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How big is a billion?

Categories : Our WorldPolitics

With media and political focus on the Lib-Con coalition plans for £6.2bn cuts in public spending, Figure it Out tries to get its head around what £6bn actually means. How big is a billion? What will £6bn buy? And what will be the impact? Firstly, how many is a billion? These days it is a thousand million. A one with nine zeroes. A one with twelve zeroes (the old definition of a billion) has been upgraded to a trillion – a million million. With me so far? So we can re-write the cuts as £6,200,000,000. But it still feels difficult to get the scale - we can think of it as representing £1 for every person on the planet or £100 for every person in the UK – but in the grand scheme of government spending, what does £6.2bn mean? Total UK Government spend for 2010-11 is £704bn, 114 times the value of the cuts. If you lost 1/114th of your salary would you notice? Perhaps, perhaps not, but imagine that your salary runs a country and pays wages. At the end of 2009, there were slightly over 6 million UK public sector employees . Losing 1/114th suddenly translates into 54,000 jobs.


Of course, not all the cuts will be achieved through reducing headcount, other areas highlighted are: ending child trust funds; ending MPs right to dedicated ministerial cars; reducing IT projects and consultancy. The Prime Minister tells us that the point of these efficiencies is to “tackle the deficit head on”. The 2009 deficit (the amount of money the government spends in excess of its revenue) was £159bn , or 25 times larger than the savings outlined. Benefits management has never been more critical, which is why a new board, called the Efficiency and Reform Group, is being set up to oversee departmental cuts. Although, as the Whitehall press release is at pains to point out, the group is made up of existing civil servants and will be located in existing premises – created therefore at no additional cost to the taxpayer. This is indeed laudable. Figure it Out wonders what will happen to these premises and individuals once the programme has been delivered. .

 

About the author

Jonathan Chadwick
Jonathan Chadwick
Jon has worked for 18 years as an analytical consultant in the UK, USA and Europe for a diverse range of sectors, most recently Financial, Oil & Gas and Government. Jon has extensive experience in benefits realisation, modelling, business analytics, portfolio management and change management. Jon devised and created Figure It Out.

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