Austerity means a lot more than less. Cutting public sector budgets and staff holds long-run implications for the capacities and orientation of the state. When fiscal cuts are connected with particular normative programmes, transformation rather than erosion becomes the watchword. The purpose of this chapter is to put post-2008 public sector restructuring in its historical context by examining some of the central strategies for reform connected to the longer-run trend of New Public Management (NPM). Rooted in neoliberal ideas, particular sets of economic theories, managerial strategy and normative assumptions of efficiency and expenditure, NPM has been altering the internal workings of the state for several decades, not only post-crisis. By merging elements of neoclassical economic theory and private management studies (Hughes, 2003: 3), including an emphasis on value for money, competition and market mechanisms, NPM is a rather broad agenda that generally consists of government doing more steering than rowing through the privatization of state-owned assets and the marketization of service delivery using publicprivate partnerships (PPPs).

NPM has been covered extensively in the public administration literature (see Hood, 1991), indicative of the context in which post-2008 austerity and public sector reforms emerged. Contemporary developments are easily traced to decades-old ideational, structural and policy changes that have transformed public administration into public management, with significant ramifications for staffing, spending, procurement, the workplace, planning, public works and service delivery, and other core elements of the public service and public sector (on NPM and privatization see Whiteside, 2015, 2019). By the early 1990s, the OECD was publishing on the widespread nature of this new paradigm among member states, and advising of the benefits of this good managerial approach (Holmes and Shand, 1995). Public management replaced public administration through a reversal of nearly all earlier tenets: stressing results rather than procedures or public interest ideals; disaggregating the bureaucracy and letting the managers manage; fostering competition within and between units in the public sector; importing private sector management styles; encouraging the recruitment of private sector employees and hiring business schools graduates; adopting strict cost control and fiscal discipline.