Government’s decision to invest in front-line services, including vital recruitment activity at Jobcentre Plus to maintain provision of targeted support to help people to find work and move out of unemployment.

I thank the noble Lord for his illuminating Answer, but does he acknowledge that the level of public employment has risen steadily since 1997? Even if we take note of the points that he made and accept that there will perhaps be many more employees in the National Health Service, education and policing, is it not also true that there is an increase in the number of those working in make-work projects that are of absolutely no commercial benefit to Great Britain Ltd?

The noble Baroness will no doubt be aware that the total number of people working in the public sector is roughly in line with the figure in 1990, when the noble Baroness, Lady Thatcher, was Prime Minister. The total increase in public sector employment since 1997 includes 116,000 more teaching assistants, 41,000 more teachers, 66,000 more nurses and 14,000 more police officers. These are important supports for our community and are consistent with our advocacy and support of good public service.

My Lords, it is in fact not the case that the share of public sector employment has risen continuously since 1997. That merely shows that it is dangerous for people who do not understand statistics to get involved with them. Is my noble friend aware that in recent years the peak of the share of public sector employment occurred in 1992? I have forgotten, but can he remind us who was in power in 1992?

My Lords, I think that I have already reminded the House that there was a Conservative Administration on this side of the House at that time. My noble friend is absolutely right. The total percentage of the workforce in public sector employment declined from the mid-part of this decade until the latter part. It has increased only as we moved into a recession. It is perfectly correct and proper that, as private sector consumption and investment decline, public sector expenditure should increase, particularly on front-line services, to help to draw the economy back towards optimal equilibrium.

Given the state of the public finances and the near inevitability that in future years total expenditure on public sector employment will fall, can the Government give an assurance that any cuts will be via reining back public sector pay increases and bonuses rather than staff numbers, particularly in front-line staff?

The most important cuts that we need are in inefficiency. As in the private sector, in the public sector there are always scopes and opportunities to improve efficiency and productivity. To that we are committed.

Can my noble friend confirm that among public employees today are senior personnel in the Royal Bank of Scotland who apparently have threatened to leave the country if they cannot be allowed to have very significant bonuses? Can he, with his experience, tell us what on earth we could possibly do if people of such unique talent were to leave the country? I should add that, while I am not certain what we would do, I am prepared to find out.

My noble friend drifts a little away from the subject of the Question, but I shall respond, as it is a matter that I find particularly interesting. The total number of public sector employees currently includes 240,000 from those banks that are temporarily owned on the part of the taxpayer. They will of course return to the private sector as and when these banks are in full private ownership. I shall not be drawn further on the legitimacy of bonus claims, nor will I verify that these people have threatened to leave the country. The board of directors of RBS has apparently threatened to resign if it does not get the bonuses that it wants, but that is rather a silly line for it to adopt and actually a very unpatriotic one. I think that the nation finds that activity shameful.

My Lords, I think that we ought to get back to the Question proper. Public sector efficiency, as shown by the Office for National Statistics, has gone backwards every year since 1997, so the Minister’s assertion that this is just about front-line services is clearly inaccurate. We have had many Statements on efficiency—there will be another today—but when will the Government knuckle down and deliver efficient public services?

I am sure that we can count on significant improvements in efficiency if the party opposite finds itself in government, because it will slash the number of people in teaching, slash the number of people in the National Health Service and slash the number of people in defence and security, thereby increasing and improving efficiency on the crude measure used by the ONS. We are more focused on the combination of quantity and quality.

Will the Minister repeat the figure for new teaching assistants, which I think was about 146,000? Is he happy with the outcomes? He talks of efficiency, yet every day we see in the newspapers that we are failing our children on reading, writing and arithmetic and that we are failing those leaving sixth-form colleges, who are not getting sufficient grades. Does the Minster think that that is efficient? Perhaps we should not have employed any of those teaching assistants.

I am shocked by that final observation. My experience is that classroom assistants significantly improve the productivity and efficiency of schoolteachers. We believe that augmenting highly skilled teachers with others working alongside them on work that requires less training and preparation is a worthy way of meeting needs in the classroom.