Admin costs

A few months ago I quoted analysis which shows that the overall cost of educating children in the state and private sectors was approximately the same, at just over £9,000 each per child. The amount spent on teacher wages and classroom needs was very different, however, which is what Labour tend to emphasise.

The difference, of course, is in the relative amounts spent on what may be called administration.

Over the week-end on his blog, Fraser Nelson publishes similar figures in the health sphere.
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In the NHS for every nurse there is one administrator, whom he calls manager. In the private health service for every 5 nurses there is one administrator.

What this means is that for every pound spent on nurses in the NHS, and pound also goes on administrators. In private health for every pound spent on nurses only 20p is spent on administrators, assuming that spending on nurse and managers is more or less the same.

(I am aware that there are enormous difficulties in making the comparison. If the difference were a matter of a few percentage points, it could be argued that the exercise is futile, but it isn't a small difference. The number of administrators in the NHS is apparently five times as high as in the NHS for the same number of nurses.)

The difference must be due to the various levels of bureaucracy and the information which has to flow up to Whitehall and down from Whitehall, that is from bureaucratic centralisation.