Monday, April 30, 2007

May Semaphore Break



BOM is heading for a week in a wifi-free zone, and the old semaphore's not too good. If things carry on as per, we'll miss nearly £2bn of government waste.


PS What does NUJV say about state education standards half a century ago?


A Dim Light In The Darkness


History will be brutal with Tony Blair. Just like the reviled Harold Wilson, he wins a string of elections, hugely increases the size of the state, and fails to grip fundamental problems. Just like Wilson he spends every last penny and leaves a disastrous legacy that takes a painful decade or two to address. And even worse than Wilson, he doesn't keep us out of Vietnam.

At root, both hugely overestimated the ability of the state to deliver public services. Both believed that that if you pump in enough fiscal steroids, the grumpy old self-absorbed elephant can somehow be made to dance.

Wilson never did understand his mistake, preferring to believe he'd been blown off course by gnomes, politically motivated union men, and Gerd Muller. But after a decade of painful scar treatment, Blair does seem to be vaguely aware: a dim light may have clicked on.

This morning, Croney Falconer says:

"One of Tony's big regrets, I think, would be that we didn't realise quick enough that if you genuinely wanted to change the way the public service delivered for the public you needed to embark upon a process of cultural change. I think it is 99-2000 that he begins to realise that something more profound is required.

The cultural change, which seems obvious now, is you transform from it being a set process in which the public service deliverer is in the dominant position to it being much more driven by the particular needs of the person to whom you're providing the public service, which then leads you into giving to all the public the choices which currently only the middle classes have in relation to the provision of vital services like health or education. I don't think we even really clocked that agenda until four or five years on."


It's not a very bright light admittedly, but it is surely a light. The language of choice is not the same as the language of equality.

But the vital step is the next one.

Because while we can all agree that "cultural change" is a key condition for improving public services, in terms of practicalities, it's not really much help. Indeed, as the fatman observed, whenever you hear the word culture, best management practice is to reach for your revolver.

What Falconer is saying here is that if we could somehow achieve "cultural change", we could transform the way the public services work, and everything would be tickety. Which is of course like saying we could cure depression by making everyone happy.

In the real world, there is no known way of achieving cultural change inside Big Government. It's the nature of the beast to be top-down, producer-driven, and wildly inefficient.


And while Falconer wants consumer choice so that ordinary punters can have the same choice on schools as rich people like him already exercise, he's putting the cart before the horse. Consumer choice is not an output of cultural change: it's a vital pre-condition.


As we constantly remind ourselves on BOM, the fundamental reason private sector businesses work so much better than our public services, is that they are driven by customers - ie the people who pay. Businesses therefore have to serve their punters well, or they lose their incomes. They have the strongest possible incentive to develop a customer focussed culture.


But the paying customers for public services are not consumers. They are the people who dish out the dosh- ie Big Government. It is a fundamental and generally crippling problem with any system that arranges itself as free-at-the-point-of-use.

Sunday, April 29, 2007

Recent Bonfires 63

In the news this week:

£77m nanny food flop- "The free fruit and vegetables policy for schoolchildren is under review after an independent report found that the initiative had failed to improve pupils' diets. A study to evaluate the £77 million School Fruit and Vegetable Scheme (SFVS), launched three years ago, discovered that it had "no lasting impact" on what children were eating and that when youngsters received free fruit and vegetables at school they were less likely to consume them at home. Just 27 per cent of pupils achieved the Government's target of five portions a day while only a third of children were even aware of the five-a-day recommendation. Critics described the project as "hopeless" and "badly run" and accused the Government of failing to implement the necessary educational backing to make the programme work. Professor Fergus Lowe, the director of the Food and Activity Research Unit at the University of Bangor and a Government adviser on food policy, said: "The scheme is hopeless and every bit of the research shows this." (Sunday Telegraph 29.4.07)

MP spent £50,000 in postal frenzy- "A leaked email written by a senior Parliamentary official shows that the bill for postage and stationery soared to a record high last year – and doubled last month as MPs rushed to beat a ban on unlimited claims... MPs were caught stuffing handfuls of pre-paid envelopes and stationery into their pockets, with large quantities disappearing two days before the curbs took effect. Many even used pre-paid envelopes – worth up to £1 each – to jot down notes and shopping lists, before throwing them in the bin. Labour MP Siobhan McDonagh, an aide to Home Secretary John Reid, spent nearly £50,000 on free postage and stationery last year alone. Immigration Minister Liam Byrne is in second place with £40,000... A Parliamentary insider said: ‘The abuse of this allowance is quite shocking. When they realised that these allowances were to be controlled, MPs literally went round filling their boots while they could. Stationery expenditure for the month was up nearly 100 per cent at over £126K, with postage at £370K against a normal monthly total of around £200K." (total annual cost £2.4m = 12 x £200,000; Mail on Sunday 28.4.07)

£1bn EU landfill fines- "When, in 1999, the EU decided to phase out the landfilling of waste with its Landfill Directive, this was always going to hit the UK much harder than anyone else, because we have traditionally put much more of our rubbish into holes in the ground than other countries. There was nothing intrinsically wrong with that, since it has been used to reclaim large areas of land that might otherwise serve no useful purpose... [but] under the directive, each country was set targets for reducing landfill, with hefty fines by the EU for anyone failing to meet them. By 2010 these will be £150 for every ton of waste by which a local council exceeds its target... the National Audit Office estimates that by 2013 we shall be paying £205 million a year in fines to Brussels. Within ten years those fines (again payable by council taxpayers) will have amounted to well over £1 billion in addition to the billions of pounds we shall be paying in landfill tax." (S Telegraph 29.4.07)


Total for week- £1,079,400,000

Friday, April 27, 2007

Another Black Hole In The Accounts


A great time had by all... but who's paying?

So the Home Office has frozen funding for the National Black Police Association, while their accounts are probed for evidence of "improper activities".
This is what we know so far:
  • the NBPA got £180,000 of our money last year, a doubling since 2003-04

  • despite the fact that the organisation is a charity funded entirely with public money, no proper accounts have been filed since 2002-03

  • it owes Greater Manchester Police £180,000 for a conference it ran (pic above)

  • there are currently "no valid trustees"
And it sounds very much like its assets have been going walkabout.

I've just taken a look at what passes for the NBPA's annual report (here). The financial report is shocking in its inadequacy, largely comprising a whine about how the Home Office doesn't give them enough cash, and how they lack "a sponsorship champion".

The actual accounting information consists of a few bar charts roughly indicating what proportion of their budget went on items like the London Congestion Charge and the phones (which in one month alone accounted for an extraordinary 40% of the budget). There are also entries recording how much was spent via debit cards and "expenses", but no clue as to what was actually being bought.

Now you may say that the not-fit-for-purpose Home Office has got a cheek questioning the accounts of the NBPA. After all, its own accounts are so shambolic they were qualified by the National Audit Office.

And frankly, we can hardly claim to be shocked when we discover yet another public sector body that doesn't take the stewardship of public money seriously.

But what we should all find shocking is the fact that a black police officers' trade union is getting any public money.

I had no idea I was being made to pay for this. Did you? I thought not.

Even setting aside the question of whether it's A Good Thing to have an overtly racist police trade union, I'm guessing we'd all like to know why can't they just fund themselves like any normal trade body? The NBPA itself sort of recognises the current situation ain't right:
"The subject of self-funding through sponsorship, advertising and membership fees have not progressed as successfully as I would have hoped and this is an area requiring further improvement for us to attain self-sufficiency."
So why don't they get on with it? If they want the NBPA to continue, they should reach into their own pockets. Not mine.

PS As regular BOM readers will recall, this is by no means the first case of taxpayers being forced to fund trade unions. As we blogged here, Labour are giving the unions £10m of our money in exchange for their continued financial support of Labour.

Limits Of Taxation


Nanny's work is never done
As night follows day, Nanny's wheeze to raise more cash by taxing rubbish collections will have the following entirely predictable consequences:
  • more fly tipping

  • more garden fires

  • more rats... and not just in government

All taxes have behavioural consequences: people don't like paying tax, and will go to great lengths to avoid doing so. We all know that: only nanny seems to sail on regardless.

Tobacco taxation is a salutary example. As the Chairman of BAT has just reminded us, punitive taxation of the foul weed has fostered a multi-billion global industry devoted to smuggling and counterfeiting. He estimates that it costs lawful tobacco companies £2bn pa, and taxpayers £12bn pa in lost revenue.

As we blogged here, HMRC estimates it costs British taxpayers about £3bn pa- nearly 1p on the standard rate of income tax- and others reckon the figure is even higher. Plus, it has unknown health consequences because many of the smuggled ciggies are forgeries made from camel dung.

Camel dung will be the least of problems once the bin tax gets going.

Thursday, April 26, 2007

Another Lesson In The Bleedin' Obvious


Top security government phone network in action

One of the major arguments against the National Programme for IT - the NHS Supercomputer - has always been that it would be insecure. All our most intimate personal details would be handily gathered together in one place and readily available to hackers all over the world.

Naturally, the Department of Health and Bliar dismissed the idea- "the system will use the most incredibly sophisticated doobries" etc. Even though many outside computer security experts say that gathering everything into big central databases is the very worst thing you can do: no known configuration of doobries is proof against your determined hacker.

And of course, even the most sophisticated doobries depend on having staff who are capable of operating them. But as we can all see today, the DoH can't even operate the most basic computer housekeeping that the rest of the world takes for granted:

"The intimate personal details of medical students have been made available online. The details include addresses, home phone numbers, and even sexuality.

It appears that the information was downloaded onto Excel files and placed on an unsecured website that could be accessed by anyone through the internet. This is astounding. These kind of personal details could have been kept on a private internal system and it only requires a small file to protect the information using a password."

This is the real world of Big Government. We don't yet know the full facts, but judging from the raft of previous cock-ups, you'd have to guess that reponsibilities for data security were muddled, and the sharp-end staff concerned were demoralised unsupervised low grade temps.

We should never trust government with personal information. Not unless we want it freely available to those Nigerian flim-flam men.

Both the NHS Supercomputer and the crackpot ID cards plan should be abandoned forthwith. Making us both more secure, and £40-70bn richer.

Wednesday, April 25, 2007

Equality Industry Jobs Carve Up



A massive 15% of Londoners voted for Ken... nobody voted for his friend

The new equality mega-quango, the Commission for Equalities and Human Rights, is now up and running (see previous blog here). Its website is coy about cost, but we reckon it's £50m pa plus (see previous blog).

Anyway, I've been perusing their new website (paid for by us), looking at who's got the top jobs.

Obviously, Clever Trevor - Best Man P Mandelson - came out of the power struggle as the very top dog (predicted here), but his fellow Commissioners are just as interesting. So far, there are 13 of them, of whom three are trade union officials, two are academics, three are civil servant/quangocrats, and three are NGO professionals. Only two seem to have jobs in the wealth creating sector, and one of them is an author.

Today, they reminded us what they do, as Trev proposed that supermarkets should be forced to employ more ethnic minorities through positive discrimination.

Well, he doesn't quite put it like that of course. He says:

"You cannot for example now, in an area where the population profile has changed very rapidly over three years, say 'We would like to attract Asian staff'.

I think that Tesco or Sainsbury's or anybody else who is in the business of serving a local community would like to have the opportunity to do that. To some extent, the framework we have at the present time prevents you from doing that quickly - to respond to commercial needs."

So in TrevWorld- far from being a burden- government regulation will actually help the supermarkets (cf this morning's blog). Just like that boot in the face helped Winston Smith and his fellows to find real freedom.

Just one minor point of information for Trev. Round our way, Asian staff are exceptionally well represented in supermarkets. Just as Eastern Europeans are. In fact, they're represented far beyond their representation in the local community.

I have no problem with that- it keeps down the cost of my groceries. But I do have a problem with Trev spending £50m of my money finding a problem that in my observation doesn't exist.

So just why should we spend our money on a bunch of self-serving socialist quango jockeys whose prime objective is to lobby the government into enacting yet more laws forcing the rest of us to accept their prejudices? We don't want 'em, and if we change our minds we'll ask for them ourselves.

The CEHR ahould be abolished soonest.

Saving £50m+ pa - a quid each.

Class Dunce Gives Another Lecture


Collapsing NHS productivity

This morning another government quango gives another lecture on how businesses can boost their productivity. According to our old friends at the National Institute for Health and Clinical Excellence (NICE):

"Employees who smoke must be given time to attend clinics to help them to quit during working hours without loss of pay.

NICE claims that the proposal will cut the £5 billion annual cost of lost productivity, absenteeism and fire damage caused by smoking. It believes that a business with five smokers could spend just £66 on providing advice, including the cost of lost employees’ time, and see an overall saving of around £350 in improved productivity."

Either they've got the most extraordinary sauce, or they - a bunch of unaccountable tax-funded quangocrats - genuinely believe they are in a position to offer useful advice on boosting profits to businesses whose very essence is making money. Could anyone be that stupid?

As we've blogged many times, the government's own record on productivity is abysmal. The Office for National Statistics, attempting to calibrate just how abysmal, has come up with the following headlines (see this blog):

  • NHS- productivity falling by 1.6% pa since Labour came to power and ramped up spending (see here- including chart above)
  • Education- productivity falling by 1% pa since Labour came to power and ramped up spending (see here)
  • Adult social care- productivity falling by 1% pa since Labour came to power and ramped up spending (see here)

When we last blogged it, we calculated that falling productivity in just those three areas is costing us over £2bn pa- cumulative. Over ten years that's £20bn plus. Or 6p on today's standard rate of income tax.

Yet despite that atrocious record in its own business, Big Government thinks it's quite OK to lecture the successful wealth generating bits of Britain on how to make money. And quite OK to spend billions more on rubbish programmes like Regional Development Agencies, R&D credits, and pointless philosophical speculations, supposedly to raise productivity, but actually just imposing an even higher tax burden on successful businesses.

We used to make dunces stand at the back with that cap on.

Today we put them in charge, let them spend 43% of our income, and lecture us on how to live our lives.

Tuesday, April 24, 2007

Pointless Philosophical Speculation


Scanning the future- "come in please"

"Researchers studying robotics said that the Robo-rights document, published in December and sponsored by the Department of Trade and Industry, amounted to pointless philosophical speculation founded on poor science.

While there are important questions to be asked about the direction of robot technology, these have been obscured by considering “robot rights” that no scientists take seriously, the experts said."

Now we all know the £6.5bn pa DTI is a monster of waste, reportedly heading for dismemberment under Gordo (see this blog and this vid). But even by their abysmal standards, Robo-rights always seemed especially crackpot. As Noel Sharkey, Professor of Computer Science at the University of Sheffield, says:

“The idea of machine consciousness is a bit of a fairytale. I’m not certain it won’t happen, in the same way as when I was seven I wasn’t certain about Santa Claus not existing, but I was fairly sure.

We need a proper debate about the safety of the robots that will come on to the market in the next few years. Military use of robots is increasing fast. What we should really be bothered about is public safety.”

Robo-rights is one of more than 200 reports commissioned by Sir David King, the Government’s Chief Scientific Adviser, from Outsights, a management consultancy, and Ipsos MORI, the pollsters. It all takes place under the DTI's grandly styled OSI Horizon Scanning Centre (a "Centre of Excellence in Horizon Scanning").

Now, I don't mind them playing Isaac Asimov if they want to.

But wtf should I pay for it?

At least when IBM Chairman Tom Watson (pic above) famously predicted that "there is a world market for about five computers", it wasn't on taxpayers' time.

PS It's disappointing when you discover that it may not have been Watson who came up with that prediction at all, but a Cambridge Maths Prof. It's like that "billion here and a billion there" quote which was attributed to US Senator Dirkson, but actually seems to have been a misquote. Dirkson (reportedly) admitted: "Oh, I never said that. A newspaper fella misquoted me once, and I thought it sounded so good that I never bothered to deny it."

Monday, April 23, 2007

Paid For By Us, Run For The Staff


Speer style model for new upgraded OECD palace complex in Paris

Further to this blog, it's interesting to see that the OECD Staff Association has issued a statement supporting the organisation's beleaguered leader Angel Gurría. Even more interesting that it reads like a press release from the party union in a one party state:

"There is a recent article in The Economist harshly and maliciously attacking the OECD and its Secretary-General. The Staff Association welcomes the fact that our Secretary-General communicated this article to the Staff of the Organisation, as well as his response and the accompanying relevant correspondence.

Several statements by officials with which we fully agree denounce the accusations made against our Organisation...." etc

Which is a little odd, given that the Economist attacked Gurría, not the OECD (other than saying its governance arrangements seemed too weak to handle somebody wishing to steer it into "dangerous waters").

It's also in striking contrast to the Staff Association at the World Bank, which far from supporting its beleagured leader, is calling for Wolfie's immediate departure.

Why the difference? Could it be something to do with the fact that Wolfie's been savaging staff perks and prospects, whereas Angel hasn't.

Nah. These people are far to public spirited to let avarice and personal ambition cloud their judgement.

PS Just as a reminder, the World Bank costs British taxpayers £1bn pa, while the OECD is a knock-down bargain at a mere £20m.

Life After Job From Hell


Great when it stops
As we've blogged many times, the public services are full of Jobs from Hell. And one of the most hellish is state school headteacher. Which is why headteachers are resigning/retiring in droves,and there is a recruitment crisis (see previous post here).

When last sighted, 1200 state secondaries were without a permanent head- a disastrous situation that would simply not be tolerated by paying customers in the private sector.

Over the weekend, we got a reminder of just what a nightmare the whole business has become, when we met up with a couple of teachers with whom ex-pedagogue Mrs T had trained many moons ago.

The husband had until the end of last year been a state school headteacher of some fifteen years standing. I have no doubt he was excellent, and his school certainly ticked all the various boxes laid down by Whitehall.

He used to enjoy teaching, and being a head. Even though- while not in a classic tough urban area- his school always had its share of problem kids.

But as we know, whereas he once had authority over the school, and the space to exercise that authority, his job gradually became a classic meat sandwich (see this post). He lost authority over vital areas like exclusions, and instead picked up the vast new burden of central government testing. He lost authority over what happened in classrooms, and instead picked up the micro-management demands of ministerial curriculum directives.

And while his balls were still on the block if things went wrong, the shots were all called by those here-today-gone-tomorrow politicos (four useless Secretaries of State in four years). Responsibility without authority- the prerogative of the schmuck thoughout the ages.

Meanwhile, he observed that the problem kids seemed to have become progressively more numerous. And kids with no respect for school authority, forced to jump through education hoops of no interest- and quite probably no value- to them, are a dispiriting and lethal proposition for all concerned.

Our friend points to the breakdown of shared morality, wholly unrecognised in the pie in the sky one-size-fits-all social engineering handed down from Whitehall. But whatever the underlying cause, it means that all-ability schools like his find it increasingly difficult to serve anyone properly- certainly not the kids who actually do want to learn.
His solution is the return of selection, only this time with proper funding for those in non-academic schools. But selection, as we know, is something our rulers are adamant will be denied to all except those like the appalling Diane Abbott, who can afford to pay (plus those few authorities which still had it when the music stopped).
Britain's state schools are in the midst of a crisis. But the people who are best equipped to tackle it are throwing in the towel.

Still, it always feels good when you stop banging your head against a wall, and for the first time in a long time our friend had a proper smile back on his face.
Which is more than can be said for the parents forced to send their kids to rubbish state schools.
PS For some time I've been meaning to research the historic funding gap between grammar schools and secondary moderns. Because it's my strong suspicion that a key reason many sec moderns were so poor is that they weren't adequately funded (something I understand was picked up in the 1963 Newsom Report). So far, the only reference I've found reckons that secondary modern pupils got barely one-third of their grammar school counterparts (The Audit of War by Correlli Barnett; also quoted in The Five Giants by Nick Timmins). If true that's a shocking discrepancy, which I'm guessing reflected capitation rates heavily skewed towards sixth form pupils. Secondary moderns of course, didn't have sixth forms. I must investigate further.

Simple Shopper Buys Again From Daley Fine Art


Straight up- it's a genuine Van Goggin

Hard on the heels of the National Portrait Gallery's £100,000 purchase of the "Lady Jane Grey" portrait from that "anonymous man" in Streatham, Bolton Council has pulled off its own Antiques Roadshow coup.

Their triumph involved a 3,000 year old Egyptian:

"The offer from the antiques dealer seemed too good to be true. He had a 3,000-year-old Egyptian artefact, a statue of King Tut's half-sister, which had been in his family for more than a century.

And although it was worth £1million, he was prepared to sell it to his local authority for a knockdown £440,000 so it could remain in his home town."

Er... sorry... home town? Surely those 3,000 year old Egyptians lived a bit further east than Bolton. Bradford maybe.

Well, guess what. It turns out to have been a fake, chiselled to order by a couple of octogenerians (no really) in some backstreet Bolton lock-up.

All you can say is that A Daley must have done a truly historic job on Bolton's puffed up local "leaders". At the time of acquistion, Councillor Laurie Williamson, spokesman on culture, came up with the immortal line:

'This latest addition will enhance Bolton's reputation as a cultural destination.'

Laurie... mate... I need to break this gently.

£440 grand. Laugh or cry?

I'm thinking of knocking up a couple of Rembrandts- painted while he was holidaying with the Dick Van Dykes in the Woking area. It's a documented fact that they shared the Presidential Suite at the Holiday Inn Express.

Sunday, April 22, 2007

Recent Bonfires 62


We know you've got an unauthorised apple core in your wheelie bin

In the news this week:

£150,000 for envirocrime snoops- "A council is paying plain-clothes snoopers £30,000 a year to track down homeowners who put their rubbish out at the wrong time of the week or in the wrong place. The 'envirocrime' officers are employed to enforce environmental regulations and have the power to fine residents who 'offend'. Ealing Council in West London is spending nearly £150,000 on recruiting and employing four new enforcement patrollers to add to its 23-strong team that already monitors 'waste disposal' regulations." (Mail on Sunday 22.4.07)

Wrong army helicopters cost £150m pa extra- "The dismal story of how our Army in Iraq is given the wrong equipment continues. To carry out a range of vital tasks, from surveillance to providing air taxi services, its only helicopters are six Lynxes, designed for use in northern Europe, hopelessly unsuited to hot conditions and continually breaking down. Much more appropriate to the job in every way would be Bell 212s (known as Hueys), which are very much cheaper and more reliable, suited to the heat, carry more people and are used by the US, Iraqi and other armies... A Lynx costs £23,000 an hour, a Huey £2,000. At 100 hours a month operating time, this means we are spending around £150 million a year more than necessary, to provide our troops with much less efficient aircraft." (Sunday Telegraph 22.4.07)

£600,000 for bird-flu turkey firm- "THE turkey firm at the centre of the bird flu outbreak has been awarded almost £600,000 in compensation – despite making serious hygiene blunders. The Government authorised the payment to Bernard Matthews yesterday for the 159,000 turkeys slaughtered in an effort to contain the crisis in February. Yet it comes as questions continue to be asked about the company’s role in the spread of the disease. An official report published in the aftermath of the outbreak identified serious lapses in hygiene on the Holton site in Suffolk... Inspectors at the plant found a leaking roof, holes in a turkey shed made by rats, ­seagulls feeding on scrap meat and loose polythene bags containing waste liquid. But last month the Food Standards Agency announced there was “insufficient evidence” to prove the company had broken the law.The decision not to prosecute paved the way for yesterday’s payout of £589,356." (Express 20.4.07)

Scottish Executive spending £68m on ads- "Ministers are planning to spend up to £68m of taxpayers' cash a year on advertising campaigns, a sum that would for the first time outstrip Tesco, which spends about £67m... The entire Scottish advertising industry is worth about £480m a year, meaning the Executive will pump in anything from 10% to 14% of the total. But evidence is mounting that the Executive's numerous campaigns on television and radio have precious little effect. A £510,000 anti-racism campaign, which started in 2003, failed to stem an increase in racist attitudes. A review even found an increase from 21% to 25% over the course of the campaign in the number of people who believed that verbally attacking asylum seekers who get housing and benefits in Scotland was justified. Analysis of another campaign, this time directed at drug driving, found that many of the audience surveyed could not remember what it had shown or said. A recent £13m healthy eating campaign encouraged Scots to call a special hotline for advice. The line had so few takers that the cost to the Scottish taxpayer was £115 per call." (Scotsman 22.4.07)

Directgovkids "rights" site cost £2.2m- "Step aside MySpace: there is a new groovy website in town. The catchily titled DirectgovKids has been provided for children aged five to 11 by the Department for Education and Skills (DfES). The aim, according to the Government, is to help children "understand the society they are growing up in", and also, of course, "to support the UN Convention on the Rights of the Child and contribute towards meeting Every Child Matters targets". Thanks to this website, every British primary school child can now enjoy fun quizzes on "kids' rights" or vital lessons such as "How to win votes", and "Naming a police dog" which advises: "Snowflake: I wonder how many of you knew the term Snowflake is sometimes used among the Afro-Caribbean community in quite a different way?" However, some commentators are proving stubbornly ungrateful after it emerged that the project cost £2.2 million of taxpayers' money." (Sunday Telegraph 22.4.07)
Total for week- £221,050,000

Saturday, April 21, 2007

Bonfire Arithmetic


Question 1.

a) Country A has 34,250 junior doctors looking for training posts. There are 18,500 training posts. How many junior doctors will not find posts?
5 marks

b) Each doctor costs the taxpayers of Country A £250,000 to train. How much money has been wasted if the surplus doctors are shipped overseas to work for nothing?
5 marks


Model Answer

a) 15,750 junior doctors will not find posts (= 34,250 minus 18,500). The answer of 10,000 given by Sian Thomas, deputy director of NHS Employers, is incorrect.
b) £3,937,500,000 (£3.9375 bn) has been wasted (= 15,750 times £250,000)


If you got both parts right, you should apply for Commissar Hewitt's job.

As quickly as possible.

Friday, April 20, 2007

Stinky Stink International


A couple of days back we blogged the near £10bn pa we pay to various international organisations such as the UN and the EU. We noted in passing that the UN is a notoriously ineffective and corrupt gravy train, but in fairness, we could have made precisely the same point about virtually any of these unaccountable, undemocratic self-serving bureaucracies.

Today the Economist takes a hefty swipe at the OECD, charging it's new(ish) head- Mexico's ex-finance minister Angel Gurría- with a whole catalogue of dodgy dealings, from employing family members, to extravagently pimping up his official residence. As the Economist notes, even the staid old OECD seems to have serious "governance" issues and "may be drifting into dangerous waters".

So rattled is Sr Gurría that he's made the staid old OECD issue a detailed and unprecedented rebuttal on its website. The same website that normally only carries news of the latest age-adjusted labour market participation analysis for central Europe. I reckon we can all draw the appropriate conclusions.

The UK currently contributes around £20m pa to the OECD. And its latest gesture to us was to put us in the international dock over the BAE Saudi bribes case.

Takes one to know one, as they say.

Consultants Pay: Grass Greenest Right Here



The above chart shows the relative pay of hospital consultants around the world. It was produced by the National Audit Office for their report on the much lambasted consultants pay deal (see report here and blog here), and the figures are calculated as the average pay of specialist doctors relative to per capita GDP (ie roughly average incomes).

As we can see, our consultants stack up quite well, earning around 5 times average UK income. That's roughly in line with specialists in France and Canada, and significantly ahead of eg Germany and Sweden.

Moreover, in all the countries where specialists earn relatively more (eg the US and Austria), they are self-employed rather than salaried, so will be bearing costs and risks not carried by British consultants.

The NAO also looked at the relationship between relative pay and numbers of specialists relative to population. Again, our consultants do quite well, getting paid well above the international average for salaried specialists, and being relatively more numerous than their self-employed counterparts in the US and Austria (a fact I certainly hadn't known).


So if you're a hospital consultant, the best advice is to stay right here.

Of course if you're a taxpayer, you should be wondering why it is we have the most expensive salaried consultants in the world.

Playing Post Offices... With Our Money



No way to run the Casdon 532

Of a wet childhood afternoon, there was nothing I enjoyed more than playing Post Offices.

If you've never tried it, you're in for a treat. Set aside next weekend, and get yourself an official Post Office set (such as the somewhat bizarrely named Casdon 532, above). You'll get sheets of stamps, proper licky envelopes, lots of forms, piles of pretend money, and best of all, a real rubber stamp with an ink-pad. Lay it all out on your counter- everything in its right place, mind- and then get to work on official business. A form completed and stamped here, an envelope sealed and stamped there- the weekend will simply fly by.

Just one word of advice: do not on any account allow anyone else to join in. Especially if they want to be your "customer". Trust me. Post Offices do not work once customers start getting in the way. They take all the fun out of it.

"Staff" are nearly as bad. They never do what you tell them, and they mix up all the forms. Sometimes they even use the stamp without asking you!

I'm reminded of all this because I've just read yesterday's National Audit Office Report on the Department of Health's disastrous pay deal for NHS consultants. The NAO seems somewhat at a loss to explain just wtf the DoH thought it was doing, giving all that money away and getting sfa in return. But I immediately recognised they were only playing Post Offices.

The depressing facts were widely covered in the media yesterday:
  • Thanks to yet another Simple Shopper NHS "new contract" pay deal, hospital consultants got a 25% pay rise for doing less work
  • Once again costs were wildly understimated- at least £715m vs a forecast £565m- which has contributed to the deficit crisis

The pay facts are summarised here:


Click image to enlarge


So since we now employ 32,000 consultants, the annual bill comes out at nearly £4bn pa (including employers' contibutions).

Good luck to the consultants, we say- who wouldn't take a deal like that if offered? But bad luck for us taxpayers. And as the NAO report makes clear, to savour the full grisly picture, we need to view the pay deal in its broader context.

Since 2000, the number of NHS consultants has soared by about one-third, from 24,400 to 32,000. And their paybill has doubled, from £2bn to £4bn. Yes, of course, that was all part of the Grand Plan to save the NHS. But guess what. While consultant numbers and pay have soared, their productivity has slumped.

The following chart shows output per consultant:



Now, the man from the BMA spent yesterday telling us that measuring consultant productivity is dashed tricky. And of course it is. But a near 15% slump in headline output per consultant in just 4 years kinda jumps off the page. And that's backed up by the NAO survey which shows over half of NHS consultants think the new arrangements leave them less time for clinical care.

Which brings us to Post Offices.

As with all the government's other half-baked NHS "reforms", this new contract was landed on hospital managements by the Big Chiefs in Whitehall and Westminster. There was very little consultation about what was practical, or even feasible, down in the actual hospitals.

Yet according to the DoH, the fundamental reason for giving all the extra pay was to get consultants to accept "job planning". By which they meant that for the first time since the NHS was founded, consultants would agree to have their work managed from above, by hospital mangers. Just like a real business. Sort of idea.

The theory was that consultants would sit down with their boss and agree individual work plans setting out what they were meant to be doing. Thus everyone could be sure it would fit with the overall needs of the business, and individuals could be subject to regular reviews and appraisals. Just like it says in the management textbooks.

But of course the real world isn't quite that simple. For a start, the theory assumes you've got managers who are actually capable of translating high level corporate wibble into meaningful job plans. Even when they get no practical help from the Big Chiefs. And second, it assumes the managers are capable of getting the staff to accept the top-down priorities.

In the NHS, neither of those assumptions holds. Thus, while the NAO found that most consultants do now have job plans, they are only plans in the sense of being forms headed "Job Plan". Their content is generally little more than a diary exercise where the consultant has recorded what he/she is already doing; they are not tools for articulating current management priorities and directing work.

It's Post Offices. The forms are all there- completed, signed, stamped, and correctly allocated to the appropriate pile. just like the ones you get with the Casdon 532. Great for shuffling around and looking "official", but totally useless for running a business.

The bottom line is that we taxpayers are now spending twice as much on consultants as we did in 2000, but we're only getting 15% more output. Working practices have not been reformed, productivity has slumped, patient care has not been improved, and "consultants' morale has been reduced" (NAO survey).

In fact the only positive outcome seems to be a pile of forms. Another one.

What a pity the DoH didn't just treat the hospitals to a few Casdon 532s instead. They could have got even more forms filled in, yet saved us taxpayers a packet.

PS The NAO report also contains an analysis of international pay comparisons for consultants. Ill blog that separately.

Thursday, April 19, 2007

You Are A Statistic


We don't make mistakes Comrade

One death is a tragedy, a million is a statistic.

Uncle Joe was far more candid than any of our present day Big Government chiefs would ever be, but the reality remains the same. To BG, we are all statistics. From health to education to criminal justice, individuals take second place to the statistical imperatives of top-down planning, targeting, and efficiency programming.

True, our own Big Government hasn't yet quite reached the stage of purges and gulags for those who obstruct The Plan, but its attitude to individuals and their rights is squarely in the Uncle Joe tradition, as graphically illustrated by two recent revelations:
Both of these things happened some time ago, but the mindset doesn't change. And the long delay in discovering what happened vividly highlights how BG uses its power to conceal inconvenient truths- even now, the inquiry into the blood scandal is having to be run privately.

Can you imagine our old friends at Tesco getting away with something like this? Not simply killing employees and customers, but helping themselves to bodyparts and concealing the truth for years? Customers would desert the stores, Sir Terry and the entire board would have to resign, there'd be criminal prosecutions, Tesco's share price would collapse, and the whole enterprise could well go belly-up.


With Big Government it's just one more barely perceptible statistical blip on the road to serfdom.

Wednesday, April 18, 2007

Top Table Latest


Ready for the Horse Lady

Every year British taxpayers shell out billions so that our preening politicos and diplobureaucrats can keep their seats at something called The Top Table.

Take the UN. Even ignoring our direct and substantial military contributions to UN mandated "peacekeeping" operations, we stump up around £700m pa for places at their Table.

What do we get for that? Yesterday we had a classic example.

Part of the package is a one month turn at chairing the Security Council (The Very Top Top Table). It's just come round, and the Horse Lady chose to use it for the Council's first ever debate on climate change.

Climate change? But surely the Security Council is supposed to spend its time addressing imminent threats to global security, not shooting the breeze about highly contested long-term eco wibble.

You'd think so wouldn't you, and the Chinese certainly agree. Their representative said:

“The developing countries believe that neither has the Security Council the professional competence in handling climate change nor is it the right decision-making place for extensive participation leading up to widely acceptable proposals.”

The Russians also agree. Vitali Churkin, Russia’s often-blunt UN Ambassador, advised Mrs Beckett to “avoid panicking and over-dramatising the situation. With regard to the UN Security Council, it should deal with consideration of questions that relate directly to its mandate.”

The trouble is of course, the Horse Lady doesn't really understand any of that stuff, whereas she does understand climate change. Well, "understand" is perhaps putting it too strongly, but at least she picked up no end of ecospeak during her days at Defra (yes, we know she made a complete Horlicks of that job too, but she must have absorbed the lingo).

In one sense of course, it doesn't matter: the UN is a spectacularly ineffective and corrupt gravy train, so you might as well spend the time wibbling about climate change. But it's still costing us £700m pa.

And when you add up the cost of all our tickets to all the various Top Tables we subscribe to, you come out with some truly eye-watering numbers. As well as the £700m to the UN, we give about £1bn pa to Wolfie's World Bank, and of course, the teeth grinding £6bn pa we hand over to the EU.

By the time you've grossed up for sundries, we must be talking close on £10bn pa.

Just so our rulers can sit at The Table without feeling awkward.

No My Lord


Visitor from another planet

How on earth do people like Lord Woolf (above) ever get to sit in judgement over the rest of us? Who appointed him? Why did they think he was equipped to head up a key part of our criminal justice system?

Yesterday the retired Lord Chief Justice told us the Sentencing Guidelines Council, which he used to chair, should operate like the independent Bank of England. It should be given a five year prison budget to manage:

"These are the resources that the Government can provide for the prison population and you must see that your sentencing guidelines achieve a prison population within those resources where the commodity of a prison space is used in the most constructive way.

What we know is that the more money spent on building prisons, the less money will go on rehabilitating and reforming prisoners.

We've got to make a proper assessment as to how much of the economy of this country should go to imprisoning individuals.

We have many people in prisons now who don't need to be there. We need to ensure that a prison place is reserved for those who really deserve it and need it."

Now, given that the Major and I are unpersuaded by his Lordship's legal credentials, you will understand why his foray into economics caused a certain choking on Cornflakes.
We've blogged the issue many times (see here for summary), but at the risk of tedium, let's just repeat they key facts:


  • Crime costs Britain something like £100bn pa

  • 50% of our crime is committed by about 100,000 persistent offenders

  • Of that 100,000, only 20,000 are inside at any one time, which means 80,000 are out and about committing more crime

  • A prison place costs about £40,000 pa (although some places are much cheaper)

  • It would therefore cost around £3bn to bang up the other 80,000 long-term

  • Net saving to the economy, say, £40-50bn pa

You see, my Lord, what we have here is something we economists technically refer to as a no-brainer. The economic return on our £3bn pa investment in prisons is of the order of 1500%. Which, in case you don't realise it, compares favourably even with the projected return on those RipYourFaceOff private equity participation certificates recommended by your broker.

Yes, we know you'd rather see these people rehabilitated, and that you don't think prison does that. But sadly, down here on planet earth nobody has a clue how to do it. Economically speaking there's just no contest.

Tuesday, April 17, 2007

The Mother Of All Juggernaut Disasters


Out of control and heading our way

This morning the Public Accounts Committee published one of the longest reports it has ever produced- 180 pages on the National Programme for IT, the NHS' not-very-super-supercomputer. We've blogged the wretched thing many times of course (see all NPfIT blogs gathered here), but the news just goes on getting worse.

Much of the PAC's report is a record of the detailed evidence they gathered (including a letter from supplier Fujitsu damning their employee Andrew Rollerson, who shot his mouth off about the whole disaster earlier in the year- see here and here).

But PAC's stark conclusions (pages 5-7) could stand for every Big Government project since the dawn of creation:
  • Meaningless delivery timetable- "The delivery of the patient clinical record, which is central to obtaining the benefits of the programme, is already two years behind schedule and no firm implementation dates exist"

  • Shambolic cost control- "The Department has not sought to maintain a detailed record of overall expenditure on the Programme and estimates of its total cost have ranged from £6.2 billion up to £20 billion"

  • No cost benefit appraisal- "The Department’s investment appraisal of the Programme did not seek to demonstrate that its financial benefits outweighed its cost"

  • No delivery capability- "There is a shortage of appropriate and skilled capacity to deliver the systems"

  • No user involvement- "The Department has failed to carry an important body of clinical opinion with it"

  • Driven by technology hype not practical business needs- "The Programme has focused too narrowly on the delivery of the IT systems, at the expense of proper consideration of how best to use IT within a broader process of business change"

  • Muddled responsibilities- "The Department should clarify responsibility and accountability for the local implementation"

  • Failure- "At the present rate of progress it is unlikely that significant clinical benefits will be delivered by the end of the contract period"
It's so bad and so horribly predictable, you almost want to laugh.
Well, no. You don't want to laugh at all. You want to scream.
It is an outrage that we taxpaying customers are being forced to spend yet more billions on yet another Stalinist fantasy that was never going to offer value, or even work.
Stalwart PAC member Richard Bacon writes about the fiasco in today's Telegraph. He reminds us how one expert described the project to the Committee:
"It was like being in a juggernaut lorry going up the M1 and it did not really matter where you went as long as you arrived somewhere on time. Then, when you had arrived somewhere, you would go out and buy a product, but you were not quite sure what you wanted to buy. To be honest, I do not think the people selling it knew what we needed."
Such juggernauts exist all over Big Government. Ill-informed grandstanding politicos commit us to some overblown nonsense like the NPfIT or the 2012 Olympics*, without having a clue how much it will cost, whether the costs make sense against the supposed benefits, or how the thing will actually be delivered. It's only once we're on the motorway we find out nobody knows how to steer, and the only way of stopping is to crash a bridge parapet.
Which is what Bacon sensibly proposes right now. He recommends that the NPfIT and its agency Connecting for Health be terminated forthwith. Pointing out that so far we've actually "only" spent £2bn- ie we still haven't even reached Newport Pagnell Services- he says:
"This disastrous agency should be put out of its misery, but most of its budget - £10 billion is still unspent - and its purchasing functions should be handed over to local hospital bosses. Any remaining functions could be handled by the Department of Health directly. IT has a tremendous role to play in healthcare and it saves lives.
One size does not fit all. The obvious solution is something similar to that which worked very well for GPs in the mid-1990s. Hospitals should be allowed to choose the systems they want, provided that those systems meet national standards. The role of the centre should be confined to setting those standards and allocating budgets. Hospital chief executives should have the freedom to buy what they want for their hospital, in consultation with their own clinicians and also be given contractual responsibility for delivering it.
This approach would not only deliver more products more quickly - it would also save a fortune, which the next prime minister will wish to note well."
Amen.

*PS Tess was on BBC R4 Today this morning, wittering on again about the 2012 "budget" and how the costs have only soared because they found all that land contamination they couldn't possibly have known about previously, and how that huge Contingency Reserve won't be needed anyway so it doesn't count as cost (see the vid blog here). She sounded like a dame lashed to the wheel of some huge out-of-control juggernaut thundering towards the parapet of certain dismissal this summer. What a shame we can't all bale out at the same time.

Monday, April 16, 2007

Brown Bottom


Now the money's run out, Gordo has been reduced to rummaging around down the back of the sofa for any loose change (aka those ludicrous Gershon "efficiency savings"), and roaming the house trying to find anything he can flog.

Last month in the Budget he told us he was going to sell £36bn of assorted family silver by 2011, double the figure he'd given us just three months earlier in the Pre-Budget Report (see this blog).

Unfortunately, as we are all painfully aware, whether buying or selling, government is hopeless at getting value. And with Gordo so strapped, the worry for taxpayers is that he'll be holding a fire sale which will leave us seriously skinned.

The precedents are not good. Just yesterday, we got a fresh insight into those disastrous official gold sales.
As we know, in a truly historic re-enactment of King Midas in reverse, he somehow managed to flog more than half of Britain's painfully acquired gold reserves just before the gold price took off, costing us a mind-boggling £2bn. He actually managed to trade at the worst prices in the last quarter century.
We now discover that a key reason was that once he and his usual cronies had made the decision to sell, no amount of common sense input from people who actually knew about the gold market could stop him. So when they said "400 tons is an awful lot of gold to drop on market which is already at a low point, and where total annual supply is only just over 2,000 tons", he just ignored them and ploughed on regardless.
No wonder the resulting further dip in gold prices has become known in the market as the Brown Bottom. And just like with that other colourful triumph of government foreign exchange wizardy- Black Wednesday- it cost us a packet.
As for other recent asset sales, the appalling case of defence company Qinetiq stands out. Underpricing on that sale cost us a reported £300m (and see this blog).
But we shouldn't just blame Gordo. Further back, the asset sales made under the Tories were hardly a triumph of taxpayer value. Studies such as this academic paper consistently show that most of the privatisations realised sums substantially below true value- the shortfall averaging out at 20-25% (eg the first tranche of BT shares made their lucky recipients an instant one-day profit of 33%).
Of course, most of those early privatisation issues were sold at a fixed price. And even our government eventually realised a competitive auction was much more likely to get the best price. So when it came to selling those 3G spectrum licences, Gordo appointed a game theory expert to extract the maximum price from mobile phone companies terrified of "losing out". Which is why he's so keen to sell more bits of spectrum now.
But as Keith McMahon has consistently pointed out at Telebusillis, the next spectrum sales will include a load of rum leftovers from the army surplus store. Its market value is questionable, even setting aside the fact that the telcos are still smarting from having been bounced last time into paying through the nose for spectrum they have still not been able to convert into paying services (eg Vodafone’s 3G service currently operates at only 16 per cent capacity-see here).
Scraping together £36bn of new asset sales will be problematic. And the pressure to raise money means there is a very high risk we will not get value.
So as lean and hungry property developers eye the MOD's massive ranges in primelocation Surrey and Hampshire, we taxpayers (not to mention residents of Surrey and Hampshire) need to keep our wits about us.

Sunday, April 15, 2007

Recent Bonfires 61


The photo's all we've got left

In the news this week:

£2bn loss on gold sales- "GORDON BROWN... disregarded advice from the Bank of England before he sold off more than half the country’s gold reserves at the bottom of the market. Insiders involved in the decision have broken ranks after an 18-month battle in which the Treasury has blocked attempts by The Sunday Times to make public the official advice received by Brown before he sold the gold. They have revealed that Bank of England officials had serious misgivings over the chancellor’s determination to sell 400 tons of bullion in a series of auctions between 1999 and 2002, when the price was at a 20-year low. Since then the price has almost trebled, meaning the decision cost the taxpayer an estimated £2 billion." (Sunday Times 15.4.07; see also here)

£58,000 for staying at home- "An immigration judge involved in an alleged blackmail love triangle has been paid more than £58,000 for staying at home since a formal investigation began into his behaviour, it emerged yesterday. Judge Mohammed Ilyas Khan has been picking up a salary of about £9,000 a month since last September, when he was asked not to sit in court... The blackmail trial involved their former cleaner, Roselane Driza, and the disclosure that the judge had been employing her illegally. Ms Driza was convicted at the Old Bailey of... stealing two videos of a sexual nature from her lover, Mr Khan... one apparently... featured Mr Khan cavorting with a mystery blonde woman." (Telegraph 14.4.07)

Costa Del Dole Brits blag £190m- "BRITS living in Spain are fraudulently claiming £190million in benefits, it was revealed yesterday. The “Costa del Dole” ex-pats have been wrongly given taxpayers’ cash by the Government. Damning new figures show that £220million in income support, Jobseeker’s Allowance and Pension Credit was paid to people living abroad in the past five years. And of that, £190million was overpaid due to fraud, Commons answers revealed." (Sun 13.4.07)

Baths already £2m over budget- "Grand plans for the Kentish Town swimming baths boil down to an ego trip for local politicians.The latest row over the baths has been partly fuelled by the Town Hall’s refusal to put a limit on the money it is prepared to spend. The joke doing the rounds is that the baths will become an open-air pool: because there is no ceiling. But concerns are mounting that costs of the project – agreed by all parties to be “risky” – could spiral out of control. Current costs are estimated at about £25 million, more than £2 million above initial quotes. Conservative councillor Keith Sedgwick told a scrutiny committee last Tuesday that plans to refurbish the 100-year-old building were in danger of becoming a “monument to this administration’s ego”. (Camden New Journal 12.4.07)
Total for week- £2,192,058,000

Saturday, April 14, 2007

More On Slavery Reparations


1952: Adenauer signs for Holocaust reparations

Last month we blogged the highly emotive issue of reparation payments for slavery.

We were responding to the widely broadcast calls for British taxpayers to stump up £7.5 trillion to compensate descendants of the 3 million Africans whom our ancestors transported across the Atlantic and set to work on British owned sugar plantations in the Caribbean.

We argued that we should not be held accountable for the actions of our ancestors ten generations ago- however indefensible by today's standards- and we rejected the proposition that we are still benefiting from the profits via the funding of the Industrial Revolution. The historic evidence is that while the plantation owners got rich, the overall net benefits to Britain were relatively small, possibly even negative.

Following the blog, I received an invitation to take part in a discussion about it on the BBC. But having no wish to be painted into the BNP corner and ritually humiliated, I declined (see here for the firestorm that engulfed the world renowned economic historian Stanley Engerman after he published his revisionist text Time on the Cross: The Economics of American Negro Slavery in 1974).

I also received a number of heartfelt emails from the Caribbean. They all basically said that talking about an abomination like slavery in terms of financial returns betrays a total lack of humanity. A great wrong has been done, and financial restitution is the least Britain should offer.
So I did a bit more reading, to see if I'd change my mind.

First, slavery really could entail quite extraordinary brutality, and some of the accounts I've read over the last couple of weeks I'd rather not have seen. It's no wonder people today still get so wound up about it. True, my own eighteenth century ancestors were agricultural labourers being worked to an early death on subsistence wages in the West of England. But at least they weren't mere chattels (the men weren't anyway), they were not subject to routine beatings- and worse- from their overseers, and they had not been forcibly transported thousands of miles from their homes.

Second, the amounts Britain made from slavery overall really weren't that great. Even Prof Simon "History of Britain" Schama, who has written passionately about the evils of slavery, discounts the argument, pointing out that "the amounts available for reinvestment [from the profits of sugar] probably did not exceed something like 2 per cent of the capital ploughed into purely industrial undertakings" (History of Britain 1603-1776, p 427).
Third, if slavery was so instrumental in our economic development, how come the other European countries that also participated (including France and Spain) didn't emulate our Industrial Revolution?
Fourth, there is a possible precedent for reparations in the form of the reparations paid by German taxpayers for the Holocaust. Between 1952 and 1966, the German government paid DM3bn to the State of Israel as heir to the victims who had no surviving family. Interestingly many Israelis- including Menachem Begin- vehemently opposed accepting anything lest it signify forgiveness. But the money was paid, and invested in the new country's infrastrusture.
So net net, have I changed my mind?
No.
I still don't see why I should be held responsible for something I don't support, and had no part in.
The evidence does not tell me I've benefited, and I'm not persuaded by the Holocaust precedent. I reckon there's a massive difference between something that happened in the lifetimes of participants and something that happened 200 years ago.
True, 60 odd years later, various Swiss and German companies are still paying funds across to victims' families. But we're still within a lifespan, and the companies involved specifically benefited (eg from slave labour). Moreover, the Swiss banks are actually only returning dormant accounts.
So my view remains unchanged. Slavery was an abomination which I certainly do not support. But I and other present day British taxpayers are under absolutely no moral obligation to pay these reparations.

Friday, April 13, 2007

The Customer Is Always Wrong


Sheffield's annual bin collection

Tesco. They make money by serving their customers. If they don't serve, the customers don't pay.

Marks and Sparks. Just in time, they remembered the same thing.

Local councils. Ah. They make money by taxing their customers, and then fining them if they have the temerity to require service.

According to the Times, under legislation introduced last year, local authorities from Birmingham to Cardiff to Medway are fining their "customers" for putting rubbish out at the wrong time. So far, fines total around £200 grand, but many more councils are now looking to jump up on the cart.

"A spokesman for Sheffield City Council, which issued 95 fines to householders because they put their bins out on the pavement to early, said: “The council decided to adopt this legislation last September but at first we tried to pursue a softly softly approach. We looked at the issues and tried to find solutions like alternative places for the bins. The fines are a last resort.”

Last resort? What he's saying is that having "looked at the issues", the council wasn't able to find a way of meeting their customers' requirements. But instead of then saying "I'm most dreadfully sorry, we've failed you; may we help you find an alternative supplier?" they said "well, bugger you- if you don't fit in with whatever crap service we choose to offer, we'll fine you".

Another local authority wallah gives us the truth:

'Paul Bettison, chairman of the Local Government Association’s Environment Board, said: “Councils are . . . working hard to reduce the amount of rubbish sent to landfill. The waste generated is increasing year on year. Unless bold reforms are made recycling rates will not rise fast enough to meet the EU Landfill Directive, councils will be fined and taxpayers hit in the pocket.”

Translation: pretty soon you'll be fined for daring to create any rubbish at all. And don't bother to complain, because it's all down to Brussels.

Meanwhile in another part of the gloomy public service forest, Durham police were called by neighbours to a teenage party that got wildly out of hand. Mummy and Daddy were away, and young Rachel's partying chums were totally trashing the house.

Naturally, those neighbouring customers expected the cops to provide the straightforward service of stopping any further damage. Forget it. A Durham police spokesman explained:

"Forcibly breaking up the party was not a serious option. It would almost certainly have inflamed the situation and led to dozens of revellers spilling out of the house on to the estate. To suggest we should have done this is completely unrealistic."

Customer service it ain't. The neighbours would have been much better calling Mr Gomulka's home security service ("No Job Too Big Or Too Violent"). They'd have sorted it in a trice, although there would have been the small matter of a call-out fee.

What's needed right across the public service board is customer choice. Yes, if you're rich like the folks who live on the Hill, you can afford to pay twice- not just Mr Gomulka but also skip-hire for all your rubbish, private medicine, and private schooling.

But most people aren't that rich. Anyway, wtf should we have to pay twice? Why can't we just have choice? That's how the rest of the world works, and it's a helluva lot better than our one-size-doesn't-really-fit-anybody public services.

More On Value Of Uni Degrees


Drinking Studies at the University of Watford Gap

Following yesterday's post about the proposal to bribe students into sticking with "hard" subjects like Maths and Physics, the ever dependable Jeff Randall has written on a similar theme, highlighting the "employability gap" between top unis and the rest:

"Although obtaining a place at university has never been easier, most employers wised up long ago to the dilution of degree quality. As a result, winning a place at an institution that is respected by recruiters - and will lead to premium-rate employment - is becoming increasingly difficult.

As in most markets where there is chronic over-supply, buyers dictate the terms of trade. The Student Book 2007 warns: "Despite claims to the contrary, employers seldom regard universities or their graduates as equal; they use their own employment criteria. Many are fairly conservative and still prefer graduates from Russell Group universities." This refers to the group of 20 top research-intensive universities, so called because their first meeting was in London's Russell Square."

A few years ago, LSE researchers reckoned a degree from a Russell university was worth up to £22,000 more than a similar degree from elsewhere. The gap's probably even bigger now. Randall goes on:

"For many blue-chip companies, the list of universities from which they normally select is shorter still. The Sutton Trust, a respected educational charity, identifies the elite as numbering only 13: Birmingham, Bristol, Cambridge, Durham, Edinburgh, Imperial, London School of Economics, Nottingham, Oxford, St Andrews, University College London, Warwick and York. These institutions have the most exacting entry requirements, yet a majority of their courses are hugely over-subscribed."

As he says, the tragedy here is that Labour's headlong- and expensive- dash to reach its arbitrary 50% target for university education is landing a lot of Britain's kids with degrees that are worth very little in financial terms. But they still incur £15-30 grand's worth of debt.

I'm sure you'll be aware that there's very little quantified evidence to show that university degrees are actually much more than a signalling device- ie a piece of paper that has no value other than signalling to employers which people are likely to be a "good employees". One implication is that, while degrees make perfect sense from an individual's perspective, their overall value to society is highly questionable, and a lot less than most of the economic return studies suggest. The economic value ascribed to the degree is actually just the value produced by good people, who'd produce most of it whether or not they had a degree.

But the ballooning number of marginal/useless degrees may have taken us beyond that. If some of the new degrees are discounted by employers altogether, they may actually operate as negative signalling devices. They may say "this guy clearly isn't bright enough to do a proper subject at a real uni, but it's even worse than that- he's so workshy and unfocused he chose to spend three years birding and boozing at the University of Neverpay rather than face up to the real world."

Or is that just me?

Thursday, April 12, 2007

Bloggeurs Nouveau


Eh bien
Two new bloggers to check out.

With the Heaven and the Earth long ago completed, The Creator has joined the 200,000 (he reckons) other British ex-pats living in France. From where he's just begun blogging at With One Bound.

I'm wondering if he has his own vineyard, like a many-partnered ex-BBC type I know.

Nice.

The Grumpy Old Sod's Law has a very promising title, and today's post comprises a Content Advisory. Which again is promising.

Posts are a little sporadic, which may reflect the fact that the poor Sod is evidently a fan of Manchester City. In my experience, that can involve long periods of of wailing and gnashing, leaving little time for other activities such as blogging. We'll watch with interest.

Welcome to Le Bleug Mondiale.

Chucking More Money News


Oh, there's one other thing I nearly forgot- don't give up Maths or you'll be £350,000 worse off

The Council for Industry and Higher Education wants taxpayers to pay school pupils to pass science and maths A Level. Their Chief Exec repeats a well-known refrain:

"The future lies in knowledge intensive businesses: pharmaceuticals, IT, financial services, manufacturing. They rely on Stem (Science, Technology, Engineering, and Maths) graduates and post-graduates. It is really important that we have a supply chain that is going to produce the numbers."

So they want us to pay pupils £500 a throw.

Now, we can all see the collapse in student numbers for hard subjects like science, and the surge of students into softer options like reflexology (see here for the picture in 2006). But cripes, we taxpayers are already shelling out over £60bn pa on education- surely we shouldn't need to pay bribes as well.

Much cheaper would be to inform pupils from an early age just how much richer they will be if they stick with the hard stuff. Spell out in detail that if they drop Physics for Media Studies, they're walking away from the chance to be hundreds of thousands richer over their lives.

Take this hourly earnings comparison from a recent Price Waterhouse report:



Click image to enlarge

It compares the average hourly earnings of graduates with different degree subjects, expressed as a premium over what people with just 2 A Levels earn. Top of the tree are medicine graduates on an average 44% premium (and this snapshot was taken even before the munificent new doctors contracts handed out by the Department of Health). They're closely followed by lawyers, on 39%.

Those of a free market disposition will be grinding their teeth and recalling how medicine and law are the two last bastions of Spanish practices Maggie never got round to sorting out. But park that, and note that both are hard subjects, along with engineering, chemistry and physics, which come next in the pecking order.

Arts subjects routinely come bottom of the pile, and the softer they are, the lower are the associated earnings. Indeed, PWC report that the earnings premium associated with an arts degree for men is actually negative- ie you'd be better off not taking the degree at all.

The report (along with this companion piece) contains a mass of interesting info, which ought to be invaluable for schoolkids thinking about their future subject choices and where they might lead. Here's another chart, expressing the same earnings data as a capitalised lifetime income benefit (blue bars):


Click image to enlarge

So med graduates on average, can expect a capitalised premium of nearly £350 grand, a quarter of a million better than history grads.

As our beleagured demoralised state schools struggle with the latest crop of government targets and directives, I wonder if any of them tell their pupils any of this. It would be a lot more effective than a £500 bribe.


PS There is another issue highlighted by the PWC work. Despite the age-old wibbling about how "the country" needs more grads to avoid certain destruction at the hands of the Germans/Japanese/Chinese/Insertlatestbogeymanhere, taxpayers have never had a good deal from higher education. Despite taxpayers providing the funding, the lion's share of the benefits has always gone to the grads themselves. Student loans and fees were supposed to redress tht, but according to PWC, under the government's latest variable fee/student loan/bursary funding structure, taxpayers are even worse off. It needs some further digging and another post.