Monday, June 30, 2008

He's Sure Got A Lotta Gall



Latest NHS plan - Bob wrote it forty years ago

"A once in a generation opportunity."

Another one.

Yup, it's yet another guargantuan NHS report, this time featuring Lord D'Arcy, 2000 hand-picked clinicians, and the entire cast of Casualty.

There was a time when I somehow imagined these NHS reports meant something. You will hardly credit it, but I actually read the first Wanless Report, more or less cover to cover. Indeed, I later mentioned that feat to well-known journalist, thinking it would impress her, but she just backed away.

So rather than waste any more time reading this report, I thought it would be much more useful to sample it.

Randomly opening on say... page 8... left hand column... towards the bottom... "developing the visions".

Hmm, yes, developing the visions. What can that possibly mean?

Doctor, doctor, I think I'm developing the visions.

Well, pull yourself together then.

No wait - that's when you think you're a pair of curtains... hmm...

Doctor, doctor, I think Rockin' Al J's developing the visions. He's never been the same since he found Commissar Hewitt's stash of magic mushrooms hidden under the Big Desk.

Doctor, doctor, I think we could have saved a lot of time and money if we'd simply recycled some of those old visions. Sixties Al must be familiar with Visions of Johanna: infinity going up on trial, and all those jewels and binoculars hanging from the head of the mule, etc. On a straight choice between Dylan drug haze and a report calling for top-down bottom-up one-size-fits-all health localism, I know which I'd choose.

It's just like Bob said:

"He's sure got a lotta gall to be so useless and all
Muttering small talk at the wall while I'm in the hall."

More On 10p Tax Fiasco


On Saturday (er, yes, Saturday), the Treasury Select Committee sneaked out its report on the 10p tax fiasco. And even though the Committee is little more than a Labour mouthpiece, it lets fly:

"For personal tax decisions, the sudden and final nature of Budget decisions has been... about the perceived benefit of seeming to pull rabbits from the hat."

Spot on. Ghastly Gordo was so fixated on his headline grabbing cut in the basic rate of income tax, he didn't give a stuff about the poor people who were to fund it.

Ah, he suggested as the rotten eggs later started coming in, ah, these things are immensely complex, and I and my ministers hadn't realised so many people would lose. Cuh! Our clothead civil servants didn't done their sums properly... what can you do? You can't get the staff. We'll put things right immediately... here's an extra £2.7bn I've suddenly found... that'll fix things.

The Committee lets rip:
  • Treasury civil servants did all the right sums, and ministers were fully informed: "Mr Nicholas Macpherson, Permanent Secretary to the Treasury, told the Committee of Public Accounts that “a thorough distributional analysis was done” regarding the impact of the abolition of the 10 pence rate of income tax and that “Ministers took decisions on the basis of that analysis
  • The £2.7bn was a panicky response that still leaves nearly 1m poor losers, and of which £2bn goes to people who hadn't lost in the first place
  • The £2.7bn only covers this year - what happens then?

More generally, as we've blogged before, Gordo's hugely expensive and hugely complex poverty programme has still managed to leave millions of people with crippling effective marginal tax rates. And as the Committee's summary table (above) shows, one very interesting feature is that, while the numbers on the very highest effective marginal rates have been cut - which is good - the numbers on rates above 60% have ballooned- which is v v bad.

Let's be clear: raising the personal tax allowance is the right way to tackle the poverty trap. People should not enter income tax at all until they are earning at least £10,000 pa. But the way Gordo was forced into this very limited, and possibly temporary, increase epitomises the grubby underhand approach he followed throughout his time at No 11.

Sunday, June 29, 2008

Chippies Set To Follow Pubs

Phase II will see the holes removed altogether


As we know, Labour's health and safety fascists have pretty well done for the traditional British boozer. The smoking ban was the final straw for an industry already under the cosh, and an estimated 20,000 of Britain's 56,000 pubs are heading into the overflowing ashtray of history.

Now, elements of the elite Special Projects H&S Gestapo have turned their attention to the British chippy. Sodium enforcement officers from several local councils have toured chippies up North replacing traditional 17-hole salt shakers with a new 5 hole lo-salt version. All at taxpayers' expense:
"Leading the way has been Gateshead Council, which spent 15 days researching the subject of salty takeaways before declaring the new five-hole cellars the solution.

Officers collected information from businesses, obtained samples of fish and chips, measured salt content and ‘carried out experiments to determine how the problem of excessive salt being dispensed could be overcome by design’.

They decided that the five-hole pots would reduce the amount of salt being used by more than 60 per cent yet give a ‘visually acceptable sprinkling’ that would satisfy the customer.

The council commissioned Drywite Ltd – a catering equipment company – to make five-hole shakers and bought 1,000 of them at a cost of £2,000, giving them away to fast-food outlets in their areas."

Duh? you say. Duh?

Ah well, it's for our own good, you see. Yes it's cost us £2 grand, plus another shall we say £1m for officers' time and assorted knock-ons, but it's going to save us an absolute packet. According to the sinister Local Authorities Coordinators of Regulatory Services:

‘Heart disease costs taxpayers £7 billion a year so to say that projects such as this are a waste of money is mind-boggling.’

Er, yeeesss...

Except... even setting aside the fact that customers will simply demand more shaking time over their chips, as BOM readers will know, these official estimates of "health costs" are never ever worth the chip-paper they're printed on. F'rinstance, the official figures touted on the cost of our "obesity epidemic" range from £1bn up to £45bn, depending on precisely whose backside they're being pulled out of (eg see this blog).

Heart disease? A quick Google reveals NHS cost estimates ranging from £7bn pa (Local Authorities Coordinators of Regulatory Services) to £16bn (Health Economics Research Centre) to £3.5bn (Heart). In short, nobody has the foggiest idea.

So remind me - why can't local councils just collect our rubbish and keep our streets clean? Like they used to.

PS Lest we spread too much alarm and despondency, let's note that not all pubs will disappear. Many are gastrointestinalising themselves (and often their customers as well), while others are going Islamic. The Halal Inn opened last December in Oldham, and offers all the traditional pub services. Well, all except booze and pork pies, obviously.

Saturday, June 28, 2008

Chipmunk Runs Amok



Tyler recently stood behind the Chipmunk in the checkout queue at Sainsburys. She was buying a Warburtons Toastie loaf (800g), a carton of pomegranate juice, and what seemed to be a mini-Easter egg. It was frankly disturbing.

Anyway, the Chipper is now in charge of local government. No, really, she is: well over £100bn pa of our money. And as you'd expect, she's racing round her exercise wheel at alarming speed. She's just told Public Finance magazine about her plans to devolve power right down to street level:

"With my own roots in local politics, grounded in the streets and estates of Salford... squeak squeak... empowerment... community engagement agenda... real opportunity... police performance regime... squeak... operating framework aligned with local indicator sets..."

Strip away the crap, and the idea is an old one: central government wants "community engagement" in order to cut local councils out of the decision-making loop altogether.

Needless to say, the local authorities are somewhat underwhelmed. The head of the Local Government Association, Sir Simon Milton, says:

"You can’t argue with it – petitions, community “kitties”, empowerment, things of that kind – but if you can’t stop your local post office, or your local GP surgery from closing, then actually citizens will get thoroughly disenchanted pretty quickly."

Nail walloped firmly on head. As we've blogged many times, local councils have very little independent power - they are an arm of Whitehall, largely paid by Whitehall, and therefore forced to play Whitehall's tune. But street level community engaged punters would have even less power: divide and rule.

The UK has the most centralised taxation system of any major economy. According to the OECD, only 4% of our tax revenue is raised locally, compared to around 10% in say France, and 11.5% in the US:



Step one in community empowerment is to return tax raising authority back to the local level, closer to the people who have to pay.

Friday, June 27, 2008

Making Plans For Nigel

Out of time

According to the Devil's definitive study, Edinburgh MP Nigel Griffiths is "a deeply unpleasant, authoritarian cnut".

But back in the 70s, ah, such plans! Such dreams! He was young, idealistic, fresh up from under Gordo's Auld Reekie Rectorship. Thus inflamed, Nige would have grooved to New Wave band XTC: with their political songs and coming from Swindon, they'd definitely have hit the spot. Late at night, you can bet he still grooves to Making plans for Nigel.

Why the sudden interest?

Well, today I heard Nige attempting to defend this shattered despicable Labour government after their worst electoral humiliation since the last one. And I heard a desperate cry for help.

Here's a man for whom the real world has now become so painful, he's constructed an entirely imaginary world in its place. And in Nigel's imaginary world, Labour's been a huge success.

How? Well, er... student numbers have soared. And for 11 years Britain has avoided recession, unlike say, the US, France, Japan, and most other countries. And anyway, the Tories are committed to high interest rates, inflation, and unemployment.

This poor chap really is in a world of his own. It was the Tories who did most to boost student numbers (see this blog); neither the US nor France have experienced a recession since 1997 (see here); and during their period in office, the Tories virtually halved interest rates (6.5% vs 11.7% - 3 month Libor), and cut inflation by three-quarters (2.6% vs 10.7% - RPI).

The real plan for Nigel is that his paper-thin majority of 405 vaporises in 2010, and he's cast into oblivion.

Shame.

Not.

PS Do Labour activists all think it's gone well? Do they really think it's been a decade of success temporarily blown off course by factors beyond their control? Do they all live in this fantasy world? The scary thing is that they probably do.

Here Is The Social Immobility News




Back when the news was The News

BOM needs your help in an important survey on Britain's social mobility crisis.

Question 1:

Thinking about your rose tinted backlit childhood (when you had no responsibility whatsoever for balancing the family finances and your peer group were the people living up your street) and comparing that with what you face today, with soaring energy, food and mortgage costs, and the fact that loads of undeserving fat cats get paid a packet, do you feel you are now better off, worse off, or about the same?

Question 2:

Do you think your obvious lack of success in life is due to your own shortcomings, or do you think it's because Britain's class-bound society denied you the chance to progress?

****

There used to be a time when Tyler thought the news was... well, The News. After all, it was read out with high authority by men with deep RP voices on The B.B.C. Home Service.

Now, Tyler has always been extraordinarily naive in such matters, and it took a traumatic experience with Robert Dougall* to make him realise the real world isn't quite like that. In reality news objectivity never existed: journalistic bias and spin has always been there.

Still, in recent years, the situation seems to have got a lot worse - or at least a lot more obvious. Much of today's news comprises little more than manufactured stories from pressure groups of one kind or another. All over Britain - but mainly clustered around Westminster - such groups are spinning stories geared to tickling fancies among media gatekeepers. It's the only way.

This morning BBC R4 Today has been giving extensive coverage to a survey by education pressure group the Sutton Trust on the social mobility crisis.

Social mobility has been much in the news this week (eg see this blog), so on one level, fair enough. But the survey itself is a monument to misleading questions and equally misleading answers. Indeed, although he wasn't challenged on it at all, the man from the Trust himself sounded embarrassed and keen to get onto the more general issues.

You have to hand it to them: the Sutton Trust manages to get this story into the media with commendable regularity. Indeed, a quick Google reveals they did the same thing precisely one year ago today - 27 June 2007 - so their diary system clearly works well.

Of course, the real question is even if you accept there's a problem, what's government supposed to do about it? And on that, despite all the spin and propaganda, even this survey says fully half of us think it's nothing to do with government.

Which is some small crumb of comfort.

PS There's a large literature on social mobility in Britain - indeed, it's yet another growth industry. Tyler's added some of it to his mountainous reading list. But an initial eyeballing suggests that, while education is clearly important (as Sutton argues), the acceleration in mobility that took place through most of the last century reflected an economic transformation. In particular, as manufacturing and other manual occupations declined, the number of higher rated service jobs increased. Such a structural shift is arguably now behind us, so there's less scope for the kind of movement picked up by analyses across standard definitions of socio-economic class.


*Footnote BBC newsreader Robert Dougall (above) was the man who shattered Tyler's illusions about the news. He'd been a pillar of authority for decades, but when he retired, he appeared on a chatshow and started referring to people as ducky. Ducky! Even Kenneth Williams didn't call people ducky. On that day, long before Christopher Morris, a sadder and wiser Tyler realised news is just another branch of show biz.

Thursday, June 26, 2008

Good News/Bad News



Hippy v Hippy


There's been good news and bad news for Tyler today.

The good news is that within two years he'll move from being the victim of state discrimination laws to being their beneficiary.

As a white middle-class heterosexual bloke, he's endured years of being discriminated against, and his cowed demeanor is shaming testimony to society's guilt. Indeed, just today Commissarette Harman shrieked out a fresh assault, making it legal for him to be formally discriminated against in the job market.

But what's this? Some good news! The Commissarette also announced that, henceforth, any white blokes who somehow make it to 60 will be given the same rights as everyone else! We'll be protected by our very own anti-discrimination laws. How empowering will that be!

Of course, the Major - miserable old cynic that he is - reckons Harman is only doing this to court the OAP vote, and that the whole package - positive discrimination for women, ethnics, and transgendered Jedi - will drop another crushing red tape burden on British business. Too bad, says free-bus-pass Tyler.

But it's not all good news.

Today Tyler attended a seminar on the prospective costs of Britain's commitment to the EU's renewable energy targets. And that put the wind up him good and proper.

The seminar - coincidentally held on the very day Gordo launched his own... er... "vision" - heard a presentation on some work in progress, so possibly not available for blogging. But there's plenty that is, and that's more than enough to suggest Tyler's old age will be a distinctly chilly affair.

In brief, Blair committed us to producing 15% of all our energy needs from renewables, EXCLUDING NUKES, by 2020. We currently produce less than 2%, so that's a huge increase. And by far the bulk of the burden (maybe 70%) will fall on electricity generation, which only accounts for some 20% of our total energy usage. So the entire electricity generating industry will need to be transformed beyond recognition. In just 12 years.

The cost is likely to be staggering. Power company E.ON has estimated the bill at around £10bn pa, the equivalent of an additional £400 pa (around 40%) on household fuel bills. Others reckon it will be considerably higher.

But even worse than that, there are very real doubts about whether the target is in any way feasible. For one thing it implies a massive increase in wind power, despite the fact that the world equipment supply and installation industry is already working flat out with order books full for the next four years.

Well, that's OK you say, it's just a load of wibble anyway: who cares if we don't do it? Especially if it's going to cost a packet.

Not so fast. The problem is that many of our existing power plants are reaching the end of their lives and will be closing. If we don't build replacements we're into a world of black-outs, long winter evenings and freezing pensioners. One of whom could be Tyler.

But if we do build replacements - nukes and coal are best - then our commissars will get wigged by their EU "colleagues", which would clearly never do. Plus, we'd likely get whacked with a mega-fine from some Euro court or other.

So. Bad news.

PS I was truly shocked by some of the figures tossed around at today's seminar (which I will blog if I can get clearance from their owner). I like to think I'm reasonably up to speed with such matters, so if I was shocked, I can well imagine how the typical taxpaying voter will feel. It needs to be out in the public arena soonest - how come our public service broadcaster hasn't done one of their climate doom specials on it?

PPS On that famous Severn barrage, the informed view at the seminar was that it does make economic sense (Tyler senior will be pleased, because it means he's right and I'm wrong). True, the latest cost estimate is £23bn (BOM adjusted, call it £30bn). But the technology is tried and tested, it is apparently Europe's largest untapped renewable energy resource, and unlike many renewables like wind, its power would be quite predictable. And yes, it would take a decade to build, but it would have a projected life of 200 years (wonder why not infinite?).

Nazi Paedophile Terrorist Bomber Gets 8 Years


At first, the Major thought it must be some kind of joke.

But it isn't:

"A Nazi paedophile who made nail bombs to attack black, Asian and Jewish people was jailed for 16 years yesterday".

So with automatic parole, that's 8 years in one of Her Majesty's holiday camps. For a man who evidently poses a serious danger to at least two groups of people; a man who thought it perfectly OK to hide nail bombs under his five-year old son's bed.

The Major came steaming round to Tyler Towers.

"There you are! There you are! What have I been telling you? A pederast and a terrorist, yet we still can't lock the bastard away for good! Human rights? What about victims' rights? Pah!"

Earlier, Tyler had listened to a R5 phone-in on the government's emergency law to allow anonymous evidence in criminal trials. Many of the callers sounded just like the Major. They wanted to know why murdering scumbags should be allowed to walk free just because they terrorise witnesses who might testify against them? They thought witness anonymity was a good idea, and they heaped derision on the lawyers and other "bleeding heart liberals" who phoned to argue that anonymous evidence overturns 1000 years of British freedoms, and puts far too much power into the not always lily white hands of the police.

It's a tricky one.

Clearly, all of us want to see scumbags banged up, and witness intimidation is a real problem. Yet at the same time, none of us wants to get fitted up by the cops and a performing troupe of faceless police snouts.

But listening to the phone-in, there's huge confusion about the distinction between trial and punishment.

We can all agree that punishments are far too lenient... well, the Major and I, and R5's callers can all agree anyway. But that doesn't mean we accept fewer rights to a fair trial: if I'm in the dock, I certainly want to see my accusers.

So what to do?

One thing we could do quite easily is to increase the penalties. If witness intimidation is such a huge problem that we're prepared to ditch 1000 years of Magna Carta etc, WTF haven't we whacked up the penalties for doing it?

According to m'learned friend, the current maximum penalty is only 5 years (equals 2.5 years after automatic parole; Sections 39 to 41 Criminal Justice and Police Act 2001). Why not make it 20 years, with hard labour and no parole? That way we keep our right to a fair trial and still do something about witness nobbling.

It's all very reminiscent of the 42 days issue. In particular, I'm struck by the line that says David Davis can't be serious about his defence of civil liberties because everybody knows he's a rabid right-winger who favours the restoration of capital punishment. QED.

That encapsulates our muddle over crime and punishment. There is no inconsistency between demanding robust protection for our civil liberties, while at the same time demanding harsh punishment for those who abuse them. Indeed, in the absence of magic wands to reform scumbags, we can only protect our civil liberties, including the right to life, if we are prepared to do precisely that.

PS As we all understand, "right-wing" is a Progressive Consensus term of abuse, and the lib media misses no opportunity to "build the brand". Thus, various reports of this Nazi bomber describe him as "a right-wing extremist", and the BBC report refers to him as making bombs "for a far-right terrorist campaign". That same brand is then routinely wheeled out by the same Prog Cons to undermine their mainstream opponents. For example, the BBC's Eddie Mair refers to the excellent Civitas as "a right-wing thinktank" (BBC PM 20.6.08), whereas neither he nor any of his colleagues would ever dream of describing, say, the ippr as "a left-wing thinktank". In reality, the freedom/personal responsibility/small government ideas of Civitas have got as much in common with the Nazis as the state broadcaster has got with objective reporting.


One last time - the Nazis were the ultimate expression of Prog Con Big Government

Another Social Engineering Flop


So who really did most for university participation?


We've blogged Labour's dire higher education policies many times (eg see here, here and here). In brief, they are spending £12bn pa in pursuit of an entirely arbitrary 50% participation target, producing massive dumbing down especially in lower division unis*, soaring drop-out rates, and wholesale overproduction of graduates with useless degrees.

But alongside their general headlong expansion, they're also pursuing policies aimed at widening participation among "lower socio-economic groups". This is classic education as social engineering: think Gordo's notorious attack on Oxford University for not admitting Laura Spence supposedly on class grounds. And predictably, its also turning out to be a complete and utter waste of money.

The National Audit Office has just reported a grim picture. Five years into the programme, and despite spending £392m, there is no credible evidence of success. Among other things, and as so often with government programmes, the data that's collected is wholly inadequate to support any serious conclusions. In fact, you'd almost think these people don't have a clue how to run anything.

And take a close look at that NAO chart above. The first point is that the big expansion in participation took place under those smash-the-public-services Tories. OK, a large chunk of that came from redefining the polytechnics as universities in 1992, but there was still a sizeable increase even without that.

The second point is that Labour's 50% target is defined not in terms of the traditional measure focused on full-time courses for 18-21 year olds, but it includes everyone under 30 taking full or part-time courses. Like for like, it ain't.

But even if the programme does succeed in boosting the number of students from these "lower socio-economic groups", so what? As we've said many times, university is too late: many of these people have already been failed by the state school system. Pushing them into third rate dumbed-down degree courses won't help with that at all. And it won't help them get a good job: something like three-quarters of new graduates now have to settle for non-graduate jobs.

So while the lib media wrings its hands at the NAO's startling revelation that poor white boys don't go to uni, we need to focus on that choice and competition programme for improving state schools: go Mikey!


*Footnote: Dumbing down is not confined to the newer Polytechnic unis. Earlier this month we heard of the sad demise of the Desmond (2:2 degree) in many of the older more established unis. Grade inflation has hugely boosted the number of 2:1s and firsts awarded. Liverpool Uni is worst with the proportion of firsts and 2:1s soaring by 23 percentage points in the last decade. But many others are not far behind, including Sussex, Southampton, and even Durham (14% increase). Shocker.

Wednesday, June 25, 2008

Citizens To Be Guaranteed Excellence!


How decisions are made in the real world


Excellent news comrades!

The People's Excellence Czar and the Homeland Excellence Commissariat are set to launch the State Excellence Constitution!

For the first time, all citizens will be guaranteed* a constitutional right to excellence.

Excellence in healthcare!

Excellence in education!

Excellence in ethnic diversity targeting!

The Many not the Few!

The Future not the Past!

*State Excellence guarantees are subject to regulation by MiniTruth in accordance with standard terms of business including but not limited to Pretty Straight Guy protocols and the European convention on Democratic Accountability. Your home and family may be at risk.

****


The new non-enforceable NHS Consitution does sound a particularly vacuous idea, and we'd really like to know how much time and money is being spent on it (it's all too reminiscent of the fad for bleedin' obvious "mission statements" that swept through big companies 15-20 years ago).

So what of the Tories' new NHS plan?

To be frank, we haven't yet read it. But abolishing top-down process targets has to be a good idea. The real question is how the accompanying choice and competition stuff is going to work?

Lansley's been saying patients will choose hospitals on the basis of detailed performance stats, but how will that work exactly? Last night Paxman had lots of fun with him suggesting patients might be zipping around all over the country, with Salford patients choosing to have their elective surgery in Guildford - visions of chaos.

But patient choice is clearly key to improving standards, and the ability to choose Guildford over Salford ought to drive improvement in Salford. So in practice, most patients will never need to travel.

Much more important is the old information problem: how will you as a bog-standard ignorant patient actually choose among hospitals? Lansley mentioned survival rates. So if you need to be treated for, say, bladder cancer, you look up the five year survival rates for patients treated at all the various NHS hospitals (and presumably by all the individual surgeons), and you choose one.

So which one do you choose?

Obviously the one with the best rate - easy.

But what if you can't get in there for 18 months? Feel lucky?

OK, park that - pick the second best. Hmm... 17 months wait.

Right, so down among the real choices - the ones that can do you within 2 weeks - how do you decide?

Well, in the real world you ask your GP. And he says he'll get you in with Mr Singh, just like he would have done without all that other rigmarole. And he says all those stats are a mixed blessing anyway- treating bladder cancer is much more complex than bald survival rates would suggest: patients differ and survival depends on far more than just the skill of the surgeon, etc etc.

In other fields we don't really attempt this kind of thing. Rather than choosing our meat pies on the basis of a load of detailed nutritional stats, we just choose Pukka because we trust the brand. We leave it to them to select the very finest cuts of fillet steak and organic mushrooms to pop inside.

A bit like competing social insurers might work.

Kind of idea.

Must read the paper.

More Aid Waste


Into the darkness goes our cash

We've done a few posts recently on overseas aid (eg here and here). Our conclusion so far is that very large chunks of the £5bn pa we taxpayers now spend on aid is totally wasted, going mainly to support the international aid industry.

Today the Public Accounts Committee published its report on one rapidly growing component of the UK aid programme - so-called "budget support". That's where instead of spending money directly on specific aid projects, like building a new hospital, the Department for International Development (DFID) simply hands over a wad of folding money - currently £0.5bn pa - to the governments of favoured developing countries, so they can spend it themselves, as they decide.

What! you say. What! That's bonkers isn't it? Surely everyone knows those people are as corrupt as hell. Won't the money just go walkabout, or at best, get flushed straight down the toilet?

The answer is that the wide-eyed fools at DFID have no idea. But the PAC reports:

"DFID has not estimated how much funding through developing governments is wasted or used for corrupt purposes, but the estimates of others are worrying. For example, in Tanzania and Uganda other bodies have estimated that 20% of procurement expenditure is lost through corruption. In 2006–07, DFID provided £90 million and £40 million respectively in budget support funding in these countries. More recently, an external audit of the Bank of Tanzania showed that US$100 million had been misused, and in February 2008, Tanzania’s prime minister and entire cabinet resigned after being implicated in corruption over an electricity contract."

It's a complete and utter shambles. DFID is doling out hundreds of millions of our money on this scheme every year, and yet:

  • It has not established the effectiveness of budget support relative to other types of aid, or been able to conclude whether, as currently implemented, it represents value for money.
  • Its budget support objectives and monitoring have significant weaknesses.
  • It rarely attempts to quantify the impact of weaknesses in systems for risks to DFID’s funds.
  • It provides budget support expenditure in countries where expenditure and output data are so weak that it cannot monitor progress effectively.
  • It claims that budget support allows it to shape national policy but at other times claims that using leverage rarely works.
  • The financial risks of putting UK funds through weak national systems are often high.

Of course, DFID makes all kinds of wild arm-waving claims, but like so much of the aid industry, it's wholly unable to substantiate them. Most are pure untestable assertion, although the PAC has at least had a go.

For example, DFID asserts its budget support has increased the supply of public services, like primary school enrolments, to the poor in recipient countries. But as the PAC points out:

"...such improvements cannot be attributed solely to budget support, but also reflect the efforts of the governments of the developing countries, other donor projects and prevailing economic conditions and growth rates. Many countries receiving budget support have increased their primary enrolment rates significantly, but so have some countries which have had no budget support. In addition, the modest increase in Ghana’s enrolment rates and the decrease in the rate in Vietnam [both recipients] show that the pattern of benefits from budget support is by no means simple."

"By no means simple", which translates as "there's no relationship whatsoever". No wonder other countries spend so much less on budget support - as a proportion of our bilateral aid programme, we do more than three times any other donor.

And what about that tricky growth issue? As we've noted before, there seems to be virtually no credible evidence that development aid has boosted sustainable economic growth in recipient countries at all. Those countries like India and China that have lifted off, have done so largely through dint of their own efforts, especially in the field of economic reform.

So has budget support helped growth? Here's a chart the NAO put together in their report on this:

When they say "no simple correlation", they mean there's absolutely no correlation of any discernable kind (apart from that they're perfectly all right).

The PAC puts it this way:

"DFID believes that budget support can assist the developing country economy to maximise the potential for growth, for example, by promoting good macroeconomic management and encouraging increased productivity. In Malawi, however, an independent evaluation found that the government had a poor grip of the macro-economic situation and that budget support actually worsened both macroeconomic performance and the steady flow of aid funds. Although budget support has been provided by DFID for ten years in some countries, direct links between the support, economic growth and poverty reduction are hard to detect. Many studies on links between growth and aid in general have been inconclusive or contested."

They could have been speaking for the entire development aid programme. DFID may believe, but there is no hard evidence all those billions have boosted sustainable growth one iota.

Although there is plenty of evidence they've boosted certain Swiss bank accounts quite considerably.

PS Further to our posts on the nonsense of UK aid to India, BOM correspondent Joan W draws our attention to an announcement from investment quango CDC that it's going to punt £126m of our money into Indian infrastructure and real estate. CDC says “The kind of interest we’re seeing in this market shows that people recognise this is an asset class that is under-capitalised and underdeveloped.” We say we don't care how under-capitalised it is, we don't want the government spivving our hard-earned taxes around a bunch of dodgy Indian property funds. If people want to do that, let them use their own money.

Tuesday, June 24, 2008

Bat Girl Meets Remploy


[NB this is quite a long post, but Tyler's Spidey Sense tells him there's a large smelly rat lurking somewhere underneath, and it would be good to see it tracked down and blatted]


Remploy is a government quango set up at the end of WW2 to employ "Disabled Persons", including ex-servicemen. It originally did so by providing jobs in its own subsidised chain of factories manufacturing furniture and such like. More recently it diversifed into employment services, placing and supporting disabled people into Real Jobs (ie unsubsidised jobs).

It currently costs taxpayers £134m pa (2006-07 Annual Report), but unfortunately it gives shocking value for money. Apart from the cost of its executive perks, that's because, according to reports from the National Audit Office and the Public Accounts Committee, its traditional focus on direct employment is hugely expensive: the average subsidy per job is around £20,000pa. So they demanded Remploy switch focus urgently onto its cheaper and apparently much more cost effective employment services.

That switch was subsequently agreed by government, and Remploy drew up a Masterplan to implement it. Just one problem: even though Remploy would quadruple (from 5,000 to 20,000 pa) the numbers of disabled it would place in Real Jobs, to pay for that, they'd need to implement closures and job losses right across their inefficient factories.

Which was never going to be easy. And with this dithering faffing union funded "government" it turned into a protracted nightmare of indecision and flipflops.

Eventually they did agree to the closure of 28 out of the 83 factories, not as many as originally proposed, but quite enough to sow the whirlwind. Thus it was, for example, that last week the authoritative Socialist Worker reported the GMB union's decision to withdraw funding from individual Labour MPs:
"The betrayal of the disabled Remploy workers by the government gave a cutting edge to the general anger of delegates.

James Stribley, a Remploy worker, said, “Last year we trusted Peter Hain when he twice promised consultation over the factory closures. But he lied. We should only support those who support us.” Alan Mills, ex-convenor for Remploy in St Helens, said, “I am a Labour Party member but I can’t say for how much longer. We simply can’t trust them anymore.”

So you're a Labour MP facing slaughter in less than two years and your stupid clothead leaders have done this to you. And all for a mere £100m pa. You scream at them.

And now you're James Purnell, cabinet minister reponsible for Remploy, eyes firmly on the top job post-slaughter, screamed at by your "colleagues", and wondering WTF you've been bequeathed such a mare by the odious Orange One. You phone the £125 grand pa head of Remploy and you scream at him.

"WTF WTF WTF!" you scream. "WTF are you doing down there?!!! You're meant to be placing these people into Real Jobs, not chucking them onto the front page of the Daily Mail!"

And now you're the £125 grand pa head of Remploy (with your £29 grand company sports car), and you're wondering WTF your effing useless job placement people aren't placing more people into real jobs. Your Masterplan quite clearly calls for an extra 15,000 punters to be placed into Real Jobs every year, so WTF has your imbecile placement business only placed seven? Especially since according to the PAC, you have an eye-watering "220 first line managers/professionals, 187 middle managers and 16 senior managers" under your command. WTF are they all doing? You roar down there in your 2.7 litre CLK and you scream at them.

And now, you're the head of the employment placement business...

Well, we get the idea.

So what are they doing?

As per, the first thing is that they've put their spin machine into overdrive. From Bootle to Burnley, local papers are full of upbeat stories about how Remploy has placed, or at least "helped to place", disabled people into Real Jobs. And according to a recent story in Personnel Today:

"A record number of disabled people found work through using Remploy's services last year. The specialist provider said in the 12 months to the end of March 2008, it found 6,600 jobs in mainstream employment for people with disabilities - an increase of 27% on the previous year." Bob Warner, Remploy chief executive, said: "These excellent figures are all the more remarkable because they were achieved while Remploy was going through a period of substantial change as we implemented our modernisation programme."

Sounds like things are going quite well: 6,600 annual placements is a huge increase on the 1,400 reported by the NAO for 2003-04.

Hmm.

Enter Bat Girl. Aka Mary, she suffers from ME and writes a blog about her experiences.

Last week she wrote about a quite extraordinary experience she's just had with Remploy

"The other day, I got a letter from Remploy. Here's a direct quote:
"To enable us to validate your employment status we require further evidence of your registration and job start. Therefore, we are writing to ask you to sign the enclosed documentation and provide us with a copy of [list of documents such as my work contract, payslips, etc]....... We understand the inconvenience this gives you and to address this, we will give you with a £50.00 giro (sic) on receipt of this pack/evidence."


Fifty quid for signing some forms? As Mary points out, that's quite a lot of dosh for a typical disabled worker - for her it would be half a week's wages.

But this was a most peculiar communication.

For one thing the documents were seriously incomplete. In fact, they merely comprised the pages where the customer's signature goes - no detail at all about what she was being asked to sign.

And why should she need to "validate" her employment in the first place? She has a job - a Real Job - her employer is happy with her validation, and HMRC and DWP are happy. Why should Remploy require her to validate anything?

And why were the forms backdated to before her local JobCentre had even suggested referral to Remploy might be an option?

And since she wasn't even contacted by Remploy until after she'd already found a job by herself, why, months later, was it now suddenly their business? Quite reasonably, Mary phoned Remploy to get an explanation and ask for the rest of the forms.

It's well worth reading Mary's blog for the full details, but in brief, Remploy told her they hadn't sent the full forms in order "to save postage" (er... and that £50 giro?). They told her not to worry her pretty little head about the details, but just to sign, and get the fifty quid.

When told the dates were false, Remploy said "they had to backdate things".

Finally, when Mary persisted asking awkward questions, they said "okay, fine, don't sign the forms then. Just put them through a shredder and forget about it." Mary wonders why Remploy wanted her to destroy the evidence.

We wonder too.

OK, Watson, here's a hypothesis. Suppose Remploy found itself under huge pressure to increase the number of disabled people it places in Real Jobs, in order to distract attention from those it had fired from its own subsidised jobs. But suppose it found it difficult to reach the wildly ambituous targets laid down by its political masters. We might well suppose those masters would scream at it to do something or face losing all those executive CLKs, not to mention a large number of testicles.

Now, suppose down in the bowels somewhere there was a threatened rat. What might such a rat do?

Yes, that's right. It would use all means at its disposal to increase the recorded number of job placements. It would comb through its records for anyone it had helped in the past, however slight that help might have been, and cook up some backdated successes. It would snuggle up to other employment agencies and coat-tail on their success in placing people. It would look round for anyone who might be disabled and already in work and send them incomplete forms to sign in exchange for fifty quid. Etc etc.

In other words, it would turn itself into precisely the sort of game-driven producer-captured monstrosity we've come to expect.

But really, we're talking some pretty vulnerable people here. Somebody should go down into the sub-basement of Remploy and sort out the rat problem before it gets out of hand.

PS Remploy's job placement service is all part of the drive to job-broke people off Incapacity Benefit and into work. We have some serious concerns about it. As we blogged here, in theory, job brokers sound like a good idea. But in practice, in the hands of our simple shopping evidence-lite commissars, it's turned into yet another opportunity for sharp operators from the private sector to get their noses even deeper into the public trough.

Monday, June 23, 2008

Broken Brown Blithering


Hurrah! We're top of the league... oh... it's the OECD's social immobility league*


So why has social mobility in Britain collapsed?

Altogether now - because Labour abolished our state grammar schools. Surely everybody knows that.

Well, no. They don't. According to Gordo:

"In the 1970s and 1980s, this rise in social mobility stalled. Skilled manufacturing jobs were lost. The opportunities for social mobility narrowed. Inequality and child poverty worsened.

As unemployment rose to 3 million, the sons and daughters of many families missed out on many of the new educational opportunities that were being created.

At a time when many of their fathers were hit by unemployment, many of the generation that some have called Thatcher's children - the lost generation - were sadly denied the chance to progress."


So according to the Brown version, it's nothing to do with Labour's dumbed down social engineering factories; it's down to Thatcher grinding the faces of the poor. Again.

So far so predictable. Yet he then goes on to quote straight from the Thoughts of Maggie T:

"Social mobility starts with parents wanting their children to do better than they did themselves. But this cannot be achieved without people themselves adopting the work ethic, the learning ethic and aiming high.''


Well, yes. We agree with that 100%. But that's because he's saying personal reponsibility is key, which is what we "right-wingers" have always believed. It's why we oppose socialism, which says society is to blame. It's why we want governments like his to go away and leave us to make our own decisions.

Doesn't he realise that? Doesn't he understand he's rejecting socialism?

Ah. Well, he hasn't quite done that. Because his concept of personal responsibility is pretty tortured. It says that government still tells you what to do, but uses carrots rather than sticks to make you do it.

What that means is stuff like paying people to stop smoking (£150 for three months smoke-free), or paying them £200 to access Sure Start services (yes, that Sure Start - the one that's already wasted about £5bn). So yet more taxpayers money chucked away chasing the elusive butterfly of socialism.

Even more broadly, this seems to be part of something called "choice architecture", which is the subject of a new book published this week. Written by two well-known US academics, Nudge reportedly explains how behavioural factors (eg peer group pressure and cognitive weaknesses) can be used to nudge us into making "socially reponsible" decisions.

And who decides what's socially reponsible? Ah.

Sounds like that's where we came in...

PS Actually Tyler is a big fan of Richard Thaler's work on behavioural finance, and will definitely read the Nudge website later. But right now, the sun is shining, the birds are singing, and Tyler's motoring down to Hampshire for a leisurely lunch with an old colleague in a pub garden beside the River Test. Soon Gordo will be motoring to meet other old age pensioners from Fife in a pub garden near you - look out for him.

*Footnote: the OECD reckons we're pretty well at the top of the international social immobility league. Their chart above "shows the intergenerational earnings elasticities as estimated in various studies. The higher the parameter, the higher is the persistence of earnings across generations and thus the lower is mobility". Source: D’Addio, A.C. (2007), “Intergenerational Transmission of Disadvantage”, OECD Social, Employment and Migration Working Papers, No. 52."

Sunday, June 22, 2008

Carrot Renewables Allotment Protocol


As we all know, the world faces a global carrot crisis. Unless something is done now to increase the production of carrot renewables, mankind's ability to see in the dark will soon be a distant memory.

Which is why, according to the Major's brainy friend Herr Docktor Professor Franz Kuntz, the government is about to launch the Carrot Renewables Allotment Protocol (or CRAP).

Modelled on the pathbreaking German scheme (which was devised by none other than the good Docktor himself) CRAP will reward consumers for growing their own renewable carrots. What's more - and this is the real stroke of genius - rather than simply consuming carrots, households will be incentivised to grow a surplus which can then be sold to the National Carrot Grid at a fixed premium price. So not only will they be helping the planet and future generations, they'll be helping themselves to a right old packet.

Renewable carrots can be grown pretty well anywhere - the garden, a windowbox, on the backseat of your Toyota Prius, or even on top of your mini wind generator. And you don't need any special skills - literally anybody can do it. All it takes is a simple Photovoltaic Carrot Panel, obtainable for just £15,000 - £20,000 from Kuntz Industries (Leipzig). Too much? Well don't worry - the government will pay half.

****

So are we all up to speed with FIT - the Feed-In Tariff for renewable energy? It's the current hot idea for stimulating microgeneration in homes across Britain, with a new government plan expected this very week. In fact, FIT is the new hot idea worldwide, and here's a nice pic showing how it all works, with a two-way connection to the grid allowing you to supply electricity... at least if the sun's shining:





Now that's all very well, but what we want to know is how does the money work?


The German scheme has been going since 1990 and it works as follows. The government subsidises the installation of electricity generating solar panels or turbines or pig muck digestors at your home. It then forces the local power company to couple your generator up to the grid at no cost to you. It then forces the power company to buy all the energy you care to supply at a fixed premium price of 2-3 times the current price for ordinary power station power.

And it's all been hailed as a fantastic success. In 2005, Germany generated 12% of its electricity from renewables, whereas we managed less than 5%. What's more, the German renewables supply industry is booming and reportedly now employs 250,000.

But doesn't the power company object to the extra costs imposed on it? Well no. The power company doesn't mind at all because you see, it's allowed to pass on all its extra costs to its customers.

Ah, the customers... we knew some schmuck would be writing the cheque. Surely they object to their electricity being more expensive?

Well, supposedly not. The official line is that it only costs a typical domestic customer about £20 pa more, and they're happy to be doing their bit for the planet.

But can that be right? £20 sounds pretty low. True, the capital costs were initially subsidised by the taxpayer rather than the power customer. And true, we are only talking 12% from renewables: if it increased to 100%, the cost burden would be more like £160 pa.

Still sounds low. All-in, the average cost of solar electricity is 2-5 times that of current domestic tariffs, and wind-power is about 2 times. So with the average electricity bill now running at just under £400pa, you have to guess the true extra cost for 100% renewables generation would be more like £400 pa.

And as we know, that understates the true cost because many renewables, like wind and solar, are intermittent sources of power, requiring the maintenance of expensive standby facilities as well.

Conclusion?

Be on your guard against FIT being spun as a get of jail free card. It isn't free.

And be equally on your guard against CRAP being spun as the answer to the carrot crisis. The only way out of that is for the Saudis to step up production.

We Ain't Quite As Dumb As We Look


The same again... only without the cars

Another gratifying smack in the gob for the Progressive Consensus this morning. Despite 20 years of propaganda, unanimity among the Westminster elite, and 24/7 support from the state broadcaster, the majority of the British public is still not convinced that climate change is caused by humans.

The Observer, which commissioned this poll, is shocked and appalled, pointing out that the plebs are confused and contradictory in their views. It goes on "those most worried were more likely to have a degree, be in social classes A or B, have a higher income". Translation: democracy beyond the borders of Hampstead is a major obstacle on the road to New Jerusalem.

For the record, Tyler ticks all the Observer's elitist boxes, has read - or at least, attempted to read - the IPCC report and the Stern Report, and is still not convinced. Indeed, he feels patronised and irritated by the one-dimensional gigo crap he's supposed to swallow, and the total lack of open debate on eg the BBC. He wants to be treated like a grown-up who can make up his own mind.

Professor Bjorn Lomborg, author of The Skeptical Environmentalist, makes the same point. He says "politicians and campaigners are to blame for over-simplifying the problem by only publicising evidence to support the case. 'Things that we do know - like humans do cause climate change - are being put in doubt,' said Lomborg. 'If you're saying, "We're not going to tell you the whole truth, but we're going to ask you to pay up a lot of money," people are going to be unsure.'

Spot on Prof.

PS Talking of the Prog Con, researching the Barnett Formula has led the bloke into some teeth-grinding byways. One of the academics who has written on the formula is Iain McLean, Professor of Politics and Director of the Public Policy Unit, Oxford University. It turns out he also wrote a paper for the ippr last year on the Prog Con. It argues that "a 21st century ‘progressive consensus’ is likely because since 1983 the combined size of the non-Conservative vote has always outstripped that of the Conservative vote". So right. So unless the Tories poll more than 50%, the Prog Con should be in power. In 2005, Labour polled just 35%, but because the LDs polled 22%, that means the Prog Con polled 57%. You see, elections really just get in the way. Without them, the Prog Con could remain in power for ever and jolly well make sure we all lived in a wonderful world of international brotherhood, vegetarianism, and proper exercise for all. Kraft durch Freude, only without the planet destroying Beetles.

Saturday, June 21, 2008

Foundation Limpets


Somewhat unresponsive to taxpaying customers

Ken Jones, president of the Association of Chief Police Officers (Acpo), says that police chiefs should be able to set their own priorities, guided by local people - not the Home Office. An end to Labour's top-down target driven culture and all that red tape.

Well, hurrah for that! It seems BOM and Acpo are 100% in agreement.

Just one small detail - how exactly will local people guide their local police? Elected sheriffs?

Ken says he wants local forces to be eligible for foundation status, just like foundation hospitals, and:

"For the issues that bother people like me and you, in our street, that should be down to us frankly to sit down with our local team, to do a deal with them about what it is they think is important and then for us collectively to monitor how that's done"

Hmm... frankly sit down with our local team, eh? Collectively to monitor... riiiigght...

"We ought to trust the public and neighbourhoods [to] direct their priorities, but I would insist that to guard against a free-for-all there has to be a standard approach to many other things, for example, the way we handle intelligence - organised crime and counterterrorism."

Ah. It's that old free-for-all again.

You see Ken, while we all agree we need something like the FBI to handle big national criminal problems and counterterrorism, when it comes to day-to-day local policing, we actually want a "free-for-all". We desperately need local experimentation and innovation.

And as for local accountability, "sitting down with" and "collectively to monitor" just doesn't hack it I'm afraid. We need the clearcut ability to sack you. We need elected sheriffs.

It's the limpet problem. Foundation status may be great for service producers, and it may possibly eliminate the worst lunacies of Whitehall driven management, but it does absolutely nothing to give us customers a say. It certainly doesn't allow us to chop the management.

Take the BBC. That's had foundation status since its foundation. It constantly claims to be consulting and monitoring. But essentially it's a huge tax-funded quango that serves itself and its political paymasters, not its customers. And it clings to its anti-competitive position like a superglued limpet, rejecting all movement. Just yesterday its Director General solemnly warned "you tinker with that [the allocation of telly tax] at your peril" . Oh, yeah? What's the worst that could happen? Wossy gets paid less and we lose a few me-too reality shows?

So Acpo is halfway there, but only halfway.

Unfortunately, it's the other half that's the really important bit.

PS We've been taking a closer look at Sheriff Joe from Maricopa County Arizona, trying to discover whether his robust methods have actually reduced crime. It must be said the jury hasn't yet returned. Crime in Arizona has certainly fallen since the early 90s, but it's fallen right across the US, after voters demanded an end to soppy 1960s "justice". So while Joe looks decidedly tougher than your average US sheriff - and has become a hate figure for American liberals - it isn't clear his tent jail and chain gangs have actually cut crime any more than the general toughening up of US criminal justice.

Friday, June 20, 2008

G-G-Gosh... Can They Do That?


It's simple -I'm going to cut your income

The Bloke is writing another paper for the TPA, and is currently researching the notorious Barnett Formula, the one that allocates all those zillions of English taxpayers' money to the Scots.

It turns out that Barnett was simply a modification to a formula originally laid down in 1888 by George Goschen, Chancellor under Lord Salisbury. He invented the "Goschen proportions", under which a certain block of central government funding was allocated in fixed proportions between England, Scotland, and Ireland (Wales? Oh, they were simply subsumed in England). But more of that anon.

What also caught the Bloke's eye was that in that same 1888 Budget, Goschen pushed through a major restructuring of the National Debt. In brief, he converted the existing stock of government consolidated debt from a coupon of 3 percent down to 2.75 percent immediately, and to 2.5 percent from 1903.

Eh?

OK, let's put that into English.

Goschen said to the widows, orphans, and everyone else whose precious life savings had been invested in rock solid gilt-edge government bonds, oh, he said, oh, I know we promised to pay you 3% pa for ever, but we've changed our minds. From here on in, we're only going to pay you 2.75%. And that's only for the next 15 years, after which we'll pay you 2.5% pa. I commend this statement to the House.

Guh?

Can they do that? For a widow or orphan with no other income, a cut from a 3 percent coupon to 2.5 percent is a massive 17% cut in living standards. Just like that.

Of course, the answer is they can do that, and have done on more than one occasion. The most recent was in 1931, when the coupon on WW1 debt was cut from 5% to 3.5%. A shocking reminder that we should never trust politicos with our savings.

So could they get away with the same trick today?

Possibly not: much more of our savings are today channelled through collective investment funds of one kind or another, and their managers are much less likely to lie back and think of England.

But then again, in 1931 we were only just coming off the Gold Standard, and our politicos hadn't yet rediscovered the joys of the inflation tax. Once you start printing money willy-nilly, you don't need to cut coupons - you simply inflate your way out of debt.

Which brings us back to the Bank of England's anti-inflation mandate (see this blog). The public sector currently has around £500bn of debt fixed in nominal (ie money) terms. At 2% pa inflation, the real debt is being eroded by around £10bn pa (aka the inflation tax). At 4% pa inflation, it erodes by £20bn pa, a windfall for the government of £10bn pa.

It's a no-brainer.

A scary no-brainer.

PS George Goschen (pic above) vs A Darling for the post of Chancellor. Goschen got a first at Oxford, worked in the City, became a Bank of England Director at 25, wrote a standard work on the foreign exchange markets, and was President of the Royal Statistical Society while still Chancellor. Darling did none of the above.

Olympian Inferno


Gee-whizz stats from the Olympic Park

The National Audit Office has just published its latest update on the 2012 money inferno. They highlight three major concerns:

1. Security budget

Unbelievably, three years after winning the games, and three years after Sir Ian "Bonkers" Blair bragged to Today listeners that we'd won in large part because his force was recognised as a world leader in security (approx 20 mins before the 7/7 bombs went off), the Home Office still hasn't got a security plan capable of being costed. The NAO says:

"In the continuing absence of a fully costed plan, there is not a firm basis for taking forward the wider security arrangements for the Games, or for making sure that wider security requirements have been fully reflected in the planning and delivery of other activities within the London 2012 programme, including the construction of the venues, transport and staging."


In other words, while the security plan is still flapping around, there's no way we can know any of the other major costs are right.

Brilliant.

2. Olympic Village

As we blogged yesterday, the funding arrangements for the Olympic Village are in melt-down. This report tells us the total cost will be in excess of £1bn, which was originally to be funded largely by the private sector. But post-credit crunch that's a non-starter, and all work so far has been funded by taxpayers. The NAO says:

"Given the uncertainty over potential cost pressures on the Village project, and the ongoing consideration of alternative ways to finance the deal, it is not possible at this stage to determine the impact on the budget for the Games."

Clear enough.

3. Legacy planning

Extravagant claims about so-called legacy were a key element of London's original bid. Yet no serious planning has been done, and cost pressures point to downsizing. But as we've blogged before, the organisers have to satisfy the IOC that they are delivering on their bid commitments. Pulled two ways - a classic recipe for faffing around. Planning deadlines have fallen by the wayside, and the NAO says:

"The continuing legacy planning could affect the assumptions underpinning the Olympic Delivery Authority budget and the specifications it has agreed with contractors, with any late changes impacting on time and cost or on deals negotiated with developers."

Yup, it's those pricey "late changes" again- a chronic problem with all public sector projects.

The NAO is doing a good job with these 2012 reports. True, they make dismal reading, but they are building up into a systematic and invaluable record of just how incompetent and expensive our grandstanding rulers can be.

PS Those gee-whizz stats really are gee-whizz... eg the amount of contaminated soil to be washed would fill 10,000 Routemaster buses, and the cut soil would fill 20,000... although, couldn't we just have had the Routemasters left alone to ply London's streets?

Caroline, This Is Our Flaming Money


The Natural History Museum has just bought a flaming meteorite. Well, presumably it's not flaming any more, but it is a bit of meteorite and they have bought it from a private collection.

So how much of our money did they pay for it?

"I'm not going to tell you," Dr Caroline Smith, meteorite curator at the Natural History Museum, replied to Humphrys this morning.

Er... sorry Caroline. Do you understand how this stuff works?

You are our servant. We pay your wages and we also fund your museum. We want to know how you spend our money.

Simple as.

Thursday, June 19, 2008

Up Betimes


"Up betimes and to White Hall, where the Committee for Tangier met, and there, though the case as to the merit of it was most plain and most of the company favourable to our business, yet it was with much ado that I got the business not carried fully against us, but put off to another day."

An excerpt from a great blog written by a senior civil servant at the Navy Board. And to read it, you'd never think there was a war on - he's forever describing how senior Board officials avoid making decisions, and constantly put off anything tricky to another day. They seem to be a bunch of bumbling amateurs stuck in a bygone age.

Which of course, they are. 1665 to be precise.

But fast forward 343 years from Samuel Pepys, and listen to Zenna Atkins, a distant successor of his as director of the Royal Navy Fleet Executive Board (as well as various other government oversight posts). She says:

'I could say without doubt that significant parts of the civil service are broken. The machinery of government is not even in the 20th century, never mind the 21st century... They are working in a machine with a set of customs, cultures, values and practices that are utterly antiquated. A lot of the time the process is more important than the outcome.'

The civil service is 'overpopulated with highly intelligent people who can't do simple, menial tasks, simply or menially'. They are risk-averse 'because no civil servant ever got fired for doing nothing. They get fired for doing something.'

Sam P would have felt totally at home.

As it happens, Ken Livingstone has been banging on about the same thing. Freed from Mayoral restraint, he told a recent local government conference that Whitehall mandarins are ‘opposed to doing anything... you could persuade ministers but civil servants were very hostile.’ Yes, OK, that's Ken, but the issue is clear.

We've blogged before about the Cult of the Amateur, and how, more than 40 years after the supposed "watershed" Fulton Report, it's still alive and well in the Civil Service.

And we've also blogged about how when Tyler first joined the Service in the early 70s, his Permanent Secretary told him the job was to stop the politicians doing anything too stupid: in other words to slow everything down, or even better, to stop change altogether (and he wasn't joking).

So we can hardly be shocked at what Pepys, Zenna Atkins, and Ken have to say.

But what should be done? What can be done?

The legions of Big Government are torn between the Ken solution (a US-style executive civil service, in which the senior people change with the administration), and the ippr solution (a "professional" civil service which smoothly and painlessly implements whatever policy the politicos desire).

Neither approach is appealing.

Much better would be to end Big Government altogether: break it up, and downsize the civil service back more like to what it was in Sam's day.

(HTP HJ)

PS Talking of the cult of the amateur, our very first blog on the subject recorded the tale of a mandarin who had comprehensively screwed up the Home Office. His reward was to be moved into the job of Deputy Governor at the Bank of England in charge of financial stability. Now, two years, Northern Rock, and a banking crisis later, Sir John Gieve has finally been exited... doubtless to spend some quality time with that public sector pension.

PPS October 25, 1668 “After supper, to have my head combed by Deb, which occasioned the greatest sorrow to me that ever I knew in this world, for my wife, coming up suddenly, did find me embracing the girl con my hand sub su coats and endeed I was..." The great thing about Pepys is that he didn't let being Chief Secretary to the Navy cramp his style. Even if these days he'd certainly have been banged up for sexual harassment of a serving wench.

2012 - Groping In The Dark


Is that a Memorandum of Understanding, or are you just pleased to see me?

Following the publication of Boris's special report on the costs of the Olympics, we've just been treated to a bizarre and highly concerning interview on BBC R4 Today.

At issue was the "secret" Memorandum of Understanding signed between Ken and the government, spelling out who picks up the inevitable further cost over-runs of 2012. Sarah asked Boris if he'd publish it?

Boris responded by saying he doubted if it even existed.

What? Sarah was confused, and asked BBC sports man Mihir Bose to confirm the Memorandum's existence. He said it must exist because, well, it's mentioned in Boris's own special report.

Hang on, thought Tyler, is this the same Memorandum of Understanding published and freely available to all on the Department for Culture Media and Sport website?

Er, yes it is (later confirmed on the prog).

So (a) why was Mihir Bose in the dark? And (b), much more worryingly, why was Boris in there with him?

Hmm.

As for the special report itself, it's a good summary of many points already familiar to BOM readers (see previous blogs gathered here). But it does contain one or two further details.

For one thing, it seems that the ODA has totally failed to deliver on its key pledge to employ only fixed-price construction contracts. It now turns out that for both the main stadium and the Aquatics Centre, it's accepted much riskier open-ended cost-plus arrangements, just like in the bad old days of wild over-runs:

"Both contracts are target cost rather than fixed price as it would not have been economically viable to seek to secure this. The ODA are realistic about the significant level of risk that remains within these contracts."

Well, that's a comfort.

When they got us into this mess, there was much macho talk from the "organisers" about how they would slam contractors up against the wall and make them accept fixed price deals. On BOM we always said that was ludicrous pie in the sky (eg see this blog more than two years ago). So we were 100% right and they were 100% wrong... but... er... how come that doesn't that make us feel any better?

Then there's the Olympic Village, which was originally supposed to be largely funded by the private sector. Well, guess what. The private sector no longer wants to fund it (if it ever did), so we taxpayers are having to step up, against a laughable promise that the flats and houses will be so valuable post-2012 we'll get our money back from sales. Yeah. Right.

TINA is back in town, as we always knew she would be. Time is running out and we have no choice. The "organisers" have now given the developer, Lend Lease, the go-ahead to start building "even though no Development Agreement has been agreed". Translation: a housing project costing many hundreds of millions is going ahead on a wing and prayer, with the taxpayer picking up whatever financial consequence may arise.

OMG.

Current meter reading to date? According to the report, the main venues are currently running £106m over the supposed final FINAL costs agreed last November.

The DCMS argues the over-run - well, this bit of the over-run anyway- is actually only £16m. But that's only because other bits of the project have been hastily canned to balance the numbers. Just one teensy problem with that - the canned bits include items that will almost certainly have cost knock-ons further down the line, eg:

"ODA value engineering exercises to contain costs and achieve savings have inevitably reduced planned spend in areas that are vital for legacy such as landscaping. Early business planning... has already identified the need for additional investment in the park to achieve the standard and quality of legacy park... The LDA is also concerned about potential shortfalls in the transformation budget for venues. It is not clear that the existing budgets will provide turnkey legacy facilities at either the Stadium or Aquatic Centre."

It's the same old same old. Grandiose projects, wishful thinking, wholesale salami slicing, short-term savings at the expense of long-term costs (now you note referred to as "value engineering")... anyone would think Big Government was a lumbering brainless over-priced dinosaur that can't even tie its own shoe laces.

PS After the Boris interview this morning, Ken phoned in. And he was very explicit about a point he'd only hinted at while in office - the reason he backed the Olympics was so London could get its hands on at least a small part of the £20bn pa it has to hand over every year to fund the rest of the country. Put that way, I'm sure Londoners might see the point. But when you have to run a huge wasteful circus like the Olympics just to get back some of your money, it is shocking testimony to just how badly Britain's huge fiscal centralisation serves London and the Greater South East (eg see this blog).

Wednesday, June 18, 2008

Out Brothers Out!


Following this afternoon's post I've taken a look at the long-term history of strikes under various governments.

The chart shows the rolling 12-month total for working days lost through industrial disputes from 1931 right up to 2008 (ONS data here). The annual average over the whole period is 4.2 million, but as we can see, that's heavily influenced by three big peaks:
  • Early 70s - after the gradual increase in strikes during the 50s and 60s, Heath tried to take on the unions. The 1972 and 1974 miners strikes eventually led to the three day week and Heath's ejection.
  • Late 70s - the Winter of Discontent was a reaction to Callaghan's public sector incomes policies, and it produced a sharp upward move in strike losses through 1978 and 1979; but the total spiked even further after Thatcher came to power and the steel unions went on strike.
  • Mid-80s - when Thatcher took on the miners, the dispute lasted for a year, resulting in a third huge spike of losses.

So is it correct that strikes always increase at the end of a Labour government? Not entirely - there was no increase in the final year or so of Attlee's government.

But in the final year of Wilson's 1964-70 government, strikes went through the roof, with days lost more than doubling from 4.2m to 9.2m. Ditto the final year of Callaghan, with annual losses increasing from 9.5m to 14.6m (yes, we're also wondering how that squares with the FT figure of 29.5m for the Winter of Discontent quoted in the last blog, but even 14.6m is still a significant spike up).

Let's see how the fag end of this hopeless shower get on. The rolling 12 month total to April 2008 stands at 1.1m, a near quadrupling from the 0.3m 12 month total just twelve months earlier. And there's nearly two years still to run.

PS There's one other point that jumps from the chart - the low level of strikes over recent years was established well before the 1997 election. Clearly the early 90s recession was important in dissauding strikers, but smashing the unions was key.

PPS Tyler has just recalled a most unfortunate indiscretion from his youth. While at uni he somehow got involved in the Kill the Bill campaign against Heath's anti-union legislation. What was he thinking of?