Before we go any farther, I feel it would be impolite if I failed to say thank you.

Here I am, stuck in an airless room in Birmingham with only David Cameron and 5,000 Tories for company and you've been sweet enough to lay on some entertainment. Admittedly, your idea of a good time isn't everybody's - a meeting on nuclear waste disposal here, a seminar on the economic development prospects of Bolton there - but I don't want to seem churlish. So, thank you.

Now, I realise that you've been busy so you left the details to others - the booking of the speakers, saying “1-2-3” into the microphone and so forth - but at least you stumped up the cash.

The Conservative Party conference is only partly what goes on in the hall. Hidden from the TV cameras and largely unreported, there is another event entirely going on in the same place at the same time. It's a vast jamboree of meetings on obscure topics and pleading special interests. In many of these the politicians are quite incidental and the pesky questions of delegates (generally about Europe) merely a distraction.

All around the fringe can be found charities talking to each other about themselves, lobby companies holding unnecessary seminars to prove to their clients that their commission is worthwhile, and public sector organisations holding meetings to persuade taxpayers to give them more money, meetings that are - here's the good bit - paid for by the taxpayers that are being lobbied. Paid for by you, in other words, in order to persuade yourself.

The bewildering range of organisations that are arms of the State, most of which I own and pay for, include many I didn't even know existed. Organise yourself properly up here in Birmingham and you could meet the Nuclear Decommissioning Authority, the Economic Development Agency for Manchester, the Northwest Regional Development Agency, reEmploy, the Food Standards Agency and Sport England. And with the Big Lottery Fund, Birmingham City Council, the Commission for Architecture and the Built Environment, the National Endowment for Science, Technology and the Arts, the Commission for Rural Communities and London 2012.

Perhaps you could fit in the National Association of Local Councils, the Environment Agency, the BBC World Service, the British Council, the Electoral Commission, Network Rail and the Equality and Human Rights Commission. Or the Financial Services Authority (special guest speaker - me)

Don't forget the Heritage Lottery Fund, the Nursing and Midwifery Council, Kent County Council, Transport for London, London Councils, the South East England Development Agency, the British Library and Arts Council England. And the Mayor's Office of the London Borough of Lewisham - wouldn't want to miss them.

And naturally the employees of all these bodies are here, too, putting their point - the Police Federation, the NHS Confederation, the National Association of Head Teachers, the Association of School and College Leaders, the Royal College of Nursing, and, oh, I give up.

On the platform David Cameron ushered in the Age of Austerity yesterday and told us all that the money has run out. The cupboard is bare. The party is over. Meanwhile, on the fringe you could still hear the clink of glasses.

I am not trying to make the cheap point that the State could save £17.50 by cancelling some fringe meetings and banking the room booking fee. I am attempting instead to show how big and complicated the State has become, and just how many parts of it are now involved in protecting their own existence, setting their own policies, employing lobbyists and holding fringe meetings.

In their book The Plan the Conservative politicians Douglas Carswell and Daniel Hannan argue that one reason that politicians are now held in contempt is that the State has a life of its own, with its institutions not fully under the control of either elected representatives or consumers. They are, therefore, unable to deliver on the promises they make. The authors cite police form-filling. Despite repeated promises by Home Secretaries to make bonfires of paperwork, the paperwork keeps rising. It carries on regardless, beyond the reach even of the people supposedly in charge.

Over the next few months we will hear a great many politicians talk of the need for the public sector to tighten its belt. But such an approach is entirely inadequate. What is needed is a fundamental reassessment of the offer made to citizens by the State and its myriad offshoots.

The policy of simply suppressing spending without large-scale structural reform has not had a happy history. After an initial flurry of privatisations, the Conservative Government controlled public spending by holding down its growth without changing the scope of the services that the State was offering. At the same time the financial needs of those services grew faster than the resources they were being given. And so by the mid-1990s it was hard to resist the idea that more spending was required.

Thus in 1997 came what might be termed a “correction”. Labour was elected largely because the public was angry at failing services. The new Government soon began to increase public spending faster than the economy was growing. But such a policy is not, of course, sustainable either. You can't increase public spending faster than overall economic growth for very long before you come unstuck. As we now have.

And so we are due for yet another correction. This time, politicians should be determined that there will be - how would Tony Blair have put it - no more “boom and bust” in public spending. This time wishful thinking about waste and macho talk about spending control won't do. This time we have to fundamentally rethink what the State does and how it does it.

daniel.finkelstein@thetimes.co.uk

Times Recommends

• It’s not just about Iraq, it’s about Blair’s style
• You can’t rank hospitals like football teams
• Minarets are not an essential part of Islam