Fantasy politics

One of the less prominent measures proposed by Mr Osborne yesterday involved the one-third reduction over the term of the next parliament of the running costs of Whitehall and various quangos. This is said to deliver £3 billion annual savings by 2014-15.

If this means anything at all, it must involve massive job losses on the part of government departments. It is of course easy enough to order the top bureaucrats to slash their budgets (by about 8% per year cumulatively). But how can you possibly get the business done with only two-thirds of the staff? I recognise that administrative budgets will always contain a little fat but not 33% worth.

"Do less" may be part of the answer. But what to stop doing? Deregulation and devolution will only take you part of the way. And, in any case, getting from here to there will usually require more rather than fewer administrative resources.

Think of the Department of Work and Pensions. Facing a sustained increase in unemployment, a drive to reduce the number of incapacity benefit recipients and major changes in the pension age regime, is this department really in a position to reduce its admin costs by 33% over the next five years?

Or HM Revenue and Customs. What effect would a 33% cut in its administrative costs have on its revenue-raising capacity? Is this really what the Tories want?