1992 ~ Nerth Shore Newa-~ Si»

Civil service next target of UK ‘Tories

From page 46

They went away after six months,

the civil servants quietly closed the
file cabinets and said, ‘Phew!
That’s over for ancther couple of
years, back to the old ways,
lads."” ‘ .

Then she tried eliminating
wastage. The theory here is each
department of government has a
fixed budget and you have to
climinate wastage if you wani to
generate extra funds.

What happens is the civil ser-
vants don't come along and say
“My job is unnecessary, you can
fire me.””

What they do is say to politi-
cians if we’re going to live within
this budget we're going to have to
cut the most popular program that

we do. They always put on line |

the one service that the public
values most. :

The classic example was’ the
U.S. Customs, when they were
required to take a budget cut of
about 2%.

They said there was only one
way they could achieve this, and
they immediately pulied out of the
airports ali the people who sear-

-ched for drugs coming into the
country.

The pubiic outcry led to the
campaign for cuts being stopped.
instantly — which was why the
customs people did it.

Public servants are just as
astute businessmen as everybody
else. .

They’ve been forced by a rotten
system into diverting their energies
into this kind of activity. But they
use the same kind of ingenuity as
the rest of us do.

They know what their own in-
terests are and they know how to
inaximize them. They know what
will make politicians give up these
cost cutting campaigns, and they
do it... :

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So Mrs. Thatcher came up with
a new method. None of the rest of
it worked, so she said she was fed
up with this public sector, let's sell
it...

Start Small, Go Big

We started with the smal! stuff,
like British Rail’s hotels and ferry

boat services, then radio, the
chemical industries and British
Acrospace.

After (wo years we were gather-
ing confidence. We sold off those
companies 1 menticned which
made the cars and the trucks, the
buses, the planes end ail that lot.

64 If it moved we

Sold it. What a huge

When they're in the private sec-
tor, the only money we get any-
where near is the 35% tax on their
profits.

We make more from the 35%
on their profits than we ever made
from the 100% when they were
state-owned.

You read in the papers about
the big sales, about the sale of

“Telecom, British Airways, the big

public Motations. This isn’t char-
acteristic.

In fact, it’s the hundreds of
small sales that dominated our
privatization program.

They don't make international
news because they’re not asking

difference this made to the economy of

Britain. 99

-Dr. Madsen Pirie

We sold off the bus lincs, the
ferry lines, the national freight
trucking company.

We sold off the telephone ser-
vice, the aerospace industry, the
gas, water, electricity -- all of
those went. The ste¢!_ industry
went. Jaguar cars. :

If it moved we sold it. What a
huge difference this made to the
economy of Britain. Ail of those
industries that had been in the
public sector, run at losses with
taxpayer subsidies, were now in
the private sector and they were
running at a profit and they were
paying money into the treasury.

Here’s the key statistic which I
always think is the best argument
for privatization you can ever get.

When these companies, all of
them, were in the public sector,
we took 100% of their proceeds
into the treasury.

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for international investors. Most
of them were by management
buyouts where we take the existing
management of a public sector
corporation and let them buy it
out and run it as a private. cor-
poration.

Many of them were worker
buyouis.

When we privatized our na-
tional bus corporation, we divided
it into 66 companies and 56 of
those 66 were bought by their own
workers.

This is happening all the time.

Sometimes we hire contractors
from the private sector to perform
government works.

In 1980 we started encouraging

. City and regional governments in

Britain to use private contractors
to do things like repairing the
roads, collecting the garbage,

_ Cleaning the streets, and so or.

After eight years, the record of
success was so goad, we made it
compulsory. We passed an act
four years ago where now every
local government in Britain is
obliged by law to invite private
businesses to bid for performing
most services.

It was unconventional because
at first it had been done on a vol-
untary basis. The result of those
first eight ycars were just so stag-
gering!y successful that it was very
hard to oppose meking it com-
pulsory.

Indeed it would have been ir-
responsible if we had not let
everyone in Britain enjoy the
benefits. .

Civil Service Next

We're currentiy engaged in a
campaign to privatize the civil
service. It’s not making any inter-
national news because we're not
inviting any international in-
vestors.

It’s one of the most radical and
revolutionary parts of the
privatization program, and you
tead barely a whisper of it in the
internationa! press.

We are turning civil service
departments into agencies -~ ef-
fectively, corporatizing each
department of government — then
reaching a contract with that
group as if it were a completely
private firm in order to do the
work required. :

Let me give you an example:
the paczport office. Now the
passport office is pretty
straightforward; its purpose is to
issue people with passports.

Unfortunately by last summer it
was taking about 13 weeks to
process applications and since a
lot of people in Britain want to go
on holiday at fairly short notice,
they have to go in person in order

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to get faster service.

We had three-day queues stret-
ching around the passport office,
which looks very bad and really
clutters up the streets. It doesn’t
create a very good impression.

So we turned the passport office
into an agency, an independent
agency.

We gave them their funding as
a block sum and said you spend
it. We want passports, that’s the
output.

You're now an_ independent
agency, run it the way you want.
We've now got the passport ap-
plication time down to five days
turnaround. :

How did they do it? They used
modern management methods —
they brought in staff at weekends
and paid them double time to
come in and clear up the
backlogs. You might say, what’s
remarkable about that?

Any private firm does that
every day. Right. But no public
sector firm ever had the incentive
to do that before.

Now the passport office is an
agency which runs itself and it
gets to keep part of any profits to
increase remuneration.

So every singie worker at the
passport office has an incentive to
run ‘the thing as effectively as
possible because they get to keep
part of the savings made. Motiva-
tidn,

The passport office will almost
certainly be completely privatized
a few years down the road. It’s
already at the halfway mark.

These agencies now account for
one-fifth of all the whole civil
service in Britain and the target is
by the end of this Parliament (314
years) four-fifths*of the civil ser-
vice will be run as independent
agencies under contract. Creeping
privatization, one ofthe unsung
success stories.

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