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“Year Zero” - Hain signals assault on public sector 

Peter Hain has once again stated the intention of the government to reduce the level of public spending in the North.  This came in a speech to the annual conference of the Fabian Society, which was hosted in Stormont in March.  The theme of his speech was how the North would have to adapt to realities of competition in the global economy.  

At the base of his argument on the future of the economy was the threat of globalisation.  He painted a bleak scenario in which the North ’s economy would be unable to cope under the “competitive threats from China and India in the future, or Eastern Europe today.”  Its industrial sector would be eroded and jobs in its service sector outsourced abroad.  Of course, this is a process that has already been underway for some time now, with regular news reports of closures and redundancies in areas such as the textiles industry.  The impact of this industrial collapse has been mitigated by the fact that the North’s economy is dominated by the public sector.  It has provided a degree of stability and underpinned basic living standards. The British treasury is no longer prepared to bear the cost of that stability.  Hain spelt this out bluntly in: “a dominant public sector hugely subsidised from London,” means that the economy is  “unsustainable in even the medium, let alone the longer, term.”  According to Hain this looming crisis means that there is a need to “rebalance the economy”.  

To this end the government was prepared to make “tough decisions and painful choices.” In practice this entails a sharp reduction in the size of the public sector and the level of public spending in the North.    A good example of what this agenda will entail is the reform of the Water Service, with the introduction of water charges and the movement of the water service towards privatisation.  This epitomises the double whammy of privatisation and service charges.  With increasing financial burdens, lost jobs and the erosion of wages and working conditions through privatisation, working class people in the North face a significant reduction in their living standards. 

This neo-liberal assault has been coming from all sides in recent months, with the announcement of a 19 % rates rise, a massive 50% rise in the cost of gas, a projected 20% increase in electricity prices and the publication of the report of the Review of Public Administration (RPA).  The RPA, which envisages the reorganisation of how health and education services are administered, and how local councils operate, is potentially the most far reaching element of the Government’s strategy.  The reduction in the number of public bodies, and cuts in the budget of these services by £200 million annually could cost up to ten thousand public sector jobs.


Hain restated his commitment to the objectives of the RPA.  However, in this latest speech he also set out more of the details on how the education sector would be administered.  He said that the education debate had to move away “from segregation and statistics and on to skills”.  He then went on to list the costs of having four separate education systems in the North, and the costs of keeping the current number of schools when pupil numbers were falling.  Some people interpreted this as pointing towards a more integrated system.  Their hope was that a reduction in the number of schools would force the remaining ones to enroll pupils from both sides of the community.  However, under Hain’s plans, which will retain the traditional “ethos” of schools, we are liable to get the worst case scenario of school closures and staff redundancies, while religious segregation and church control is maintained, even if Catholics and Protestants do share the same campus. 

Hain also announced the establishment of a review of all spending on educational provision for 14-19 years olds.  He said that this would be along the lines if the Appleby Review of the health service last year. That report recommended the centralisation of health services, hospital closures, and the introduction of regional pay.  More of the same for the education sector can be expected from this new review; it will provide a rationale for continued spending cuts – in fact the government has announced in advance of the review that regional pay will be applied to teachers. 
Spending Review

Hain topped off his speech with the announcement of on Comprehensive Review of all government expenditure in the North.  He said that this would be a ‘Year zero’ review – “no existing expenditure should be assumed to continue. No specific funding stream or programme exempt.”  Every area of public spending is likely to be subject to cuts.  While this was dressed up in the usual phoney populism of shifting resources to “front line services”, there is no doubt that it is an agenda for severe cuts in public spending which will actually fall most heavily on those who deliver and use those services.  We have already seen this with the cuts in funding to education boards, which have resulted in the redundancies of teachers and special needs assistants, the removal of essential services such as crossing patrols and the threatened total closure of a number of schools.  Under Hain’s plan, this process is likely to accelerate across all areas of the public sector.


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