% The Flaming Right by Rudy de Haas

Government layoffs - who should go?

8:54 Feb 14, 2015

There are many barriers to laying off civil servants the most important of which is that it really doesn't work well as a means of reducing an annual deficit. The reason it doesn't is, of course, that the direct salaries, overheads, and entitlements run up by those tens of thousands of faceless bureaucrats don't actually amount to much relative to the big entitlement programs: health care, education, and human services. Basically, if the entire civil service (i.e. excluding the healthcare, education, and justice establishments) worked for free, the effect on the budget would be almost negligible.

Still, if Prentice et al push a 9% average budget cut on the civil service, there will be layoffs and so the question is: who should go?

In the usual process there's a hiring freeze, some scores get settled, some ambitions get cut off, a few clerks get laid off, and a lot of people in late middle age take early retirement.

Generally speaking this has little effect on costs - everybody reports a million here or a million there, but in a $48 billion ($48,000,000,000) budget it doesn't amount to squat. Worse, the overall demographic in the civil service changes as younger and more aggressive players quickly move up - with the result that growth as money eventually loosens always exceeds the pre-cut forecast rate.

So here's a better idea: a hiring freeze accompanied by an open offer giving any current civil servant under some age in the 35 to 40 range enrolling in a full time science (including non loonitunes healthcare), business, engineering, or trades program at an accredited Alberta institution a bundle of benefits including free tuition; non pension related benefit continuation; and up to two thirds of his or her salary for up to three years. In exchange the person agrees not to accept direct government employment for up to 5 times the number of years he or she spent in the program - and, of course, nominal employment ends with no further severance or support after the three year maximum.

This will cost much more than doing the usual thing, but those costs are spread over four years instead of one (meaning, among other things, that the budget commitment will slow new hiring) and what we get for the money might be awesome: four to six thousand commited young adults graduating in a wide range of trades, professions and businesses? and most with deep roots in Alberta? that's got to be good for everybody.

And the one third reduction for as many as 6,000 people is going to net out in the 60 to 80 million dollar per year savings range - trivial in the budget context, but broadly the same as laying off 2,000 tomorrow.

Meanwhile, the zinger is in the effect on civil service demographics: giving many of the best and brightest clear paths to success outside the civil service will change the mix among survivors to one that's older and much more risk averse - meaning that civil service impacts on the private sector (especially in terms of information demands) will be reduced while internal pressures for growth will ease.