Does government spend too much ?
How can we cut government waste ?
The first is a reasonable question; but the second is simplistic. I suggest we should be on our guard when we hear claims about the opportunity to quickly cut large amounts of ‘government waste’.
Just this very month there was a claim in Parliament that the £50 billion spent by local authorities could be cut by around 20% – suggesting a very attractive saving of £10 billion.
I am indebted to More or Less for bringing this to my attention, and for Ben Goldacre for previously identifying the flawed origins of the 20% statistic. It turns out that the figure arises not from a careful analysis of the potential to reduce costs, but from a self-promotional leaflet written by management consultants. The leaflet claimed that 20% could be saved on mobile phone bills – and so – it follows (?) – ‘we can save 20% on the entirety of local government spend’.
The problem here is that the collective spend on mobile phones is £600 thousand – a tiny proportion of £50 billion (about a thousandth of one percent). The other problem is that mobile phone tariffs are especially labyrinthine – and so we might expect that applying a strategic eye to this problem may well yield savings of – say – 20%.
Zombie statistics ? This is a More or Less reference to ‘dodgy numbers that refuse to go away – it doesn’t matter how often you shoot them down – they refuse to die.’