Revolution in the UK Economy Part 2

This is a second part to my thinking about the future direction of the UK economy and just as I touched on the NHS in my previous post, in this I will be using the Armed Forces as the basis of looking into the future. Rather like the NHS, the Armed Forces combine expensive hardware and the need for considerable manpower and all paid from tax payer funds.

Unlike the NHS though, armed forces spending is constantly being squeezed and budgets are always under extreme pressure but there is a problem with that because the forces need to combine being a deterrent to potential aggressors with always being action ready so there is only so much cutting that can be done.

Background

In the past when vast amounts of manpower were needed for the Armed Forces the answer was conscription but it would not be an efficient solution in today’s technological age where something far more useful is needed than just lots of “canon fodder”. For whilst as throughout history you still need manpower for armies to take and hold territory, to conduct modern warfare you need highly skilled manpower spread throughout your armed forces capable of deploying a wide variety of technology in an ever evolving battle space.

So conscription is certainly not the answer, but we need to find a new way of doing things by using some lateral thinking and also by adopting a different perspective. But first, we need to pull the problem apart to take a look at all the elements involved and see if we can rearrange them into a new and workable solution.

The first problem and it is not just specific to the UK, is that governments are more prepared to fund major defence equipment projects than they are to pay more to and generally improve the lives of service personnel. The reason is simple, big defence projects tend to involve high tech jobs that benefit civilian workforces through high wages as well as large companies through big profits so politically and economically it makes sense to politicians. However, one must question the spend on “big ticket” projects because costs escalate and the potential number of bits of equipment that the armed forces can afford, seems to decrease with every new weapon generation, it doesn’t seem a sustainable model.

Personnel

The other factor is that apart from a few that go on to senior roles, the vast majority of service personnel will leave the armed forces before they reach 30, it is a young persons game. This in turn can lead to recruitment problems as young people look ahead and beyond their days of service. Consequently it is easier to recruit people into ‘technical roles’ where the skills may be transferable to the civilian sector when they leave the armed forces but more difficult for the “boots on the ground” infantry type roles which are as crucial to the effectiveness of the military as the technical skill set.

There is also a further element which is totally different to my childhood and youth. Growing up in South London during the 1950s, every adult I knew had “served” in some capacity during WWII and even into the late 60’s I was aware of older work colleagues who had served during the war, the military was very much part of everyday life. However the ending of National Service (conscription) in the early 1960s led inevitably to the ‘military’ no longer being part of normal family life as it had been so that today, few people know or have even met a serving member of the armed forces.

The young people who join today’s armed forces are also very much part of the youth of their generation, they want all the same things as as their peers who don’t join up, a good time, being able to plan a better future and so on and as importantly, so do their non forces partners. This can lead to people in the Royal Navy for example, not wanting to be at sea for months on end, sounds a bit daft but very much part of a wider series of problems.

Finally there is the real issue of training/retraining service personnel ready for them to have really good careers in civilian life. I would acknowledge that the MOD does have a very active training program in place but perhaps some of that effort might be converted into a very specific area that carries both military as well as civilian benefits going forward.

Democratising Profits

As I have written previously, many of today’s politicians are totally devoid of original ideas so that rather like Hollywood studios stuck on remakes of past “successes”, they reach into the past for ideas such as nationalisation or grammar schools but these are irrelevant solutions to today’s issues. One of the problems of generations of generally lame politicians is that public spending has reduced the general public to the level of expectation of a “Cargo Cult”who hung up on their particular needs or interests, have totally lost touch with reality.

A classic example of this being people getting exercised by the UK giving the EU some £8 billion pa in net contributions whilst totally ignoring the over four times that amount, the £33 billion we are paying in interest on UK Government Bonds to finance the gap between what the government collects in taxes and what it spends.

I would suggest that the next major step should be to “enfranchise” company profits so that people working within a business get a major share of the profits paid to them as bonuses so that whilst they would not be equity owners, they would have a vested interest in the financial success of the business. The quid pro quo of this may well be that they get a lower regular salary and have to participate in the management of the business but this would be better for most people than everyone working in a “gig” economy.

My main thinking here is that as an economy, we need to engage people by economic inclusion if we are to build a new economy that works for most if not all people.

Restructuring Key Elements

The above is not an immediate blueprint or detailed policy, it is more of a “direction of travel” but how it may work out, I will now explore a bit further although in doing so, we may need to look at what the basis for funding any particular “service” should be.

I will start with a question: Why should a civilian defence contractor design and manufacture a bit of military equipment just to flog it to the government ? If we can have “software as a service” which means we pay a monthly fee and it is up to the supplier to keep it up to date, why not “military hardware as a service” ? However, I would add a slight twist to that too, not only the hardware but much of the crew and support team as well who, whilst on duty serve as members of the Military Volunteer Reserve.

These people could be civilian or, come from the Armed Services in fact the serving members of the services would be crucial in determining the operational effectiveness of the kit in question. As the military increasingly spends effort on cyber space and allied technologies they would be constantly under training and therefore be acquiring transferable skills directly relevant to civilian life which now is also totally dependent on digital technologies and digital defence of those services.

The other element concerns “profit share”, whilst obviously civilian employees in these services would get profit share, so should military personnel whilst also engaged in delivering the particular defence package. The objective is to deliver a better defence package for the Country whilst providing steady income for commercial enterprises, high level training for personnel and a financial incentive to go the extra mile for all concerned in delivering a high quality defence capability.

Obviously you could expand this topic by looking at various aspects of delivering such an idea on a case by case basis: How would it work with ships, planes, tanks, uniforms, accommodation, food plus how would we look at design and development programs and so on ? But for now I just want to express a basic idea for people to think around and I will finish by taking a similar approach to a key element of the NHS.

The GP Service

The way our Health Service is set up, GP Surgeries are the essential front line of the NHS. They are, unless you get run over in the street and are taken directly to a hospital, the first line of defence and the conduit for sifting through patients ailments before deciding whether they need more specialised treatment. The problem is that in many places, recruiting GPs has become impossible with the consequence that people are not bothering with even trying to get a GP appointment and instead are going directly to hospital A&Es which are then getting overrun. In a sense our GPs are meant to act as a flood barrier which means if they are not there, A&E gets flooded.

Now there may well be cultural and social reasons for people not wanting to be GPs, not glamorous enough or just far too daunting working by yourself as opposed to in a hospital where there are lots of other staff around to give you support but in the medium term, suitable finance packages might close the gap. Ever since 1948, the GP service part of the NHS has always been private and practices generally run as partnerships between groups of doctors. They have one main customer who provides virtually all their income and that is the NHS and some are quite substantial businesses in their own right.

What this has commonly led to is practices investing in buying the property they operate from so come retirement, a partner looks forward to cashing in by selling their share of the partnership on however, adding property values to the profit share from the actual work performed can make buying into such a partnership quite expensive. The bigger practices therefore often have “employed” doctors who receive a salary but no profit share and this can lead to recruitment and retention problems where the location is not considered “desirable”. Also one must question whether GP practices would be in the position to invest in the type of upcoming technologies that are bound to form the core of patient screening/diagnosis going forward.

It might make sense for the government through the local NHS, to set up their own GP practices and equip them technically in terms of facilities relevant to the local circumstances. They could then employ salaried doctors and given the existence of a current “price list” for services provided, after a deduction for the capital costs involved pay the balance as a profit share to all the staff employed in such a “practice”, there being no partners to pay.

This would be a fairly immediate “fix” to try and bridge current GP shortages though the real solutions going forward lies in changing the training pattern of medical staff to create more staff at every level faster. For all the fuss about the current state of NHS hospitals being “under pressure”, absolutely nobody appears to be thinking sufficiently long term to solve the problem. With an ageing population living longer but with more complex health issues, the NHS needs radical reform and totally fresh thinking, it is not getting it.

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