Friday, June 30, 2006

Questionable Beards At CSA

Today's National Audit Report confirms what we've blogged many times- the Child Support Agency is a national disgrace:
  • It costs taxpayers 70p for every £1 it collects
  • Its case backlog is one-third of a million
  • It takes nine months to process a case

The NAO points out the previous attempts at reform have cost us £540m, and achieved zilch. A further £321m is being spent on yet more reform, but nobody expects much improvement. So nearly a billion of our money blown on tinkering with a hopeless institution.

Of course, the government says it's drawing a line under its incompetence by appointing a Wise Man to find The Answer. Unfortunately, the... ahem, "wise man" in question is Sir David Henshaw, an old student politics mate of Jack Straw with a highly questionable beard (see here), whose previous experience was running Liverpool City Council. The latter is a local authority which has always been a byword for waste, incompetence, and often sleaze, and which as we noted previously, after its time under Henshaw was rated by the Audit Commission in the bottom 2% of councils for value for money.

So far, so bad. But there's a broader point.

The CSA scandal is no more than a particularly outrageous example of the Big Truth: Big Government is good at talk, but totally crap at delivery. Whether it's the CSA, the Immigration and Nationality Directorate, the Rural Payments Agency, the Probation Service, the Department for Work and Pensions, the Department of Health, or the Department of Extreme Wishful Thinking, delivery is not us.

Beards ain't gonna help.

Thursday, June 29, 2006

Nurses Off The Job

Boom and Bust: new nurse registrations

Now the NHS has hit the financial buffers, thousands of newly qualified medical staff are unable to find jobs. The Doc has recently blogged unemployed doctors, and today comes news of unemployed nurses:

"A survey of 20 universities suggested that more than 80% of nurses qualifying this summer have yet to find a job, compared to 30% this time last year...trusts have imposed recruitment freezes because of mounting deficits."

Obviously we feel for those who will now have to pursue Career Plan B at Tescos, but as taxpayers, what we really want to know is how much has our hopeless government wasted on their now unwanted training?

The facts are that it costs us about £30,000 to train a nurse (excluding any costs incurred in training placements in hospitals etc). And since current throughput (degree and diploma) is about 20,000 students pa, the waste for this year alone is of the order of £0.5bn. Another £0.5bn.

There are two points to draw out.

First, what we are witnessing is just one more example of a Big Government boom and bust cycle. Given the slightest chance, our commissars will always turn on the resource taps to max- irrespective of whether the system can stand the strain. In nursing the number of new registrations doubled between 1998 and 2004, achievable only by vastly increasing the recruitment of dubiously qualified overseas nurses, and by dropping the entry standards for UK trainees.

Between 1998 and 2001, overseas nurse recruitment quadrupled to 15,000 pa. Meanwhile, rejection rates for UK training courses have fallen, so that for example only 4% of trainees now have any A levels. Anyone who has had recent experience of an NHS hospital will be only too aware of the consequences.

Second, the cost of training nurses is as nothing compared to the cost of training those unemployed Docs the Doc blogs about. On average it costs us taxpayers £250,000 to train a doctor, and that's without taking account of the costs of hospital placements etc. So if we don't then employ them, we are burning money at a quite phenomenal rate (all figures taken from The Education and Training of Medical and Health Professionals in Higher Education Institutions from the Higher Education Policy Institute, November 2005)

Ps I'm going to investigate the economics of doctor training more closely. We are spending well north of £2bn pa on training doctors and dentists. Most dentists then work in the private sector, and as Doc Crippen tells us, GPs are now paid like rock stars. So... er, where's the taxpayer value?

Useless Appendages Pricelist

Deputy Prime Minister- £2m pa

The supersize DPM mega-set comprises: £133,997 salary, pensions contributions £35,911, allowances in 2004/5 of £105,494, £1.3m wage bill for 20-strong office, £195,00 pa grace-and-favour flat in London, official car £49,000, other travel £93,034, Whitehall office £64,267, rebranding the Office of the Deputy Prime Minister £12,000, and maintaining website £30,000pa; plus free lunches, snack attacks, and secretarial facilities to suit.

Lord Speaker of House of Lords- £0.5m pa

The brand new Lord Speaker package comprises: salary £102,685 pa, holders allowances £33,990 pa, black and gold Jedi robe £10,000, other diverse robes £700 each, private and personal secretaries c£60,000 pa, private office c£50,000 pa, kipping rights in the Lord Irvine Memorial Suite £150,000 pa, official car or gold carriage as required £50,000 pa; plus all the usual facilities with respect to free travel, family travel, mortgage subsidies etc etc.

PS For the discerning taxpayer, a complete catalogue of grace and favour properties is available here.

Wednesday, June 28, 2006

More Pants From The Home Office

As the inestimable Frank Field reminds us, the Home Office- and indeed the entire government - has long inhabited a parallel universe in terms of immigration.

"When the EU expanded to 25 members in 2004 the UK, Ireland and Sweden were the only countries which decided not to restrict people from the new member countries - notably Poland - taking jobs.

At the time the UK government predicted 13,000 workers a year from the new EU member countries would move to the UK for work, but the actual figure of registered workers was about 329,000 in 18 months."

Out by a factor of twenty. And that's only the new Europeans that have bothered to register.

But as Field says, this is much more important than just hopeless forecasting. It is by no means clear Britain can absorb such massive inflows:

"It is only because the BNP are so inept that the debate has not taken off...mainstream politicians should address immigration "before the BNP stumbles on somebody with talent...We are living on borrowed time. We can not continue on the assumption that the BNP will present leaders which turn off most voters, even if what they are saying is important."

Well put.

PS Mass immigration is clearly bad news for native plumbers, farm workers and cleaners. But is it even good for the economy overall? Although the conventional wisdom says yes, it's by no means clearout. See the analysis on Migration Watch.

The Answer

Experts on the case

Big Government gets a whole lot of stuff wrong, but one of its most abiding errors is an unshakeable belief in "The Answer": if it can just assemble enough experts, then it can find some technically optimal solution that all right thinking people can accept.

In the Soviet Union this found expression in a massive state planning system, harnessing the country's very best brains to the very best of American managerialism. We all know where that led, and you’d think it might have put most people off. But you can find exactly the same thinking today in the comments on the new Labour Home.

Britain's chief exponent of "The Answer" is Gordon Brown. From his early dalliance with post-neoclassical endogenous growth theory, through all those academic seminars at No 11, and onto his tortuously targeted tax credits, he has been infatuated with the Appliance of Science.

Of course, taken to its logical scientific conclusion, “The Answer” eliminates the need for politics altogether. You just leave things to the experts to manage for the benefit of all in the Best of All Possible Worlds.

And that’s exactly what Gordo did with his masterstroke of Bank of England independence. Whereas interest rates used to be decided in frenetic smoke filled rooms at Westminster, now a group of apolitical experts sits down once a month in the calm marbled halls of Threadneedle Street. It’s worked very well. As we’re constantly being told, Britain has enjoyed the longest period of low inflation and interest rates since 1327.

The indefatigable Doc Crippen has recently flushed out the possibility that Gordo is thinking of following the same approach with the NHS. Doc quotes an article in the British Medical Journal:

“…the NHS needs a system that replaces political dogma with clinically driven decisions, confrontation with consensus, unaccountability with democracy, and short term decision making with long term stability. The NHS is too complex and too vital to our future prosperity to be governed by the self interest of any specific party."

How much better to have a non-political expert committee modelled on the Bank's Monetary Policy Committee (pictured above):

"The proposed NHS body has similarities with that committee. Economic stability and the health of the nation are major factors in the country's prosperity. Both bodies' decisions would affect everyone in the UK; this is not necessarily true for the Home Office or the Ministry of Education, for example. Since its inception in 1997 people have respected the decisions of the Monetary Policy Committee, and the interest rate has ceased to be the political football it used to be.”


Healthcare would be much much more complex than the Bank of England’s task. In particular, the Bank has been set a single target - the inflation rate - which, give or take the odd bit of statistical goalpost moving by Gordo, is very clear and straightforward. But what target could he set for a Health Policy Committee?

To make Britain healthy? How healthy? How measured? And you do understand Mr Brown that you need to quadruple the health budget. And oh yes, you’ll have to ban fags, booze, unauthorised sex, super size BKs, the school run, slumping in front of the telly, computer games, and- especially- old age.

In reality a Health Committee would face a multiplicity of targets and a limited budget. It would be forced to make all those messy trade offs that cause so much difficulty today. Breast cancer drugs or IVF? Free nicotine patches or home visits from GPs? Free liposuction or stomach stapling?

And why would unaccountable "experts" be any better at making the right choices than politicians? Obviously the latter are pretty rubbish, but at least we can sack them.

Of course, Gordo’s not dumb and it’s quite likely this is just another eye-catching initiative. He needs a Big Gesture because he knows as well as we do that his huge NHS cash injection has failed, and there’s no more money in the pot.

But at some gut socialist level, Gordo still Believes. So despite all the evidence to the contrary, it’s quite possible he still thinks The Answer is out there somewhere.

God save us from the experts.

PS Experts come in all flavours. Of the ones shown in the photo, I've been taught by one, worked for one, and been called a clot by one. Sadly of course, one of them has died since the photo was taken.

Tuesday, June 27, 2006

NHS Supercomputer- Denobbling The Nobblers

The Comptroller and Auditor General of choice

We blogged the NAO Report on the NHS Supercomputer here. Given the disastrous nature of the whole enterprise, it was surprising the report was not more critical, and at yesterday’s packed Public Accounts Committee meeting, MPs quizzed the NAO’s head, the splendidly titled Comptroller and Auditor General Sir John Bourn, on why that might be.

Bluntly, had the NAO been nobbled by the Department of Health? All NAO reports have to be agreed with the department concerned, and the PAC Chairman said he’d heard this one had been fought over “street by street, block by block”. Another highlighted Nicholas Timmin’s assessment in the FT that it had been “the fiercest Whitehall battle for years". And listening to Richard Granger, the pugnacious husky killer who runs the project, you could easily see how that might happen.

Sir John, a dry old stick in the finest auditing traditions, played a very straight bat. He’d done his duty, and he wasn’t responsible for what journos might say. And actually, after two and a half hours of questions, denobbling as required, it became clear his report is deeply critical:

  • The whole project has been imposed from the top, starting with that notorious Blair "summit" in 2002. NHS clinicians were never consulted, and their principal champions at the DH (Professor Peter Hutton and Dr Anthony Nowlan) were dismissed after they'd refused to play ball with an outrageous post-hoc spin exercise
  • Support among GPs especially is still very low, despite furious DH backpedalling on their "one-size" plan, and some hastily cobbled measures supposedly going to safeguard patient confidentiality; as Doc Crippen keeps saying, GPs are quite happy with their existing computerised systems
  • Although this is the biggest civilian IT project ever, there was no serious cost-benefit analysis to support it. The government committed to a massive expenditure without quantifying the supposed benefits. And they still can't show the benefits will exceed the costs
  • The costs are way higher than originally advertised. That's because the now estimated £6.2bn spend on the central core project takes no account of the massive local spending on implementation. If all goes to plan, the NAO puts the total at £12.4bn. But Lord Warner puts it at £20bn, and others have put it as high as £50 bn. The bottom line is that nobody knows, and the financial burden on local health authorities is open-ended
  • The guts of the system-the National Care Records System- is two years behind schedule and is not working; boasting about all the peripheral gimmicks they have put in is so much flim-flam: email is hardly new technology
  • Although the DH has managed to procurement process well, inasmuch as it had properly competitive tendering and fixed price contracts, because of all the usual problems between IT customers and suppliers, as the problems have mounted, the hard-pressed suppliers are biting back: Fujitsu have already fined the NHS £19m for failing to provide sufficient support, and Accenture's lawyers are doubtless hard at work on recouping their $450m hit.

Overall, we were left with the same picture: this massive programme has been imposed on our battered NHS by pig-headed commissars and husky killers who are convinced they have "The Answer", and will use all means at their disposal- including our money- to drive it through. Cowards and rumour mongers will be shot!

Our advice remains the same: keep up those BUPA payments and be sure to ask your GP for a hard-copy print out of your medical record.

Monday, June 26, 2006

A Bigger Pie

Baking a bigger pie is the holy grail of economics. That's why Gordo said he was going to use Jamie's edgy new recipe for post neoclassical endogenous Tuscan pigs trotters. Sadly he did no such thing, falling back instead on yet another helping of ancient British Railways Scotch Egg, with extra tax and Stalinist planning. Not even nouvelle, let alone Jamie.

Now the TaxPayers Alliance is having another go. They want HMT to take a proper look at Jamie's cookbook:

"At the moment the Government uses a "static" economic model which assumes that raising taxes by a certain amount increases revenues by a set amount. This is obviously wrong – doubling tax rates will not double revenue because of the negative effect on incentives and the health of the economy. Similarly, the Treasury’s economic modelling does not acknowledge that tax revenues can hold up when taxes are reduced because of the positive impact on incentives and the wider economy. These are known as the “dynamic effects” of tax cuts – and there is plenty of evidence from around the world showing their extent (Australia and Ireland are two recent examples)."

To get things moving, they've got 40 leading economists to sign a letter calling for HMT to establish a Dynamic Analysis Division, along the lines of that recently set up inside the US Treasury (see here for the more detailed case).

As far as we know, these 40 economists were not among the 364 who signed that notorious letter to Mrs T in 1981.

PS For the 364 names that will live in infamy, see here. A key difference is that they were the establishment trying to hold back the future: the TPA's 40 want to bring it on.

Sunday, June 25, 2006

Recent Bonfires- 21

In the news this week:

£420m on teacher sickies- "Teachers took a record number of sick days last year, costing taxpayers £420 million in supply cover. Classroom teachers missed an average of 9.3 days, compared with six days for private-sector workers. Schools lost 2.8 million teaching days to staff illness in 2005, with 302,300 teachers missing work - the first time the total has topped 300,000. Unions blame the demands of the job, long hours, red tape, endless Government initiatives and unruly pupils." (Sunday Telegraph 18.6.06)

£3bn Sure Start scheme making things worse- "Labour's flagship project to help deprived children and families is making crime and truancy worse, not better, an alarming investigation revealed. The £3 billion Sure Start scheme is adding to the difficulties of schools and the spread of violence and stealing instead of helping to solve them. Families with 'greater personal resources' may have been able to edge out less able families from Sure Start benefits like help with affordable childcare and play, while the worst-off families may have found attention from Sure Start workers 'stressful and intrusive'. Earlier this week Sure Start children's centres began distributing a 'Dad Pack' which advised fathers that if they wished to play with their child they could go to a playground. It added as a safety tip that they should check whether bath water was too hot before putting a baby in it." (Mail 16.6.06)

£5m for unworkable gun register- "The National Firearms Register promised by the Government in the aftermath of the Dunblane massacre has been condemned as "fundamentally flawed and not fit for purpose". An internal police report describes the database, intended to carry information on everybody who has applied for a gun licence, as unworkable. A report by Lancashire Police reveals that the current system is so riddled with problems that its officers had to abandon a pilot scheme last year. The system is described as having "persistent and immense problems" and "delays of a magnitude which could not be reasonably expected". (Telegraph 11.6.06)

Total for week: £3,425,000,000

Thursday, June 22, 2006

Choking Smokers

Because of punitive taxation, Britain has the most expensive cigarettes in Europe. Quite right too you say - disgusting habit that costs the NHS a fortune. And as a non-smoker, obviously I agree. In fact, I doubly agree because the more tax smokers pay, the less I have to.

The problem is that our dirty rotten smokers won't play ball. They look at the five quid for twenty they have to shell out here, and wonder why they don't buy for two quid from Spain. Or even 50p from Latvia. And getting on for 20% of them do just that, via those guys down the pub/car boot sale.

The consequence- as the Public Accounts Committee reminds us today- is a big loss of tax revenue. Customs and Excise put the overall loss at £2.9bn pa- no less than 27% of the tax due- and the tobacco companies reckon it's even more. So pretty well the equivalent of 1p on the standard rate of income tax.

C&E claim they're getting a grip on the situation, which is vital if the Chancellor's optimistic revenue projections are to have any chance. But as Rummie puts it, we don't know what we don't know: in reality, it could easily be heading the wrong way.

What this illustrates is the limits to taxation. Because even though the government has got political support for a punitive tax on a beleaguered minority, it doesn't actually have the ability to make it stick. The tax is at such an unreasonable level that normally law-abiding citizens are quite prepared to circumvent it. And as high tax countries such as Italy learned long ago, once public acceptance of high tax is lost, it gets fiendishly difficult to maintain fiscal order. Not to mention the broader issue of bringing the law into disrepute.

The final irony here is that many of the black market ciggies now sold in Britain are cheap forgeries containing camel dung and shredded Egyptian underpants. Nobody knows what the long-term health effects are, but issuing free Capstan Full Strength would probably work out cheaper for the NHS.

PS Ciggies are not the only products subject to punitive taxation of course. When you fill up with unleaded, getting on for 70% of what you pay is tax. And ironically- because of the 50p flat rate duty- if the pump price falls, the percentage taken by the government increases. At 70p, roughly 85% goes to government. The problem for us is that it's much more difficult to smuggle.

Glug Glug

It makes you want to vomit. Just like all that terrible French wine supermarkets used to sell before the Australians arrived to show us peasants that wine didn't actually need to taste like paint stripper.

Of course, what always made the Hirondelle taste even worse was the knowledge that it was heavily subsidised by EU taxpayers. And now, those same EU taxpayers- ie you and me- are to stump up €500m in each of the next five years to convert Europe's subsidised wine lake into disinfectant. At least it won't be too difficult.

The EU also intends to "help" the producers break into new markets. How the eff will that work? EU bureaucrats have certainly proved they can destroy those "law of the jungle" markets, but create new ones? And how will they reduce the acreage (sorry, hectareage) of vines planted illegally to claim their own subsidies?

Stop the subsidies now, and use the wine lake for its original purpose. Stripping paint.

Wednesday, June 21, 2006

Livingstone New Town

Plans for Livingstone Platz

Good to see King Ken keeping up the fine tradition of tin-pot demagogues throughout the ages. The man voted in by just 16% of Londoners has now pledged he will build a shining new city truly worthy of his memory. Flanked by glittering ranks of outreach commissars, he lifted his eyes to heaven and made this solemn tryst with Destiny:

"Lord Rogers will champion my vision for exciting, sustainable and world-class architecture and design."

The King is an inspiration to us all, and we eagerly await the bulldozers. Perhaps they could start with that ugly goldfish bowl currently wrecking the view of Tower Bridge.

Olympics Revving Up Nicely

2012 Organising Committee

Costs are escalating, and "according to documents circulating in Whitehall, officials at the Department for Culture, Media and Sport plan to “top slice” £410m from the lottery good causes to help to fund the Olympics".

Sports Minister Richard "Dick" Caborn has already admitted costs have increased by £500 m since we "won" the Games, the excuse being 7/7. So the lottery piggy bank is being raided again.
Free money? No. Those lottery funds are a tax on gamblers which should be used to reduce taxes for the rest of us. Not to pour down the 2012 toilet.

PS Dick's only qualification for running the toilet is that he once shared a bed with Arthur Scargill. No wonder Arthur's on the team.

Promising The Earth

While we griddled ourselves beside the pool, I made a further attempt to work through my vast stack of unread books.

J. Paxman's "The Political Animal"- bought as usual from a remaindered shop- was not as satisfying as it should have been, but his conclusion is on the money: Westminster electoral politics is now little more than a fantasy auction in which the parties compete in making extravagant promises they cannot deliver. And increasingly, they promise exactly the same things.

The Big Extravagant Promises are of course wildly improbable stuff like an excellent NHS free at the point of use. Which, despite all the evidence, they all still reckon they can deliver (see the excellent Doc Crippen here and here for how charging would improve healthcare).

But politicos are also happy to make small extravagant promises, especially if they're headline grabbers. IIRC Jim Hacker once personally intervened to extract a kitten that had got stuck up something unpleasant. Was it John Prescott?

Now Tony has intervened to send those 400 swindled schoolkids to see the World Cup. He reckons getting those kids to a match is "something we need to work on". So right up there with Iraq, Afghanistan, imploding public services, increasing crime, global warming, global poverty, Cherie's hair, etc etc.

Of course, World Cup tickets will be a lot easier than sorting any of the Big Promises: all he's got to do here is phone one of his corporate cronys, because as we know, corporate sponsors get their 20% of the tickets specifically so they can give them to our needy MPs and other deserving cases. Much cheaper than the £500 grand they would cost street retail.

Then we can look forward to football crazee Tone accompanying them to the match itself. What joy.

PS Paxman does have some interesting snippets in his book. For example, did you realise that 62% of British Prime Ministers lost one or both parents before the age of 15? Or that Prezza's dad was a magistrate, rather than the horny Son of Toil we'd been led to believe? No wonder they were appalled when he failed his 11 plus.

Catching Up

Back from rubbing sunburned shoulders with a splendid collection of C list celebs* poolside, we've missed a packed week. Our old friends at the Home Office have been particularly busy:

  • Prison places run out- what a comfort that Reid has "not ruled out" a new prison building programme. Unfortunately, these clowns have done FA about it for the last 10 years, and now the money's run out. Of course, he could easily find it by cutting some of the especially useless bits of his empire (eg £1bn pa on the hopeless Probation Service), but Prescotts might fly
  • Strategic melt-down- the monumental incompetence and wishful thinking surrounding the "management" of convicted paedophiles is highlighting the real problem- a total absence of workable strategy at the top. Little wonder that the cops are despairing at Reid's panicky response to the News of the Screws campaign for Sarah's Law- does he really believe any of us are still fooled by Labour's increasingly ludicrous attempts at headline management?
  • Border controls collapse- the government's own counter-terrorism advisor reports that Customs officers are too thinly spread to deter bad guys from coming in via private jet. Or just hiring a floating gin palace and joining the drug runners flooding ashore at Brixham and Salcombe

Home Office alumni have also been busy in their new jobs. Hopeless Beverly Hughes- the New Labour apparatchik eventually forced to resign over the Morecambe Bay cocklers- is happily back at work at the DfES. There she's been assuring us the Department takes their shambolic paedo screening system "very seriously". Another comfort.

And the infuriating Barbara Roche- sacked as too dire even for Tony- has been opining on management reform at the HO. Well, she's been telling us things need to change, but it's all very difficult, and er... umm...well they jolly well need to be sorted out... by... well, we need a committee of, you know, real experts, who sort of know what to do.

There's nothing we can add to that.

* As regards C list celebs, the spotting was all conducted by Mrs T who has a frankly unhealthy familiarity with the OK Magazine form book. Increasingly, I'm like that High Court judge who used to ask "Who are the Beatles?"

Friday, June 16, 2006

NAO Report On NHS Supercomputer

The long-awaited NAO report on the NHS mega-IT project was published today. In truth, Mrs T and I are currently in the Med taking in some rays, so I haven't yet properly digested its 63 pages.

But the big picture is that the NAO estimates total costs at £12.4bn. What's more, they set out a detailed breakdown of their figures- the first time we taxpayers have been given any detail at all. But they also warn ominously:

"This is not a budget but an amalgamation of fixed price contracts, extrapolation of costs beyond the contract periods and provisional forecasts of other costs."

In other words, don't be surprised if it goes a lot lot higher. Because while £12.4bn is five times the government's original figure, it's a whole lot less than £30-50bn quoted by industry insiders.

Bizarrely, it's also a lot less than the £20bn quoted by Lord Warner only a couple of weeks ago. Apparently, his civil servants told the NAO he got that wrong. Well, I guess why would he know? He's only in charge.

Which is a pretty fair summary of the whole thing- the numbers are all over the place. And the £3.4bn the NAO have pencilled in for local costs are clearly little more than a stab in the dark.

The report needs much closer study, but one thing that immediately jumps out is the estimate of benefits. Because you'd have to think we wouldn't be spending all this dosh unless government was pretty clear about the benefits, right?

Er, wrong:

"It was not demonstrated that the financial value of the benefits exceeds the cost of the Programme. The Treasury’s guidance states that benefits should be valued when possible, but recognises that sometimes they cannot be. In this case, the Treasury has accepted the Department’s approach and has approved all expenditure so far made and planned."

So for the biggest IT project in world history, it was not thought necessary to quantify the benefits.

And as for the sharp-end- the local health trusts etc who have had this whole thing imposed on them and who are now having to cut spending elsewhere to meet its open-ended costs:

"NHS Connecting for Health has not sought to monitor systematically the actual impact the Programme is having on local IT spending or the extent to which the initial estimates of its impact are being borne out in practice. However, it believes that experience of individual deployments so far will enable local savings on a substantial scale."

It believes, huh? How very reassuring.

And the most jaw-dropping sentence spotted thus far?

"Some of these [efficiency] savings are planned to contribute to the Department’s Gershon economies."

The Gershon economies. Those things that only exist in the Chancellor's Marx Brothers script.

Madness on madness. The Circle is complete.

Thursday, June 15, 2006

£45bn On Underperformance

Further confirmation today of how badly our state education system fails Britain's children. We spend £45bn pa on our state schools yet according to research from the Sutton Trust:
  • Of the leading 100 media opinion-formers, 54 per cent came from private schools, compared with 49 per cent 20 years ago. Only 14 per cent were from comprehensive schools, which cater for 90 per cent of all pupils
  • 70 per cent of barristers from leading chambers were educated at private schools
  • 42 per cent of those holding government office or shadowing ministers are former pupils of private schools

Social mobility has collapsed since arrogant Highgate and Oxford Labour autocrat Antony Aloysius Crosland fecked our state grammar schools. It's difficult to think of a more grotesquely destructive example of socialist wishful thinking: it not only destroyed the life chances of millions of poorer kids, but in a world where education is all, it's increasingly holding back Britain's prosperity.

Both Mrs T and I attended those state grammars, and we're as mad as hell. Luckily we had enough dosh to buy our kids out, but how disgraceful is that?

Vouchers, pupil passports...whatever we call them, the sooner we give all parents some education spending power, the better. That ladder is desperately needed.

PS Having bogged up my General Science O Level in 1966, I'm seriously thinking of doing the new multiple choice GCSE. How hard can it be?

Wednesday, June 14, 2006

£3bn Well Spent

Typical cell at HMP Parc

We've blogged many times about cost effective justice ( see here for summary). So we're heartened to see the growing support for building more prison places. A few more TV interviews with the head of the Probation Service explaining how there was "no way of telling" a previously convicted paedophile might be a danger to children, and the demands will become unstoppable.

As we've blogged before, the stats say that to halve our crime rate, we need to double the number of prisoners to about 160,000. It will cost about £3bn pa, just over one-half per cent of public expenditure, and chickenfeed against the £100bn pa cost of crime.

For that we get 80,000 modern prison places provided and managed by private sector specialists. Prisons such as Parc in Bridgend, managed by Securicor and costing taxpayers £38,000 pa per place. When I visited, I was much taken by the "in-cell sanitation, natural and forced ventilation, in-cell electrics, in-cell TV, Pool & Table Tennis Tables". A bit too much of a holiday camp for the Major's taste perhaps, but most of us just want bad guys taken off the streets.

So lets hope Reid is more than just talk. It's no good complaining about short sentences without providing the extra prison places. And he could get a billion of that £3bn by scrapping the hopeless Probation Service.

Monday, June 12, 2006

Olympics Update

Legacy of Doom

The 2012 Olympics remains well on course for financial disaster (see here for cost primer).

Set aside the fact that our "Olympic heroes" are about to be relegated from the top division of European athletics. Much more concerning is the fact that Lord Coe's merry band have not yet agreed what they want. Those grandiose computer simulations have already been heavily revised:
  • The main site has been downsized. Lord Coe says the latest plans will give us "a compact and exciting site": ie they're now trying to squeeze it into the carpark behind Stratford Costcutter
  • The journo centre is being moved out to some distant and dodgy corner of Hackney: they won't like that
  • The volleyball is being shipped out completely: other sports will doubtless follow

Meanwhile, we're all finding out how those much touted "fixed price" contracts actually work. Over-running, over-budget Wembley was supposedly fixed price, but constructors Multiplex are now claiming up to £150m from Wembley National Stadium Ltd for additional costs they incurred from WNSL's many flip-flops on the spec. And the NHS is discovering their IT contractors are making similar demands in connection with the meltdown on the supercomputer.

The Paddington Health Campus fiasco shows what can happen when quangocrats can't agree what they want. That resulted in the whole thing falling years behind schedule and finally being abandoned. Alas, that won't be an option in 2012.

Keep those cheque books handy.

Sunday, June 11, 2006

Recent Bonfires- 20

In the news this week:

£140,000 for Shakespearean bureaucrats- "The Government has spent more than £140,000 of taxpayers' money sending Whitehall mandarins on Shakespeare training courses. More than 100 senior civil servants have been studying some of the Bard's plays, including Henry V, Macbeth and Julius Caesar. At least 10 permanent secretaries have been on the courses devised by Olivier Mythodrama...Macbeth, the Scottish tale of witchcraft, ambition and murder apparently offers valuable lessons about "courageous leadership and ethical ambition". (Sunday Telegraph 11.6.06)

£100m wasted on student reward card- "£100 million of public money has been wasted on a reward card scheme, intended to encourage teenagers to stay on at school, which has been officially evaluated as a flop. Ministers decided last week to cut their losses and axe the Connexions Card - but not before it has earned Capita, the private company that runs it, more than £66 million. The Card was launched six years ago to give 16- to 19-year-olds an incentive to stay on at school by giving them "loyalty points" that they could exchange for discounts on CDs, clothes and tickets for events.Less than four per cent of youngsters had redeemed points with the card. Just 54,788 had used it by the end of 2004 - spectacularly failing to hit the target of 1.7 million." (Sunday Telegraph 11.6.06)

£300,000 sub for naked Geordie artist- "BRITAIN’S top financial watchdog has investigated how an art gallery has so far failed to recoup £300,000 of public money which was paid to the sculptor Antony Gormley to create a work that he can now sell for £1.5m. Gormley, was commissioned by the Baltic to create Domain Field, a series of life-size metal “skeletons” for which he encased 240 naked Geordies in body moulds. The Baltic Arts Centre, in Gateshead, met the cost of producing the work in 2003 but has so far failed to recoup the money. Gormley then joined the gallery’s board as a trustee in 2005. The Baltic opened in 2002 with £43m of Arts Council lottery money, including an endowment of £7.5m, which will run out by April 2008." (Sunday Times 11.6.06)

This week's total - £100,440,000

Friday, June 09, 2006

The Belly Of The Beast

Today's waist news:

Tax-funded belly dancing- "Nottingham has spent £600 sending more than 100 of its frontline staff to lessons in belly dancing. Council chiefs claimed that the lessons were part of a drive to improve customer service, and were included in a two-week session of classes and workshops aimed at exploding the “myths and misconceptions” of belly dancing. The classes took place during working hours, and staff were advised to wear loose and comfortable clothing. The dance classes were one element of “customer and diversity” sessions arranged by the council to increase staff awareness of equality legislation and to “challenge and stimulate staff to reflect on attitudes, behaviours and prejudices”. (Times 9.06.06)

Yes, it's the return of the Loony Left, but we can't be surprised: you've only got to glance at any annual report from any public body to find pages of guff explaining how it's meeting its diversity targets. Belly dancing must tick all manner of boxes. (On further reflection, I'd like to volunteer as a taxpaying observer at all future sessions involving young female staff. But not fat dustbin men)

£69m to go walkies (maybe)- "THE right to roam over almost two million acres of English countryside has cost the taxpayer £41 million more than the Government intended. And, according to the National Audit Office, it is not certain that walkers are exercising their right to explore the mountains, moors, heaths and downs that were out of bounds until two years ago. £69 million has so far been spent on the right-to-roam policy. The initial estimate was £28 million. The audit office says that these costs could have been curbed if the agency had conducted a pilot scheme to test procedures." (Times 9.06.06)

Plunging straight into some half-baked nonsense without a pilot- we've heard that a few times before. Why the eff don't these hopeless quangocrats (in this case the Countryside Agency) ever learn from experience?

And why the effin eff do we always have to pay for it? Couldn't it be deducted from those guaranteed index-linked quango pension funds?

Stinky Stink

So the new Chief Inspector of Schools just happens to be married to hopeless Home Office Minister Tony McNulty.

Obviously in appointing Miss Christine Gilbert, all the usual niceties were observed blah, blah, blah.

But stink, or what?

One of the (many) damaging things this government has done is to politicise our Civil Service. When Tyler joined the Service 30 years ago, along with other new entrants, he attended a briefing session with the department's Permanent Secretary. We were left in no doubt about the heavy public duties resting on our young shoulders. And I vividly recall his summary:

"The main role of the Civil Service is to stop politicians doing daft things"

Yes, I know. How appallingly Sir Humphrey.

But how many of our top public servants stand up to ministers these days?

Get ready for school standards to sink even further.

PS To get a good idea of what already passes for educational assessment between Ofsted and the sharp-end, see the latest annual performance assessment of Miss Gilbert's own education authority, Tower Hamlets. It gets a glowing 9 page report, covering all the education essentials like health, safety, and well-being. Education gets a brief mention on page 3.

Thursday, June 08, 2006

New Look For Haberdashery Department

Ming launches new look

You almost feel sorry for the Lib Dems: collapsing poll ratings, scared to death by Cameron, and led by a minger. And now they've come up with a tax package that seems designed to alienate the very Middle England voters they depend on.

To start with the good points. At least they're now talking about cutting taxes rather than raising them. And their proposed reductions in income tax are substantial: 2p off the standard rate, an increase in the personal allowance to £7,000, and an increase in the 40p threshold to £50,000. Both common sense and the economic evidence tell us that would incentivise work and increase growth.

But the bad points are pretty bad. To start with, as with so much LD fiscal doodling, it's not at all clear the sums add up. £20bn is a big cut in income tax, which implies some massive rises elsewhere. Blithely assuming you can somehow just get it from higher environmental taxes and another pensions hit is so much wishful thinking.

And then, as Iain Dale points out, while Ming reckons only polluters and the super-rich would suffer from his new taxes, in reality it would be middle income earners. A further £5bn on capital gains tax, plus another £7bn off tax relief on pensions contributions, would certainly hit somebody- but it wouldn't be the internationally footloose and professionally advised super-rich. The £26,000 pa it's reckoned some could lose would fall squarely on Middle England.

Of course, we know these LD tax plans are just more of that overplayed "mood music"- they're never actually meant to be enacted. But just as their half-baked Local Income Tax plan cost them Guildford, Maidenhead, and a score of other Home Counties seats last year, this package could also tum out to have hidden bite.

What a pity the LDs aren't presenting us with a real package. One that started from the straightforward proposition that the overall tax burden must be cut.

Why can you never find an Orange Booker when you need one?

Wednesday, June 07, 2006

Latest On NHS Financial Mire

Commissar Hewitt addressing Parliament

The Commissar has given her long-awaited update on those NHS deficits. According to her the net deficit is "only" £512m, not the £1bn some had claimed. But as always, the headline number deliberately disguises a multitude of Sins:
  • The gross overspend is £1.27bn, but the Strategic Health Authorities have been pressured into "saving" £75om. That's come from cutting spend on such fripperies as training and probably anaesthetics. And those 12,000 posts that are going are not just in deficit trusts.
  • £512m is still way over the £250m the Commissar promised just a few months ago
  • These are still provisional numbers -last year the final figures were revised up substantially
  • The 11% of Trusts that apparently account for 70% of the deficits are all down South. Pat says that's because they're Crap at managing, and she's not prepared to tolerate the "unfairness" of letting rich areas run deficits when poor areas manage within their budgets. The truth is that the South's deficits reflect the fact the DH budget allocations do not give sufficient weight to their higher local costs. It is another example of Labour diverting money towards its own constituencies (see our numerous blogs on vote buying).

Plus of course, the Commissar has still not actually explained how the deficit trusts are meant to manage going forward. It's totally unrealistic to expect them to claw back historic overspends anytime soon. And are they even supposed to achieve balance this year? Pat referred to achieving balance only on a monthly basis by year-end. But what does that actually mean?

The NHS remains deep in the financial mire. And after that doubling in budgets, the money's running out.

PS Doc Crippen draws my attention to the latest on the supercomputer. Not only is the thing way over budget and way behind schedule, but the private sector contractors are now imposing financial penalties on the NHS for wasting their time. Fujitsu has just "fined" the NHS Southern "cluster" £19m. Please tell me I'm dreaming this.

Crashing The Buffers

The history of Big Government is littered with the wrecks of runaway spending trains that ended up crashing the buffers of fiscal reality. The Blair/Brown Special is about to do the same.

Since the brakes failed in 1999-2000, spending has increased by 5 per cent of GDP; by 2008/09 it will be 5.6 per cent. That’s equivalent to £70bn in today’s money, or 20 pence on the standard rate of income tax.

It’s unsustainable. I know it, you know it, and as his panicky speech yesterday showed, Tony knows it too.

When they set off, Brown’s hope was that he’d just reapply the brakes in 2008/09 and pull up gently at the platform of transformed public services.

In reality, much of his extra spending- as always– has gone into higher costs, bigger bureaucracies, and mad mega projects like the NHS supercomputer. To the frontline managers who have to balance the books, these things are now fixed costs. And when the money runs out, the easiest things to cut are, yes you guessed it, services to customers. Hence all those stories about hospitals sacking nurses and canning operations.

So what will happen? One possibility is that the government ignores its flimsy “Golden Rules” and just borrows more. We’ve blogged many times about how they are finding ever more novel Enron techniques for borrowing off-balance sheet, and we should expect such efforts to intensify. Unfortunately, lenders demand an ever higher price, which soon intensifies public sector cost pressures even more: witness the mounting problems of paying for those PFI deals.

Another possibility is that they carry on taxing. The Telegraph recently compiled a list of 80 new taxes since Labour came to power, and 100 is now pretty well a done deal. But it’s tricky, because even we dumb taxpayers can now see what’s going on.

So once again our public services are heading for the buffers. But this time, as we crawl from the wreckage, let’s try to remember the key lesson: no matter how much money it spends, Big Government is incapable of giving us good public services. Big Government politicos should never ever EVER be allowed near the cab.

Tuesday, June 06, 2006

Buying votes- 3

We've blogged Labour's vote buying strategy before (see here and here). To recap, over half the electorate are now state beneficiaries, with 5.8 million employed directly. All of which ought to secure socialism in perpetuity.

But of course, voters are also consumers, increasingly angered by Labour's failure to deliver dependable services. And having exhausted every other excuse, Labour has now fallen back on bashing its public servants. Or in John Reid's case, kissing them Glaswegianally.

Now there's a bit of a problem here, isn't there.

Yeeees. That's right. Those public servants don't like it very much . They're thinking they've tried their very best to implement Labour's arsehead policies, just like they've been employed to do. Why should they take the rap when it eventually becomes obvious to everyone the policies themselves are unworkable? (see this blog)

Now that nice Mr Cameron has seen an opening and rushed into it:

"Instead of using public servants as scapegoats we should acknowledge their successes. The truth is that public servants are privately dedicated to what they do. To them, it's not just work - it's their vocation. Often it's not just their job - it's their life".

Quite right too. We all know dedicated public servants, from Doc Crippen to PC Copper. And although they're on the public payroll, we can see they're Sick to Death of living the Nu Labour Lie.

So Labour may well find a lot of those bought votes don't actually stay bought.

Unfortunately for us taxpayers, that doesn't mean our Big Government is about to be trimmed. Dave C knows even disillusioned turkeys don't vote for Xmas, and goes on to say:

"Too often these days, there seems to be an automatic and lazy assumption that you get terrible service in the public sector and fantastic service in the private sector."

On one level, nobody could disagree with that. But the danger is that Dave means more. Hemmed in by all those state dependent votes, he may actually have convinced himself that Tory managerialism would be better than Labour manageralism.

But the superiority of the private sector does not rest on the simple fact that it's private. It rests on real choice and competition, things that are impossible to replicate in the public sector- as the bureaucratic horror of Labour's hospital and school choice policies so amply demonstrates.

The extent of state dependency clearly makes it much more difficult for Westminster parties to trim Big Government. But let's not kid ourselves it doesn't matter. It does.

Sunday, June 04, 2006

Profiting From Crime

The Major and I have been arguing for some time that cost effective justice requires doubling our 80,000 prison places. So it's good to see Britain's investors lining up to supply the finance:

"There are around 140 British gaols, of which just 11 are privately run; eight of them were built under the Private Finance Initiative. According to HM Inspector of Prisons, many of the private sector prisons are among the best run in the system. Private operators have shown the Government how to construct and manage prisons efficiently: prisons used to take 12 years to build - now they take nine months."

Now pay attention all you soft-hearted liberals out there worried about your pensions: here's how you should be investing that self-select ISA:

"Britain is the second largest private prison market in the world, and likely to be the fastest growing in the coming years. The major UK players are Serco, Premier Custodial Group, Sodexho, UK Detection Services, Group 4 Securicor and GSL, which is owned by Englefield Capital and Electra Partners. Serco, Group 4 Securicor and Sodexho are quoted companies - the first two listed in London. However, their prison management activities are a small segment of their operations. There are currently no pure-play UK investments poised to take advantage of the coming prison boom. New operators may become involved: GEO Group, the world's largest operator of "privatised correctional facilities", has been in the UK for just 18 months and now runs an immigration centre. Obviously, the company has major ambitions. Revenues and profits from such sources are long term and stable, and they service a growing market - sadly."

Sadly? Sounds like a no-brainer.

Get onto your broker and buy while stocks last.

Please note: Tyler Investments (Lagos) is not regulated by the FSA. The value of investments can go down and out. Your home and family may be at risk if you act on anything you read here.

Recent Bonfires- 19

In the news this week:

£20bn NHS supercomputer means longer waits- "EVIDENCE that the government’s troubled £20 billion National Health Service computer system has lengthened waiting times for patients has emerged for the first time. It was hoped that a pilot scheme for the technology at the Nuffield Orthopaedic Centre NHS Trust in Oxford would show the benefits of the delayed system. Instead, when it went “live”, the computers crashed, data could not be found and some patients found that they were facing among the longest waits for operations in the country. Staff who were instructed to sort out the problem could not even establish from the malfunctioning computers which patients had been waiting the longest and the numbers kept climbing." (Sunday Times 4.6.06)

£1,000 each for MPs' World Cup junket- "MPs have been given free World Cup tickets by fast-food giant McDonald's - to the fury of ordinary fans who face being locked out of England's matches. The politicians asked the company for seats to watch England's opening game against Paraguay on Saturday - the tickets they and their Commons researchers received now command more than £1,000 each on the black market.The Parliamentary Football Club, whose members include Health Minister Andy Burnham and Pensions Minister James Purnell, secured the coveted tickets after approaching McDonald's, despite its role in the long-running storm over healthy eating." ( Mail on Sunday 4.6.06)

NHS pays £1,250 for one nurse's shift- "NHS chiefs paid an astonishing £1,250 for an agency nurse to cover a single shift, according to new figures which reveal that tens of millions of pounds is still being spent every year across Scotland to cover staff shortages. Despite pledges to reduce reliance on out-of-house agencies, the NHS in Scotland is still turning to the quick-fix route of agency nurses and doctors to cover sickness, holidays and unfilled vacancies which last year cost it more than £40m." (Scotsman 4.6.06)

£1bn pa will always be wasted on tax credits- "More than £1billion will be wasted on tax credits every year, the Government admitted yesterday. The Inland Revenue has already written off £3billion of taxpayers' money handed to families by mistake in the past three years. Ministers conceded they were never going to solve the problem because of the system's complexity. Losses are likely to carry on running at some £1.2billion a year, of which half will have to be written off. Chief Secretary to the Treasury Stephen Timms said the Government had introduced changes to cut down on errors. But he admitted: "Once fully implemented, we expect them to reduce overpayments in future years by around one third." That means £1.2billion will be paid out wrongly every year unless tax credits are scrapped altogether." (Mail 1.6.06)

Total for week- £21,040,011,000

Saturday, June 03, 2006

Happy Tax Freedom Day

Back in the Middle Ages, we peasants had to spend vast swathes of the year working for our feudal lords. And all we got in return were unwanted wars and the Black Death.

These days we have to spend vast swathes of the year working for Big Government. And all we get in return are unwanted wars and... er, well, at least we get to laugh at my Lord of Prezza I guess.

Today, at last, we've made it through to another Tax Freedom Day. Rejoice!Over at the Adam Smith Institute, they've put together an excellent site telling us everything we need to know about TFD:
  • It's three days later this year- again
  • Blair's government has pushed it forward by ten days since they came to power; it's now later than at any time since 1988, later even than in Germany
  • Forty years ago it fell in late April, but Wilson's abysmal government raced it forward at an lunatic five days a year: by 1970 it was a whole month later
  • Thatcher found it very difficult to drag it back: the need to balance the fiscal books in the face of massive economic restructuring meant that under Thatcher/Major it was never earlier than 21 May, and even that was distorted by the early-nineties recession

Looking forward, the signs are not encouraging.

Brown's own budget projections say TFD will move forward by another 5 days over the next couple of years. Bad enough, but beyond that the fiscal sums look even more ominous. Brown's arithmetic is crudely balanced by assuming he can slam on the spending brakes while at the same time extracting every last drop of tax revenue. To the rest of us that looks like a fiscal Black Hole which will only be filled by higher taxes.

So enjoy this early summer TFD. In a few years time it won't come until harvest time. When we'll all be out slaving in the fields to fill my Lord P's pie barn.

Chart shows 40 years of TFD (lifted from ASI site)

Thursday, June 01, 2006

Who Speaks For Taxpayers?

George has been depressing our socks off again with his latest speech on tax policy. Yes of course we welcome his promise to simplify Brown's nightmarish encyclopedia of new tax measures. But what we also want is a pledge to cut the overall tax burden.

That formula of "sharing the proceeds of growth" may be the voice of centrist pragmatism, but it does nothing to address the vast increase in our tax burden since 1997. By the time of the next election, taxes will have increased by 4-5% of GDP since the Tories were last in power: equivalent to £50-60bn pa in today's money, or around 15 pence on the standard rate of income tax.

Of course, given three successive electoral drubbings, we know exactly why Dave's Tories are being such wusses. But whatever happened to the Flat Tax, George?

Not a day passes without yet further appalling examples of government incompetence and waste. In terms of delivering modern public services, Labour's spending splurge has shown just how incapable Big Government is.

And you know what? We taxpayers are plain fed up with it.

Come on G. Instead of just helping itself to more and more of our money to spend so badly, you know government should focus on downsizing itself. You know as well as us that we'd get much better education and healthcare if we spent the money directly ourselves, rather than paying yet more tax and leaving the choices to you politicos and your hopeless demoralised bureaucrats.

Taxpayers are still waiting for that alternative.

Tights In A Twist

Gordo's tax credit system remains in meltdown. 6 million recipients, of whom no fewer than 2 million have been overpaid. On top of that, there are an estimated 1 million who are eligible, but who don't claim because its all far too complicated. Overall, that's half of all target recipients who are failed.

Who's to blame? Well, the government obviously. But we shouldn't forget the men in twisted tights.

Big Government likes to see itself as Robin Hood. Taking from the undeserving rich and giving to the deserving poor. As a romantic image it's hard to beat: who wouldn't want to be on the side of justice?

Sadly, the real world is more complicated. For one thing, while I'm no expert, I don't reckon Gordo and Prezza in tights are the greatest homoerotic icons.

What's more, in Robin's day it was so much easier to work out who was who. The undeserving rich lived in huge eff-off castles, were grotesquely fat, and spent all day gorging themselves on meat pies, ravishing the serving maids, and playing croquet. Whereas the deserving poor were painfully thin, and spent all day tilling the soil, praying, and sharing their gruel with the Merry Men.

These days the rich are working 24/7 in investment banks, generating a third of Britain's income, and never having time to play croquet. Whereas the poor spend all day eating Super-Size BK's, necking Stellas and playing pirated copies of Grand Theft Auto.

Worse, if you take too much from the undeserving rich, they find all kinds of ways to get out of it. Like hiring those cunning tax accountants, or even moving to Ireland. And if you give too much to the deserving poor, they give up responsibility for themselves altogether, and just go on stuffing themselves until they literally explode. Leaving us to clear up the body parts.

It's all a lot messier than in Errol Flynn's day.

Big Government's response has been complexity. Instead of dishing out the dosh to all-comers, they target. The help must go to those who are really really really deserving. And there must be incentives for the poor to help themselves- flipping burgers rather than eating them. Hence Gordon's horrendously complex tax credits.

The problem is, we are simply incapable of operating such complexity. It's another manifestation of Socialist wishful thinking that ends up causing as many problems as it solves.

But at least some sense is breaking out in one area. The Child Support Agency is going to be scrapped. The whole monstrous carbuncle is to be replaced by a pared down operation that will just concentrate on errant fathers who refuse to settle privately. Which should get rid of two thirds of its casework. The redoubtable Frank Field says:

"Most people are grown up and accept their responsililities, and the CSA wastes its time chasing them. The power of the State should only be used against people who fail to meet minimum requirements of good parenting.”

If only Gordo and Tony had listened to Frank back in 1997. They might never have constructed that monstrous credit system at all.

As in so many other areas, the state is hopeless at being Robin Hood. Stealing from the rich may be easy, but giving to the poor turns out to do more damage than the Sheriff himself.