The TaxPayers' Alliance - Burning our Money

OECD Verdict On Brown's Fiscal Strategy

The OECD has just published its latest Economic Survey of the United Kingdom. And it's a pretty damning verdict on 12 years of Labour government.

To start with, the OECD reminds us exactly where Mr Brown's "economic miracle" came from - a huge government spending splurge, combined with easy credit.

On government spending, the following chart graphically illustrates how spending soared after Brown turned on the taps in 2000 (right hand panel). In the following 8 years, it rose by getting on for 10 percent of GDP, and that at a time when GDP itself was rising strongly:

So from being comfortably below the average of other G7 countries throughout the nineties, the UK's public spending burden overtook the average in 2005, and has not looked back.

And as the chart also shows (left hand panel), a large chunk of that extra spending was funded by increased borrowing. Again, Brown moved from borrowing roughly the same, or less, than other governments (as a percent of GDP), to borrowing more than the others - and that is only the official debt, not including off-balance sheet Enron items.

Of course, easy credit was not confined to the public sector. The OECD highlights the fact that the UK's private sector credit boom was allowed to become much more extreme than elsewhere, largely through our extraordinary house price/credit spiral:

"Although the credit cycle touched many assets and countries, the UK housing cycle was particularly intense: nominal house prices more than doubled in the ten years to their peak. The asset-price and credit boom was self-perpetuating for a time, as easy availability of credit stoked demand and raised asset prices, which in turn increased the value of collateral and engendered further borrowing. In the end, this proved unsustainable."

The following chart shows how our house prices spiralled way beyond even the excesses in the US, and still look off-track:

It's a right old mess.

So where do we go from here?

The OECD emphasises the vital importance of clear fiscal rules, setting out a defined path back to sanity. However, crucially - and unlike Brown's now-abandoned 1997 rules - the new rules must deal with spending as well as borrowing, they must encompass Enron debt, and they must be honest about so-called fiscal drag:

"The original fiscal rules could be amended in a number of ways, rather than being reinstated. The reformulated rules should be forward looking, ensure medium-term spending discipline and account more explicitly for off balance sheet public liabilities. Finally, income tax thresholds and national insurance thresholds should be linked to wage, rather than price inflation so that fiscal drag is handled more transparently."

Which is spot on.

We have long called for such rules, and in current circumstances, they are more vital than ever.

Given our dire fiscal straights, we simply cannot leave things to unfettered political discretion. Not only would that consign us and our grandchildren to a life of low growth, high debt, and high taxes, but more immediately, it would expose us to a collapse of market confidence, even worse than we saw in the sixties and seventies (eg see this blog). And trust me - we really don't want to go there.

So let's have one more go.

Mr Osborne, if you're listening, please tell us you misspoke yourself in Birmingham last October when you rejected fiscal rules (see this blog). Please tell us you do agree with the OECD, and that Britain does needs clear rules, including a spending rule. And please tell us what those rules are going to be.

Because you should understand this: if you don't set out a medium term fiscal strategy - backed up by clearly stated rules - you are going to have an even tougher time as Chancellor than everyone is now saying.

You are going to be making swingeing public spending cuts, but they will not be embedded in a bankable strategy, the kind of strategy the markets will demand. You are going to be facing down the howls of anguish all around you, without even getting the market credit you will need.

Indeed, the louder the howls, the more the markets will worry about a Heathite U-turn. You will stand in real danger of repeating the experience of the Wilson government - a whole series of hand-to-mouth emergency budgets, all of which cut spending (and raise taxes), but none of which get you on the front-foot with the markets.

Is that what you want?

Because that's what you're going to get.

Non-job of the week

There are over 550 jobs in government this week, so it's quite appropriate to mention that today as it's been announced that graduate trainee jobs in the private sector are down by an average 13% this year.  But never mind, the government are content on squeezing the productive, profit making sector to line the pockets of the state apparatus.

Our runner up from the the Guardian jobs pages today is a job as a Climate Change Officer at Bedford Borough Council, which includes a car allowance (I wonder if it’s a Prius?).  Our winner, and the non-job of the week, is from Surrey County Council:

“Publications Journalist
£32,169 - £36,912

With excellent knowledge of newspaper, magazine or online publishing and a proven track record of working as a professional journalist your job will be to research and write for Surrey Matters, our magazine for the 1.1 million residents of Surrey, Jigsaw, our staff magazine, and their respective online equivalents.

Reporting to the Publications Editor, this wide ranging role requires you to assist in developing these and other key publications while helping explore revenue generating initiatives to help make them cost effective.

You will also be expected to help develop the online versions of publications.

A confident team player, you'll have a flair for communication and building relationships and work as an ambassador for the Council as you meet with people inside and outside the organisation. You will also help manage editorial boards and be involved in the entire process of developing each publication. This provides a good opportunity to get to know all parts of the Council and Surrey. There is plenty of scope for development in this interesting and diverse area where no two days are the same."

We can all breathe a sigh of relief now that we know Surrey County council are fighting the recession by throwing nearly £40k into their propaganda department. 

We’ll all hear about crises in local government funding as the economy stagnates.  But you’ll also notice that the recommendations the officer corps put to the councillors are to cut where it hurts first, on the front line.  The bureaucratic non-jobbers will remain; the axe won’t fall on the equality and diversity, health and safety and other PC positions.  They’ll be there to carry on their ideological wars against smoking, freedom and traditional views out of sync with their bureaucratic, killjoy worldview. 

That is, unless, you do something about it.  Contact the new leader of Surrey county council, Cllr Andrew Povey, to ask him to stop funding non-jobs and to get to work on council tax reductions.

Non-job of the week

This week the Guardian website has well over 600 vacancies for jobs in government.  Ranging from local to national and policy jobs, they’re paid for by the taxpayer.  One thing I will note, however, is that there are still plenty of communications and similar jobs on offer (as we have revealed the costs of in our Council Spending Uncovered series of reports) but they’re sneakily being advertised through recruitment agencies – so we don’t know which government body, council or department is spending your money on communications positions.  It’s an interesting point, one that shows how effective our research into local government spending has become.

Some of the stars of the non-job roster this week include:

A position as the ‘Head of Economic Policy’ at Central Bedfordshire council, showing that elected councillors have outsourced out yet more policy competences to unelected, unaccountable officers.

Kent County council, seemingly with more money than sense (remember Iceland?), lavishes out on a head of Equality and Diversity with a starting salary of £41,112 a year.

But our non-job of the week comes from Merton council:

“"Consultation and Community Engagement Officer
£37,692 - £40,314

There couldn’t be a more exciting time to join Merton, as we embark on a major transformation programme that will help us deliver even better services to the borough. We’re committed to involving local people in the decisions that affect them, making this a key role in our drive for improvement.

You’ll develop innovative, sustainable policies and programmes for consultation and engagement and provide expert advice to managers, councillors and partners in this specialized area. High on your list of priorities will be ensuring we meet the requirements of the Duty to Involve and capitalizing on the opportunities presented by new neighbourhood governance arrangements. We’ll look to you to promote cultural change, disseminate best practice and respond to changes in legislation and Government policy.

Versatile, self-motivated and highly organized, you will have experience of consultation and community engagement policy work in the public sector or a similar organisation. This will have included engaging seldom-heard groups, advising at senior level and working with local communities and partner agencies. You will also have proved your ability to organize community engagement events, work with decision makers and deliver projects to demanding deadlines. Strong qualitative and quantitative analytical skills will be vital, together with a high level of IT literacy."

This is an interesting position because Merton hasn’t exactly been that engaging with local residents and is fairly hypocritical to admit it has.  On council allowances – my own bugbear – Merton does not have an independent remuneration panel, like most boroughs outside London.  Instead it defers to a panel of three hand-picked by the unelected, unaccountable quango London Councils.  Behaviour like that doesn’t exactly demonstrate a record of inclusion and consultation.

When we were campaigning in Merton earlier this year, I asked some of our supporters to enquire about applying to join Merton’s own IRP.  After three or four attempts, we were told there weren’t any vacancies because Merton doesn't have one, despite the law saying it can.  But when we were campaigning on the streets telling people about this, Merton council's PR department called us up to ask “why are we picking on them?”  Simple – they increased taxes and adopt an opaque system of recommending council allowances. 

That brings us to this post.  Will this non-job change much, including more people into the political process?  I doubt it.  For all the job adverts that promise inclusion, they mean it in the PC, trendy-left definition of the word.  What we want is real inclusion, to have local taxpayers sit on remuneration panels for all councils and to have more opportunities to consult, via local referenda.  We want more open government at all levels that the politicians themselves can enact.  Simply throwing more taxpayers’ money around won’t solve the structural problems within local government. 

Public Service Productivity - Still Appalling

Fancy stats, but the picture remains the same

For many years now, the Office for National Statistics has been beavering away trying to develop measures of output and productivity in our public services. It hasn't been at all straightforward, as we can see by glancing at the dense array of statistical formulae they have been forced to deploy.

So why is it important?

Because we've shovelled vast amounts of money into these services over the last decade, and they now consume well over 20% of our national income. We need to understand just what we're getting in return. We need to know if we're getting value for money.

And why's that so hard to do?

Because the output of public services is not subject to valuation in the marketplace. We know precisely what cars and window cleaning services are worth, because the marketplace tells us. But with public services provided free at the point of use, we have literally no idea what they're worth.

All we know is that they cost hundreds of billions every year, and since 1997 the bill has more than doubled.

So the ONS has being trying to work out how much of our extra spending has actually fed through into extra output. And last week, they published their latest attempt, which for the first time gave a picture for the whole of our public services (although still excluding welfare payments, and other cash transfers). Here's their widely quoted big picture:

As we can see, they reckon that from 1997 to 2007, the combined output of our public services went up by 33.6%. Unfortunately, the inputs - after stripping out inflation - increased by 38%. So according to the ONS, productivity fell by just over 3%.

Now let's just be quite sure we all understand what that means. It means that compared to 1997, our public services are now delivering worse value for money - we get less for every pound we put in.

Ah well, you say, a fall of 3%... that's not too bad... at least the bulk of the extra money has fed though into more output... at least we are getting 33.6% more healthcare, education, law enforcement etc etc. Could be a lot worse, so stop whining.

Hmm.

Just compare this public service productivity performance with that delivered by the market sector of the economy. According to the ONS, over that same period, 1997-2007, productivity in the market sector increased by 2.2% pa. Which meant that by the end of the period we were getting nearly a quarter more output from the same input.

So why can't our public services manage that? Surely they should be able to achieve at least some productivity gains. Surely they shouldn't be giving us worse value for money as each year passes. How hard can it be?

And in truth, the picture is almost certainly even worse than the ONS figures suggest.

That's because the ONS has incorporated into its output measures a series of highly contentious "quality" adjustments which they claim have the effect of increasing measured output year-on-year.

For example, its measure of education output basically comprises the number of pupils passing through our state schools and colleges. But the ONS now adjusts that straightforward measure for supposed improvements in quality, and they do that by factoring in the year-on-year rise GCSE grades.

What?

GCSE grades as in prizes-for-all-dumbed-down-through-the-floor-abandoned-by-the-leading-private-schools GCSE grades? Why would anyone believe education quality has improved just because our kids have even more of them?

Similarly, the ouput of healthcare services has been adjusted for supposed improved quality using - among other indicators - the reduction in recorded waiting times. Even though we know that waiting times are routinely massaged and gamed by NHS managers (see previous posts).

So the ONS results almost certainly overstate the output growth of our public services and understate the extent to which productivity has fallen.

Indeed, the ONS themselves publish this alternative version of productivity, without the quality adjustment (blue line):

As we can see, on this measure, productivity is down by 9% over the period, a fall of around 1%pa.

Or to put it the other way round, even after allowing for inflation, every pound we put into public services today buys 9% less than it did a decade ago.

Ten years of massive spending has left us with the fiscal headache to end all fiscal headaches. And despite interminable promises about public service reform, value for money has gone out the window. How long are taxpayers supposed to put up with this?

Let's forget about "ring-fencing" this or that hot potato public service. Now the money has run out, drastic reform is the only solution. Other countries have shown the way to get better value for money, and we've blogged many of the key ideas many times:

• choice and competition
• school vouchers
• social health insurance
• elected sheriffs
• localised welfare
• fiscal decentralisation

The trouble is, while we can all see the shape of the real public sector reform we need, our politicians have yet to show anything like the political will necessary to push it through.

Non-job of the week

As you can see on the right there are almost 600 jobs on offer in the government sector this week.  Our non-job of the week comes from Hackney council:

“"Cultural Officer

£34,707 - £37,476 p.a. inc.

The London 2012 Olympic and Paralympic Games has led to the biggest regeneration project ever seen in London, and around 30% of the Olympic Park site is in Hackney. This is your chance to work with the team focused on harnessing the benefits of hosting the Games for the people of Hackney. The opportunities are varied and expectations high. How will you take part?

As one of the five London boroughs hosting the Games, Hackney is leading on culture. This role will focus on facilitating all the cultural aspects of Hackney's involvement in the Games and its legacy. You'll help to build the local contribution to the Cultural Olympiad, ensuring participation from all sections of the community. You'll also deliver the annual Hackney One carnival and support the Create festival.

With strong communication and presentation skills, you will have a proven track record of working on major events in partnership with the emergency services and a range of council departments. Ideally, you're already working in the cultural sector and have a good understanding of the challenges and opportunities to deliver the borough wide vision around culture.”

This is yet another add-on non-job to the 2012 Olympics.  The taxpayer has already had to foot an incredible bill for the Olympics, an area where the recession has far from helped matters.  Now we see a telling trickle of non-jobs to supplement the Olympics.  Here, Hackney adds one more cultural officer to their plans to ‘lead on culture’. 

With council and Olympic overspending squeezing the taxpayer to intolerable levels, surely it’s time to scrap these ‘cultural’ positions and save taxpayers’ money.

 

PFI Millstone - How Heavy Is It Now?

It's definitely heavier

Regular readers may recall an extraordinary exchange at a Public Accounts meeting in November 2007. The PAC were grilling Treasury mandarins on the PFI millstone, and they wanted to know how big the debt had become.

Now, you might have thought that would be simple to answer. After all, PFI involves some pretty chunky liabilities, so the mandarins would surely have the figures at their fingertips.

Er, no. The mandarins floundered around all over the place. Finally, one PAC member - the redoubtable Richard Bacon - got so frustrated, he whipped out his own pocket calculator and literally added up the numbers for himself.

You see, the projected annual contractual payments under outstanding PFI deals are published on the HM Treasury website (see here - the "Signed Projects List"). What HMT doesn't publish is their total compounded value, and that's the figure we really need to know. Otherwise, we cannot understand how big the PFI liability has become in the context of the government's overall debt.

So let's re-run Bacon's calculation and see how big that future liability now is.

First, here's the latest HMT projection (April 2009) of annual payments under existing PFI contracts:

As we can see, annual payments are projected to peak at £8-9bn pa in the middle of the next decade (ie the decade when we won't have any money). And they then remain above £7bn pa all the way until 2028.

The first calculation we can do is to add up all the annual payments to give the grand total over the whole of the projection period. That comes to £206.6bn.

Which in itself is quite worrying, since when Mr Bacon did his calculation, the total was "only" £157.9bn. So in just 18 months, the total has increased by £50bn, or around one-third.

But of course, simply adding the numbers doesn't give us a figure we can properly compare to the rest of the government's debt mountain. For that we need to discount the future PFI payments by an appropriate interest rate. And in this case, the appropriate rate is the yield on government debt (ie gilts) which currently stands at about 4.5% pa.

And when we do that, we get a figure of £124bn.

So we estimate that our PFI debt currently stands at £124bn, up from £100bn the last time we crunched the numbers.

There - that wasn't so hard, was it.

In which case, how come there's so much confusion about the right figure? As Mr B put it:

"I have been trying for several years to get to the bottom of how big is PFI, and it seems to be quite difficult to get an accurate answer. I have been told by various people, including by the National Audit Office, answers such as, “Well, really they do not know.”

The truth is that the mandarins don't like debt calculations like ours. They prefer to quote a much smaller number that comprises the so-called "capital value" of the PFI projects. And that currently stands at £63.8bn, only about half our number.

Why the difference?

In essence, it's because the mandarins' number only measures the capital cost of building the PFI school or hospital (although, to be frank, it isn't entirely clear that it even measures that). Our number, on the other hand, includes not just the capital cost, but also the future cost of various services that come as part of the PFI contract - everything from maintaining a hospital to running a prison. Our number also includes the funding costs of the PFI contractor.

So our number measures the whole shebang, whereas the mandarins prefer to focus on just one element of the total PFI cost. Which - surprise surpise - is much smaller.

In fairness, they do wheel out an argument to support this apparent trickery. They say that the element of future PFI payments that represent service charges (such as cleaning and maintenance), is nothing to do with borrowing to fund a capital asset. And just as we don't count the future salaries of government employees in our measure of government debt, we shouldn't include the future payments for these PFI services.

Hmm.

You see, the big difference is that future payments for PFI services are a clear contractual liability, whereas future salary payments to government employees are not.

Government employees can always be made redundant (watch this space), but PFI contracts cannot be broken unless the government can prove (probably in court) that the contractor has failed to provide the agreed service. Which means we are skewered firmly on the hook.

And fundamentally, that's also why the Office for National Statistics' tortuous distinction between different types of PFI contracts is also bogus.

(As you may recall, the ONS distinguishes between so-called operating leases - which don't count towards government debt - and financing leases - which do count. And guess what... according to them, the vast majority of PFI deals are operating leases, so don't count. How very convenient. See this post).

The bottom line is that PFI represents a substantial contractual liability for taxpayers. One that has now soared well over £100bn.

Of course, there are those who think PFI debt is now pretty small potatoes compared to the gzillions of debt being run up everywhere else. But as always, a hundred billion here, a hundred billion there, and pretty soon you're talking real money... either that, or national bankruptcy.

PFI Decouples From Reality

I assure you - I'm a real financial wizard

It's difficult to recall now, but once upon a time, PFI was meant to save taxpayers money.

 

The idea was that by leasing schools, hospitals and roads from private sector providers, we'd benefit from their superior efficiency in designing, building, and operating such facilities. It would be so much cheaper than the traditional approach of hiring a firm of builders and extending the mortgage to pay them.

But it hasn't worked out like that (see many previous posts gathered here). For a start, the public sector (aka the Simple Shopper) has proved to be awful at negotiating good deals with private sector operators (aka the Carnivores). And also, although private suppliers ought to be cheaper because they are more efficient, the cost of their funding is always higher than that obtainable by the public sector directly (in the gilt market). So net net, they might not be cheaper at all.

PFI was introduced by the Conservatives, but it's under Labour that the big problems have emerged. That's because Mssrs Brown and Balls twisted PFI into an Enron-style off-balance sheet borrowing scam, geared primarily to keeping official debt within their spurious fiscal rules. To that end, they put huge pressure on local councils and health authorities to fund projects via PFI, rather than via direct borrowing. Costs naturally soared.

Then in 2008, this entire charade hit a major problem. The near-collapse of our banks meant that private sector funding for PFI suddenly dried up. Banks were no longer willing to provide the debt finance essential to all PFI deals. Scores of projects were threatened with the axe (see this post).

With the economy sliding into recession and an election looming, the government was desperate to avoid that, so back in March, Chancellor Darling stepped in. He established a special government bank - The Infrastructure Finance Unit, or TIFU - to provide government funding for PFI projects that could no longer access commercial bank finance "on acceptable terms".

TIFU did its first deal in April. It funded Britain's biggest waste project, in Manchester (a costly composting/recycling facility forced on Manchester by EU landfill regulations). The precise terms under which the deal was done have not been revealed, but we do know that TIFU will be providing £120m of the project's total £640m capital value. However, that is in addition to some £180m coming from the European Investment Bank, and another £40m from local councils round Manchester. So overall, there will be £350m of taxpayer funding, which is over half the total.

Taxpayers were left choking: what on earth is the point of a PFI deal where we are having to stump up over half the cash ourselves?

And then there's the blockbuster PFI deal to widen the M25. After massive wrangling, that deal finally closed (ie got signed) in May. And amazingly, it did not in the end require any capital injection from TIFU at all.

Unfortunately, taxpayers were still left choking. Because the only reason it did not need TIFU cash was that the terms of the deal had been sweetened massively. The all-in cost over 30 years had been cranked up from £5bn to £6.25bn - a 25% rise. And on top of that, we'll now be getting considerably less for the money, with the motorway widening scaled back drastically. So the true cost increase is even higher.

But why?

The official line is that our busted banks have increased the risk margins charged on all forms of lending. In the case of PFI projects it seems their typical margin has gone up from less than 1% pa, to something more like 3% pa (ie they now charge something like 3% pa over their cost of funding).

But that can't be the whole story. Banks may have increased their risk margins across the board, but they won't have forgotten that PFI loans are still ultimately a claim on the public sector - the most secure borrower there is. Given the current low level of market interest rates, increased margins should not have increased costs by well over 25%. Also, at a time when contractor costs in general have fallen, shouldn't we actually be seeing a smaller overall bill?

The obvious explanation is that we're now getting an even worse PFI deal than we've had over the last decade.

Now, as we've said many times, we cannot and should not blame the PFI providers. They are commercial operators earning a perfectly legitimate crust in very tough times. It's not their fault that the Simple Shopper is so poor at negotiation.

No, the underlying problem here is that the government is absolutely committed to PFI: committed at virtually any price.

There are no less than £8bn of PFI deals in the pipeline, scheduled to close over the next 18 months. And we currently have a government desperate to avoid further pratfalls pre-election. In the circumstances, there's no way they're going to scrap their promised new hospitals, or add yet more construction workers to the dole queue.

Well, OK, you might say, why can't they go ahead with the projects, but simply switch back to traditional gilts funding and at least save us some money?

Nice idea. Excellent idea.

And in the case of the 2012 Olympic Village that's pretty well what they have done.

As BOM readers will recall, while never a standard PFI deal, the Village was supposed to be largely funded by the private sector on normal commerical terms. We never thought that was realistic, even before the banking crisis, and sure enough, no commercial developer has been prepared to take it on, except on truly outrageous terms.

Of course, we wouldn't have started from here in the first place (ie we wouldn't have bid for the costly Olympics at all). But fair play - the government did at least have the sense not to accept those outrageous terms. Instead, the entire Village will now be funded by us (either from within the formal 2012 budget, or as borrowing from the EIB and various commercial lenders).

So if the government funded the Village, why not do the same for all those stalled PFI projects?

Two reasons. First, it would mean long and electorally awkward delays, as each individual PFI deal got unpicked and painstakingly restructured along traditional lines. And second, it would bring all that borrowing directly and visibly onto the government's official balance sheet - which is the very thing this card-maxxing government has worked so hard to avoid.

And just to underline that very point, the Treasury is reportedly about to announce the most flagrant Enron accounting fudge ever. According to the FT (and others), they are to fiddle their way round their own promise to clean up PFI accounting:

"In spite of the widespread expectation that almost all PFI projects would go on the books as the Treasury fulfils a longstanding promise to move the public sector to international financial reporting standards, the Treasury has now issued all-but-final guidance to Whitehall departments indicating that, while they will count on departmental accounts, a different accounting standard will apply for the Treasury's budgeting purposes.

That will be based on the European accounting standard that is applied by the Office for National Statistics to the national accounts. It has the effect that many projects will continue to count as off-balance sheet."

This latest con is apparently known as "decoupling", which just has to be a bad joke. Because these days, HM Treasury - our once proud guardian of fiscal rectitude and the public purse - seems to inhabit a world which is almost entirely decoupled from reality.

Taxpayers really should be jumping up and down and screaming about this. Whatever our political views, we can all agree that PFI has gone seriously wrong (eg see this post by George Monbiot, not a commentator with whom we often agree).

While everyone's attention is distracted by the Westminster soap opera, the costs of PFI are racking up alarmingly. It is yet another problem George Osborne will need to grip on Day One.

And to think - once upon a time, PFI seemed such a wonderfully simple idea.

Non-job of the week

As of writing the Guardian jobs website is advertising 527 jobs this week as you can see from the box on the right.  The pick of the crop this week, and our non-job of the week, comes from Brent council:

“Brent Tobacco Control Alliance Co-ordinator

From £34,045 - £43,529 p.a. inc.

(NHS Band 7) fixed-term 3 years

Brent Council and NHS Brent are seeking to recruit a highly motivated individual to the post of Tobacco Control Alliance Co-ordinator.

We are looking for a charismatic and dynamic individual with the ability to communicate to a diverse community.

You will lead the effective development, coordination and implementation of Smoke Free Brent in partnership with a range of agencies and organisations, including statutory, voluntary, community and business sector.

The focus will be to reduce smoking prevalence in Brent. This role will require you to be able to undertake some evenings and may include some weekend working. You must be a non-smoker.

A 5-minute presentation will be required at interview; the successful interviewees will be notified of the presentation title.

For an informal discussion about this position, please contact Kostakis Christodoulou, Head of Health Promotion, NHS Brent on 020 8795 6118 or Yogini Patel, Deputy Head of Environmental Health, Brent Council on 020 8937 5262.

Closing date: 17 June 2009.

Interview date: 26 June 2009.

To apply, go to http://www.jobs.nhs.uk

http://www.brent.gov.uk/jobs

BRENT - PROUD OF OUR DIVERSITY

The council welcomes applications from all sections of the community”

While it’s commendable that there have been several public education programmes about the effects tobacco, it’s another thing entirely to use our money to try to create smoke-free boroughs. 

The government has put its case consistently that it would prefer people not to smoke.  Fair enough.  It ‘nudges’ us when it increases cigarette duty and rolls out public advertising campaigns.  For these departments to propagandise to taxpayers and to encourage ‘stakeholders’ to go smoke free, however, is a step too far.  Whatever happened to choice?  There is enough information out there for people to make up their own minds about smoking.  We read anecdotal stories about the chain smokers who live to 100 and the fanatical exercise junkies who drop dead of heart failure at 30.  No council or government body can control the quite legal and socially acceptable habits of its citizens. 

Some people will smoke regardless of the dangers; some just don’t like it as a habit and will never light a cigarette.  That’s life, and no government has a right – or an effective role – to try and manage lifestyles.  In the philosophical sense it’s the nanny state at its most literal and intrusive, in the practical sense it will just turn out to be a waste of money.

Heading For The Hot Seat

 
This week's reports from the IMF and Standard and Poors (see this post) have piled the pressure on George Osborne.

The IMF says he must be much tougher than Darling in tackling the build-up of public sector debt. And he must place the emphasis on cutting expenditure rather than raising taxes.

S&P threatens to remove the UK's coveted AAA credit rating if:

"... we conclude that, following the election, the next government's fiscal consolidation plans are unlikely to put the U.K. debt burden on a secure downward trajectory over the medium term."

So the heat is on, and George Osborne is the man strapped in the flaming seat.

What must he do?

First, as we've repeatedly blogged, he must set out an explicit Medium Term Fiscal Strategy. It needs to incorporate a robust and quantified set of fiscal rules covering government borrowing, debt, and most crucially, spending. That last element was the gaping hole in Brown's famous fiscal rules, and Osborne must close it.

The Strategy must set out a clear, and inevitably, stoney path for cutting the burden of government expenditure. A path which must be linked to, and driven by, a sustainable projectory for borrowing and debt. Spending must be driven by affordability, not grandiose social engineering projects.

Second, he must establish an independent fiscal monitoring authority to keep a very public eye on him - as he has promised to do (Another quango? Yes, but a critical one, fully funded by closing scores of others. And if the government is that strapped, perhaps the TPA might be able to put something together pro bono).

Third - and by far the most difficult - he must actually cut spending.

Unfortunately, that last task has just been made even more difficult by the MPs expenses scandal. For how can these duck feather-bedded MPs possibly wield the axe on the poor and heavy laden? Where is their moral authority?

Take welfare. That comprises around one-third of all public spending, so it cannot possibly escape the cuts. But unlike say healthcare, where you can take refuge behind the argument that "efficiency" will deliver painless cuts (as Philip Hammond did on yesterday's Newsnight), cuts in welfare benefits mean someone loses cold hard cash.

Consider just one of the more radical money-saving ideas - a redefinition of the poverty line (eg see this post).

The current definition of poverty is 60% of median income - ie households living below 60% of median income are defined as being poor (actually, it's 60% in so-called "equivalised income" terms - see here). And government welfare payments are driven by the desire to ensure nobody is below 60% (that's what Labour means by "abolishing" child poverty).

But there's nothing magical about 60%. Years ago, it used to be 50%, and that was when median incomes were much lower than they are now. By and large, 50% of today's median income is more than enough to buy food, shelter, and clothing; indeed, it's enough to buy TVs, DVDs, and washing machines as well.

So given our dire fiscal straights, some have suggested returning to 50%. A rough estimate says that could save perhaps one-third of the welfare bill - a staggering £50-70bn pa. In one bound, we'd have solved our fiscal crisis.

But can we imagine George Osborne being that radical? And can we imagine our moat-owning, property-flipping, cosseted, chauffeured, MPs being ready for the howls of outrage that would greet such an attack on the poor?

I think we all know the answer.

But if we rule out welfare as being off-limits, and if we also rule out the NHS, and schools, and overseas aid, pretty soon there's nothing left to cut.

Except of course, the second duck home allowance.

If Mr Osborne is going to deliver anything like what the IMF and the financial markets will demand, he will have to grit his teeth, stop reading the Guardian, stop watching the BBC, and keep his eyes on the prize.

Non-job of the week

500+ jobs are on offer this week in the government sector, a week where parliament and government lost the people’s trust over the Commons expenses scandal.  With everyone’s eyes on how the politicians spend our money, we give you our non-job of the week as another reason why taxpayers need to constantly monitor what the government is doing.  From Lambeth Council:

“Active Communities & Neighbourhoods Officer
Starting salary £40,104 rising in annual increments to £42,726 pa inc

Lambeth First is a passionate partnership that brings together local residents, voluntary groups and organisations in the public and private sectors. We put ideas into action at a local level to improve the lives of the people of Lambeth. We have just been awarded 'Best Local Strategic Partnership' (LSP) in the UK by the Local Government Chronicle (LGC) based on our passion for working together and improving our partnership.

We are looking for a talented and energetic individual to help us deliver in this key area, related to our long-term vision set out by our Sustainable Community Strategy, that by 2020: Lambeth will be a diverse, dynamic and enterprising borough at the heart of London.

Each neighbourhood in Lambeth is unique and has different issues and priorities. As a partnership, we have made a commitment, in our Sustainable Community Strategy, to ensure that we recognise and respond to this in the way we design and deliver services.

Educated to degree level or equivalent, you will have experience of working across a range of agencies - statutory, voluntary and community - in neighbourhood level delivery and/or design of services. You will draw on your strong influencing and negotiating skills to work with stakeholders to progress this agenda and develop sustainable delivery mechanisms for the borough.”

Working in the TPA, I meet and campaign with Residents Associations and campaign groups at the neighbourhood, grassroots level.  I campaign with very successful local groups.  Not once, not even in passing, have they spoken of the value of Local Strategic Partnerships and the Active Communities and Neighbourhoods Officers contributing to their success.  I doubt the campaigners we team up with would even be able to pick them out of a line up. 

Grassroots campaigns work because they’re independent and voluntary.  The dynamism and enthusiasm of voluntary activity makes it successful – not government meddling.