"Flash flood not planned irrigation"

The Reform think tank have produced an analysis of the last nine years public spending programme. You can read the whole report here but these extracts from the Executive Summary will give you a taster:

"This Reform report examines the period of public spending increases begun in April 1999 and finishing in March 2008. It shows that the public spending programme has not achieved its stated aims of reformed public services and stronger economic growth. In fact the fiscal consequences of spending and the absence of reform leaves the UK much worse placed to face the challenges of coming years. The UK has missed the opportunity to improve its long term growth potential in benign global conditions.
The spending increase between 1999-00 and 2007-08 is the largest and longest of the last 35 years....There were four main justifications for these increases. Firstly, that hitherto there had been under investment in public services and additional spending could remedy this, in partnership with reform. Secondly, that increases would help drive endogenous growth and therefore make Britain more innovative and productive. Thirdly, that public spending was a good in itself and would strengthen community ties. Finally, the strong fiscal inheritance meant that funds were available.
The scale of spending increases – and the absence of reform – means that they have acted as a “flash flood” rather than a planned irrigation. Much of the spending has resulted in doing the same thing at a higher cost. Unreformed and over-centralised management has not ensured that resources are used productively. Capital has been purchased and then rendered obsolete or underutilised. Staff costs have risen. Entrenched producer interests have not been effectively challenged and consumer preferences are not driving delivery in the way they should.
...The strong growth record over the period is misleading. Between 1999 and 2007, 29 per cent of GDP growth has been generated by the public sector, compared to 2 per cent between 1993 and 1998. An expansionary fiscal policy is contributing to inflationary pressures and slowing growth.


The legacy of Ken Clarke is acknowledged in the report: "In 1997, the new Government inherited a strong fiscal environment. The public finances had improved after a period of severe cyclically-adjusted deficits (around or above 5 per cent of GDP) in 1992-93, 1993-94 and 1994-95. The spending plans of the previous (Conservative) Government imposed a further two years of spending discipline. As a result, by 1999-00 the public finances were 1.7 per cent of GDP in surplus."


The section you must read is that entitled "Results – flash flood not planned irrigation"