The TaxPayers' Alliance - Better Government

With great power comes no responsibility - The Planning Commission

Parliament is gearing up for its next major confrontation with the government this week, with the return to the Commons of the controversial Planning Bill.

Despite a very real need for reform, the Planning Bill was a poor bit of legislation from the start, and in keeping with this government’s belief that passing legislation is the same as governing, concessions have been given to every remotely rebellious Labour MP.  Indeed it’s become something of a Christmas tree, and begins its third reading this Wednesday overburdened with unnecessary amendments (some reports claim there have been more than a 100 changes since its last reading). Any positive contribution this bill might have had in clearing up planning law is now probably lost.

But for the Government (and most critics of the Bill) the issue is not planning law as such, but rather the creation of a new Infrastructure Planning Commission. It's this quango which is really stoking opposition to the Bill, and it's in effort to establish this new quango that government is so readily handing out concessions.

The proposed Infrastructure Planning Commission (to sit alongside the existing £48 million Planning Inspectorate) will deal only with planning permission applications for major infrastructure projects; airport expansion, nuclear power stations, highway and rail developments and so forth. Ostensibly this will 'de-politicise' what is currently a painfully slow process, allowing swift, independent decisions to be made. Ministers and local government will be removed from the process of authorising such large-scale projects, freeing decision making from the pressures of special interests.

The cynicism - and grubby power grab - which lie behind this proposal is amazing. By 'only deal with major infrastructure projects' what is really meant is: 'what government decides is a major infrastructure project'. The potential for mission-creep is huge. The term 'de-politicise' is a red herring too: the Commission will actually centralise control of planning in the hands of central government. The only groups that will really be cut of the planning permission process are local government and the public.
The Secretary of State for Communities and Local Government will appoint all the members of the Commission, its Chairman and its Chief Executive. It will, in short, be a proxy of Whitehall. And as for freeing decision making from the pressures of special interests, the reality is rather more like freeing decision making from the bother of having to deal with the public.  Quangos are enormously susceptible to the lures of actual special interests – developers, retailers, power companies - and the Planning Commission one will be no different.

The need to reform the planning process for major infrastructure projects is real; the current system is costly, slow, often arbitrary and arguably damaging to Britain's long term future. But the Infrastructure Planning Commission is not the solution. It will reduce the public's input and no doubt end up being more expensive. Worst of all though, it will provide government - as all quangos do - with the ability to make decisions without having to take responsibility, shielding ministers from accountability. If established, it will not be long before the Commission gives permission for a project widely opposed. Government ministers will then hold up their hands, shrug their shoulders and point out (loudly and repeatedly) that it was a decision made by an 'independent' and 'expert' Commission.

But of course the Planning Commission will be nothing more than a tool for the government in power, carrying out its agenda under the guise of 'independent, impartial enquiry'. Whatever one's opinion on airport expansion, nuclear power or road building, people must see that a super-quango is not the right body to take decisions which will affect us all.

Senior civil servants to get facebook lessons

One of the most worrying things I came across in my investigation into Britain's quango state - Unseen Government - was the noticeable decline in Cabinet Office time given over to monitoring quasi-government. This was surprising, as being the gate keepers of government one might assume this to be one of their primary functions.

But all is now revealed. Rather than waste their time frivolously auditing the actions and costs of taxpayer funded quangos, they were instead preparing guidelines "to encourage civil servants to take the first steps to engage with on-line social networks", such as Facebook and MySpace. Young, 'plugged-in' civil servants - "digital pioneers" as Tom Watson the Cabinet Officer minister described them - will be seconded from their trivial jobs running the country to "enlighten their counterparts in more senior positions" to the joys of photo sharing, instant messaging and virtual 'poking'.

With all the recent failings in government management - HMRC, Rural Payments Agency, etc - one might think that civil servants would be undergoing serious training in data protection and IT. But clearly the Cabinet Office has other priorities.

Amateurish professional politicians

Stephen Glover, writing for the Mail, laments the grip of inexperienced politicians on our public services:

"The irony is that the professional politician, fixated on power and on a limited but guaranteed financial reward, often turns out not to be a professional at all, but a bumbling amateur who struggles to remain on top of a brief. And that is why it is a certain bet that, with politicians like these, we will continue to read about one Government plan after another going wrong."

The solution isn't to find politicians with different backgrounds but to avoid relying on them to deliver effective public services.  Instead, we should hand control back to civil society.

The Home Office takes more control of police forces

From the Mail on Sunday:

"A policing green paper out next month will propose centralising control over all 43 police forces.

But concerns were raised that ministers may stuff the top ranks with chief constables who share their political agenda, and local people will have no say in who runs their police force."

This measure would mean that the police would, even more than before, work for the politicians and not the people.  Police forces would be pressured into spending even more time chasing the nonsensical targets that are the only way politicians can understand the performance of police forces across the country and there would be less genuine accountability.

The Minister's off to the football

The Department for Culture, Media and Sport is an almost unbelievably large and complex organisation.  It is has a budget of £6.8 billion, 21,380 staff and is responsible for 63 quangos.  Its head has only been in position since January so, one presumes, he is still attempting the near insane task of trying to get some kind of control over the sprawling organisation.

Blogger Croydonian alerts us to the fact that yesterday the Secretary of State, Andy Burnham, had better things to do.  He was 'representing' the Government in Moscow at the Champions League final.  He wasn't alone; Gerry Sutcliffe - Minister for Sport and Tourism - also made the trip.  Why does the Government need to be represented at the match?  How does that task take two Ministers?

We'll see the same thing happen, on a far greater scale, this Summer at the Beijing Olympics where 50 ministers and officials are off to the Games as part of their 'work'.  Some kind of representation, to see what the Chinese get right and what they get wrong, makes sense to learn lessons for 2012 and the Prime Minister might need to be dispatched for diplomatic reasons.  However, the idea that we need a coterie of senior ministers there on the taxpayer's pound is deeply spurious.

This highlights one reason, among many, that politicians struggle to manage public services.  The priority is showy publicity stunts rather than quiet, effective administration.  If Ministers don't have the time, experience or inclination to impose themselves on their department then there is no effective accountability to the public.  That lack of accountability drives a host of problems throughout the public services which are expensive and blight the lives of those who rely on them.

P.S. The image on the right at the top of this post shows Andy Burnham, Secretary of State for Culture, Media and Sport, in a playful mood along with Ed Balls.

The public sector discovers user involvement

Yesterday the Public Administration Select Committee put out a press release:

"The Public Administration Select Committee (PASC) today publishes the first parliamentary assessment of the idea of “user involvement” in public services, potentially a new model for public service delivery that promises improved services and greater user satisfaction."

Apparently, getting users involved at all is still an innovation in our public services.

It is important that public services be driven by users.  As David Holmes, from the charity Mind, told the committee, mere consultation isn't enough:

"In our experience the reason people have started to seek user control is that the mechanisms and involvement do not seem to have brought about the changes they would like.  They have been consulted but they seem to have been excluded from the real decision making..."

Holmes will find that nominal power within a system where politicians control all the levers of real power, particularly the funding decision, will be little more effective than the consultations they are designed to replace.  Users of public services will only have real control when they are free to choose between a range of providers, when public services are no longer monopolies.

Fortnightly collections

Fortnightly bin collections increase fly-tipping, more than doubled over the last three years, risk becoming an environmental nuisance and pose a serious inconvenience, particularly for larger families.  It has emerged, today, that the number of councils only providing fortnightly collection has been rapidly increasing:

"Almost 20 million people have their rubbish taken away only once a fortnight after nearly half of all councils withdrew weekly collections, it has emerged.

Figures released by the Government show people living in 169 council areas now have their refuse collected every other week."

There is little real justification for such draconian measures to increase recycling, which has rather marginal environmental benefits (for more on this see Chapter 5 of our report on green taxes, PDF) and benefits from taxes on landfill, but the European Union has spoken.  Its legal threats provide the main rationale for dramatic efforts to increase the amount of waste that is recycled.  When policy is set so far from ordinary people practical concerns go out of the window.  A lack of accountability means that idealistic schemes are not subjected to the kind of scrutiny that should be expected.  'Experts' prove chronically unable to get things right.

Power needs to be returned to civil society, to ordinary people who can take control of their own lives and then get the kind of services they are entirely right to expect.  The rather humble convenience of weekly bin collection is just one example.

Too many laws

The Telegraph report that the definitive guide to British laws has doubled in size over the last twenty years:

This is a crushing burden of new regulation.  Ordinary people and businesses have an ever-expanding variety of laws that they are expected to obey.  The vast complexity of the legal system is costly to comply with and hard to predict as people are unsure which of the million pieces of legislation they could fall victim to.

The problem is inexperienced political leadership.  A lack of clear objectives leads to a mish-mash of many regulations that achieves little but complexity and inconvenience.  Beyond that, politicians with little experience of the problems regulations create for private industry do not see the problems they create coming.  Finally, they are only in office for a short period of time so are unable to really appreciate the vast amount of regulation that builds up over time with new legislation year after year.

Crime mapping

New Conservative plans, reported in the Telegraph, for detailed, public crime mapping could do great things for the relationship between ordinary people and the police.  Particularly if they are combined with the election of local police chiefs:

"The maps would have to be updated each month, while police would have to hold quarterly "beat meetings" where residents can raise their concerns with local police commanders.

Local residents could enter their postcodes and click onto the map, where the different crime types are represented by differently coloured pins.

Eleven categories of crime - ranging from burglary and vehicle theft to violent assaults - will be detailed on the maps. For sensitive crimes, like sexual assaults, then map will only detail a 300 yard street area."

With such detailed information local people would be able to hold the police to account.  The police would then have to really work for the public.  There might be resistance in the ranks to such accountability but hopefully the police will realise that, if it is a choice between working for politicians and working for the public who see the results if they do a good job, the latter is more rewarding.  The public will, rightly, have more trust in a police service that caters to their priorities than one that follows absurd government targets as it does now.

Who is in charge?

The police today are complaining that their role is 'not recognised' as the Home Secretary didn't honour the results of their pay arbitration.  It really says something that they are looking to the politicians for validation.  The very idea of the police as public servants has been undermined by political management that means the police are actually serving the politicians - catering to their priorities.  If the police were freed from political management and made accountable to local people, the ones who really face the economic and social costs of crime in their area, then they might feel genuinely valued.

We would all get better services.  Another story today is the news that PCTs have been advising GPs to minimise their time with patients:

"Concerns over the quality of out-of-hours care were raised after doctors were told to cut down on home visits, speak less to patients and make fewer referrals to try to save money."

We all lose out because consumers have no power over a health service run by unnaccountable quangos like the PCTs.  Politicians dictate the objectives, quangos provide the detail and the views and needs of doctors and patients are largely sidelined.

Politicians should tend to their own responsibilities instead of spending their time hassling business

Two stories from the Telegraph today that have a common theme.  The Government have 'negotiated' a plan for energy companies to help certain householders with their fuel bills:

"An extra £225 million will be provided by the six biggest energy firms over the next two years to help those who are struggling to pay, said John Hutton, the Business Secretary.

He estimated that the money could remove up to 100,000 people from fuel poverty - where 10 per cent of household income is spent on heating."

And, Internet service providers might be taxed to support unprofitable programmes:

"Internet service providers could face a new tax to help pay for unprofitable programmes shown on ITV and Channel 4, which may in turn lead to higher broadband charges for consumers.

The levy could be imposed by the Government on the service providers and websites within the next few years, under proposals published yesterday about the future funding of "public service" programmes which make little or no money for commercial broadcasters."

In both cases the private sector is being forced, either directly or through threat of regulation, to tend to Government priorities rather than getting on with its own job of trying to obtain a return for its shareholders by providing for its customers.  If the Government hadn't put in place green regulations that constitute 8 per cent of the cost of energy far fewer people would face fuel poverty.  Why broadband companies are responsible for current affairs programming on TV is a mystery.

So often politicians fail to deliver quality public services that people would use even if they had a choice.  They should stick to their own jobs instead of spending their time hassling businesses in competitive industries that successfully provide the services or products their customers want.

Tackling inequality

There is room for debate on whether reducing inequality is a proper goal for government.  Too often attempts to tackle inequality substitute petty attacks on 'the rich' (usually the middle classes are the ones actually affected) for meaningful attempts to help the poor.  However, as reducing inequality has been a central objective for the Government for over a decade it is important to look at measures of equality just to see if they are succeeding in their own terms.

They aren't:

"Karen Dunnell, head of the Office for National Statistics, said the income gap between high- and low-earners was not affected by the measures introduced while Gordon Brown was chancellor to raise the living standards of the poor."

It isn't just that we might differ with the Government on questions of priorities.  Even on the issues they have set up as central concerns for their government our present Ministers have failed dismally.  Clearly,  we need to look at the ability of our present system of government to get things done.

Priorities in Government

There are two issues in the news today that deserve a prompt and serious response.  Hospital infections are proving more lethal than we thought:

"Nearly 10 people are dying every day from the superbug Clostridium difficile.

Official figures show 6,480 death certificates in 2006 mentioned the bug, compared with 3,757 the year before - a rise of 72 per cent.

The increase comes after the Government told doctors in 2005 to note healthcare-acquired infections on death certificates."

And:

"The quality of education in primary schools has worsened under Labour despite increases in funding, says the biggest inquiry of its kind for 40 years.

Reports published today say many pupils spend too long preparing for "batteries of tests" in English and maths at the expense of a broader education. The reports say educational standards may actually have fallen as a result.

In one study, it is claimed that Government control of state schools has risen over the past 20 years but "especially after 1997"."

These are the kinds of issues - the life and death struggle to control hospital infections and the future of an entire generation - that Government should be worrying about.  With a massive concentration of power and responsibility at the top the attention of the Prime Minister should be focussed on matters like these.  Instead, Gordon Brown is concerning himself with plastic bags:

"Gordon Brown has warned supermarkets he will force them to cut down on the number of plastic bags they give out if they do not take steps voluntarily."

It's like Northern Rock's Chief Executive choosing to spend his time scrutinising orders for paperclips.

Multi-tasking Government

Two stories today, both from the Telegraph.  First, we are a 'soft touch for terrorists' because of a failure to tackle unintegrated immigrant communities:

"Britain has become a "soft touch" for home grown terrorists because ministers have failed to tackle immigrant communities that refuse to integrate, warns a report released today.

The Royal United Services Institute (RUSI), a body of the country's leading military and diplomatic figures, says the loss of British values and national identity caused by "flabby and bogus" Government thinking has made the country vulnerable to attack from Islamic extremists."

Second, one million elderly people's needs are being ignored by the authorities:

"More than a million elderly people are being ignored by the Government and local authorities, and for many, services have got worse since Labour came to power, a new report claims today.

One in five over-80s are suffering from severe social exclusion, cut off from other people and largely neglected by the state, according to the charity Age Concern."

What these two challenges, from major new reports both published on the very same day, illustrate is that Government faces a massive range of challenges.  Is it possible for a monolithic organisation, with a single head, to respond to all of these?

Particularly when that organisation is highly centralised with the single leader (Brown) stepping in to deal with problems of specific briefs (for example, his recent interventions into health care policy).  Of course Government will neglect important priorities when there are so many it has to keep on top of.

Two Newcastles

Another example of ludicrous managerial incompetence.  Why on Earth should we trust these people with children's education, our healthcare and our money?

"Bungling Whitehall officials got their Newcastles mixed up and gave £2.7 million meant for the North East city to its namesake in the Potteries.

Newcastle-under-Lyme, population 74,000, was handed the cash instead of Newcastle upon Tyne, the regional capital of the North East. And the Staffordshire market town is refusing to hand back its windfall from the Department for Communities and Local Government, saying it was accepted in good faith.

"We assumed it was in recognition of the work we've done to encourage business," said Simon Tagg, the borough council leader."

Business leaders wish ministers would last more than five minutes

From the Financial Times:

“This is the fifth minister in this role in less than three years. The constant changing of faces and portfolios has been unhelpful to building a long-term dialogue, so it is important that we now see a period of stability,” said Lucy Findlay, head of enterprise at the CBI.

Exactly the same question should be asked about how a minister is supposed to form a working relationship with their Civil Servants and other stakeholders, understand their jobs and impose their authority on a government department in such a short stretch of time.  Five ministers in three years is pretty bad but the problem of short-term ministers is endemic across the Government.  The Better Government position paper (PDF) describes how, since the war, the average time that a minister has stayed in a post has been under two years.

The Better Government Initiative report

Today the Better Government Initiative, a group of establishment figures with no relation to our campaign, have published their report (PDF) today and have noted the problem of inexperienced political management:

"Ministers are increasingly drawn from a specialist political background with little experience of the management and operation of large organisations, but they are in a position of great influence in relation both to their own Departments and to deliverers of public services. They need appropriate training. Such training should also be available to potential Ministers within the governing party and to members of the Opposition and Select Committees."

It is great that they have acknowledged the problem but their conclusion, that training is needed, is a mistake.  There is a reason why big, private sector, firms wouldn't dare to hope than an inexperienced candidate can be prepared for the role of chief executive - an analagous role to that of a minister - with training alone.  Managing large organisations is not a skill that has ever been effectively taught through formal training alone.

Beyond that, even if a Minister knows how to do manage large organisations they will also need to know their subject.  Few have an in-depth knowledge of the area in which they'll be working so can be, at best, informed laymen.  They rarely stay in a department for long so they won't be able to build up that knowledge over time or build up a close working relationship with their staff.

All these weaknesses make it harder for Ministers to attempt the already close to impossible task of managing big government departments - huge, monopolistic conglomerates.  Training will not improve the situation.  Instead, we need politicians to get out of management and hand services over to professionals - held accountable either by the politicians or, in most cases, the competitive market.

The Better Government Initiative

The Better Government Initiative, a "grouping of top civil servants, ambassadors and former local government chief executives" with no relation to our own campaign, are set to report today.  The Financial Times describes how they will argue that:

"Gordon Brown's proposals for revamping the way Britain is governed address neither the issue of "sofa government", nor the erosion of both cabinet responsibility and parliament's ability effectively to scrutinise the executive."

These problems are described as contributing to the number of "failed and flawed" initiatives in recent years.  Their report will be released later today but at this stage it looks like they have confined themselves to too narrow a remit to address the root causes of public service failure and the resulting collapse in trust in politics.

The recommendations mentioned so far, parliament setting standards for the preparation of legislation, select committee members and chairmen being paid and select committee appointments being brought under the control of MPs, are pretty minor adjustments.  With administrative chaos and endemic failures in the public services more serious reform to end attempts by ministers without management experience to manage public services from the centre is needed.

Germany defends its carmakers

The BBC reports fury in Germany at EU proposals to restrict emissions from new cars:

"German Chancellor Angela Merkel has opposed European Union (EU) plans to cut pollution from new cars, saying it was "not economically favourable".

She said the move would burden Germany and its carmakers disproportionately."

It would be easy to get up on a high-horse about double standards and a German government unwilling to pay the price for action to meet international targets to cut emissions that they've been so active in pushing for.  That would be a mistake, though.

The German government should be defending the German national interest.  A democratic government should look out for the interests of its constituents.  In fact, we should be asking very serious questions about why our government cares so little about our own interests.

There are two key examples here.

The first example is the Emissions Trading Scheme where countries were allowed to allocate themselves emissions allowances.  This way of doing things obviously encouraged every country to set the highest allowance they could.  Every country then did just that except for the UK.  We set tough limits and Open Europe found (PDF) that we ended up paying £470 million in subsidy to other European states.  No emissions were cut at all.

The second example is the EU Landfill Directive which was obviously going to hit disproportionately at Britain as we recycle less than other European states.  Hated bin taxes are blamed on the European Union but our Government never seriously opposed the Directive that makes them necessary.

With our overly centralised politics public services monopolise the national debate and squeeze out foreign policy.  As few votes are at stake politicians attend to their own foreign policy agendas rather than the priorities of the public.  Being popular at international conferences makes them feel good but leaves us worse off.  It would be better if our politics was a little more German in this regard, if we learnt from L'exception Francaise.

They're busy with lightbulbs

The bureaucratic procedure attached to the simple act of clearing up a broken lightbulb is more important than it might seem.  It is important because it demonstrates just how unwieldy the procedures are becoming in too much of the public sector for even the most basic of task.  All this, as the Times is quite right to note, means far less time to do the vitally important real work they are supposed to be doing:

"So how many government ministers does it take to unmask the identity of a lavish donor, or to rescue Northern Rock, or sign an EU treaty at the same time as other EU leaders, or to ensure discs containing confidential details of millions of Britons don't get lost? Answer: Are you crazy? Do you imagine that MPs have time for all that when so many lightbulbs need changing?"

The police pay deal

If this were simply another case of public sector workers complaining about a poor deal from the Government because they weren't going to get another inflation-busting pay increase the TaxPayers' Alliance wouldn't be particularly sympathetic.  Public sector workers have had a pretty good deal over the last decade and most have very little to complain about.  Taxpayers have to foot the bill and are hard pressed as it is.

However, the debate currently going on over the police deal isn’t really about the money.  The police themselves will tell you - if you push them on the subject - that they're pretty reasonably paid.  Their deal is tough but in the harder economic conditions we're facing at the moment a lot of people are having to tighten their belt.  This dispute isn't about pay restraint but about the way the Government went about securing pay restraint.

Essentially, the police pay deal is negotiated each year but often isn't negotiated in time.  When that happens the pay is backdated so that the torturously slow process doesn't leave officers out of pocket.  This year was particularly difficult and, in the end, went to arbitration.  That means an external body taking over and, after both sides have made their case, deciding on what the final deal will be.  The body in question is ACAS and their decision is binding upon the police - they have to accept it - but not legally binding on the government.  The arbitration is not legally binding on the government but is clearly, in some sense, morally binding if the arbitration is not completely meaningless.  The arbitration did not go the Government's way and they've responded by refusing to pay the backdated pay which means that the police will only get their rise for nine instead of twelve months this year.  They understandably see this as a huge breach of confidence.

The way to avoid disputes like this isn’t to throw ever higher salaries at public sector workers.  A deal that was financially identical but reached in a less dubious manner would not have gotten the police nearly so wound up.  Instead we need to address the real problem which is that ministers without the management experience to run an organisation on the scale of the police service – Jacqui Smith was a teacher – made a complete mess of the negotiating process.

The police are quite reasonably paid but they see other public workers striking, the government backing down and those workers getting more generous deals.  The classic example was the Warwick Agreement where they backed down on essential reforms to public sector pensions.  At the same time their morale is sapped by targets that prevent them getting on with their job.  Just today it was discovered that the police now spend barely one hour in seven on the beat deterring crime - "incident-related paperwork" is keeping them busy.  The present crisis is a result of these problems and the mishandling of the negotiations.  It is right that the Government should try to control public sector pay but it will take good management, which centralised politics cannot provide, to do this without compromising services.

Political management and the Nimrod

The replacement for the Nimrod spy plane, the Nimrod MRA4, was ordered in 1996.  Since then we have had five defence secretaries.  Michael Portillo, Des Browne, John Reid, Geoff Hoon and George Robertson.  They've been in post for less than three years each.  During that time the project to replace the Nimrod has suffered repeated delays.  The plane should have been in service by April 2003.  It is now forecast to arrive in September 2010 despite increases in its budget - there are even suggestions it could take till 2012.  All this we already knew thanks to the National Audit Office MoD Major Projects Report (PDF).

Now we find out that the MoD has not just failed to keep the project on track but has also failed to effectively maintain the existing fleet of Nimrod MR2 planes.  The Telegraph reports that:

"The Board investigation identified what Mr Browne admitted were key "failings":

Fuel may have leaked because ageing rubber seals cracked and withered. Despite advice from the manufacturers, the MoD had not been routinely removing and inspecting seals, because engineers were worried about having to replace them. BAe, the plane's manufacturer advised as long ago as 1985 that such inflight over-flows were possible, but no action was taken.

Another cause of the fuel leak could have been an overflow from the plane's fuel tanks.

After a heat-pipe malfunction on another Nimrod in 2004 melted fuel seals, the MoD rejected an RAF request to fit a warning system to the plane. And only after the inquiry into XV230 identified the cooling system as a possible problem were the cooling units of all Nimrods turned off.

The BOI found a "fire suppressant" could have given the XV230 crew a chance of surviving. In 2004, the MoD rejected advice from the plane's manufacturer to install such a system."

All of these maintenance failures, and the lack of a replacement that we have to hope will fix these problems, have their roots in the short-termism of political management by generalist ministers only in post for a few short years each.  Each defence secretary, knowing that they will likely have moved on before the effects of today's maintenance become clear, will focus on more immediate - but often less vital - concerns.  Their priorities will necessarily dictate the priorities of the rest of the MoD's staff.

 

Many of the mistakes that created the current crisis were probably made by earlier defence secretaries, and not Des Browne, but none of them have stuck around long enough to take responsibility.  Who would go to John Reid or Geoff Hoon now and take them to task for the steady falling to pieces of the Nimrod?

It would be wrong to confine our judgement to particular individuals, whether politicians, civil servants or contractors.  They all worked with the confines and pressures of the job presented to them.  The confusion and myopia of our system of government is the real cause of the failure to provide a reliable spy plane.  Fourteen servicemen and their families have paid a terrible price for that failure.

Private sector role in pioneering healthcare scheme to be slashed

From the Financial Times:

"A pioneering £700m-a-year government scheme to buy surgical treatment centres and diagnostic services from the private sector is set to be more than halved by ministers.

The decision – expected later this week – will not only mark another retreat from the use of the private sector in healthcare but will also see the health department forced to pay out millions of pounds in compensation."

The waste, £20 million pounds in compensation to private sector firms to cover the cost of bidding for contracts now cancelled, is a frustrating result of an insincere flirtation with involving the private sector in healthcare.  More importantly a glimmer of hope that we might see providers from outside the lumbering NHS bureaucracy involved in providing healthcare is now pretty much gone.  With the existing contracts more than halved - from £700 million a year to as little as £200 million - there is little prospect of this small step away from a politician and bureaucrat-led NHS being turned into important healthcare reform.

The failure of regeneration schemes

Policy Exchange have released a report (PDF) examing the effectiveness of expensive regeneration schemes designed to create a renaissance in poor inner cities.  Their research team's findings offer a fascinating insight into how the divide between successful suburb and poor inner city has actually grown over time:

"On GVA, the gap between ‘urban policy towns’ and the national average has widened from them being 9% behind in 1997 to 13% behind in 2004 (the latest year for which figures are calculable). The successful towns sample set, conversely, increased their lead over the national average.

On personal income, the ‘urban policy towns’ began 17% behind the UK average in 1997 and ended 18% behind in 2005. Again, successful towns which do not receive substantial urban regeneration funding improved on their position of a decade ago.   

Nor has there been any improvement in unemployment levels in our urban policy sample since 1997, relative either to the national average or to the sample of successful towns. Unemployment is still a stubborn 50% higher in ‘urban policy towns’ than it is nationally or in successful towns suggesting that Britain does not have an economy-wide unemployment problem, but rather quite marked pockets of unemployment in some big cities."

At £30 billion we have spent a lot of money on these schemes for them to be failing so thoroughly.  These regions have still not recovered from the decline of the old staple industries at the start of the twentieth century and outside money appears unable to help.  The truth is that rather than big new industrial projects what these regions really need is the freedom for new, private-sector, industries to develop.  An urban renaissance will have to be driven by the entrepreneurial citizens of that town itself.

David B Smith set out how big government gets in the way of such renewal earlier this year in the Economic Research Council's Britain and Overseas (PDF).  Unfortunately, national government - which sets a minimum wage too high for these areas and offers salaries that, in these areas, can outcompete the private sector - crowds out the private enterprise.  Each city's entrepreneurial talent is devoted to securing a better political deal rather than creating new enterprises and employment.

The problems with the Happy Planet Index

Informed sources think that something along the lines of the New Economics Foundation’s Happy Planet Index is going to be recommended in the Conservative Quality of Life group report this Thursday.

The purpose of the Happy Planet Index is to create a measure that captures a society’s ability to produce what we really want, long and happy lives, from what we have to work with, natural resources.  To support it you have to accept two key propositions:

First, you have to accept that happiness economics properly captures true human aspirations and needs.  Second, you have to accept that resource efficiency is the proper standard to hold economies by.

Both of these should be an absolute anathema to a conservative and the Conservative Party.

Happiness economics isn’t the reliable policy tool that the New Economics Foundation makes it out to be.  It is based on one key observation, which Lord Layard is most famous for advancing, that average happiness doesn’t increase along with national income.  As Helen Johns and Paul Ormerod pointed out in a book published by the Institute of Economic Affairs it isn’t only national income that happiness doesn’t correlate with, it’s also public spending, longevity, income equality, even levels of depression and almost any other variable you care to name.  As the iea authors point out this implies that either happiness can’t be created through social policy or it isn’t a reliable measure.  Either way it is toxic to the NEF’s view that improving happiness should be the primary goal of social policy.  “State control with a smile”, as Corin Taylor described happiness economics in The Business, cannot be justified empirically.

Another idea that cannot be sustained is that resource efficiency is the standard economies should be held to.  As the NEF suggest we do have a limited stock of natural resources, however, other resources such as human time and ingenuity are also only available in limited quantities.  Both environmental and human resources have the capacity to be used in alternative ways and produce returns both now and in the future.  Deciding how those resources should be used and which it is more important to use efficiently is a job the market does very well.  Let’s think about that in more concrete terms, with a historical example:

At the beginning of the twentieth century Britain was far more resource efficient than the United States.  We used less raw cotton for each yard of cloth produced, less coal and iron ore for each tonne of steel.  However, we used far more skilled labour.  This was the result of us having more skilled labour, as we had been an industrial nation for longer, but less natural resource, as we did not have the big resource endowment of the US.  The market prioritised resource efficiency in Britain but efficient use of skilled labour in the United States.  Resource efficiency is not an unqualified good.

The Happy Planet Index is based upon assumptions that classical liberals, conservatives and the Conservatives should all be opposed to:  An understanding of what people really want and need based upon the opinion of “experts” rather than preferences of those concerned and an ignorance of the capacity of market mechanisms to prioritise the efficient use of different scarce resources.

There is a simpler, more intuitive, rebuttal though.  Leaving aside tiny Pacific Islands the number one ranked country in the NEF’s index is Colombia.  One of the worst ranked is the United States.  Where would you rather live?

The answer is obvious.  Thousands risk death each year attempting to get from 38th placed Mexico to the 150th (out of 178) placed United States.  This is just one way that people clearly reveal their preference for a higher standard of living.  I’m sure the New Economics Foundation can blame this on some kind of false-consciousness.  The reality is that it illustrates that the free-market economies and resulting high living standards that the NEF deride are people’s real priorities.

Alan Johnson to review Healthcare

The Telegraph is not impressed by the review of the NHS that the new Health Secretary Alan Johnson has launched:

"The "once-in-a-generation review" he launched yesterday, to be undertaken by the distinguished surgeon Sir Ara Darzi, now a health minister, appears to be aimed at soothing the ruffled feathers of health professionals. It carries an unmistakable hint of surrender.

Mr Johnson said there would be no more structural change while Sir Ara's review, a leisurely affair that is not expected to conclude until some time next year, attempts to formulate a "vision" for a 21st century NHS. Has the Labour Government spent the past decade lavishing billions on healthcare without having a "vision" of what it was trying to achieve? Apparently so.

The Darzi review's focus on producers rather than consumers of healthcare does not augur well for patients who are rightly aggrieved at the modest scale of improvement in health provision under Labour. The last prime minister had, we believe, grasped the essential truth that the NHS should be run for the convenience of patients, not the medical professionals. This review seems to mark a lurch back to the bad old days."

The TaxPayers' Alliance Better Government report contains some facts that should be sufficient for politicians to realise that a review is not necessary to realise that the NHS is in need of serious reform:

British spending on health care has reached the OECD average of 8.9% of GDP.  Yet,

• The British Medical Journal ranked the NHS one from bottom on the quality of healthcare provided;
• The British Medical Journal ranked the NHS bottom on mortality amenable to healthcare;
• The National Audit Office in 2000 ranked the NHS worst on hospital acquired infections.  It estimated that at least 100,000 patients are affected resulting in at least 5,000 deaths a year;
• A recent EU study found that NHS patients are up to 40 times more likely than other Europeans to contract infections in hospital.

Better Government Position Paper

In this document Patrick Barbour discusses the problems created by the present system of government and the principles by which it might be improved.  Subsequent papers will outline detailed programmes for different government functions.

Download Better Government Position Paper (PDF)