Saturday, September 30, 2006
As we pack our buckets and spades, there's just time to highlight a great quote from poor Ollie Letwin.
He's heading up Dave's policy review, and as today's Telegraph points out, he's going to have the Devil's own job reconciling the recommendations of those various policy commissions. So to save time, he's already made his mind up on chunks of it.
Take those elected sheriffs, something we think is vital if we're ever to get the police serving us ordinary law-abiding punters again. Ollie wants none of it:
"If you have locally elected police chiefs, who's going to say what sort of mad things will happen?
People with wildly populist views who know nothing about running a large organisation will stand. As soon as you have excessive local discretion you have public outrage about the postcode lottery."
Mad things? What, you mean like not policing the streets of London so that residents have to hire private security firms to do the job instead. Say.
And when it comes to populists who know nothing about running a large organisation, I fancy we'd have to go a long, long way to beat you bungling image-led MPs and your senior "cult of the amateur" bureaucrats.
As for postcode lotteries, when will you twig that nobody actually knows "the answer"- it really is only by local experiment and letting a thousand Chief Constables bloom, that we have the faintest chance of turning things around. Top down managerialism is bust.
Should be a fascinating week.
PS As from today, I'll be blogging the Conference on Conservative Home. Normal BOM service will be resumed next Thursday.
Thursday, September 28, 2006
Given that government departments are multi-billion pound operations, you probably imagine they'd have properly qualified people in charge of counting the money. But no - once again, you'd be wrong.
Shockingly, until very recently, departments didn't think it was necessary to have properly qualified finance types in charge of anything: there was simply no equivalent of the private sector Finance Director. Which obviously goes some way towards explaining the appalling accounting cock-ups we routinely see at places like the Home Office (see this blog).
Eventually, they decided to put it right by recruiting a whole load of FDs from the private sector. Good idea.
Except for one small detail - can you think of any reason to jump from a senior job in a thriving can-do commercial operation, to working for Patricia Hewitt or David Milliband?
According to the Finance Director:
"The obstacles to poaching the best talent from the private sector have come into stark relief over the past two years as the government struggles to fulfil its target to recruit professionally qualified finance directors for each of the 45 departments by the end of the year. With just three months left, the government is still 12 FDs short of achieving its target."
Money is part of the explanation, but just as important is the fact that a spell in a government department is not exactly career enhancing- only one departmental FD has ever managed to return to the private sector.
Given all that, government recruiters are being driven to desperate measures- the DTI has just appointed Charles Clarke's brother as its first FD.
Mrs T, the Major, and I are off for a sunshine break in sub-tropical Bournemouth. By a strange coincidence the Tory Party are having their Conference there at the same time. So from Sunday we'll be blogging on Conservative Home, reporting the Conference deliberations on economics and tax.
Given the intense speculation about what Michael Forsyth's Tax Commission has come up with, it should be a fascinating few days. Shadow Chancellor - and one-time flat tax advocate - George Osborne will be firmly under the spotlight, as party members continue to ask "where's the tax beef?"
As well as his main platform event, he's got himself a punishing schedule of fringe meetings. Assuming we can stand the pace, we'll go to all of them, bringing you a balanced view of the arguments and the reaction from members.
Now where's my Factor 20 Ambre Solaire....
As blogged previously, Accenture is about to walk away from its contract for supplying large chunks of the disastrous £20-50bn NHS Supercomputer. It's reporting its full-year results in New York tonight, and will need to tell angry shareholders how it's going to stop the pain.
There are some interesting comments from an industry insider in today's Telegraph. He reckons that while the original bidding process for the NPfIT contracts was highly competitive - thereby driving down the price - it was seriously flawed:
"The people who stayed in [the bidding] fell into two classes. Those who thought they could do it for the price but didn't understand the complexities of what they were getting into; or those that concluded you couldn't do it for the price but were willing to take the risk that the government wouldn't pull the plug on this and that they'd be able to get their money back from changes downstream."
He said the procurement process lacked sophistication: "So much of this public sector procurement is done on the basis of what is the lowest price and not enough attention is paid to the competence of the people who are actually tendering, what is their track record for delivering."
We've blogged Britain's Simple Shopper many times, and here we have a perfect example. Clearly taxpayers do not want government to pay through the nose, but its new macho approach- buying cheap and pushing all delivery risks onto the suppliers- turns out to be just as bad: the suppliers are commercial operators and if they can't make money they'll simply pack up and walk away, leaving taxpayers to pick up the expensive pieces.
And this is not the first time we've seen it. It's precisely what happened with the new National Physical Laboratory, when a half-baked contract was forced through on a contractor who was clearly out of his depth, the contractor ultimately failed to deliver, and taxpayers ended up with a bill that was even bigger than it would have been with a more expensive initial contract. In that case, the contractor actually went out of business.
It's all too reminiscent of that classic episode of Fawlty Towers, when the cheese-paring Basil attempts to save money on building work by hiring the cheap Mr O'Reilly instead of the expensive Mr Stubbs. Unfortunately, Mr O'Reilly nearly manages to demolish the hotel, and an incandescent Sybil has to call in Stubbs to put things right.
We go along with PAC members Richard Bacon, the Conservative MP, and John Pugh, a Liberal Democrat, who are calling for the programme to be decentralised and for more control to be given to hospitals locally. As they say:
"The fundamental error made when setting up the programme was to assume that centralised procurement of single systems across the NHS would be more efficient than local decision-making guided by national standards."
A statement that could be applied just as well to the whole NHS shooting match.
Wednesday, September 27, 2006
To Tory ears, the most striking passages were those where he was attacking Dave Cameron from the right, boldly asserting that Dave's desire to hug hoodies and his opposition to ID cards showed he was soft on crime.
Talk about sauce.
Two stories today underline just why - with the single exception of Bonzo's co-star - no matter how well political actors deliver the lines, they can never be trusted to deliver the goods.
First, Mssrs Lucas Fernandez Jesus and Werleson Rodrigo Ferraira De-Oliveira, another two illegal immigrants from Brazil, have just been jailed for running Britain's biggest fake passport factory:
"They had the capability of producing hundreds of thousands of forged documents and their passports alone were worth £12 million on the black market... Police believe they could have caused an extraordinary £360 million of damage to the British banking and credit card industry.
Detective Sergeant Tony Lynes, of the Metropolitan Police, said: "These ID documents would have gone from between £400 - £1,000 apiece. But the potential loss to the UK was much greater."
"The documents gave illegal immigrants indefinite leave to stay in the UK. This would have enabled them to get a foothold in the country which would have entitled them to state benefits. The damage to the banking and credit card industry is potentially huge if each of the passports was used to it's full potential the sort of damage they could do could be between £30 - £35,000 each."
"If you times that by 12,000 you are looking at somewhere in the region of £360 million. These two men would have swamped the streets of London and done untold damage."
And that's all on top of the obvious risk that the forged ID papers might be used by terrorists.
So what did they get? Ten to twenty in Sing Sing?
After a decade of Tough on Crime Bliar, they got just five years. Which as we now know, in reality means no more than two-and-a-half, probably in an open prison. So that's £12m split two ways and divided by 2.5, equals £2.4m pa. Not bad, even if not quite up there with Dido.
Or what about this:
"Britain's most notorious living traitor has been handed a compensation payout by European human rights judges. They ruled that George Blake - a Soviet spy blamed for hundreds of deaths - suffered "distress and frustration" when the government tried to stop him making money from a book about his betrayal.
Blake, who has lived in Moscow since escaping from a London prison 40 years ago, will now be paid nearly £4,700 in compensation and expenses by the British taxpayer because his human rights were breached."
Which is so absolutely blood spittingly outrageous, the top of my head has literally blown off.
You may say, well, Tony can't be blamed for those whacky European judges. But Jeez, the guy's been there for ten years, surrendering more and more of our sovereignty with every extra year (finally of course, even surrendering our veto over EU criminal law).
Politicians rarely deliver. We know that. But somehow we've got to remember not to suspend disbelief next time some Westminster thesp does a good turn.
Tuesday, September 26, 2006
Updates this morning on three old favourites:
1. Defra Airmiles- The department that likes to lecture the rest of us on cutting greenhouse emissions continues to clock up the airmiles:
"In the past financial year, Miliband's staff at the Department for the Environment, Food and Rural Affairs have clocked up fees of more than £1.75m on airline travel. According to figures obtained under the Freedom of Information Act, nearly £1m of that figure was spent on flights outside the EU, an increase of two thirds on the previous year. Around £255,000 of it was spent just on flights within the UK."
We've blogged the dire Defra many times- see here for its nomination as Britain's very worst government department. The big increase in travel outside the EU is presumably down to its Great Ape Film Initiative.
2. NHS training bungles- We've paid for their training- £250,000 each in the case of doctors- but now the money's run out, our newly qualified doctors and nurses can't find NHS jobs:
"Thousands of young doctors could be driven abroad in a £ 1.4billion brain drain because of a critical shortage of jobs. The British Medical Association fears Government reforms could leave 11,500 doctors without the specialist training posts needed to advance their careers. This could prompt a mass exodus of doctors who may leave the NHS to work abroad or quit medicine altogether."
Yes, of course we understand the BMA is a trade union and they would say that wouldn't they. But as we blogged here, this situation is a classic of boom and bust public expenditure management, and it's only too familiar to students of Big Government fiscal policy. Recruitment was cranked up far too rapidly, necessitating wholesale recruitment from overseas. The jobs are now filled by those recruits (some of them dubiously qualified, not least in terms of language), so its our own guys who have to emigrate. Fantastic.
3. Miners compensation- This half-baked scheme is still proving a sensational little earner for the lawyers who've got their snouts wedged firmly in the trough:
"Nobody would have guessed it, but the UK's richest lawyer lives not in the leafy streets of North London, but in Warrington. In August The Lawyer revealed that Andrew Nulty, senior partner at Avalon Solicitors, took home a profit of £13m in 2006. £14.4m of its £21.2m turnover came from the controversial coal health compensation scheme."
We blogged this particular outrage here, and we're relieved to note that someone is finally taking action. It's not the government of course, but the Law Society, who are concerned lest we get the impression all lawyers are money-grubbing oligopolists exploiting the poor ignorant public. And according to the Lawyer, Mr Nulty himself is now facing "an alleged charge of actual bodily harm".
Monday, September 25, 2006
His problem is that the penny is dropping- in an age when we increasingly hold all politicians in contempt, slowly, dimly, we're starting to ask why they should be in charge of so much? And the end-game is clear- both for our public services, and, sadly, the career prospects of our politicos.
Somehow, the voters have to be deflected... Hey- I know! Why don't we have an independent NHS board! A direct parallel with the independent Bank of England- coincidentally, the only thing I've ever done that hasn't ended in tears!
But most independent commentators are pointing out that running the NHS is much much more complex than setting interest rates (see our view here), and that a better comparison would be with our old dysfunctional nationalised industries, or with a super-quango. Both are disastrous precedents- cumbersome, bureaucratic quagmires, run by placemen, and wholly dependent on their political paymasters for all the decisions that really matter- like funding.
In fact, such structures can easily give us the worst of both worlds- bungling around in no-mans land between the wishful thinking of politicians and the harsh realities of commercial existence.
There's an excellent example in the new private medical centres (independent sector treatment centres- ISTCs) contracted by the NHS to bulk supply standard procedures like hernia operations and day-surgery orthopaedic, gastroenterology and urology procedures. It turns out most of the 20 centres opened so far are falling way short of their operating targets- doing only just over half of their targeted operations.
Unfortunately, because the NHS is such a rubbish shopper, we are contracted to pay the ISTCs whether or not they actually do the operations. And as is usual with these public-private deals, the contracts are long-term, and those let so far have a value approaching £2bn.
You can't blame the commercial operators- the private sector works on the basis of contracts, and nobody in their right mind deals with government unless the contract is absolutely watertight, to protect their interests once the inevitable political wriggling and welshing gets going.
But government operates to a different beat, where political survival always takes precedence over financial good housekeeping. £2bn wasted on services we may not get is but a drop in the ocean compared to the Grand Sweep of that tiresome political narrative on NHS reform.
Gordo's NHS board is simply another example of the same thing- driven by politics, not by our need for better healthcare, it will end up costing us dear.
Sunday, September 24, 2006
£2,000 on Council "thinking caps"- "AN initiative to inspire managers by getting them to wear baseball "thinking caps" has been ridiculed by staff at a local council. The headgear was handed out to senior Isle of Wight council workers as part of a £2,000 move to help them come up with cash-saving ideas. Emblazoned with "Thinking Cap", they are urged to put them on at brainstorming sessions. But staff say wearers look like "bloody idiots". Councillors blasted the handouts: "At a time of cutbacks, spending nearly £2,000 on things thrown quickly in the bin is a bit rash. I've not seen anyone wearing a cap." One councillor even mocked the initiative by turning up to a meeting wearing a Fez with "Independent Thinking" on it." (Mirror 23.9.06)
Quangos cost hits £123.8bn pa- "Taxpayers' money spent annually on quangos and other public bodies has soared by 50 per cent, to £123.8 billion, in only two years. And at least 20 officials who sit on quangos have received pay rises of 20 per cent or more over the past year. When in opposition, Tony Blair pledged to consign the "quango state" to the "dustbin of history". However, the directory shows that 299 of the 882 quangos and other public bodies were set up under New Labour. Nearly 30 have been created over the past year. New quangos launched under Labour include the Music and Dance Scheme Advisory Group, the Public Diplomacy Board and the Disruptive Passengers Working Group." (Sunday Telegraph 24.9.06)
£11m blown on yet another IT flop- "The government has pulled the plug on a flagship housing IT project that has been given millions of pounds of taxpayers’ money over the last two years. Private company Scout Solutions Projects has received nearly £11 million to develop the Move UK service to allow families to access information about housing, education and jobs around the country through an internet site. Councils had been growing increasingly concerned about the contract after serious drops in the level of service... Chris Goodrich, housing specialist at the Society of IT Managers, said the the department's review was like ‘shutting the stable door after a herd of horses has gone through it... Serious questions have to be asked about whether the tax payer has had value for money out of this’. (Inside Housing 22.9.06)
"Life coaches" cost £340,000 plus- "At least £340,000 of taxpayers' money has been spent on 'life coaches' for struggling civil servants, official figures reveal. In 'cash for quacks', it emerged that three Government departments have spent huge sums on 'mentoring' classes to help staff deal with the pressures of office. One of the firms employed uses concert piano recitals and cookery classes to 'stimulate thinking'. The Treasury paid £29,326... The Cabinet Office confirmed it had paid £50,348.75 to psychologists to help with 'succession planning... psychometrics, psychological profiling, personality profiling... culture audit, stress audit and coaching'. (Evening Standard 20.9.06)
Total for week- £123,811,342,000 (plus)
Saturday, September 23, 2006
So the rumours are true: just as the Doc foretold us in June, Brown wants to set up an "independent" NHS Board:
"PLANS to remove politicians from decisions on running public services, including the health service, are being considered by Gordon Brown as part of his manifesto for government. The Chancellor is looking at new ways of running government departments after the success of his decision to make the Bank of England independent in 1997, a move that restored trust in the setting of interest rates because it removed political interference."
But as we blogged here, there's a massive difference between setting interest rates and running the NHS:
"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."
This is a fundamental point: as we blogged here, electing the politicos is the only sliver of control we've got over the entire wobbly edifice. They're the ones who make all the promises and they're the ones we hold to account for non-delivery.
Instead, Brown wants to muddy the waters along the lines suggested by the ippr:
"Mr Brown is looking... to separate policy decisions by politicians from their implementation by Whitehall. In regard to the NHS, the Government would still set the budget and strategic policy but a new independent board would be responsible for management."
Well, fine. Sir Terry presumably reorganises Tesco's internal management structures from time to time. But the buck stays with him: his shareholders hold him to account for strategy, budgets, organisation, personnel, and- most of all- results. Why should we expect less from our ruling politicians? And the answer is- we won't
Brown's new wheeze threatens to make things even worse: so long as politicians set the budget, they call the tune, and no amount of organisational deckchair shuffling will change that.
The only sure route to reform is to break up our nationalised services, and put the spending power directly in the hands of customers. Just like with Tesco.
PS On another blog, a commenter has accused me of mostly talking "party political bollocks", strewn with contradiction. Well, just to be clear- I want serious reform in public services, but not this reform, which I think will make things worse. As for being party political, I remain deeply disappointed that no party has the cojones to propose and promote the radical choice and competition agenda developed by Reform, among others.
Friday, September 22, 2006
Now a European taskforce has looked at the situation across the EU and apparently concluded that Britain has "a unique problem". They estimate that in the 12 months to June, we lost £8.4bn- much higher than Brown's figures, and not inconsistent with our extrapolation for the current year.
HMT have said they "don't recognise the figure" and have refused to comment further before they produce their own updated figure in the Pre-Budget Report in December.
But the bottom line remains the same: for all his complex rules and micro-management, this Chancellor has presided over a catastrophic breakdown in the government's ability to collect taxes efficiently and securely.
The Doc reckons those involved "should get their jackets off, roll up their sleeves, put some patients on bedpans, wipe their bottoms, turn them every two hours and make sure they are actually able to eat the food that is put in front of them."
Bang on. Go and read it.
PS Essence of Care is part of a sprawling NHS benchmarking programme, designed to cut costs through de-skilling healthcare just like Henry Ford de-skilled car manufacturing. It even has its own special club- the Benchmarking Club. Gaa.
It was all too much for the fastidious souls down Westminster way, and Ted Heath (yes, him again) put in a new Met Commissioner to "clean things up". Tyler's brother-in-law left shortly afterwards along with many of his colleagues (NB: well before this).
Unacceptable. Yes. Of course. We're so much better off with the modern compassionate inclusive police, ticking all the boxes, meeting government targets for gender, ethnic, and disability balance, and producing the glossy reports to prove it. Plus their new BMW 5 series are so much more refined than those Zodies.
Of course, all that caring activity does take an awful lot of time. And there are bound to be a few sacrifices. We recently blogged the problems of Primrose Hill residents, but how about this:
"When police received a tip-off that armed robbers were about to strike at a jewellers in their area, they immediately swung into action. They left an empty police car in a street adjacent to Henry Johnstone's shop.
Hours later, gunmen in business suits walked straight past the car and stormed in threatening staff with guns. The gang - thought to be responsible for a series of terrifying raids in the area - took watches and jewellery worth more than £500,000 before escaping in a car parked at the back of the shop in Alderley Edge, Cheshire.
David Baines, Cheshire Assistant Chief Constable, said: 'I regret on this occasion it was not enough and an offence did occur causing considerable distress to those involved. 'We are reviewing what we did, if it was appropriate in light of the information, and could we have done more, and to learn from that.'
He said police were hunting four men seen leaving the scene in a silver Subaru Impreza."
Now, what would Tyler's brother-in-law have done? For a start, in those days he'd have used some of the time now required for box ticking, to stake out the jewellers- as they once did with a similar set of armed robbers targeting sub-Post Offices (ending in the unforgettable line "Drop the effin gun S***y, or you're effin dead").
And if they had somehow got away, those bad guys would have been vigorously pursued with all the classic tools of detection- big drinks for the snouts, threats of extreme physical violence, and calling in "favours". Which is why detection rates were twice as high in the 60s than they are today.
When oh when oh when can we have the real police back?
We need those elected sheriffs now. And what's more, I've just realised who would make an excellent choice for the Tyler hood.
When we blogged in detail about this particular outrage back in March, we quoted the latest estimate produced by consulting actuaries Watson Wyatt- £960bn. ASI reckon the figure is even higher, at £1025bn. Yet another £65bn to add to our £1.8 trillion Real National Debt figure.
They also calculate that the government is making "new pension commitments to public sector workers each year worth more than £40 billion". At the risk of stating the bleedin' obvious, what that means is that overall public spending is understated by £40bn pa: part of public sector pay is not being included in the total annual expenditure.
It's funny money alright, but not very amusing.
Thursday, September 21, 2006
School truancy has just risen to its highest ever level. The highest ever level.
The government has unleashed its usual torrent of blame on parents and schools, while somehow finding its own efforts entirely laudable. Schools Minister Jim Knight ludicrously squawks:
"Our targeting of 'serial truants' is delivering impressive results. We will continue to support local authorities and schools facing the greatest challenges with targeted measures that we know work in improving attendance."
Jim "Parallel Universe" Knight will be well known to readers of this blog. And once again he seems to be lamentably ignorant of the facts.
Back in January, the Public Accounts Committee issued its report on Improving School Attendance exposing the multiple failures in Labour's multi-million pound anti-truancy programme. Jim should read it.
When it was introduced in the late nineties by then Schools Minister Estelle Morris, the programme was meant to reduce unauthorised absences by a third. In reality, as we know, such absences have reached record levels. The whole panoply of 10,000 special "mentors", 1,000 Learning Support Units, multi-agency teams, attendance audits, police in schools, and yes, yet more "consultants", has not only failed to deliver- it's actually taken us backwards:
And the financial cost has been huge. In January a figure of £885m was widely reported, but that only covered the period from 1997-98 to 2003-04. According to DfES another £560m has been spent on the same programme since then (page Ev 17 of PAC report). Making a GRAND TOTAL of £1,445m.
Now, nobody denies that unauthorised school absence is a problem, but this programme has been an catastrophic waste of money. So why might that be?
One reason is that it always incorporated the usual huge dollop of wishful thinking. As plainspeaking ex-headmaster Gerry Steinberg told the PAC: "What you are trying to do cannot work, because there is a hard core of truants who will not go to school, for one reason or another, and it does not matter what you do, you will never get that hard core of truants back to school". He recommended more special schools, pointing out that, as well as their general behavioural problems, many truants are “slow learners” or “educationally subnormal”.
But of course, special schools are entirely contrary to Labour's ideological fixation with "inclusion". The same fixation that originally spawned all those bog standard comps, and has sunk Blair's school reforms.
A second important reason for failure is that the programme was forced on schools top-down. It was all of a piece with the government's drive to cut the number of school exclusions. The aim was to force schools to keep their quotas of "challenging" children, and somehow find ways of dealing with them. Unsurprisingly, teachers were unenthusiastic from the start.
Government attempts to cajole headteachers with targets, or bribe them with insulting "truancy buster" cash prize rewards of £10,000, evidently failed. As a delegate to the Professional Association of Teachers conference told the visiting Estelle Morris in 1998, schools were "working overtime not ... to get children back in school, but to authorise their absence, so that they don't appear on their truancy figures. Truanting pupils reduce class sizes and disruption in school, and they significantly reduce the bureaucracy and workload of teachers."
Which is the authentic voice of teaching in the real world of Britain's state schools.
Most teachers knew this hopeless programme was going to fail right from the start, and there was virtually no buy-in. But the government went ahead anyway. Because they knew best, and after all it's not their money.
So that's another £1.5 billions of our money to make things even worse.
And the meter's still running.
Update: According to the Grauniad, one pupil in five now plays truant, "with truants in primary schools on average missing the equivalent of four days of education a year and those in secondary schools absent for seven days". Which is extraordinary. Tyler cannot remember one single incident of truancy at the various state schools he attended, despite catchments that included some pretty "disadvantaged" groups. Back then, truancy simply wasn't a runner.
After a lengthy enquiry, the Office for National Statistics has just published its revised estimates for public sector debt. At issue was the thorny question of whether taxpayer liabilities under PFI contracts constitute debt.
As you know, PFI involves the private sector funding and building new schools and hospitals etc, and then "renting" them to the public sector under longterm contracts- generally for 25-30 years. And as long as the facility is maintained in an operational condition, taxpayers are obligated to pay up- we're on the hook. Which under any real world definition, means PFI is debt.
We've blogged this many times, and based on the Treasury's latest projection of contracted PFI rental payments, we estimate the true value of this debt currently stands at £90bn (see here).
Unfortunately, after God knows what backroom arm twisting, the ONS has folded under pressure from Gordo, and decided that only £4.95bn needs to be included in its official total for public sector debt. That's just five out of 149 PFI projects.
We needn't go into its tortured reasoning (including a flimsy distinction between "finance" leases - debt - and "operational" leases - not debt*). We just need to remember its figures for public sector debt remain wildly understated, not just because of PFI, but also because they omit other big ticket liabilities like those unfunded public sector pension liabilities.
Here's a handy cut-out and keep comparison with The Truth:
- PFI debt- ONS= £4.95bn (0.4% of GDP); The Truth= £90bn (7.2% of GDP)
- Total Government Debt- ONS= £474.2bn (36.7% of GDP); The Truth= £1,800 bn (144% of GDP)
£1,800 bn is £75,000 for every household in Britain.
Relative to GDP, Gordo has already clocked up nearly as much debt as Lloyd George needed to fight the First World War. Pretty soon we'll be on a par with WW2- and that took us two decades of misery to pay down.
*Clarification from our eagle-eyed correspondent in Canary Wharf: "Although Operating Leases are off-balance sheet under most GAAP schemes (so many companies do the same trick), credit rating agencies recapitalise them and count them as debt when establishing a credit rating. So this will come back to sting the government (sooner than the actual debt will)."
Wednesday, September 20, 2006
Yesterday CPO Commissar Hewitt joined the lengthening queue of New Labour high-ups who are finally confessing the terrible truth we've known for ages- all that money they've poured into our public services has been flushed down the toilet.
Displaying a brass neck worthy of the good Doc Goebbels, the Commissar told her old chums at the IPPR that the NHS was stuck in the Stalinist 1940s, and:
"We asked the public to pay higher contributions to fund record investment in the NHS and we have to convince them that those resources are being used in the most effective way possible. For all the extra money, all the extra staff and extra patients treated, NHS productivity has remained almost unmoved*.
But if we are to match people's rising expectations, care for an ageing population, provide the best new treatments, the NHS needs to become not just a bit more efficient, but dramatically more efficient and effective. That is why we still have to reform."
But how the Commissar proposes to achieve such miraculous reform is kinda vague. And after a dacade of such vacuity, I'm guessing eveyone needs a little more than politicians promising tough action to somehow make everything better. Especially now all the money's gone.
The Commissar's appearance in the confessional follows hard on the heels of Gordo's NHS architect Sir Derek Wanless, who told us in April:
"What they've finished up with now is using all the money - actually, slightly more than all the money - and they're not doing some of the things that were actually crucial: prevention, and productivity of the health services."
The Blessed Leader himself confessed in June, and outriders like Milburn even seem to be thinking the unthinkable- nationalised public services simply don't work and government hasn't a prayer of putting things right.
*Technical...well, not that technical, footnote. Contrary to what to Commissar says, NHS productivity has not "remained almost unmoved". According to the ONS, productivity has plummeted by 1.6% pa since Labour took over. Clearly that's a tad awkward for the Department of Health, which has therefore locked statistical horns with the Office for National Statistics over exactly what constitutes NHS productivity, and how you should measure it. According to DoH, once you allow for "quality adjustments" productivity has sort of been unch. Yeah, right. I wonder who we should believe.
Tuesday, September 19, 2006
You know how democracy works, don't you: the Sovereign People vote and the politicos carry out their wishes.
Just in case you missed it, two years ago the people of the North East voted overwhelmingly (by four to one) to reject the Fatman's pricey and bureaucratic nightmare of a brand new layer of government- the elected regional assembly. So here in the home of democracy you might have thought that would have been an end to it.
But you'd be wrong. The whole thing has simply carried on anyway. Except without the "elected" bit.
If you check out its website you'll find the North East Assembly is now the self-styled "voice for the region", whose "unique strength lies in its breadth of representation". What's more, it's "placed itself at the centre of a whole range of issues affecting the lives of people who live and work in the North East."
Er, would those be the same people who just two years ago made it so abundantly clear they didn't want it at any price? And if so, why would anyone think "the people" would want to be "represented" by the 73 (!) placemen and quangocrats (see pic for example) who now make up the Assembly's members?
Of course, if they were just meeting up in the Scout Hut and not putting the rest of us to any cost or inconvenience, that would be fine. But sadly, that isn't the case.
They, along with corresponding assemblies for the other seven administrative regions imposed on England by Brussels, are part of the government's bloated "regions" industry. Of course it's no longer "run" by Prezz; instead it's fallen under the sinister sway of the Da Vinci's Code's Msgr Ruth Kelly. But that's done nothing to stop its spread.
How much does it all cost? A bit difficult to say, because as the National Audit Office found (see their report), funding comes from a plethora of different departments under a host of different programme headings. Objectives are vague and confused. But the biggest single chunk of money goes to the Regional Development Agencies, mega-quangos with punchy names like Advantage West Midlands, and "one North East". Their soaring budgets are currently gobbling up £2.3bn pa:
Obviously there's no evidence to support such wibble. As any A Level economics textbook will tell you*, taxing successful regions to subsidise unsuccessful regions has never been shown to increase a country's overall growth rate. Indeed it can make it more difficult for unsuccessful regions because it artificially inflates their wage costs and often lumbers them with white elephant projects (like the infamous Rootes car plant at Linwood) that will never be commercially viable and distract effort from real businesses.
So here we are. Another entire state industry that is costing us a fortune, is in nobody's long-term interests, and which the sensible voters of the North East rejected.
Nobody wants it.
Except the politicians.
* When I talk about A Level economics textbooks, I am of course talking about such books from the late 60s. You're probably not going to find this stuff in your modern picture book equivalent.
Many years ago, when Tyler was a very junior and naive Civil Servant, he went to a party with Doctor Crippen. It was full of medical students joking hysterically about the lastest horrific cock-ups they'd perpetrated on the sick citizens of South London. Steadying his nerves with a brace of stiff ones, Tyler sought out another non-medico, who happened to be a most delightful young lady. Which was nice. And most gratifyingly, she hung on his every word, laughed at all of his jokes, and was totally smitten with the tedious details of his work.
It was only later- amid a departmental leak enquiry- that it transpired she was a journalist with Computer Weekly. And she'd reported in full Tyler's serious misgivings about a major IT project then underway in the department. Fortunately, Tyler's boss was an understanding sort of chap, and in exchange for a full confession, he commuted the capital sentence to a flogging on the quarter-deck.
Ever since then I've taken Computer Weekly's commentary on public sector IT projects extremely seriously- if anyone knows the truth, they do.
So when CW's executive editor, Tony Collins, tells us why government is so very very crap at IT, we should listen:
"Why do projects fail regularly to meet expectations? Each project runs into trouble for complex and sometimes unique reasons, but when projects are looked at over decades, it is possible to see some common factors emerging, particularly a lack of accountability and transparency.
Last year a senior civil servant, a chief communications officer, put his finger on one of the main causes of IT related failures in government: nobody tells it like it is.
This may be at the heart of the difficulties faced by the Government when it tries to introduce hugely ambitious schemes such as the NHS’s National Programme for IT and the technology that supports ID cards: government is set up to publicise its successes and to suppress its failures."
Mr Collins has put his finger on it. Lack of accountability and transparency is endemic to government (which is precisely why we'll be proposing a Transparency and Accountability Act in Conservative Home's 100 policies). And government always has an unerring ability to fool itself about underlying realities.
But it's his final point that's the real killer: government- especially this government- government is set up to publicise its successes and to suppress its failures.
We should all cut that out and stick it on the wall.
PS Today also brings- again via CW- the latest news of problems with the NHS Supercomputer: "HOSPITAL operations and consultations are being delayed across England because the new NHS computer system suffers almost one “major incident” failure every day. Patients have been left waiting on operating tables and others have had appointments cancelled. More than 110 major incidents have been reported by hospitals and GPs over the past four months, Computer Weekly magazine reports today. Reported problems include failures of the system used by surgeons to see X-ray pictures on a computer screen in wards and operating theatres. On some occasions the system has crashed during an operation, forcing the surgeon to suspend the procedure while a hard copy of the X-ray is found."
Monday, September 18, 2006
"COUNCIL workmen have repainted warning signs outside a school - which was demolished in 2003. The new markings tell drivers not to stop even though the plot is now just an overgrown field destined for housebuilding.
And taxpayers who live near the site of the former Thomas Chippendale Primary, Otley, West Yorks, agreed: "It's a mindblowing waste of our money." Local John Morgan said: "The school shut in 2002 and was torn down a year later. You'd think they'd have noticed - and no one ever parks there anyway." (Mirror 18.9.06)
I have a feeling the British Army used to make its peacetime conscripts do stuff like that- painting roadside stones white etc. The difference is those guys were killing time between wars, whereas these guys are just killing time between cups of tea. Hah!
PS This is not the first bizarre council road painting incident we've recorded on BOM. In January we highlighted the case of the badger painted over on the A361 near Frome- pic above. At the time we put it down to some unfathomable local practice. But it's clearly much more widespread.
Sunday, September 17, 2006
Not before time, the government has sharply revised up its estimate of Britain's losses to fraud. Officially they now reckon it's costing us £40 bn pa, more than double the figure they gave only two months ago. But the Attorney General’s deputy accepts even that is probably an understatement: one leading law firm reckons that it could easily be over £70 bn, or nearly £3,000 pa for every household.
£70bn is One Very Big Pile of Cash Indeed to be losing. So big that it makes a nonsense of the last Home Office estimate of our total losses to all crimes, at "only" £60bn pa. The total figure must now be well in excess of £100bn pa, or £4,000 pa for every household.
So what gives? Back in July, when they estimated the cost of fraud at £16 billion a year, the government reckoned "credit card fraud cost £439 million a year, cheque fraud £40 million, insurance embezzlement £1.5 billion and telecom fraud £866 million. Economic crime cost Revenue & Customs a further £11.5 billion a year. Trading and marketing scams account for £1 billion, and the public sector loses up to £14 billion".
Did you get that? Out of the £16bn estimated loss then, £14bn was lost by the public sector, mainly through fraud against HM Revenue & Customs. Implying of course that losses by the private sector were a mere £2bn- including identity fraud (cf the government's disgraceful attempt to persuade us we need those pricey ID cards to stop massive ID fraud- eg see this blog).
Since then, while private sector fraud losses may have edged up, the Big Trumpeting Elephant rampaging through the Accounts Department has been the explosion in VAT Carousel fraud (see previous blogs here and here). We estimated that alone could now be running at £30bn pa, which accounts for most of the government's new official fraud total.
So what to do? Ideally of course, the government would be capable of running efficient tax and benefit systems, thereby at a stroke eliminating 90% plus of all fraud. But pigs might fly out of Gordon Brown's butt, so what can we do in the real world?
Cost effective justice, that's what.
Consider the recent case of John Kaduwanema, 27, an illegal immigrant from Uganda (photo above). He somehow (duh?!?) got a job as a finance manager for Birmingham City Council's social care and health finance department. From there he proceded to defraud the Council of more than £1 million in public funds. Just like that.
He was then extremely unlucky because he got caught in the 20% of crimes actually detected. And what did he get? Seven and a half years. Which given automatic and completely bonkers 50% remission means just over three years inside. So that's £300 grand pa- nice work if you can get it, even if not quite in Dido's league.
According to research by Stoy Hayward, the average sentence for fraud in 2004 was just 2.4 years. Which means the actual prison term averages a derisory 14 months. And that's despite the fact, as Stoy Hayward note, that "greed, not hardship is driving fraud in the UK - our statistics show that wherever a motive was reported, an overwhelming 60 per cent of cases were motivated by the desire for a more lavish lifestyle."
Cost effective criminal justice demands much, much harsher sentences - say 20 years for Mr Kaduwanema, with no remission. And until we get that, fraud will go on bleeding us dry.
Must stop now- the Major's nodding his head so vigorously I fear it may work loose again.
It doesn't do to dwell on past horrors, but some of us still wake up sweating at the nightmarish mauling Paxo gave to David Davis during the Tory leadership campaign. Setting aside the charming intro ("why are you a shit?") the real killer was the grilling over DD's so-called "Growth Rule".
For those who've forgotten, the Growth Rule was actually devised by Reform and calls for the growth of public spending to be set below that of trend GDP, thus creating fiscal room for the tax cuts essential to lift the trend economic growth rate. It is an additional Golden Fiscal Rule, and plugs the yawning gap in Gordo's version (under which he can increase spending as much as he likes, just so long as he increases taxes to finance it).
Specifically, Davis promised to limit public expenditure growth to a quite do-able 1% pa below the rate of trend GDP growth, which on then current economic projections would have released £38bn for tax cuts during the life of the next Parliament.
Paxo had great fun with it. Is it a guarantee or a promise? Oh, it's a strategy, is it? But you can't promise it? And can we trust a shit anyway? Etc.
The truth that didn't get out was that Davis was offering a bankable pledge to Britain's increasingly taxed and increasingly cynical electorate: in binding himself to a clear and measurable Rule, he was promising to surrender some more of the unfettered governmental discretion that has proved so very damaging to us all.
And why do we need a spending rule? As we said at the time:
"Quite simply, because all of our experience tells us that politicians and money- our money- are not a safe mix. We need rules because political discretion can't be trusted. Politicians of all persuasions find it much, much easier to increase spending rather than cut it, so we get a tax and spend ratchet. With a rule, they will be forced to actually find and implement those notorious "efficiency savings", rather than just commissioning another report or ten which merely rearrange the deckchairs.
Just as the seventies showed political discretion was hopeless at "fiscal fine tuning" (hence the abandonment of Keynesianism), and the eighties and nineties showed it was hopeless at monetary management (hence Bank independence), now the noughties are showing (er...reshowing) it's hopeless at managing public spending. If we can't get the politicians removed completely, we need clear simple rules to rein in their excesses."
Davis' message was that of the anti-establishment outsider, an explicit rejection of the cosy ruling consensus that reckons it's perfectly OK if government takes up over two-fifths of our GDP (as promoted once again in this week's Economist- see this TPA blog for response).
But that was then, and this is now. It's one year on, and with Cameron having delivered a consistent poll lead, we true believers have being trying ever so hard not to rock the boat by replaying tricky debates from last year.
But reading the full text of Alan Milburn's individual choice and freedom speech (here), has brought it all flooding back:
"A new assumption should guide policy. The state should be running less not more. And to give this new political assumption bite it will need to be given institutional form. After all nobody ever willingly gave away power. So Whitehall should be capped in its scale and its scope. Where one new regulation is proposed two old ones will have to go. Where one new form is issued two old ones will be replaced. Where one new standard or target is introduced two old ones will be withdrawn. Where one new job is created two old ones will be lost."
This is from a Labour man, right? Having been inside the biggest expansion of Big Government since... well, since the last Labour government, he's realised not only was it all a terrible mistake, but that to roll it back we cannot depend on politicians to use their discretion to somehow do the right thing.
The only way of gripping Big Government is to give our rulers clear and explicit rules. Everything else- be it best endeavours, or "trust us", or even "sharing the proceeds of growth", - is doomed to end in the sort of disappointment and disaster we document every day on BOM.
PS For an excellent commentary on Milburn's speech, see this TPA blog. Matthew D'Ancona also highlights it here, arguing its radicalism is "enough to chill the blood of anyone who wants the Tories to win the next election".
In the cash-strapped NHS waste news this week:
NHS trusts blowing £172m pa on management consultants- "Spending is now almost twice the £93 million that hospitals and surgeries were paying out two years ago. Tens of millions of pounds are being handed over for advice on everything from corporate "branding" to how best to plan away-days. Maidstone and Tunbridge Wells NHS Trust in Kent, for example, is expected to spend about £3.5 million on external consultants this year — even though the trust has a £16 million deficit and has announced 300 job losses. Mansfield District Primary Care Trust spent £1,300 on the "design and facilitation of the prescribing team's away-day" and a total £175,612 on advisers. Ashfield PCT, which will spend about £150,000 this year, has paid for advice on "branding" as well as the "preparation and facilitation of governance time-out". Burton Hospitals NHS Trust said it had spent £58,000 for advice on "publicity". The Robert Jones and Agnes Hunt Orthopaedic Trust in Shropshire paid £33,000 on public relations and a further £16,000 on board training." (Telegraph 12.9.06)
£20m for hospital art- "Nearly £20 million has been spent on art in hospitals over the last four years. At least £4.1 million was spent on hospital art last year, but the actual figure is likely to be higher as it only represents data supplied voluntarily by trusts. The statistics were revealed in response to Parliamentary Questions and come as the new NHS chief executive this week admitted in an interview that key hospital departments across England could be closed. Steve Webb MP said: "At a time when NHS budgets are stretched to breaking point, patients will find it hard to accept £20 million being spent on art projects. Whilst no-one objects to cheerful hospital environments, it is hard to believe that this is the top priority when doctors and nurses are losing their jobs. If millions are being spent unnecessarily on art projects, how many more millions are being wasted elsewhere in the NHS instead of being spent on frontline patient care?" (LibDem News 14.9.06: for full Written Answer see here)
Sham consultation exercise cost £1m- "A £1 million public consultation into the future of NHS services has been exposed as a "sham" by an official Government evaluation. A large proportion of the people who took part in Your Health, Your Care, Your Say, the consultation vaunted by ministers for allowing people to influence a White Paper on health published this year, felt they had little or no impact on the final policies. Participants were paid to take part in the form of "expenses", costing a total of £151,300. Travel and hotel accommodation for the consultation's "summit" in Birmingham were also paid by the taxpayer... Some of those who took part have admitted that they were "only there for the money". The evaluation report said there were concerns about "restricted polling questions" that were "slightly leading and framed to get specific answers". Almost half of those questioned felt that issues raised in discussion groups were not considered in the questions they were then asked to vote on during the consultation. One participant said: "We ended up voting for what they wanted us to vote for. Some things should not have been there on the list." (Sunday Telegraph 17.9.06)
£1.2m plus on toothbrush advice- "Ministers have announced the Government's latest attempt to interfere in family life, telling parents how to brush their children's teeth. A multi-million pound campaign will give advice such as "hold the brush at a 45 degree angle against the gumline" and "eating cheese after a meal can help reduce the risk of tooth decay". The Brushing for Life campaign was greeted with ridicule. A £1.2m trial scheme has already seen extra staff hired to give away toothpaste... Tory MP Sir Paul Beresford - who is also a dentist - said: "It is incredibly rich for this Government to be offering children advice when they won't give them dentists." (Daily Mail 14.9.06)
Total for week: £194,200,000
Saturday, September 16, 2006
You'll remember when Father Ted won a Golden Cleric Award, but Mrs Doyle still reckoned he was only the second best priest in Ireland. Poor old Ted was so upset he had to ring 'Priest Chatback' to calm down ("Welcome to Priest Chatback – if you’re under 18 or not a priest, please hang up now…").
Well, I don't feel anything like that at BOM being named Third Best Tory Blogsite by the ever-excellent Iain Dale. After all, we're only just behind Conservative Home and... er, Iain Dale.
So I'd like to thank my producer... my parents... Mrs T and the little Ts... and of course Iain himself. (How he manages to read his way round all the political blogs, I have no idea- it takes me about 30 mins just to read CH and his).
And I'm very pleased to see he's also put my good friend the Doc in at number 3 in his list of top non-aligned blogs, hard on the heels of the inestimable Guido and Mr Smithson (who once "moderated" me on Political Betting, leaving me with a permanent limp).
Trebles all round I think.
The NHS Supercomputer disaster is still marooned out on the pack-ice. Back in April we blogged how lead supplier Accenture had been forced to take a $450m charge against problems on its share of the NPfIT contract, and how it was unlikely to take the set-back lying down. In their view the problems are largely the responsibility of the Department of Health which keeps changing its mind, and one of the subcontractors, iSoft, which is failing to deliver. We predicted legal action.
Fast forward six months and guess what:
"Industry sources suggest that Accenture has threatened legal action by the end of the month if it cannot reach a satisfactory agreement with Connecting for Health, the NHS's IT procurement arm, on ending or substantially renegotiating the contract. Any withdrawal would be a further blow to the NPfIT, already beset by worries about cost overruns and delays."
Now of course, we all know about Connecting for Health. It's run by a Big Swinging Dick called Richard Granger who likes to treat his suppliers mean. He likens them to huskies:
“When one of the dogs goes lame, and begins to slow the others down, they are shot. They are then chopped up and fed to the other dogs. The survivors work harder, not only because they’ve had a meal, but also because they have seen what will happen should they themselves go lame.”
Great line. The trouble is Accenture turns out to be quite a large husky that doesn't much fancy the idea of being lunch. So it's baring its gnashers and biting back.
Which is catastrophic news for the Supercomputer, especially coming on top of a whole mass of other problems, most recently the near bankruptcy of iSoft (see this blog; also this blog for the recent PAC probe- now to be re-opened).
But there's a much broader point here. Ignoring all the spin, this government's current recipe for fixing our dysfunctional public services is to privatise the suppliers. But crucially- and unlike the situation with normal markets for stuff like groceries- the customer will remain the government itself. So how it manages its supplier relationships is critical.
And the Supercomputer is highlighting once again just what a rubbish customer government is. As we've blogged here and here, most of the time it naively overpays for stuff we don't want. But here's a case where it's swung to the opposite extreme- trying to throw its weight around but succeeding only in getting bitten.
Paul Farrelly, the Labour MP for Newcastle under Lyme is clearly perplexed: "Major consultants, like Accenture, have been paid a small fortune by the government for advising on contracts like this. It is a pretty fine state of affairs if Accenture is now thinking of biting the hand that feeds it."
Paul, it's like this- Accenture is a global commercial enterprise that has clearly decided dealing with your hopeless government isn't worth the candle.
And if you want a friend, don't buy a husky.
Friday, September 15, 2006
So CPO* Commissar Hewitt has been caught with her pants down engaged in a despicable act with the Chipmunk and other creatures of the night:
"A SECRET meeting has been held by ministers and Labour Party officials to work out ways of closing hospitals without jeopardising key marginal seats. Concerns about the political impact of planned hospital closures and other cuts to the NHS prompted ministers to organise the closed-door discussion. Details of the meeting, revealed in e-mails passed to The Times, show that it included Hazel Blears, the Labour chairman, political advisers from No 10 and even — at the request of Ms Blears — a Labour Party representative. "
To complete their degradation they reportedly viewed pornographic "heat maps" depicting scenes of marginal Labour seats where closures or reconfigurations of health services could cost votes.
So the lives of those in Conservative and Lib Dem constituencies are cast into the hazard in a desperate attempt to save the skins of a few marginal Labour MPs.
These people are the absolute pits. Politicos have always bribed us with our own money, but this lot have turned it into black art. Because this isn't just the traditional pork barrelling of spending in safe Labour areas like the North East and Scotland. This is systematically denuding some areas of healthcare in order to shore up electoral support in the governing party's dodgy marginals.
It's bad enough that political campaigning is now concentrated on those hundred or so key marginals. It now seems that public expenditure has gone the same way. Public services guided by the lights of perverted psephology.
Let's hope the electorate take due note. Politicos never could be trusted, but operating with modern tools in our dysfunctional unrepresentative democracy, they endanger both our prosperity and our lives.
PS If you want to increase your blood pressure still further, ask why the NHS- despite its doubled budget and protected competitive position- is having to close its big hospitals to fund new local ones. In the ferociously competitive groceries market, Tesco and Sainsburys have opened hundreds of local convenience stores over recent years, but I don't recall them closing too many of the big ones to pay for it. The politics of "and" it ain't.
* footnote: for those who've forgotten, CPO stands for Criminally Patronising Oleaginous; it is a rare accolade bestowed only on acknowledged world leaders in the field, such as Ms Hewitt.
They won't vote for it- we know that. But at least some of them are now starting to gobble about it.
Brylcreem Bounce Milburn tells us:
"There remains at the heart of New Labour an unresolved ambivalence about the role of the state. As a parent, I don't want power in the hands of councils or schools. As a patient I don't want it in the hands of managers or hospitals. I want it in my hands."
Yes, we know he has his own axes to grind, but he's spot on here. How long before he takes the next step- the simplest and cheapest way of putting power in the hands of the people is to give them the money to spend on the schools and hospitals of their own choice. Even better, leave them with their own cash in the first place.
Of course, that wouldn't be great news for the career prospects of gobbling politicos.
Thursday, September 14, 2006
We've blogged the atrocious British Council many times. Run by my Lord Kinnockio, it costs taxpayers an outrageous £0.5bn pa and is completely and utterly useless.
But even by their rock-bottom standards, their latest project plumbs new depths. According to the Azerbaijan News Agency
"British Council starts in Azerbaijan new project - Touch The Sky. In relation with this, several events will be held in Baku. From 26 to 28 September, the renowned British skateboard company Blueprint will run trainings for local youths. Nil Chester, Colin Kennedy and Faul Shier together with local skaters from Roller Club will skate on Baku streets to explore the historical and modern urban areas of the city and also share their excellent world famous skating technique. Ramps for will be built be specially invited ramp builder Richard Holland. Representatives of graffiti Kid Acne and Boyd Hill will be running trainings for young local graffitists."
There's no word on quite how much of our hard-earned taxes MC Klothead K has deemed fit to burn on giving Nil, Col, and Faul a free skate round Baku, or spraying the city with graffiti.
htp: David Blackie
Following this morning's post on quango shuffling, I've been refreshing my memory about Partnerships UK (PUK, quite deservedly pronounced puke).
Variously described as the "Mother of all Public Private Partnerships" or more simply as "One Real Mutha", it was established by Gordo on April Fools' Day 2000 (no, really) "to support and accelerate the delivery of infrastructure renewal, high quality public services and the efficient use of public assets through better and stronger partnerships between the public and private sectors". Which in English means it promotes PFI projects.
It's 49% owned by government and 51% owned by various private sector investors. These have included Serco, Jarvis, British Land, Barclays, HSBC, and Abbey National.... umm, yes they do all have something in common- they all stand to benefit bigtime from the PFI projects promoted by PUK. Get the cosy picture?
According to HMT's accounts, PUK itself costs us around £17m pa. But it isn't helping public sector efficiency or value for money. Indeed, it isn't even clear quite what it actually does. According to its website, it majors on advising other public sector bodies how to commit yet more of our future taxes to overblown PFI schemes (eg those expensive NHS LIST projects). But it also invests money- our money- in its pet schemes: about £50m up to March 2006.
When the Centre for Policy Studies took a detailed look at it in 2004, it concluded PUK “lacks logic” and “adds confusion and contradiction” to public sector procurement (you can get some feel for its capacity to confuse just by glancing at the organogram reproduced in the our last post). CPS called for its abolition and the redeployment of its well paid City surplus staff to special PFI units, or out to the spending departments or back to the private sector.
Sound advice. But somehow puke still seems to be cosying along. Doing all it can to pump up our PFI debt even higher than its current £90bn (see this blog for latest debt estimate, and this blog for how we're paying through the nose).
We all know that quangos love to play post offices, with lots of paper shuffling, official coloured forms to stamp, and boxes to tick. So it's quite possible that yesterday's announcement from the Department of Health is just that:
"Department of Health to buy partnerships UK's stake in Partnerships for Health (PFH)
The Department of Health and Partnerships UK (PUK) today announced that the Department is set to become the sole owner of Partnerships for Health (PfH), the public private partnership set up to encourage investment in GP premises and health centres.
Under the deal, the Department will assume sole responsibility for PfH's 20 per cent stake in each of the 42 NHS LIFT companies. The seven schemes in the fourth wave of NHS LIFT will continue as planned, with the department providing all investment and support to PfH."
In case you don't know, Partnerships UK is a Treasury sponsored quango that promotes PFI deals, and Partnerships for Health is a DoH sponsored quango that... er, promotes PFI deals. NHS LIFT companies are 42 local health authority sponsored quangos that... er, promote and "own" PFI deals.
So amid a flurry of paperwork, press releases, and no doubt expensive "closing" dinners and a sackful of those perspex deal tombstones, one quango has sold its stake in another quango- and all its subsidiary stakes in 42 other quangos- to the Department of Health.
How very useful.
Some questions. First, when we say "sold", what money actually changed hands? Unlike such announcements in the real world, the DoH press release makes no mention of it. But "sold" sort of implies something. And given what we know about NHS LIFT, it should have been quite a lot.
You don't know what LIFT is? It's the government's £1 billion NHS Local Improvement Finance Trust (LIFT) programme to improve primary and community healthcare facilities by building a whole load of new spec offices around Britain. The idea was to get GPs surgeries out of their converted front rooms into glossy new buildings, which would also accomodate NHS dentists and other primary care providers.
Unfortunately, the new accomodation has turned out to be very expensive. The Public Accounts Committee produced figures suggesting LIFT accomodation is 15-20% more expensive than comparable brand new premises, and the excess over the cost of existing premises is often 3 to 4 times higher. A staggering gap.
Which means it's extremely difficult to find paying tenants. So to make the sums add up, GPs and others are being "incentivised" to move in. To start with, the DoH has made it virtually impossible to build new premises outside of LIFT. Moreover, tenants who can't reclaim the costs from the DoH already are being given rent subsidies. GPs can reclaim from their Primary Care Trusts, but as many have pointed out, money spent on fancy premises is not then available for actual care.
So who benefits? The PAC pointed out that the financial return on these projects- described by the National Audit Office as low risk- is a very attractive 15% pa. Which means that anyone owning a slice has got a pretty attractive asset. And via their 50% stake in PfH, PUK owned 10% of all LIFTCos. Which must have been worth a few bob.
Why does that matter? Well, it wouldn't if Partnerships UK was owned 100% by the Treasury. But it isn't- as you may just be able to make out from the convoluted diagram above, 51% of it is owned by private investors. Who have now copped 51% of whatever DoH paid for that stake.
And we taxpayers are paying for it.
Sound like an urgent job for FOI.
Wednesday, September 13, 2006
The Labour government has just agreed to give their trade union paymasters another £5m of taxpayers' money. Our money.
This time it's ostensibly to fund a "legion of equality watchdogs" in the workplace. But it's actually just the latest instalment of the £10m Labour has promised unions in exchange for their continued financial support of the party.
They call this outrage the Union Modernisation Fund, and the first bungs took place in March. Then £3m was dished out to virtually all the bruvvers, including such model citizens as Bob Crowe's RMT, and ASLEF.
WTF should we taxpayers support trade unions? Just taking this latest £5m tranche, why should we pay for equality watchdogs that will do even more damage to our economic performance?
Oh yes, I forgot- this is about flexitime for women, and our Minister for Women (Ms Kelly) reckons "giving women the opportunity to do better quality jobs at a time that suits them could inject £23 billion a year into the UK economy". Not £22bn you note, or even £24bn, but £23bn- that's how precise you can be when you know about these things.
I'd rather believe David Frost, Director General of the British Chambers of Commerce, who says: "This is more red tape. Employers are absolutely smothered already with the sheer scale of employment legislation. Having introduced this legislation, why does the Government seem to lack trust in companies to implement it? As firms are trying to deal with it, they don't need the dead hand of the state monitoring their every move."
The unions contribute 82p of every funding pound the Labour Party receives.