Tuesday, January 31, 2006

Byers Joins Ruination Drive

Tax 'n' Spend isn't the only way governments can burn our money. They can also impose costly and onerous regulation, particularly on business. The Company Law Reform Bill (780 pages, 885 clauses) is set to do just that.

When first introduced it was trumpeted as a simplification, designed to slash red tape and save British companies £250m pa. But having studied the detail, the corporate world is now seriously alarmed, especially about Section 156. It says that, in fulfilling his duty to shareholders:

"A director must (so far as reasonably practicable) have regard to the likely consequences of any decision in the long term, the interests of the company's employees, the need to foster the company's business relationships with suppliers, customers and others, the impact of the company's operations on the community and the environment."

This may all sound well-meaning, but the clause represents fundamental changes to a director's responsibilities. What's more, in the words of Baroness Noakes, "The interests of these stakeholders conflict and there's no hierarchy in the bill - no explanation of which are more important. There's also no explanation of what is meant by 'success' - that is a very subjective term."

It's the incorporation into British law of what's known as CSR- Corporate Social Responsibility- a woolly stakeholding notion of company objectives that's been floating around in one guise or another for 10-15 years. The risks to company health and overall economic dynamism are obvious. As the the immortal Milt put it:

“There is one and only one social responsibility of a business ― to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

As always Milt puts is succinctly: we might want to add that companies need to consider long-term as well as short-term profits, which can lead them to eschew the fast buck in favour of public reputation. But the point is overall financial return to shareholders should be the driver, within the limits of the law.

Once politicians start insisting in law that company directors weigh nebulous aspirations for "a better world" against the cold hard reality of making money, our directors become no more use than...well, politicians.

And if you want absolute proof that I'm right, consider this from the FT:

"Stephen Byers, the former trade and industry secretary, is said to be sympathetic to calls in a Commons motion from 125 Labour MPs for directors "to identify, consider, act and report on any negative social and environmental impacts" from their companies' activities."

And you thought Byers had a stake through his heart.

Monday, January 30, 2006

Vale Of Tears

Let me say straight away I have absolutely no interest in sport. The only sporting events I ever watch are the games where England get knocked out of the World Cup on penalties. They leave me feeling so depressed and angry that I have to go out and smash up a few town centres to calm down.

Which was pretty much how I felt last July when, just because some Greek bloke pressed the wrong button, we got landed with the 2012 Olympics. Not only am I angry about being forced to fund yet another parade of gallant British losers, but I know as night follows day that the whole fiasco will run way over its official £2.375bn budget.

There's a good summary of the facts in a Commons Library Research Paper. The headline £2.375bn of public money is actually only the start. That pays only for the construction of venues and the Olympic Park infrastructure.

We are going to spend a further £9.9bn (yes, £9.9 Billion) on associated infrastructure. This includes £2.7bn on sports venues, further Park infrastructure, and the Olympic Village. The remaining £7.2bn is going on London's transport infrastructure that the government argues it would be spending anyway.

And then there's the cost of actually running the Games. That's put at £1.5bn, which the organisers reckon will all be met by revenue from the games.

So totting up, the projected cost comes to a grand total of £13.8bn, of which £12.3bn comprises infrastructure projects. And all to be done in roughly the same location in a space of 6 years.

Not only does it make to Dome and Terminal 5 pale into insignificance, the Pyramids themselves become Lego models.

Is there even the faintest chance this lot will come in on budget?


Sydney ran two-times over budget, and Athens four times. We're a lot better? With the Dome, the Tunnel, Pickett's Lock , and now Wembley? Don't make me laugh. (Yes, I know the Wembley contract put most of the over-run cost on the main contractors, but nobody will take the Olympics on those terms).

All around the world public infrastructure projects routinely run way over budget. Boston's notorious "Big Dig" tunneled highway project was originally budgeted at $2.6bn, and ballooned to $15bn. The Cato Institute reported research showing that, internationally, 90% of public infrastructure projects exceed budget.

The organisers of the London Olympics are already worried. So much so they've decided to call in the heavies to put the frighteners on the contractors. According to the Times, 'organisers of the 2012 Olympics are preparing to use undercover surveillance to prevent construction firms from cheating to win £3 billion of contracts to stage the London event...new MI5-style techniques, including paid secret agents, to stop building work from being hijacked by cartels'.

That will presumably include listening devices hidden in bricks and bags of cement. Although sadly, they haven't managed to recruit many actual spies. A "Mr Williams" said:

“The take-up of what is effectively our informant programme has not been as good as I would wish. I would want people in the construction industry and elsewhere to understand that we have this programme and our officers have been trained by the best to run informants. We play a professional game. It’s possible somebody will remain within an organisation, which is involved in wrong- doing, as an informant.”

Hmm. IIRC, previous generations of construction industry informants ended their days holding up the elevated section of the M4.

But I digress. In the words of Cato's report:

'The study concluded that lying, or intentional deception, by public officials was the source of the problem: “Project promoters routinely ignore, hide, or otherwise leave out important project costs and risks in order to make total costs appear low.” Politicians use “salami tactics” whereby costs are only revealed to taxpayers one slice at a time in the hope that the project is too far along when true costs are revealed to turn back.'

Prepare for a great deal of wailing and gnashing.

Saturday, January 28, 2006

Waste In The NHS

Just how is it that a doubling in NHS spending has resulted in crisis ward closures, cancelled ops, and rationed drugs? The answer is a case study in the appalling wastefulness of Big Government.

The facts are that in the six years since Brown and Blair turned on the taps in 1999-2000, NHS spending (England only) has nearly doubled, from £40.2bn to £76.4bn this year. That extra £36.2bn is the equivalent of 10 pence on the standard rate of income tax, and constitutes "real money" in anyone's book.

But pumping all that extra money into an unreformed NHS was always going to cause problems. And all too predictably, the bulk of the cash has simply been gobbled up in higher costs. Health service measured inflation has been running at 4-5%pa, twice the average national rate. But even that understates the true magnitude of what you or I would call cost increases. The King's Fund analysed in detail the growth in funding between 2004 and 2005:

'In 2005, ...health services... in England, received £5,086 billion more than they received in 2004. However, not all of this has been available to expand and develop health care services (in other words, to open more beds or perform more and better procedures).

Most of the money has been ‘earmarked’ (or set aside) for ‘cost pressures’, such as increased pay and new terms and conditions for GPs, consultants and other NHS staff. Around a fifth has had to be spent on meeting other cost pressures such as clinical negligence claims, the new staff grading exercise (Agenda for Change) and increases in costs associated with guidance on new drugs and procedures from the National Institute for Clinical Excellence.'

So over 80% of the money went on cost increases, with less than 20% actually available to 'develop health care services'. Shocking- particularly when you note that all those 'cost pressures' were generated by decisions taken in the Bureau of State Planning, rather than on the ground close to patients.

What's even worse, of the money left over for developing actual healthcare services, a significant chunk has gone on bureaucrats rather than healthcare professionals. Reform calculates that NHS managerial staff have increased at three times the rate of professionally qualified clinical staff, with managers up by no less than 66% over the period. Again, it's the hand of Big Government: bureaucracy creates bureacrats, and the complexity of today's NHS planning, targeting, and payment systems has far surpassed anything Gosplan ever dared imagine.

Neither should we overlook the mounting burden of servicing those massive PFI debts. That was another top-down government initiative, driven largely by a desire to keep public project debt off the government's books. But in a couple of years time the NHS will be paying well over £2bn pa to service it.

No wonder NHS productivity- the amount we get out for every pound we put in- has been falling. According to official figures from the Office for National Statistics, NHS productivity has been falling by up to 1% pa since the mid-nineties. Value for money has gone down.

The problem we now face is that this NHS spending bonanza- like all previous Big Government excesses- is heading for the buffers. The public finances simply cannot take the strain. So Patricia Hewitt is slamming on the brakes. As a result, our Health Trusts are facing mounting deficits- £1bn this year alone- and all over the country operations are being postponed, beds are being closed, and new hospital projects are being axed.

It is a crisis which is going to get a lot worse for patients and those who work in the NHS. But it is also a crisis we taxpayers must not forget. We are witnessing the dismal results of a huge top-down programme to fix our public services not with reform based on choice and competition, but with massive injections of money. Our money.

The waste is running into billions.

Friday, January 27, 2006

Driven To Drink

We're well aware of our rulers' fondness for the bottle, but it's really irksome when we taxpayers have to pick up the tab. Because it turns out the government is spending over £100,000 pa on bottled water for their own use:

"The Home Office was the worst offender, spending £46,665.34 on bottled water in 2004-05, although the Treasury was unable to separate mineral water from the cost of "teas, coffees and biscuits" which totalled £200,344."

According to Ben Bradshaw, "It is much more sustainable for people to drink tap water."

Well, that's right Ben. And you could do something about it right now, by the simple act of turning on your own departmental tap and saving us over 20 grand a year.

PS On a similar theme, we learned last year that Westminster uses enough electricity and water to supply a small town. "The amount of energy used on the Parliamentary estate has risen 45 per cent since 1997 and the amount of water by 50 per cent, according to a report submitted to the Commons authorities. More offices, computers, televisions and air conditioning account for the rise in energy consumption - enough to supply 1,500 households. The Commons alone used enough electricity to supply a town of 5,000 households for a year and it costs £181.53 for each MP and peer just to heat the Palace of Westminster."

Government Waste: A Cavendish Writes

The Cavendish Family has been running Britain pretty well since records began. So when a Cavendish turns her attention to government waste, we peasants touch our forelocks and listen respectfully:

"IT disasters, glossy brochures – it's all Whitehall's ever-expanding wasteline. Every week a drip, drip, drip of indecipherable figures. When is an NHS deficit terminally scary and when is it benign and easy to remove? Will identity cards cost £18 billion (as an LSE professor says) or £5 billion (as ministers say)? Why is more than £2.5 million spent on a team of 15 coppers munching their way through Paris to reinvestigate Diana’s death? For that matter, why is the bill for the Diana Memorial now approaching £5 million? Oh, of course, it ’s a fountain, so it must be all those plumbing bills."

Yes, it's another review of the Taxpayers Alliance's forthcoming Bumper Book of Waste, and Camilla's jaw has dropped nearly as far as ours.

She also highlights the lack of accountability. For example, among numerous other failures, the hapless Beverley Hughes presided over the Bicester asylum fiasco (£25m of our money wasted). Yet Hopeless Hughes is still a minister, and even tipped to join the Cabinet in the forthcoming reshuffle. "Businessmen who negotiate private finance initiative hospital contracts tell me that the public sector officials rarely stick around long enough to see the first door fall off, let alone the end of the 20-year lease."

Wonder what William would have thought.

Off with their heads.

Thursday, January 26, 2006

Another £168m Blown On Consultants

We already know about John Prescott's pig-headed Pathfinder scheme, which will demolish many thousands of fine Victorian houses in the North of England. It is budgeted to cost taxpayers £1.2bn, and is being bulldozed through despite widespread protests. According to SAVE Britain's Heritage:

"Perfectly decent historic houses are being condemned on the basis of ten minute external surveys in a blatant abuse of the powers granted under the Housing Act. Householders are being forced out of their beloved homes following minimal and often misinformed consultations...It is the return of the clean sweep, the mass clearances of the fifties and sixties from which we all assumed the lessons had been learned - the buildings are not the cause of the problems."

So far, so dismally familiar. But SAVE has also been digging into how our money's actually being spent. According to the Times report:

“The real winners here will be the house builders, who stand to gain from the compulsory purchase of people’s homes at artificially low prices and redevelopment of more expensive housing, often out of reach of the displaced residents. Also cashing in on the bonanza are the consultants on whom to date £168 million has been spent — enough to restore 8,000 terraced houses.”

So that's another £168 million to add the government's soaring consultancy bill. According to the Management Consultancy Association, they spent £1.9 billion on management consultants alone in 2004. No wonder the Civil Servant in charge of cutting government procurement waste admits:

"You can't make excuses when there is money pouring down the drain...People working on similar projects are often using the same consultants to give them the same information - this has all got to stop."

Indeed it has. But in a week when the Health Secretary dished out yet more work for consultants, we'd be a lot more impressed if the government actually did something about it.

PS Lest anyone think otherwise, we have no problem with the management consultants themselves. They have to earn a crust just like everyone else, and theirs is one of our most successful industries: annual billings running at over £10bn pa, and the European leader. No, the people we have a problem with- as ever- are the poilticians who preside over huge expensive departments that they don't even trust to manage themselves, let alone something important like The Kabin.

Wednesday, January 25, 2006

£1.3m To Clean Up White Van Man

It's about time.

From the filth plastered on his back-door, to his frequent and quite open sausage roll munching, to his other manifold acts of depravity too revolting to describe, White Van Man is an affront to polite society.

So we hail Commissar Darling's fine initiative to clean them up:"If we can persuade them to drive better, you'll get a cleaner drive...that must be a good thing." 200 new instructors will be hired from Kleeneze to make the vision a reality.

I don't mind telling you, I'm relieved for Mrs T. She blenches uncontrollably when confronted with their filth. And the poor Commissar has obviously had similar experiences: "I think I've been driven mad on a number of occasions."


Well worth £1.3m of anyone's money.

Picture: The Saw Doctors

More Dodgy Brown Numbers

We blogged last week on the phantom Civil Service jobs cuts- the fact that the Chancellor's boasts of rapid progress towards his Gershon "efficiency" cuts weren't supported by the ONS figures for actual numbers of civil servants employed.

Now the Treasury Select Committee is also questioning the Chancellor's figures:

"...different departments are using different starting dates for measuring workforce reductions...If different starting dates are able to be used, departments might seek to choose a time when their workforce numbers were at their highest, thus exaggerating the extent of decline from the Gershon review starting point."

We're shocked to think Sir Humphrey would stoop to such naked chicanery, but we take the point. The Committee wants a single baseline of April 2004- so sensible that most of us assumed we already had it.

The Committee also reports scepticism about the money savings the Chancellor claims to have achieved, given "the lack of detail about savings by department and the difficulties in measuring non-cash savings arising from claims of improved outputs".

"Non-cash savings arising from improved outputs". Although you may have missed it when the Gershon efficiency savings targets were set, departments can avoid making actual...well, savings, by the simple expedient of claiming that outputs have improved. Which with government departments of course, is almost always impossible to prove one way or the other.

So that's the Gershon efficiency programme. The words "costly", "wasteful", and "charade" spring to mind.

Picture: Propaganda Critic

Tuesday, January 24, 2006

Top Politicos Not Workers

The Prime Minister has confirmed what many have long suspected:

"Holders of political offices in the UK are not defined as "workers" under the terms of European working time legislation."

It seems that not all EU legislation is nonsense.

Please Mr Murdoch...

During his rare interview with Jeff Randell, Rupert Murdoch was asked what he thought David Cameron stands for:

"I don’t know. I’ve had a couple of very charming meetings with him. He’s very bright, he’s put together a more impressive front bench than was there before, but it seems to be all about image. I’d really like to know a little bit more about what his vision is for the future of this country and its people, you know, some facts and some real policies rather than just a lot of almost throw-away positions they take to try and change their image. So much so, that if you believe everything he says, there’s not going to be an alternative between him and a New Labour government.

I think they’ve gotta say look, we are gonna shrink the size of government rather than keep expanding it, and they gotta shrink taxation to get better rewards for people who are prepared to risk everything."

Well, begging your puddin', Mr Murdoch, Sir, but that's exactly what we think too. Unfortunately we're not global media tycoons. All we can do is squawk in the Blogosphere.

Now, we keep hearing that the Sun and the Times will soon be switching their support back to the Conservatives, which is excellent. But there is something else you could do for us- for Britain- which would be even more helpful.

Because you understand how modern party politics works. Our Big Politicos are not leaders but followers. They all crowd onto the centre ground slugging it out in an ugly beauty contest. So the only way we can get meaningful change is by shaping public opinion itself.

Which is precisely where you come in.

Please Mr M...if we ask ever so nicely...would you please transform Sky News into our very own Fox News? Lively opinionated news coverage from the right rather than the left.

You see, we've got this really big problem with a statist liberal propaganda machine called the Biased Broadcasting Corporation...oh, you already know about it. Well then, you know it's like the Clinton News Network only much richer, much much worse, and paid for by our taxes.

We need your help. And yes, we're begging. But the really great thing is that it needn't cost you anything. You'd make money. We realise you couldn't charge subscriptions- any more than you can now for Sky News- but look how much ad revenue you now make off Fox News in the US. Shedloads.

It's a win-win Mr M.

You owe it to your grandchildren and your shareholders.

Monday, January 23, 2006

A Body Is Found In A Canal Lewis...

As from next week poor old Lewis is going to be handling all those bodies floating in Oxford's backlit waterways on his tod.

Although he may not actually have the time. Because according to the Sunday Telegraph, Britain's police spend over £500 millions a year on paperwork. And that's only the cost of "non incident-linked paperwork...general correspondence not related to any specific incident, and checking paperwork (supervisory)". The figure would be even higher if "paperwork linked to particular crimes, such as interview notes or arrest warrants" were included.

The figures come from a so-called ABC (Activity Based Costing) analysis, which our paperchase government has required from all forces every single year since 2003.

Against a backgound where less than a quarter of reported crimes are solved, the Met apparently thinks it appropriate to spend twice as much on paperwork as it does on dealing with robberies, and three times as much as goes on burglaries.

Think Lewis. We must be missing something.

Just Like Old Times

News today that 1.5 million local government workers are to be balloted for strike action. Unions involved include UNISON, Amicus, the Transport & General Workers Union, the GMB and the Fire Brigades Union.

At issue is the so-called "85 Rule" under which workers whose age and the length of service add up to 85 years can retire early on full pension. Thus a worker aged 60 with 25 years service can retire at 60 rather than 65.

Despite assurances to the contrary, we confidently expect the government to cave in, just as they did over increasing the retirement age of other public servants from 60 to 65. Because in the public sector the unions are rediscovering their taste for 1970s style industrial blackmail. And our shambolic faction-riven Labour government lacks the requisite cojones to oppose them.

But somebody's got to oppose these resurgent unions. The Sunday Telegraph yesterday carried a frightening report on how much public sector pensions actually cost the rest of us. In English local authorities alone, £5.2 billions pa- 26% of Council Tax revenue- now goes on pensions. And according to leading local authority actuaries Hymans Robertson, "there's every possibility this figure will rise over the next five years as age-related costs continue to feed in."

More broadly, according to Liam Halligan writing in the same paper:

"The public sector pension deficit - the liability which must be met by future taxes - now tops £700bn. This figure - conveniently kept off the Government's books - amounts to £30,000 per household, all of which will have to be met by taxpayers.

That's because, unlike private sector schemes - where regular contributions are invested in a fund which is itself invested in equities and bonds - public sector pensions are generally "unfunded", that is to say, they are financed by current Government receipts.

And as public sector payrolls expand, and state retirement ages continue to ignore longevity, the deficit grows ever wider. Over the last three years, it has grown no less than 35 per cent."

Government failure is taking us down the road to a national debt crisis. Moritz Kraemer of Standard & Poor's, the world's leading debt ratings agency, says:

"If there is no policy change, in terms of higher taxes or retirement ages...within 10 years, this would become a major issue. And in the decades that followed, the situation would look dire indeed, becoming similar to what we see in countries like Egypt or the Ukraine."

Sooner rather than later something must be done. If Britain's debt is downrated to sub-investment grade junk, with all the punitive interest rates and harsh borrowing conditions that go with it, we will be sucked into a vicious circle from which it is difficult to escape. And none of us want to go there.

You can't blame the unions for trying.

But you can blame the government for caving in.

Who's Money Is That?

For reasons that needn't detain us, MrsT purchased yesterday's News Of The Screws. And while perusing it over cornflakes this morning, I was momentarily diverted from the exploits of "she knew what she wanted and she wasn't afraid to ask" Chantelle, to read this:

"Gordon Brown has paid for the insulation of one million pensioner homes, and given free TV licenses to the over-75s."

Gordon Brown? Can that be right? I was under the delusion we tax-payers had done the paying.

Then I noticed the author- none other than Labour's Master of Black Propaganda, Ali Campbell.

On the face of it just another helping of vomit-inducing Labour spin. But more and more these days I get the even more uncomfortable feeling that they actually believe it themselves- they really do think it's their money, to spend entirely as they see fit.

I could get very upset about it. Fortunately, Vera Sucanova (sic) was on hand to...er, mop my fevered brow.

Sunday, January 22, 2006

More Dosh For The Doc

We've blogged before about the government's plans to help those- let's face it- hopelessly ill-informed GPs to recognise the work-shy. As we keep being told, there are 2.7 million malingerers on Incapacity Benefits, costing us £12.5bn pa. And now we know it's all the fault of GPs!!

Well thank goodness for DWP Secretary John Hutton and his splendid new plan:

'DOCTORS are to be offered financial incentives to curb “sicknote Britain” by forcing people on benefits back to work. Under plans to be unveiled by ministers this week, employment advisers are to be stationed in GPs’ surgeries and medical assessments will be revised to make it more difficult for doctors to sign people off as long-term sick.

A “national education programme” for GPs will also be launched. Ministers then hope to introduce targets and financial incentives — after consultation with medical bodies — to ensure that GPs abide by the new rules and cut the burgeoning cost of incapacity benefit.'

We know Doc Crippen will be pleased about this. He keeps complaining about the lack of support for GPs, and those extra cash incentives will come in handy.

What's that? Isn't this just one more example of politicians telling professionals how to do their jobs, and trying to bribe them to do things they don't agree with, where it's the politicians who should have the balls to change the welfare benefits system itself so that Incapacity Benefit doesn't pay more than Jobseekers Allowance, but they don't want to do that because their leftie backbenchers would rebel, and they've already got the Education rebellion so they can't handle another, and anyway GPs get paid far too much, and their contracts got screwed up anyway when the Department of Health gave away the store, and well now it's payback time, and...gnnnnnaaaaaaahhh.

I'm just going to chew the carpet.

"Wheels Coming Off"

Excellent article by David Smith and others in today's Sunday Times summarising how "Blairism" is failing. The Third Way turns out to be less a new millenium Ford Mondeo, and more a 1973 Austin Allegro- the one with the square steering wheel.

"From education to health, pensions security to economic growth, the wheels are falling off...

Spending on schools ...has soared from £22.4 billion in 1997-98 to £35.4 billion in 2004-05. Yet school performance has hardly altered...59% of the extra money pumped into the NHS ...has gone on staff pay...NHS productivity is still falling by at least 1% a year...unemployment rose in December for the 11th month in a row to more than 1.5m...this year Britain’s tax burden will be 42.4%, higher than Germany’s 42.1% and well above America, which has come down to 32.7%...Productivity growth has slowed sharply...the latest figures show output per worker in Britain up by a paltry 0.4% on a year earlier. Measured on a per-hour basis, there was no increase at all."

We've blogged about these things many times of course, but articles like this are important-attention from respected msm commentators like Smith is vital if the message is ever to resonate beyond a circle of crackpot zealots like Tyler.

Especially heartening is the impact being made by the Taxpayers Alliance, whose new Campaign Director, James Frayne, is quoted as saying:

“People’s experience with the NHS and schools means that it’s becoming less credible to claim higher taxes mean better public services. Also, people are taking on board all these stories about politicians wasting money.”

Absolutely right James. We'll be redoubling our efforts.

Pic: The Unofficial Austin Rover Web Resource

Saturday, January 21, 2006

Civil Service Cuts Mystery

You will recall the Gershon Efficiency Review, and how in the 2004 Budget- to general gasps of amazement/horror- the Iron Chancellor committed to cutting 84,000 Civil Service posts by 2008. And to show it wasn't just pie in the sky, he set out a specific target for each department (above).

So nearly two years on, how's he doing?

According to his own account, thing's are going swimmingly. In December's Pre-Budget Report he claimed to have already cut numbers by no less than 25,314 (net). He reckoned the Department for Work and Pensions had already cut 14,215, and HM Revenue and Customs 3,246.

However, according to the Office for National Statistics, nothing much has happened. Civil Service employment is down only marginally from 569,000 when he started to 567,000 when last sighted, both miles higher than the 475,000 Labour inherited in 1997 . And as Sir Humphrey pointed out, you must always be very wary of any apparent cuts in Civil Service numbers- whole divisions and even departments can be magicked out of the Service by the simple act of quangoization. You've really got to scrutinise the detail.

Unfortunately, there is no detail because the ONS's proffered Cabinet Office links all return a mysterious "page not found" error message. In fact, it seems no detailed Civil Service numbers have been published at all since...er, 1 April 2004.

Gordo and the statisticians can't both be right, can they? How mysterious.

To check, I've looked at the three departments who were always in line for the most drastic surgery- Department for Work and Pensions (net 30,000 cuts), Ministry of Defence (net 15,000), and the Chancellor's own departments (net 13,350). Together they account for 58,350 of the net 70,000 cuts (yes, we know the headline number was 84,000, but as with all Brown's slippery pronouncements, you have to check the small print: the actual cuts target was 70,000).

Start with MOD. They've been very busy producing voluminous Technical Notes describing in great detail "the various components of the Defence Efficiency programme, and how performance against them will be measured". Unfortunately, they don't seem to have made any actual cuts just yet. None at all. Hmm.

The Department for Work and Pensions seem to have done better. They say in their Autumn Performance Review 2005 that they've cut 13,750 posts since 1 March 2004- almost half way to meeting their 30,000 target. So give or take the odd five hundred shattered careers, they actually agree with Gordo.

Amazing. A government department that's actually axing its own Civil Servants.

Ah, well of course, it isn't quite like that at the DWP. As we've posted before, the place is a total shambles, lambasted by all and sundry for dire performance, and wrestling with rock-bottom staff morale. It's less a case of sacking people, and more a case of hoping to God at least a few people show up for work again next week. In reality, these cuts are less a triumph of managerial efficiency and more a symptom of a terminal malaise that is threatening the Department's viability.

What of Revenue and Customs? Incredibly, they also agree with the Chancellor- in their case, spot on, at 3,246 fewer posts. But again, the place has serious staffing problems: after all, it was bashed together only last year from the old Inland Revenue and Customs departments specifically to get rid of staff. As a slightly ludicrous aside, one of the Chancellor's other departments, HMT says it's making its own important contribution- a cut of 119 posts already, coupled with a bizarre and possibly life-threatening promise "to relocate 26.5 posts out of London by 2007-08".

So it's just possible the Chancellor's cuts numbers do add up- 25,314 . In which case, why no reduction in the ONS overall Civil Service numbers?

We strongly suspect the hand of Sir Humphrey. A "cut" is one thing: Civil Service establishments are quite another. There's an awful lot of deckchair rearranging going on somewhere.

The overall conclusion is that the promised Gershon cuts have not yet materialised. Civil Service numbers are pretty well unchanged since Brown made his announcment nearly two years ago.

Meanwhile, total public sector jobs have increased by another 100,000.

Friday, January 20, 2006

Silver Service

According to the House of Commons Commission, "in 2005, the Refreshment Department spent £10,630 to replace cutlery lost or damaged through general wear and tear, or to meet changes in the demand for catering services."

Even allowing for all the backstabbing, that sounds like an awful lot of cutlery for our MPs to get through in a single year. Argos offers the splendid 24 Piece Venice Cutlery Set for £3.49. So £10,630 buys you 73,100 pieces, even before the volume discount.

What can they be doing? The most kleptomaniacal MP imaginable couldn't possibly waddle out with that much wedged into his/her pants.


They'd rattle.

Pic: Argos

Truancy Flop Actually Cost £1.5bn

It turns out that yesterday's post on the government's failed anti-truancy programme understated the cost.

Rather than the widely reported £885m, the total cost so far is £1.5bn (see Taxpayers Alliance).

And the meter's still running.

Thursday, January 19, 2006

£885m Anti-Truancy Programme Increases Truancy

The Public Accounts Committee today reported that the government's £885m campaign to reduce school truancy has been worse than useless.

In 1997-98 when Labour came to power, unauthorised absence was 0.78% of total pupil days in state schools. They reckoned this was far too high and set themselves the target of reducing it by a third. The then Education Secretary, "Bonkers" Blunkett, implemented expensive programmes involving 10,000 mentors, 1,000 Learning Support Units, and "attendance audit and training materials and consultants".

The result? By 2004-05 unauthorised absence had increased to 0.83%.

Ask yourself. Honestly. Would 10,000 government mentors, 1,000 LSUs, audits, consultants etc etc make the school experience more or less attractive?


Another £885m on the fire.

Doctors' Pay

Leaks from the Treasury suggest that family doctors are the new plutocrats:

"GPs and hospital consultants have benefited from new contracts. The Treasury figures suggest that GPs earn £80,000 a year, consultants about the same."

Not only is that an envy-inducing 57 grand more than the average Briton earns, but more specifically, say HMT, it's a lot more than other European doctors get. German GPs for example receive only just over £60,000.

And so doctors cannot expect more than a 1% increase in their next pay award. CPO Commissar Hewitt has written to Michael Blair, QC, the chairman of the review body to tell him so. As she puts it:

“We have always known that after 2008, when we will effectively have eliminated waiting lists and got to the European average on healthcare funding, we won’t need the same level of unprecedented funding. That also means we have got to make sure that we continue to improve the NHS and get even better value for taxpayers from these unprecedented funds that are going in.”

Great news about waiting lists of course (!), but the docs are crying foul. BMA chairman, James Johnson, said the government was "seeking to undermine the established process by which evidence is considered, and will provoke anger and further disenchantment among [BMA] members. These government recommendations are a kick in the teeth for doctors."

And the NHS Blog Doctor is spitting blood.

So who's right?

First, it is quite clear that medical practitioners have been enjoying some chunky pay increases lately. According to the official Annual Survey of Hours and Earnings, their average gross pay was £69,527 in April 2005, up by 24% over the previous 12 months. And 20% of them earned over £106,000.

Second, it seems that the government made a total horlicks of renegotiating doctors' contracts as part of those notorious NHS "reforms". In order to buy acceptance of targets etc, they gave away the store (again, see NHS Doc- especially the comments).

But what should we conclude? Yes, we know the BMA is a trade union, and there are doubtless all kinds of restrictive practices, but you can't get away from the fact that doctoring is a demanding highly skilled job, with a lengthy training period. It is perfectly arguable that their original pay was too low. After all, Britain has long had a serious shortage of doctors.

The fact is that doctors' pay- like that of public servants generally- is administratively determined, rather than being left to the market. As a result it tends to move in fits and starts, driven by the exigencies of the political cycle. Today's "fat years" are no more than a counterpart to all those preceeding "lean years".

This Treasury leak is a classic piece of dirty spinmeistering designed to turn public and media opinion against doctors just as they go into pay negotiations. Even though it is those same doctors who are absolutely vital to the delivery of the improved NHS the government has been promising so long.

The government is handing out record-breaking pay to doctors with one hand, and undermining their morale and trust with the other. No wonder all that money is producing such disappointing results. Pay- one more reason why the politicians should be taken out of healthcare.

PS As for those German doctors the government reckons are so content on their 60 grand...well, according to Pravda (no, really), "Thousands of doctors some in their white hospital coats, others wrapped in thick jackets amid steady snowfall, marched from a Berlin hotel to a Health Ministry building, carrying banners with slogans including "Money gone, doctor gone" and calling for Health Minister Ulla Schmidt to resign." Seems they want more pay, and a reduction in bureaucracy. Hmm...maybe that German healthcare model is not quite all it's cracked up to be.

Pic: Grinning Planet

Wednesday, January 18, 2006

Can We Fix It?

"Despite this being the 10th consecutive year I have qualified these accounts, there is an initiative on the part of the Agency to rectify or at least lessen the extent of my qualification."

So said the Child Support Agency's auditor in their 2004/05 Report And Accounts. Any private business in such a state would of course have been closed down long ago.

During the brief period when he managed to hold down the job of Work and Pensions Secretary, Shagger Blunkett grasped the nettle:

"None of us can be in any doubt that the CSA, over many years, has not delivered. It has been a complete shambles and I am absolutely determined that we are going to do something about it."

And today the CSA jolly well found out what Tony intends to do about it. Er...well, more precisely "sources have told BBC's political correspondent the decision to sell-on the massive arrears has been taken "in principle". Details of the reforms are still being finalised."

In other words, the shambles continues, but Tony wanted another eye-catching leak he could be associated with, and which conceivably might make any extremely naive four years olds listening believe their support is finally on the way. (Incidentally, do make sure you watch/video C4's hilarious looking Tony Blair Rockumentary tomorrow)

What exactly would "selling on" those £3.3bn of arrears mean? Presumably they have in mind going to a debt factor who will advance say 80% of the debts right away, chase up the debtors, and then let the CSA have the rest as it's collected. Less admin charges and expenses of course. Which in this case could be on the large side, particularly if in tracking down those errant Dads, the factor has to engage any Sarf London gents with baseball bats.

They're also supposedly going to switch the task of collecting regular child support payments from the CSA across to the new Revenue and Customs agency. But they are the very people already sinking under the weight of Gordo's nightmarish tax credits. Can they possibly take on anything else? Needless to say, the switch "is being described within government as a "preferred option" - though not finally settled, and still being debated within Whitehall".

In other words, there is no plan at all. There's a Whitehall report setting out various options. But no actual plan in the sense of "we've made decsions and this is precisely what's going to be done".

In fact, all that has been achieved by today's leak of more half-baked pie in the sky is a further undermining of morale among the 12,000 poor benighted souls who work at the CSA. As their Chief Executive said in his most recent Business Plan:

"Last year the morale of our staff was badly affected by the disappointment of not being able to move as effectively as we had planned. This concern and disquiet was reflected in our Staff Attitude Survey. This year we will increase our efforts to develop our managers as leaders and coaches and continue to develop within our team leaders ‘real time’ performance management skills."

And despite the fact he was going to have to fire 2,000 of his demoralised staff to meet Gordo's arbitrary Gershon efficiency target, he gave them this personal commitment:

"The Chief Executive maintains an ‘open door’ e-mail facility in which staff can (and do) contact him on any issue."

His name was Doug Smith. And he resigned shortly after signing this Plan.

PS Just found an interesting new (to me) site: Child Support Analysis seems to be a one-man thinktank on this area. Interesting to see what they put up on Tony's leak.

Tuesday, January 17, 2006

Spinal Problems

A wise and very scarred old systems project manager once slipped Tyler the Golden Rule of IT budgeting: "if you've got a great systems guy, double the original budget; otherwise add a nought to the number you first thought of."

This excellent advice has always allowed Tyler to bluff his way on such matters, and even sound quite expert. Until now.

As you may know, the NHS is currently undertaking a truly massive systems development project called the National Programme for IT (NPfIT). Its aim is to couple up England's 30,000 GPs to our 300 major hospitals, allowing both to access common records for everyone in the country. It is the world's biggest civil IT project. Ever.

Let's not concern ourselves here with the project's Big Brother aspects, even though it has twice won BB Awards ( "Most Heinous Government Organisation" and "Most Appalling Project"). Let's just concentrate on the money.

It was originally budgeted to cost £2.3bn. So on the Golden Rule for IT budgeting, that translates into an actual outlay of between £4.6bn and £23bn, depending on the quality of the IT guy- with any government project you obviously go for the top end.

But it turns out £23bn won't cover it. Not by a long chalk.

The government itself has admitted to £30bn, and Computer Weekly have been told off the record that it could be up to £50bn.

£50bn! That's 50 Barts/Royal new hospital projects.

What's even more shameful is that most of our health professionals don't even want the damned thing. Computer Weekly reports a survey of doctors, with only 17% thinking it's a good use of NHS resources, and 70% of GPs believing it will threaten the confidentiality of patient records.

And will it actually work anyway? Computer Weekly also reports that the system's backbone, the so-called data spine, went down for 28 hours in the first week of this month alone. In a world without local back-up records that would have been 28 hours in which doctors would have been flying blind.

Scary. I advise all patients to get a full paper print-out of their own records so they can lend it to their doctor when it becomes necessary.

Pic: NASA History

CPO Commissar Hewitt On Barts PFI

Criminally Patronising Oleaginous Commissar Hewitt has broadcast to the nation on C4 News. She's told us why she's canning that £1.2bn Barts/Royal PFI deal.

Simple really. It turns out that the planned new cardiology facilities at Barts- first agreed way back in Labour's first term- are NO LONGER NEEDED. The NHS has been so successful in bringing down waiting lists for heart ops that the pricey new Barts development is no longer needed.

Well, hurrah for that! All those professional sceptics like Doc Crippen, who reckon thousands of people can't get proper heart treatment until it's too late, are just plain wrong.

That's well worth the £100m cancellation charges.

Picture shows the Commissar getting her gnashers attended to at a secret location housing Britain's last remaining NHS dental surgery ( Dental Art ).

Child Trust Funds

The take-up on Child Trust Funds has been predictably low. Of the two million vouchers sent out- worth at least £250 each- a third have not been cashed. At all. The IFS says:

"Parents may be very busy and not have time to open an account. The other possibility, which is much more concerning for the government, would be that parents aren't really engaged with the accounts. If that continues, perhaps they won't engage with the accounts over the next 17 years, which means it won't deliver the benefits that the proponents of the policy hope."

This is another of those worthy cloud-cuckoo ideas from Labour's nanny state. It's estimated to cost about £250m pa, and when it was launched the then Financial Secretary to the Treasury, Ruth Kelly (!), described it as:

"..a groundbreaking new initiative which will strengthen financial education, promote positive attitudes to saving and ensure that all children, regardless of family background, will benefit from access to a stock of financial assets when they start their adult lives. It is based around the Government’s belief in progressive universalism – benefiting every child while offering more help to those in most need.”

(Translation- "progressive universalism" means everyone gets the basic benefit, but the poor may get more if they can navigate another quagmire of means testing).

What's actually happened- as many predicted- is that the children of the financially switched-on "middle-classes" have cashed in, and the children of the switched-off poor have lost out. It has done nothing to "strengthen the financial education" of those that need it most.

The CTF is a waste of money and should be abolished forthwith.

Monday, January 16, 2006

Recent Bonfires

£25m on asylum centre that will never be built:

"The Home Office spent £12 million pursuing a planning appeal for the accommodation centre on Ministry of Defence land at Bicester, Oxon. It has had to pay a further £12.4 million in compensation to the private security company that would have built and run it."

At least £1.9bn pa squandered on management consultants:

"People working on similar projects are often using the same consultants to give them the same information - this has all got to stop."

£12m pa wasted on "subsidised" school milk:

"Because the top-up creates high administrative costs...the average price schools charge parents for subsidised milk (11.4p per one third of a pint) exceeds the price supermarkets charge for non-subsidised milk (8.4-10p)."

PFI Panic

In principle the Private Finance Initiative could be a good deal for taxpayers. Instead of trying to build and maintain hospitals and schools itself, the government gets private sector specialists to compete for the job. Not only should the price be lower, but the risks of things like project overspend are transferred to specialist operators who are better equipped to manage them. Everybody should win by eliminating waste and inefficiency. Hurrah.

Yes, well...sadly it hasn't always worked out quite like that. For one thing, the government has used PFI principally as a tool to borrow off-balance sheet. The best estimate is that PFI debt now amounts to a chunky £60bn. And the pressure to borrow covertly means they have driven through deals which would have been cheaper funded directly by the public sector.

There's also a suspicion that our commercially naive hospital trusts and education authorities have not always cut a good deal for taxpayers. It's clear that many of the early PFI deals have subsequently yielded substantial refinancing gains to the contractor/bank consortia that did them.

Of course, just like a mortgage, all of these deals commit some public sector entity- such as a hospital trust- to a stream of payments stretching many years into the future. And the sums can be big, say a quarter of a hospital's annual income for the next 25 years. If they don't pay up, they can expect the bailiffs. Whatever the spin says, this is public sector debt.

Now, finally, the Treasury seems to have woken up. Hospitals could go bust, just like the PFI Queen Elizabeth in Woolwich, whose Chief Executive says:

"In traditional commercial terms we are insolvent - and we are not alone. We are relying on temporary cash borrowing to enable us to pay our creditors, staff and PFI partners. It reaches a point where there is no way out on your own. Somebody is going to have to come along and restore our balance sheet."

That "somebody" of course is the Treasury. Time to hit the panic button.

Which is why they've just pulled the plug on the biggest PFI deal of all- the £1.2bn Barts/Royal London rebuild. Well, strictly it's Commissar Hewitt who's done the deed ("We have not ordered a review of the whole Barts and London PFI scheme. We have simply asked the local NHS to commission an independent review looking again at the proposed redevelopment"- hmm, I see).

Unfortunately for us taxpayers, the PFI consortium involved- Innisfree/Skanska- have met these panicky prevaricating politicos before. They evidently took the highly sensible precaution of getting themselves a contract. Which reportedly says "if the scheme is not approved by the end of January, Skanska will be entitled to leave the project claiming £100m costs, or continue on the basis that it will be paid more".

So that's another £100m down the drain, then.

How many MRI scanners is that?

The Docs at Barts/Royal are naturally up in arms, demanding Tony step in. Fat chance of that. Perhaps their time would be better spent sorting out the Commissar's arse and elbow problem.

Tax Funded Propaganda

I try to stick to a self-denying ordinance on the £3bn pa telly-tax funded BBC. There are plenty of other blogs, like the excellent Biased BBC, devoted to recording its egregious left-wing propagandising.

But sometimes I just can't stop myself.

This morning's Start The Week was too much. Presided over as usual by Mr Jackie Ashley, it featured Estelle Morris (telling us once again why school choice was bad because aspirational "middle class" families would only choose the good schools), a leftish novelist, a leftish comedian, and Jackie Laws.

Laws was promoting her book 'Big Pharma'. This seems to be the usual stuff about dark Drax Industries style corporations stuffing us full of harmful chemicals and making a fortune in the process. As far as I could tell, she believes most new drugs are basically recycled aspirins, but huge advertising and doctor entertainment budgets convince us they're important breakthroughs. She wants politicians to protect us.

Er...would they be the same politicians that refuse to fund the Herceptin breast cancer treatment, while simultaneously spending billions on hopeless bureaucratic gridlock?

Naturally, Ashley and the BBC did not think it necessary to balance these cloud-cuckoo lefties with even a single opposing voice.

Roll on privatisation.

PS Talk of all those drug company freebies made me wonder once again about the chauffeur-driven Roller the splendid Dr Crippen uses on his rounds.

Sunday, January 15, 2006

UK Overtakes Germany- In Tax

A depressing article in The Business, reporting how Gordon Brown's tax and spend policies are dragging us behind supposedly high tax Germany:

"The UK fiscal burden will hit 42.4% of GDP this year. By contrast, the fiscal burden in Germany will fall to 42.1% of GDP, less than Britain’s for the first time in recent history. Britain will also outspend Germany from next year, OECD figures show. In 2007, German government expenditure will fall to 45% of GDP, while British public spending will hit a new high of 45.7% of GDP."

As we've blogged many times, higher taxes mean slower long-term growth. Gordo's 4-5% increase in the proportion of GDP going in tax will likely reduce our trend growth rate by about 0.5% pa.

Under Labour, Britain has lost its position as the low-tax enterprise capital of Europe. And we will all pay for years to come.

Another Terrifying Shambles

You're a headteacher. It's Sunday night and you've been watching the hysteria over paedophile teachers with mounting anxiety. Maths is a difficult subject to recruit for, and Mr Boggis seemed OK.

But then again...

Have all the forms been filled in, and the boxes ticked? With the press in full cry, best to make sure. You couldn't expect any help from the education authorities- right now they need to throw some raw meat to the dogs quickly, and you could well be it.

Better check. Right away.

But how?

Onto the DfES website and search for List 99. Of course, you've heard of the List before now- possibly from one of the million DfES circulars you get every month. But what exactly it is, and how it works...you're still unclear.

The first couple of search links are clearly directed at Supply Agencies and not you. But what of the third- "URGENT: CRIMINAL RECORD BUREAU: ARRANGEMENTS FOR CHECKS ON STAFF". Sounds right on the button, so you bring it up.

And what you get is three pages of this:

In case you can't see, it's not so much "URGENT ARRANGEMENTS" as an indecisive, incomprehensible, contradictory, struck-through, underlined, multi-coloured, total effin' shambles.

You're completely on your own.

Which of course, is pretty well where Ruth Kelly finds herself tonight.

It's not that Ruth's a bad person per se, but as Matthew D'Ancona points out:

"What Mr Reeve's case has disclosed fully is an unbelievable thicket of bureaucracy, failed communication and downright idiocy, a system apparently tailor-made for the devious paedophile in its provision of convenient loopholes.

If there is a single lesson to be drawn from last week's scandalous disclosures, it is that politicians are not fit to make discretionary judgments about those who represent a risk to children.

And how can a modern government, responsive to public anxieties and proud of its supposedly "joined up" policies, not know how many registered sex offenders will be working in classrooms and school gyms this week? If only this were all Ms Kelly's fault. As far as I can see, the whole lot of them are to blame."

We need to remember this case because it so clearly exposes the sham at the heart of big government managerialism. Organisations as big and unaccountable to customers as our nationalised education and health systems are organisations that cannot work.

They're nearly always a shambles.

And sometimes they're downright dangerous.

Saturday, January 14, 2006

Too Close To Home

Chances are your local NHS is in financial crisis right now. Following recent TV appearances by the Criminally Patronising Oleaginous Patricia Hewitt, we're all aware of that in some dim distant sense.

But Tyler has now realised it's actually a bit too close for comfort. Because it turns out our local
Surrey and Sussex Strategic Health Authority is one of the worst. In fact things are so bad that the Audit Commission has issued a special report "in the public interest under section 8 of the Audit Commission Act 1998". Does it get any worse that that?

The Commission runs through the usual catalogue of unforgivable inaction and general bureaucratic incompetence, but the bit that really caught my eye was when they let slip how it is proposed to address the deficit:

"Effective commissioning and robust demand management were identified as key to transforming this financially unsustainable model of healthcare by effectively managing entry into the healthcare system."

What does that mean exactly? Not altogether sure I like the sound of it.

The report says no more, but a quick Google throws up another report from the sinister sounding PCT Configuration Reference Group. They spell it out:

"Demand Management: The ongoing S4 work on developing sustainable services in Surrey and Sussex has shown that effective management of demand will be crucial to the future sustainability of the health economy. The population of Surrey and Sussex is a high user of secondary care health services. The effective management of demand will require the ability to incentivise and engage clinicians in both primary and secondary care to ensure that patients are treated in the most appropriate way and within budget."

Now, correct me if I'm wrong, but that sounds awfully like rationing- even stricter rationing than we have right now. Despite all that extra money.

As somebody once nearly said, if you live in Surrey or Sussex, I warn you not to pay tax; and I warn you not to get sick.

DWP Shambles

We're always blogging about the Department For Work And Pensions. Hardly surprising when it spends £125bn pa of our money and employs 120,000 civil servants.

Of course, it's much more than that. DWP is a complete shambles that has had its accounts qualified for the last fifteen years, and on its own admission loses £3bn pa to fraud. As the Public Accounts Committee reported in October, DWP "still has a long way to go...the Department is still not performing to the standards that might reasonably be expected...and has problems with basic record keeping...the Department needs estimates that are more
accurate than the nearest £500 million...unable to find supporting papers in 106 out of 800 cases selected by the National Audit Office for checking...etc"

A total shambles.

And a total shambles being made even worse by Gordo's ruling that 30,000 DWP posts must be axed as part of his Gershon "efficiency" drive. Never mind the fact that many of the inefficiency problems result from his own ludicrously complex benefits system. Somehow, his civil servants must now manage with a quarter fewer staff.

Inevitably, Departmental morale has slumped to an all-time low- and that's pretty low. Over on the Civil Service Forum DWP unfortunates are blogging about the results of an internal staff survey:

"...confidence in Senior Managers has plummetted from 18% to just 10%. Taking into account the reduced response rate, less than 6% of staff have confidence in Senior Managers. If you work in a team of 17 people just one person from that group will have confidence in Senior Managers."

"Overall the results are mixed," is the languid response from the Permanent Secretary, Leigh Lewis CB (for you oiks out there, that means Companion of the Bath). And he's sent round a morale boosting email explaining the exciting David Brent paradigm shift he'll be facilitating:

"being visible and approachable; too many of you see your senior managers as remote and uncaring. ...I have already asked my 300 top managers in the Department to spend a lot more of their time this year out talking and listening to you;
- living our values; I want to breathe more life into the Department's values by making them the glue which binds us together..."

Sorry I think I've had a siezure.

DTI Paper Factory

The DTI costs us about £5bn pa, and it is primarily known for useless and time consuming schemes designed to hobble British industry.

It is therefore sometimes forgotten that it is also a major publishing house. According to a Parliamentary written answer:

"Between 1 January 1997 and 20 October 2005, the number of titles produced by my department was 10,066, the total cost of producing these titles including commissioning and printing amounted to £66,007,130. This equates to an average cost of £6,600 per title."

10,066! That's more than Penguin.

And what are they publishing? Take one at random from the 135 listed under Equality and Diversity: "Better services - better working lives. How health and education services are delivering for women". That turns out to be 74 pages of tedious propaganda on Labour's social spending splurge, and I doubt that anyone has read it other than the authors. Maybe not even them.

Friday, January 13, 2006

Tough On Crime

Four hundred years ago, my good friend Guido Fawkes was taken to the Old Palace Yard, and there hanged, drawn and quartered "to the great joy of all beholders". And you know what? Nobody else tried to blow up Parliament from that day to this.*

These days of course, as with all crime, we have new ways of dealing with Treason: Home Office Written Answers on Tuesday:

'Mr. Hollobone: To ask the Secretary of State for the Home Department when the last conviction for treason was; and what penalty was imposed.

Fiona Mactaggart: The last conviction for treason was in 1994, under the Treason Felony Act 1848. The sentence was a community supervision order.'

Doesn't quite have the same ring to it, does it.

And I wonder which is more cost effective.

* Yes, OK, the Luftwaffe, the IRA, Islamic extremists...but let's not split hairs.

Cost Of Fiscal Churn

Fiscal churning takes place where governments both tax households and pay them benefits at the same time: taking money out of one pocket, and putting it into the other pocket of the same people. In the late nineties, the OECD estimated such churning accounted for about 7% of household incomes in Australia, up to a staggering 34% in Sweden.

We have no official UK estimate, but we do know it takes place on a massive scale: even families on incomes of £55,000 are eligible for Child Tax Credit. My own estimate, based on ONS data, is that the UK's fiscal churn is of the order of 10% of household incomes, or some £70bn pa. This relates just to cash benefits: adding in health and education benefits would almost treble the figure.

Now, the administration of both tax collection and benefit payment is notoriously inefficient, so the scope for waste is considerable.

The Department of Work and Pensions alone spends £6bn pa on administrating benefit payments of £116bn. That's 5% gone on admin. On top of that there are overpayments and fraud, which they estimate account for about another 1%.

The tax authorities reckon to do better, with a cost of collection running at around 1%. Although there's also the £1bn pa written off as non-collectable by the Inland Revenue and a corresponding £2bn written off by Customs (hmm...I know a Sarf London gent with a baseball-bat who might be able to help there). Customs admits it loses yet another £3bn pa through fraud.

So totting it all up, the total cost of fiscal churn- admin, errors and fraud- is about 8% of the amount churned.

Which means it's costing us £5-6bn every year.

All to transfer money from one pocket to another.

Picture: Ostler Family History Net

"Dirty Little Secret"

The Times carries a major expose on the rancid connections between commercial lobbyists and MPs:

'Organisations including the nuclear, pharmaceutical and drinks industries are funding and even writing policy reports in the name of influential all-party groups (APG) of MPs and peers. There are nearly 300 such groups in Parliament focusing on a huge range of subjects. The Times has established that two thirds of these are now being assisted by special interest groups.'

As a case study, they expose how consultants helped the pharmacy industry win a slice of the £20m morning-after Pill market:

"In 1999 came the creation of the All-Party Pharmacy Group, funded by four pharmacy associations. It immediately announced that its first inquiry would be into over-the-counter emergency drugs. In its report in February 2000 it concluded: “Many women seeking emergency contraception, especially younger women, feel uncomfortable at having to visit their GP [for a prescription] . . . Community pharmacists are able to offer expert advice on the use and appropriateness of emergency contraception without the need for an appointment.”
Within months the rules were changed."

The pharmacy associations operated through a lobbying company, that was responsible for drafting most of the MPs report (chairman Dr Howard Stoate- above with a fat man).

Of course, inside the Westminster bubble most people reckon they are well aware of such practices, and can "adjust" for them when evaluating what MPs and others might say. Indeed, during my recent disastrously liquid lunch with Mr Fawkes, I was frankly shocked by his worldly-wise acceptance of such rottenness. I urged him to remain pure and for the sake of his immortal soul to work tirelessly to expose those concerned.

From the outside looking in, I find this completely unacceptable. I'm with the Times:

'...the dirty little secret exposed today is the emergence of a culture of complacency, collusion and, possibly, worse. Politicians must clean house, and now.'

Thursday, January 12, 2006

Boffins For Sale

If reports are to be believed, top private equity players, the Carlyle Group, will make up to £300m from the floatation of Qinetiq, the high-tech boffin company spun out of MOD's Defence Evaluation and Research Agency, and apparently named after Q. Not bad for eighteen months work.

Naturally, there's much outcry about the loss to taxpayers. Ex-Shell man Vince Cable says:

"I'm seriously worried that the government massively miscalculated the value of its own assets and has sold the taxpayer short."

Which is almost certainly true: Qinetiq owns a treasure-trove of intellectual property, which the IPO bankers are now busy bigging up to potential investors.

But amid the outcry, nobody should have anything but praise for the Carlyle Group. Those guys can recognise underpriced value when they see it, and were even able to convince Qinetiq and MOD to select them as "partners" without an open contest.

And by God, have they delivered: not just for themselves of course but also for the 56% still owned by the taxpayer. That's now apparently worth some £500m more than it was when the Commons Defence Committee looked at the deal in 2003.

OK, doubtless Carlyle have brought some strategic expertise and some useful commercial connections to the table, but the main thing they've done is to show us once again why our politicians and senior civil servants are not to be trusted with our money.

PS On the fatcat front, Qinetiq's IPO will create quite a few multi-millionaires: 'About 2,000 Qinetiq staff own 13% of the business, with the lion's share belonging to top management. Sir John Chisholm, the executive chairman, stands to make an estimated £24m from an initial stake of £129,000. Sir John was appointed chief executive of the Defence Evaluation and Research Agency, Qinetiq's forerunner, in 1991.' This is despite assurances given to the Defence Committee that the fatcat issue had been dealt with by setting the pay-out hurdles at seemingly impossibly high levels (30-40% rates of return). Looks like those hurdles may have been achieved after all. Of course, any similarity to all those utility bosses- who after years of running underperforming businesses in the public sector only had to remain at their posts through privatisation to cash out- is purely coincidental.

Wednesday, January 11, 2006

Failing Schools

When Tyler recently visited his old state grammar school, the headmistress showed him a foot high pile of paper on a table beside her desk. It was the pending tray for various official forms and dockets she was currently working on. Compared to the fearsome Wilfie of my day, her authority is strictly coralled, controlled, and monitored from above. Of course, if anything goes wrong, she's on her own.

I recalled this as I read the National Audit Office report that more than a quarter of primary schools and a fifth of secondary schools have no permanent head. The NAO says that heads are the “key to sustaining performance and improvement in any school”, but they also acknowledge that the numbers of “appropriately experienced people” applying for the posts are falling.

The NAO says that 23 per cent of secondary schools and at least 4 per cent of primaries are “poorly performing...We estimate that these 1,557 schools educate around 980,000 pupils, or 13 per cent of the school population...a sizeable number of schools encounter problems that put children’s education at risk, and some do not provide good value".

Ministers spent £840 million on improving struggling schools last year and £160 million on replacing failing comprehensives with city academies.

We need fundamental reform in our schools. Head teachers and their governors must be freed from Whitehall interference and form filling. They must be given real authority to manage their own schools, just as their customers must be given real choice.

Tuesday, January 10, 2006

What's Wrong With The Tap?

The ineffable David Lammy has vouchedsafe that the Department of Culture Media and Sport spent £19,059 of our money on bottled water last year.

£19,059 that could have been saved by using the tap.

Or maybe it was only for special occasions, like winning the Olympics. Now let me see...twenty grand...500 employees...that's 40 quid each. Down our local Sainsburys you can get a six pack of Caledonian Spring, 2 litre size, for £1.99. Which means...umm...40 divided by 1.99, times 12, equals...why, that's 240 litres per head. A swimming pool each.

Or maybe the taps just don't work.

PS At least it's not as much as DCMS's media monitoring costs, which are running at £120,668.96 (2004-05).

Crack Down On Tearaways

Tony's ordered a crack-down, and to underline his seriousness he's even hosed some graffiti off a wall:

"Youth crime and disorder have risen sharply, but very few young offenders end up in court, and when they do half are let off with another warning. Far too often young criminals offend again and again.

We will replace repeat cautions with a single final warning. New parental responsibility orders will make parents face up to their responsibility. We will tackle the unacceptable level of anti-social behaviour and crime on our streets. Our 'zero tolerance' approach will ensure that petty criminality among young offenders is seriously addressed. Community safety orders will deal with threatening and disruptive criminal neighbours."

That's a crack-down alright. Taken from Labour's 1997 Manifesto.

Or what about the one he promised in 2000- an end to "yob culture", fixed £100 penalties for offences of disorderly behaviour in public places, police to shut down rowdy pubs and clubs, a ban on drinking alcohol in the street, child curfew schemes for those aged 9 to 15...

I can't go on. He's had 30 Criminal Justice Acts since his 1997 Manifesto, and setting aside the statistical manipulation, the problems are as bad as ever.

Of course we know what today was really about. It's the Home Office's top strategic priority, accounting for £6.2bn of the HO's spending this year:

To ensure that"People are and feel more secure in their homes and daily lives," coupled to the inevitable target to "Reassure the public, reducing the fear of crime and anti-social behaviour, and building confidence in the Criminal Justice System."

"Feel more secure....reassure the public...reduce the fear...build confidence."

If there's one thing we don't need it's another propaganda exercise.

Directed at us.

Paid for by us.

Monday, January 09, 2006

How Much Waste?

As posted yesterday, the Taxpayers' Alliance Bumper Book of Government Waste 2006 is out at the end of the month. The individual examples of waste are jaw-dropping enough- even when they don't cost that much. But as someone once observed, a pole dancing class here, a pagan priest there, and pretty soon you're talking real money.

In this case, a denture loosening £82,000,000,000 pa according to TPA.

And it's not a figure plucked from the air. £82bn is derived from the pathbreaking research carried out at the European Central Bank by eminent economists Afonso, Schuknecht, and Tanzi. They conducted a statistical analysis across 23 industrialised economies, comparing government "outputs" with "inputs". For outputs, they measured end-results like life expectancy and infant mortality as health outcomes, educational attainment, and the equality of income distribution- all the stuff government says it's doing for us. Inputs comprised government spending.

Overall, they found that the UK falls well short of best international practice in terms of how efficiently government turns spending into valuable outputs. Specifically, they estimated that the UK could reduce its public spending by 16% if our government could match the efficiency standards of the best. £82bn is simply 16% of current government spending.

Now £82 bn is much bigger than the Gershon Review's estimate of waste- £21bn- and even the James Review figure- £35bn. But that's because they tried to construct a figure from the bottom-up, largely accepting the existing institutional structure, and its concomitant spending programmes and mindset.

If we are ever going to grip the waste issue properly, we need a much more fundamental rethink. We need to focus on end-results- as in the ECB study- and be prepared to learn from others who are operating their public services so much more efficiently than we are.