Friday 9 July 2010

Unbuilt Schools

Reaction to Michael Gove's announcement that the coalition is to abandon over 700 school building projects first centred on the pupils and teachers who will continue to work in sub-standard conditions. It then switched to anger from the users of the 25 or so schools which were not on the list, so thought they had escaped the axe, only to discover that they had been left off by mistake.

One really does wonder about the competence of civil servants who can't even put together an accurate list. What has happened to these "mandarins" who used to have the reputation of running the Rolls Royce of administrations? They have first class degrees from swanky universities and have survived the latest in scientific selection procedures. How is it that they can't do a simple job like this? I suspect that too much emphasis is placed on interview skills and not enough on the ability actually to do the job to which they are appointed. Today we are too prone to appoint and promote the glib who can best spout the latest fashionable jargon rather than those with a proven recored of competence.

However, what has received much less attention are the economic consequences of abandoning these projects. The building industry has long been regarded by economists as a "bell-wether" industry: the first to feel the pinch in a recession and the first to perk up at the start of a recovery. The abandoned projects will lead to unemployed builders, carpenters, brick and concrete makers, plumbers, manufacturers of lavatories etc etc and perhaps some bankruptcies. The famous Keynesian multiplier will kick in as these unemployed cut back on their own expenditure, leading to further decreases in demand and further unemployment, as every school boy or girl who has ever studied economics knows full well.

In other words, school buildings are a classic example of the "pump priming" Keynes advocated for avoiding or ameliorating recessions. In the present precarious circumstances we should be expanding programmes of public works, not cutting them back.

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