As a business there may be many reasons why you choose to buy a product or service in rather than do it yourself. The primary reasons are that you do not have the capacity to do it, you do not have the capability to do it or it makes economic sense to do it. When times get tough businesses look to bring in work where they have capacity and they look to extend their capability through training and investment. They also take a look at the economic case for undertaking work, in order to keep skills and capability. There is a recognition that cash is best off staying in the business rather than spending it elsewhere. Most sound businesses will adopt similar principles in order to survive troubled times.
Now as a nation, which financially is in its worse state in history, should we not adopt similar principles. We are many decades from balancing the books, and as those that need to impose austerity measures are avoiding targeting themselves then would it not make sense to keep hold of the cash that we have rather than spending it elsewhere.
As a manufacturing region we are often astounded by how much work is placed overseas that could be made on our shores. It is no wonder that we no longer have the capacity or capability that we had, but we should do what we can to secure and protect what we have. I know it smacks of protectionism but there are many cases of outright ineptitude when it comes to spending the tax payer’s money.
One doesn’t have to travel far to understand why certain European countries have such strong manufacturing sectors. Having had the debate with government spending authorities, they blame the treasury for setting the rules. They have to be seen to be spending the least they can to secure the best deal for the tax payer. This is a very noble statement and one that seems on the surface to be eminently sensible, until you work out that if the work is kept onshore then who gets all the money?
The taxpayers, who duly pay most of it back to Government so they can spend it again. It is a very simplistic principle that seems to have eluded the treasury for eternity. And they are in charge of balancing the books! We could be in for many bleak winters.