The reason for "public sector waste" is that much of the spending on the NHS and on education, for example, has been siphoned off to the private sector.
See source 1, on the NHS IT programme designed to computerise all patient records - £12bn and rising, perhaps with an estimated final cost of £30bn. This was initially handed to Fujitsu, but they pulled out, costing the NHS another £2.3m so far in legal costs.
Then there is Building Schools for the Future and PFI (Private Finance Initiative) schemes - all of which hand over the running of buildings for a guaranteed profit to a private company. This was reported in the Channel 4 documentary Dispatches in 2006. A council had closed down a middle school but was still paying for school meals for the empty school, all because its catering and maintenance had been handed over to a contract by the private sector.
Its not public sector waste, it is private sector greed which is causing the problem.
All funding should be publicly accountable to make sure it does deliver value for money. However, New Labour, like the Tories and the Lib Dems, have sold out to big business and no longer represent the interests of the public. (source 2)
Then there is the ID cards fiasco . . . the list goes on.
Finally - we need a new party to represent ordinary people. (source 3)
Kevin - I agree with you about the internal market in the NHS (created by the Tories) and this has continued with Foundation Trusts (New Labour's name for competition and privatisation between Trusts, i.e. inefficient and expensive). However, the NHS was hugely efficient before 1979 and is still more efficient than the US healthcare system. Before 1979 admin counted for less than 10% of NHS costs, now it is 20%. It is not the public sector model which is inefficient, it is the private sector model which increases bureaucracy and waste, introducing more middlemen. (I also work for the NHS). - see source 4 for an alternative.