Public services as an economic generator.
The general mantra is the cost of the public sector, the NHS, local services.
How they take an increasing amount of taxpayers money to run.
The very same taxpayers that use the services.
The reality is very different. If we want to improve Wales' economy we should be spending more on the public sector.
We invest in an NHS not just to cure sick people, but to prevent sickness,
We invest in social care in order to improve the quality of life.
We invest in education to improve the life chances of children.
We invest in local services for the improved welfare of the people.
All worthwhile in themselves, but there is a wider economic gain.
Public Service Multipliers.
All Welsh Public Services are economic multipliers, which means that for each £1 invested in these services, the country gains more than £1.
The Welsh NHS is one of the economy’s highest multipliers
The KIngs Trusts think tank, estimates an NHS multiplier of 3.6.
For every pound spent on the NHS the economy gets £3.6 in return.
There’s the obvious,
A fitter, healthier working population is more productive.
Productivity means higher wages and profits, leading to higher tax revenues.
Much of the investment in public services are wages.
Of this 33% are immediately clawed back in income tax and NI.
The 67% remaining is then largely spent back into the economy creating a further multiplier of local taxes [ council tax ] VAT and tax revenues from the recipients of the spending.
Education has a lower multiplier of approximately 2.4
The principle remains the same, as education staff, teachers, assistants, dinner staff and cleaners are all involved in the tax and spend multiplier.
In addition, as shown by the Scandinavian countries in particular, an educated population is more productive, skilled and engages more readily with work.
Local services too have a contribution.
Leisure centres for health, community centres for mental health and wellbeing and libraries, all helping improve the population welfare and reducing costs of medical interventions.
Waste collections and road repairs help business work more effectively and the likes of local authority housebuilding contribute economically through employment and procurement.
The wages from this, indeed the wages of all local authority employees contribute to Wales public sector multiplier.
Public Sector Spending.
The Welsh public sector spends £10 billion per year on procurement, the purchase of goods and services.
That's £10 billion that should be mainly spent into the local Welsh economy.
A significant boost.
The problem is that the present Welsh government, when laying out the rules and conditions for public sector procurement, missed out the part about buying locally.
This distinct lack of an overall economic vision will be corrected in an Independent Wales.
The NHS spent £10 million per year on Personal Protection Equipment [ PPE ] prior to Covid, that is in a normal year.
There is an opportunity to encourage, assist a Welsh company to set up the production of this equipment.
It would ensure the security of supply and quality and provide a platform for exports to UKr and beyond.
The security of such a contract would enable investment in technology and skills training for the workforce.
A Welsh company, wealth and job creating, equipped and able to provide Wales needs in the event of future pandemics.
Welsh public services, far from being a burden on the taxpayer, or a cost to the economy, in addition to the necessary services provided, is a significant economic generator.
A contributor to Wales wealth creation
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