To be critical of wasteful public spending is not to be ideological

I was disappointed, but hardly surprised, to see a lot of abusive web posts following the publication of Sharper Axes, Lower Taxes. The main drift of these usually anonymous comments was that the book’s authors were just ideologues and their analysis consequently worthless.

Well, I don’t think this is true of any of my fellow authors, but certainly my own chapter was not conceived in that way. What I was looking for was examples of government spending which had itself been undertaken for political reasons, with confused objectives, and which were achieving little if anything. I hoped, perhaps optimistically, that some of my suggestions might find support across the political spectrum. Despite comments made by panellists at the book’s launch, I believe that there are many thoughtful Labour supporters out there who would like to see wasteful public expenditure cut back.

The area I covered – education, childcare and training – is clearly one where emotions run high, particularly amongst those of us who are parents. I should say that, while I think public spending in this area needs to be cut back dramatically, there is still a role for government. For example, the state has a longstanding and largely unchallenged commitment to ensuring that all minors have access to education. There are also compelling grounds for some regulation of childcare, and for making it possible for young people to borrow to finance higher education. Other interventions may be more controversial amongst economic liberals, but a plausible case can be made for continued public funding in a number of fields.

However, most of the areas of government intervention on which I focused in my chapter are difficult to defend by anyone who is prepared to ignore vested interests and looks seriously at the issues.

One example is the Sure Start programme for pre-schoolers, which has been found to be poor value for money by the National Audit Office, is badly targeted (with middle class users taking up places intended for disadvantaged children), seems not to be significantly improving the educational performance of participants, and is probably crowding out private sector childcare provision.

Another is the continuing subsidy to STEM (Science, Engineering, Technology and Mathematics) degree courses at a time when direct funding for most other subjects is being removed. Sir Howard Davies has said that this support for STEM is ‘economically irrational’. There is no meaningful shortage of these graduates, many of which have poor qualifications. They have a higher unemployment rate than graduates as a whole, and a high proportion of them take up careers in areas where their degrees are irrelevant.

Or take the Pupil Premium, on which I have previously blogged. This is an extra payment to schools for pupils who are entitled to free school dinners (taken as a crude proxy for being educationally disadvantaged). It is gesture politics, part of the political deal which brought us the coalition, and its objectives and the means by which schools are supposed to achieve these objectives, are totally unclear. In any case, given the huge increase in staffing (up from 570,000 to 811,000 despite falling pupil numbers) and other resources given to state schools in the last decade, it isn’t a shortage of funding which is the reason many of our children receive a poor education.

My proposals for funding cuts in these three areas alone would save £4.5 billion in 2015, and it is difficult to see that the public would suffer significantly from their implementation. This isn’t ideology, it’s common sense at a time when we need to tighten our collective belts.

Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham. He was previously Dean of the Royal Docks Business School at the University of East London and prior to that was Dean of the Westminster Business School. He has also taught at Queen Mary, University of London and worked as an economist in the Civil Service. His research interests are primarily in the economics of labour markets. He has worked with many think tanks, most closely with the Institute of Economic Affairs, where he is an Economics Fellow. He edits the journal Economic Affairs, which is co-published by the IEA and the University of Buckingham.