The Public Teat

MONDAY, JULY 20, 2009

http://burningourmoney.blogspot.com/

The Public Teat

£700bn feeding frenzy

His Extreme Eminence Bishop Hill has managed to get some fascinating information out of the Department for Children Schools and Families (DCSF). It's a spreadsheet listing all the individual payments that went into the department's £66bn spend last year (see here). And it makes for a riveting read.

His Grace has been busy combing through it and highlights a number of payments going to some of BOM's oldest friends. You should read his post, but here's a taster:

• Guardian Media Group - £1.1m.
• Gypsy Media Company - £7,500 ("Britain's only media company run by and for Gypsies")
• Consultants -£28m
• Cap Gemini £44m
• Crapita £132m
• BBC's Mike Baker - £2,643
  

Etc etc

This is the first fruit from a much bigger and altogether splendid project the Bishop has underway:

"This would look at those companies that were living off the taxpayer. It would essentially be a searchable database, where you could look up how much a company was raking in from which bit of the state. It would be called The Public Teat."

Of course, in theory, George will be launching just such a searchable spending database when he becomes Chancellor. And it's something we've long called for on BOM (eg see here).

But His Grace isn't prepared to wait for all that - he needs Action This Day.

So well done to him.

And let's hope he can get the comparable info out of all the other spending departments. We need to know precisely who's getting all the billions we pay in taxes every year.

, JULY 19, 2009

Fear And Loathing In Surrey

A typical weekend in Guildford

Tyler lives in Surrey.

Well, he would, wouldn't he. Surrey is nice and leafy, yet close enough to the fleshpots up the Smoke.

True, Surrey has been described as Britain's biggest carpark, and Surrey housewives are not to everyone's taste. But it's also got more Waitroses than anywhere else outside London, and important National Treasures like Cliff Richard live here.

Unfortunately, it is expensive. And one of those expenses is high council tax. This year Tyler will be contributing £2972.16 to his various local authorities, of which no less than £2178.36 is going to Surrey County Council.

Now, Surrey CC is an entity that knows how to spend money. Last year they got through £1.4bn on so-called Revenue Expenditure, which was nearly £1,300 for every single inhabitant.

But unlike most local authorities, apart from its ringfenced schools grant, Surrey gets very little financial assistance from central government - the inhabitants are deemed too rich. Indeed, under this Labour government the County has receivedonly about one-third as much support per head as the average authority. True, that's a perfectly fair punishment for voting Tory (which is why Labour voting areas should expect heavy retribution over the next decade), but it has made balancing the jolly old books rather tricky.

So some years ago, Surrey CC chiefs decided they needed to cut costs. And to achieve that, they wheeled out a giant mechanised scythe called the Business Delivery Review, or BDR as it was "affectionately" known.

The results were somewhat less than a triumph. In four years, Surrey's "star rating" - awarded by the Audit Commission for service quality and value for money - plunged from four (the top award) to one (the bottom):

Surrey had landed in the bottom 3% of local councils, alongside Haringey (yes, Baby P Haringey), Doncaster (yes, 7 child deaths Doncaster), and Milton Keynes.

How could that possibly have happened? According to the Commission:

"Surrey County Council is not improving adequately. Overall levels of improvement and service provision are variable. Services for vulnerable children and young people do not meet minimum requirements and safeguarding is inadequate."

The impact of this verdict on Surrey CC was huge. The Chief Executive "left". The Leader of the Council was forced to resign. Many of the top managers were exited. Staff morale collapsed. It was a Grade A disaster.

Things got so bad, an emergency Chief Exec was parachuted in by Whitehall. Andmost unusually, he has just published his findings for all to see (HTP JF).

He reckons he's found an organisation in breakdown. The staff loathe the managers, the managers fear the chief exec, the members hate the officers, and the officers spend their days trying to ignore an Elephant that's somehow crept into the Room. To summarise:

"The difficult position in which the County Council finds itself is fundamentally a failure of leadership, culture and governance in its widest sense...

...the Council is seen as remote... is viewed as superior and arrogant... problems compounded by a significant breakdown in mutual trust and confidence within the Council... widely viewed as lacking vision, direction and strategy and instead operates by a series of often disconnected short-term tactics... driven by events rather than a sense of the Council being in control of its own destiny... very internally focussed, obsessed with itself, with its own processes and bureaucracy... silo mentality... central control-freakery... blame culture and bullying... 

The most striking aspect of the management style is how bureaucratic it has become as a result of an obsession with the control of inputs and resources since BDR which is then mistaken for a focus on efficiency. This is perhaps inevitable given the lackof a clear vision and strategy which means there are no clear strategic outcomes to focus on. Documents... are widely viewed as being designed to keep either the Government or various Inspectors happy."

Sheesh!

Absolutely, terminally, hopeless!

We clearly need to get out. We need to move right now to a better council - to... I dunno... Barking and Dagenham - according to the Audit Commision, they are a four star council.

Hmm.

Hmm and double hmm.

The thing is, all local councils are bureaucratic. We surely all know that. And they can all appear arrogant and remote. And they all seem to lack vision and direction. That's just the way it is when they're accountable to the commissars in Whitehall rather than to their local taxpayers.

In fact, because it gets so little funding from Whitehall, Surrey CC is probably rather more accountable to its council taxpayers than many other councils.

And how come the Audit Commission rated Surrey as a three star council last year but only one star this? What changed so quickly? Are we saying last year's assessment was wrong? In which case, why should this year's be any righter?

What changed of course was the Baby P case, and the panic knee-jerk reaction in Whitehall. Once Baby P had died... no, once the public reaction to Baby P's awful death had impacted on our national politicos, then the hunt was on for any council that wasn't ticking all the child protection boxes precisely as specified. And Surrey fell into that category.

We've said it before, but let's say it again: these Audit Commission reports aren't worth the paper they're printed on. Just remember that Haringey Council itself was rate three-star even as Baby P was dying.

We're no particular fan of Surrey CC. But the truth is that most residents think it does a perfectly steady middle-of-the-road type job. School results are above the national average, social services seem no worse than elsewhere, and the potholes in the road aren't noticeably bad.

Sure, Council Tax is ridiculously high, but we know that's largely down to our Labour government. Nobody gets too excited about the Council itself one way or the other (although from the remoteness perspective, it might be nice if it moved County Hall into the county, rather than sitting in the London Borough of Kingston).

But the Audit Commission's report is nothing to do with what we think. After all, we're only the Council Tax payers.

What it really comes down to is that, although the average Surrey resident gets a reasonable - if expensive - service from the County Council, the Commissars reckon "vulnerable children" may not. And since "vulnerable children" are this year's hot button, the Commissars are giving that priority over everything else - including value for money (where they actually think Surrey does quite well).

Like we've said from the start, local democracy and localism will never work as long as the Commissars hold the purse strings.

PS The Audit Commission costs us £210m pa and has c2000 employees. It should be drastically downsized. We should strip it of all the "quality improvement"functions it picked up under Labour, and return it back to its original (and cheaper) simple audit functions. Another contribution to George's list.

SATURDAY, JULY 18, 2009

Cutting The Burden Of Welfare

Some of the hardest cuts George will have to make will be in welfare.

The current social security bill is running at £165bn, with another £22bn going on Brown's complex array of tax credits. Added together, they will absorb 13% of our GDP this year - and that's on the optimistic Budget forecasts.

Worse, as the slump unfolds, the burden is going to get even heavier. And we simply can't afford it.

When cradle-to-grave welfare was introduced back in the New Jerusalem, benefits spending was about 4% of GDP. But since the 40s, successive governments of both colours have managed to increase the burden threefold - and contrary to popular belief, it even increased under Thatcher (albeit by just 0.2% of GDP).

Still, in 1997, Labour inherited a booming economy in which the burden was falling quite fast. It had already declined by 1.4% of GDP in the previous four years, and in the next two it went down by a further 0.4%, reaching a low of 10.8% of GDP in 1999-2000.

But as we know, instead of consolidating this promising fiscal position, Brown turned on the spending taps - including significant increases in a wide range of benefits.

For nearly a decade, he got away with it. A booming economy meant that the welfare burden remained only just above where it had been at the end of the 90s.

Unfortunately, reality finally intruded, and with a collapsing economy, Brown's earlier largesse means the burden will soon surpass the peak reached in the early 90s recession.

Of course, behind the scary long-term upward spending trend lies another scary upward trend: our longevity. We're all living too long. Much too long, and fully half our welfare spending goes on pensioners (£87bn this year).

So what's to be done?

One possibility is to shoot everyone over 70. But 59-year old Tyler is not entirelyconvinced by that option.

More realistically, we need to push up the state pension age to 70, and do it on a much faster timescale than the current leisurely move towards 68 by 2046.

But that will take time. Time the markets might not allow us.

No, George is going to have to wield the knife quickly and decisively, for immediate results.

Child Benefit (£12bn pa) is almost certainly for the chop (as proposed by Reform among others - see here), and many benefits could get frozen.

None of it will be easy. The screams will be loud, and the pain horribly real.

But one thing's for sure - given the size of the burden, welfare will have to take its share.

Inaction is not an option.