VIEWFROMTHE EU
Cut to survive
By Jon Barrett, Electronics Sourcing
Jon Barrett, editor of ESNA’s sister publications in the U.K., Ireland and Europe
I usemoneymost days yet I’ve never really understood what it actually is. I asked a friend who worked in banking for 25-years but he didn’t know
either! Thus, I decided to educatemyself and read a fascinating book on the history ofmoney.
As I made my way through the chapters I was struck by the
many benchmarks in the development of money, with one of the most intriguing being ‘debt’. From my basic understanding, when managed well debt can be a force for good, ensuring money gravitates to points of need and underpins innovation and sustainable growth. However, when managed poorly, debt is the destroyer.
And so the next chapter in the development ofmoney begins.
As I put pen to paper, news is filtering though regarding the new UK coalition government’s first wave of public sector cost reduction in response to the country’s deficit and debt. The BBC is reporting that Chancellor George Osborne has outlined plans for £6.2bn in spending cuts, including a civil service recruitment freeze, plus cuts to IT programmes, property and quangos.
This is a lifetime first forme to see the government voluntarily
subject itself to the same pressures that the private sector grapples with during never ending economic cycles.
The sad fact is that the savings, which range fromcurbing
travelling costs to renegotiating supplier contracts, are just the type ofmoves the private sector startedmaking during 2008.
22 | June 2010
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I assume the cuts will continue during the emergency Budget which will, undoubtedly, include tax rises for us all. (Imust admit, hearing that public servants will be stopped fromtravelling first class didmakeme chuckle).
Whether the UK’s cuts are considered precision scalpel work or
axe blows, they are tame compared withmoves being reported in other UE countries such as Greece and Spain. Unsurprisingly, civil unrest and strike actions is growing yet this contrasts with photographs fromChinese electronicsmanufacturing sites where workers are allowed to sleep at their workstations during their 15-hour shifts.
Back on the subject of austerity, many of the cuts relate to
deals made with private sector companies, from business consultants to IT contractors. Time for such businesses to think beyond the public sector paymaster and promote their services to the real world.
My observation is a simple one. As I havewatchedmanufacturing
industry fight for its survival by applying detailed costs control to every aspect of itswork the result, over time, is a lean, efficient, world class sector that I amproud to be part of. Iwonder if government itselfwill ever come close to the achievements ofwell managed private sector production? Timewill tell.
Jon Barrett is editor of ESNA’s sister publications in the U.K., Ireland and Europe
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