Thursday, 25 September 2008

Boris Johnson: Cost Cutter or a False Economist?

Over at MayorWatch, ex-assembly member Damien Hockney has rightly expressed concern about the redundancy of Director of Corporate Services Janet Worth from City Hall.

Janet was by all reports a highly respected administrator who was ready to take on both the old and the new administration when it was necessary.

Her departure has therefore caused much surprise and consternation within City Hall.

However, what is more worrying, is the widespread perception that Boris has prioritised cost-cutting above all other considerations.

Hockney, who is a member of the Taxpayers Alliance and a long time small government man, believes that Boris is making short term cuts at the expense of longer term value for money:

"A remark the new Mayor made about wanting a lean mean machine to run London should receive the support of all. But squeezing local government of good people and treating those who remain like a second class state in the name of savings is false economy and is the type of thing that brings the concept of value for money into disrepute."

Hockney quotes a senior official within City Hall as saying:

“Staff and elected members are shocked at Janet’s early retirement and many are concerned that she will not be there to work with them through a time of change and uncertainty for hundreds of staff who have always turned to her as the steady, calm leader. What does it say to other female managers - if someone as outstanding as Janet is forced to leave why would they want to stay.”

Of course the loss of one official is not cause for concern of itself, but when it comes amidst the loss of other highly experienced staff, and amidst the appointment of staff members who have nowhere near that level of experience, then alarm bells should start to ring.

False Economies

The restructuring of the Mayor's office, highlighted here earlier this week, now seems a clear sign of things to come. 

For a demonstration of this, take a look at this table taken from the Mayor's leaked reorganisation plans:

The first figure which jumps out at you is obviously the total savings of £847,000 a year. 

However, if you look again, you see that what has happened is the replacement of higher grade officials, with lower grade alternatives.

Now you can argue that this may have been necessary, and like Hockney, I am not against job cuts per se. 

But when you are bringing in a new Mayor and new appointments, some of whom have little or no local government experience, then you should always be cautious about losing those very people who actually do have the experience that's required.

As Hockney points out, this isn't an argument about big-spending vs small-spending, but an argument about how you get the value out of the money that you do spend.

And by giving so much focus and publicity to his short-term cuts, is Boris merely saving up longer-term problems for himself and his team at City Hall?


Anonymous said...

Just what we needed, another senior woman gone at the GLA! I guess the ghost of Tim "no qualified women here" Parker is still haunting the corridors of City Hall.

ch paul said...

As said before this is the inevitable result of not knowing what you're going to do once you get elected. All Boris is thinking about is freezing the precept and nothing else and it's a real shame. Janet will be much missed.

Tony said...

Maybe Boris could start by cutting his own pay. He made such a big play about flying economy and Tim Parker's £1 salary. Now Parker's gone, maybe Boris could take his salary instead.

Tom said...

I've no objection to Boris taking a decent salary *as long as he gives up his bloody Telegraph column*. It's seriously not right that an elected politician collects a whack of cash substantially larger than his official wage for a part time job with a reactionary newspaper. One or the other, Boris, one or the other.

Anonymous said...

This is a further sign that Johnson quite literally has no idea of what 'value for money' is and doesn't understand the difference between that and cost cutting - which is not the same thing at all. It will get even worse if applied to TfL where Johnson was ranting on in the election about how disgraceful it was the number of people paid over £100,000.
Put someone who can only command a market salary of £50,000 in charge of a £50 million programme and you will soon see the difference. You will save £50,000 on the salary and lose £10 million on the contract.
But perhaps Boris Johnson thinks only people who write newspaper columns (and on his latest remarks about the City those who lose hundreds of millions for banks) have the skills deserving high salaries?
London will really 'gain' from lowering the skills base of its transport managers - that is it will save a few million on salary and lost hundreds of millions in the resulting inefficiency.

CarsmileSteve said...

hold on, if they're making redundancies, there'll have to be redundancy payments for the (bare minimum) 13.5 people they'll lose, which is unlikely to be cheap, so there's no way they'll save £847,000...

The Troll said...

You're quite right Steve, I forgot to include that point. It also does not include the cost of the Mayor's transition team which is approaching half a million pounds.

victor allen said...

Be cautious about any early retirement - is it definitely on grounds of redundancy?
However, even if it is aprt of a 'voluntary trawl' it exposes how few women remain in Boris's house.
There is also something else that's problematic here.
If you run an outfit (such as a small weekly newspaper) where the management structure is very few people at the top (say the editor and assistant) plus mix of fairly low paid, low ranking employees, salary may not be that important, I don't know. If however you are running a complex local governemnt structure that requires skills in various departments, then to attract those who have the skills and experience requires competitive salaries. When you consider that those with the skills were already in post, only an idiot (or Tim Parker)would drive out those who could do the job.
Efficiency isn't the same as cheap.