Tuesday, 15 December 2009

Christmas is bad for your wealth

At least it is if you are one of the poor saps who contribute tax to the funding of the NHS. One of the administrative departments of the NHS, based in Southwark, has spent £2,500 on a Christmas tree to decorate its office.

This is wrong in so many ways that it is difficult to know where to start, but I will. Firstly, why is a manager given the authority to sign-off such a large purchase on what is basically a frivolity? Is the NHS so efficient and awash with resources that this sum of money can be afforded in preference to front-line services for patients? I think we know the answer to that one.

Next, how do you go about procuring a Christmas tree that costs £2,500? Allowing for the fact that Southwark is in London and therefore prices are higher than elsewhere in the UK, a decent-sized tree should not cost more than £100, and even that is outrageous. The tree is reported as “dressed”, so it must come with tinsel, baubles and lights, but even the most ardent spendaholic would struggle to waste more than a few hundred quid on decorations. So that leaves a balance of about £2,000 to deliver and set up the tree, which means someone is trousering a nice little earner.

But if this is a symptom of the spending patterns within the NHS, where Christmas decorations are bought for a minimum of 5-times their actual value, what does it say about the rest of the spending within the NHS? At a time when companies and households are trying to spend less, and when even the presiding party has woken up to the fact that the civil service might be a tad corpulent, it’s time for a full audit of the procurement process within the health department.

The NHS spends about £8bn per year on drugs: maybe that should be nearer £2bn? What about all the medical equipment? Then there are the IT systems, of which at least £12bn has been wasted on a national system for patient records. The total NHS budget is about £100bn, or should it be £20bn?

The Tory party has said that it will “ring fence” the NHS budget if it wins next year’s election. This cannot be justified in an economy where there is a £200bn budget deficit. If the NHS is wasting thousands on Christmas trees, how much is it wasting on core services? And how much are the other departments wasting? There is plenty of scope for reducing the deficit quickly, as long as there is political will to do so and cooperation from the civil service.

The next government needs to move on from Labour’s “think the unthinkable" and actually “do the undoable” – reduce the size and cost of government, whilst delivering better services.

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