The TaxPayers' Alliance - Burning our Money

Dr Battey's Accounts Book

Dr Battey had to account direct to his customers

In the continued absence of the inestimable but exhausted Doc Crippen, we've once again been delving into the cost of our GP services.

The bald facts are these (NB: because of the glacial speed at which NHS stats are collected and collated, most of the figures are a couple of years out of date):

• Numbers- in 2005 there were 32,738 NHS GPs in England, up from 27,465 ten years earlier; however, over those ten years the proportion of part-timers doubled, to about 27%; that largely reflects the rapid growth of female GPs, half of whom are now part-timers (see the Doc for his robust views on that); on a full-time equivalent (FTE) basis, the number of GPs has only increased from 26,114 to 29,248, a rise of 12%.
• GPs per head- with a rising population, the number of GPs (FTE) per 100,000 head of population only increased from 54 to 58, an uplift of 7%; put another way, the number of patients per fte GP has decreased from 1852 to 1725.
• Practice staff- on a FTE basis, other practice staff increased from 59,255 to 72,990; 73% of them are admin and clerical
• Cost- in 2005-06, the NHS spent £7.7bn on GPs services in England, excluding prescribing costs of a further £7.8bn

So do we get value?

The first point is that the cost of these services has rocketed. And rocketed far more than even the Wanless-pumped government had planned. As blogged many times, the new GPs contract was a financial disaster for taxpayers: the official post-mortem, just published, not only shows spending on GPs services rose by one-third in the two years to 2005-06, but also that it turned out a cumulative £1.7bn over budget (see also this Times article).

Are we getting a commensurately better service?

Highly unlikely when we've lost our traditional out of hours service. But health minister Ben Bradshaw reckons things have improved, and since the NHS has never developed a coherent way of measuring overall output, we can't be absolutely sure he's barking (see recent Wanless update).

Still, we can certainly probe those costs a little more.

With a population of 50.4m (England 2005), the £7.7bn pa cost of GPs works out at £154 each, say £160 at 2007 prices. So for a family of four, that's £640 pa, or £12 per week.

Is that good value against the alternatives?

No, not the alternative of another KFC family meal every week, but the alternative of a private GP. For example, CityDoc offers a twenty minute private GP consultation for £65, or £85 for "more than 30 minutes". When did you last have more than 30 mins with your NHS GP? They just don't have time for that kind of carry on.

So, a family of four could have ten 20 minute visits to City Doc for the annual cost of their NHS GP service. Or maybe eight normal visits, an emergency contraception visit (£40 including medication), and jabs for tetanus, diphtheria, polio, typhoid (see here for full price list). What's more, they still open on Saturdays- 11am to 4pm.

Yes, yes, I know. What if you have something really wrong with you? £640 pa might not cover it. And indeed, it might not. But by the same token, what if you're really well? What if you never need the GP from one year to the next? You'd be quids in.

Clearly, in the real world, you'd buy insurance- an extended version of the private health insurance you can already buy for hospital treatment. We don't really know what that might cost, because the market hasn't yet developed. But judging from the price of private GP consultations, it needn't be prohibitive for most people, at least those of working age.

So relative to their private counterparts, it's not at all obvious that the cost of NHS GPs is a good deal.

History offers another fix on cost and value. Over at The Huntsman (2 September), the H Man himself has been digging into his family history. His father was a fenland GP who started with the NHS in 1955, but, frustrated by all the bureaucracy (even then!), left to go private a decade or so later.

HM has discovered that back in the sixties there were four local GPs serving a population of about 10,000- about 2,500 patients each.

Since then, the population has grown by around 50%. So how many local GPs do you reckon there are today? Six? That would seem about right, but maybe we should allow a couple more to account for the greater complexity of modern medicine and all that screening work. Call it 8 or 9.

The actual answer is a staggering 16. Four times the number of GPs for only 50% more patients!

According to this, when the NHS was launched in 1948, it had around 18,000 GPs in England and Wales, and they were serving a population of 41.5m. The average GP was therefore covering 2,461 patients, about the same as those fenland GPs in the sixties.

Compare that to the average 1,725 patient list now (see above). Not such an extreme change as in the fens, but still 42% more GPs per patient.

Does anyone think we're getting 42% more service? 42% more than when that nice Dr Finlay used to come out all hours of the day and night?

Once again, the NHS has spent vast amounts of taxpayers' money and hugely ramped up costs. But we simply haven't had the service improvements promised.

Non-job of the week

Our non-job of the week is yet again another politically correct post in local government the British people could easily live without.  Rather than putting our taxes to essential services, Lincolnshire County Council want not one but TWO - yes, Laurel and Hardy – diversity officers for its public sector pay roll.

If that wasn’t an incentive enough for Guardian readers, the advert also explains how the County Council is negotiating a new pay grade, hiking the salaries of each of these non-jobs to £27,000 a piece. 

So, our non-jobs of the week from Lincolnshire County Council:

“2 Diversity Officers

£23,164 - £26,928

1. PURPOSE OF JOB:
The postholder is responsible for leading on all aspects of policy advice, performance and monitoring in respect of the promotion and development of equality and diversity within their respective directorates.

2. MAIN RESPONSIBILITIES, TASKS & DUTIES
i. To be the lead officer providing advice and guidance to designated directorates on meeting their responsibilities under the Corporate Equality Policy and Scheme.
ii. To work closely with managers and employees within designated directorates, and external stakeholders, to ensure delivery of key objectives and targets arising from the Corporate Equality Policy and Scheme.
iii. To lead directorate steering groups, providing guidance and ensuring delivery of key messages and targets.
iv. To manage directorate information required for assessment of the Equality Standard for Local Government and publication of the Corporate Equality Scheme, and others as required by legislation.
v. To develop new policies and systems within their directorates on existing and emerging areas of equality and diversity legislation and best practice.
vi. To manage and develop projects that achieve results/improve performance.
vii. To facilitate relevant learning and development opportunities within directorates, whether for managers, employees, elected members, trades unions, consultants and contractors.
viii To provide leadership and support to internal and external networks that promote and develop partnership working and community involvement in order to promote equality and celebrate diversity.
ix. To provide advice and guidance on relevant policy, research and analysis, including trends, statistics and demographic information.
x. To help maintain a high quality, regularly updated and consistent corporate equality website.
xi To represent the Diversity Manager in appropriate meetings and events, as directed.”

Value for money?  Nah!  So let Lincolnshire’s taxpayers know they are being ripped off!

Write to:

The Lincolnshire Echo
Brayford Wharf East,
Lincoln,
Lincolnshire,
LN5 7AT,
United Kingdom
Email:  yourview@lincolnshireecho.co.uk

The Lincolnshire Free Press
Priory House,
The Crescent,
Spalding,
PE11 1AB,
United Kingdom
Email:  nick.woodhead@jpress.co.uk

If you know of any other popular local newspapers, then do post them in the comments section.

Keep up the fight, folks!

Weekly Waste Watch- 75

In the news this week:

£500,000 on luxury police cars- "The police force that last week claimed it did not have enough cash to fight migrant crime has spent more than £500,000 on new Volvo cars for top officers to use when on and off duty. Cambridgeshire allows the officers to use the cars for holidays, shopping trips and other “social and domestic pleasure” purposes as well as when they are on duty. It has bought 21 Volvo XC70 estates for all its superintendents and chief superintendents, partly as a perk to attract new recruits. They cost at least £33,000 each and, in the words of Volvo’s marketing literature, they “aim to spoil”. (Sunday Times 23.9.07)

New £4bn pa department useless- "Jack Straw's failing Ministry of Justice looks likely to be split in two — only four months after it was created. Critics accused the Government of creating a department with a budget of £4 billion without knowing what it was for. One insider said: "The MoJ was rushed through to provide Blair with a legacy. As a consequence, its record over the past few months has been appalling." Overflowing jails have forced thousands of offenders to be released early, record court delays have led to hundreds of compensation claims, and senior judges have launched an unprecedented onslaught against the Government, accusing it of curbing their independence. (Sunday Telegraph 23.9.07)

Another stupid prosecution costs us £1,000- "Prosecutors were accused of wasting taxpayers cash yesterday after charging a boy with criminal damage worth 1p. The Crown Prosecution Service charged the 15-year-old after he admitted ripping the handles off a plastic bag, worth 1p, belonging to a girl of 13. The girl's parents called police who passed a file to the CPS. The case is believed to have cost £1,000." (Mirror 18.9.07)

£1m per month to support foreign kids abroad- "14,000 families living abroad collect our child benefit because of astonishing EU rules. Ministers last week admitted that, scandalously, more than £1million a month is handed to the families of youngsters who live in former Communist countries. Mirek Kryszczak told The People: "As soon as I arrived in Britain three months ago I heard about it. I was told all I had to do was fill in a form to get almost £80 a month. At first I thought it was a joke but it is not." Back home in Poland's northern region of Warminsko-Mazurskie, Aneta is just as bemused. "When I first heard it was possible for my husband to claim these benefits I was amazed," she said. "It's still difficult for me to believe - but I am not complaining." (People 23.9.07)

Extra £1,565 for health and safety fence- "THE cost of installing fencing at Victoria Park, Malvern Link, has increased by £1,565 from its original estimate of £2,500, councillors will be told next week. The overspend is because the height of the fencing had to be altered to conform with health and safety." (Malvern Gazette 19.9.07)

Total for week- £4,001,502,565

Cult Of Amateur Delivers Northern Wreck

The Labour dominated Treasury Select Committee had a simple job yesterday- to stick responsibility for the Northern Rock debacle on Mervyn King, the Governor of the Bank of England. Darling and Brown clearly wanted that, and so too did the City banks, who have been running a well orchestrated campaign against the man who refused to bail them out over the summer.

But the Committee wasn't up to the job. With one or two notable exceptions, it's full of grandstanders whose repertoire extends no further than taking free hits at City fat cats (eg the resident evil that is private equity- see this blog). Faced with the top notch Mr King, they were hopeless. He totally outclassed them.

Of course, given the whole Northern Rock debacle, that hasn't stopped King being given some pretty mixed reviews, but overall he put in a strong performance. Key points:

Systemic failure- as we blogged here, Brown's decision to split responsibility for bank stability has been a disaster. Although King valiantly declined to blame the new system, it was perfectly obvious that the split between the FSA (responsible for supervising individual banks) and the Bank (responsible for overall stability) allowed NR to fall down the crack in between.

EU regulation (again!)- the EU's Market Abuses Directive, introduced in 2005, prevented the Bank from adopting its traditional and preferred technique for bailing out banks in temporary difficulties- covert lending that would not frighten the horses (aka retail depositors). Worryingly, the Bank didn't seem to have discovered this until last Thursday at the height of the crisis.

Deposit guarantees- King strongly backs improved deposit guarantees, including arrangements for rapid payouts in the event of a bank failure (the US FDIC pays out in 24 hours- see this blog).

Taxpayers- it was heartening to hear King affirm his concern for taxpayers. Several times he said he does not have the authority to risk taxpayers' money. Let's hope his successors always remember that.

But if King emerged credit enhanced, his Deputy Governor in charge of financial stability came out with an unambiguous junk rating.

Sir John Gieve will be familiar to regular BOM readers. Until end-2005 he was Permanent Secretary at the Home Office, where he presided over a huge catalogue of blunders and disasters. In particular, from his lofty position on the bridge, he never seemed to have a clue what was happening down in the engine room. Foreign prisoners went missing, files got lost, money went walkabout- he was always totally oblivious (see many previous blogs, eg here and here).

Eventually, even the mandarins decided he had to go. So they moved him out of the Home Office and put him somewhere they reckoned he could do no harm- the Bank in charge of financial stability. How hard could it be?

Yesterday we learned his amateur bungling has continued- despite being the Bank's representative on the FSA board, he totally failed to enquire into the nitty gritty of what they were doing about Northern Rock, he failed to even read the worrying trading statement issued by NR in July, and he went on a fortnight's holiday during the height of the crisis.

The Committee Chairman accused Gieve of being "asleep in the back shop while there was a mugging out front", adding "frankly, I do not think you are doing your job."

Which is shocking. But even more shocking is that, despite that lamentable record at the Home Office, and despite public calls for him to be removed from his Bank job more than a year ago (see this blog), this "seriously tainted public official" was left in post.

Result? The cult of the amateur has delivered yet another train wreck. And we taxpayers will foot the bill.

PS How big is the NR bill going to be? We don't yet know. But despite constant assurances that the the operation has value and that a commerical buyer will soon be found, nobody has so far bitten. Lloyds, HBOS, Santandar, ING... all have looked, but so far politely declined. Analysts at Citibank now say it may only be worth £25m, compared to the £5bn it was supposedly worth earlier this year. At that rate of collapse, it's only a matter of days before it's worth zilch. As we've said before, with the housing market teetering, and mortgage rates heading up, a maxxed out geared up mortgage book is the very last thing you want to be holding. The trouble is, we are.

Non-job of the Week

When Islington Council has in the past been responsible for such bright wheezes as using £400,000 of taxpayers’ money to clean up graffiti and then offering free classes to local teenagers in graffiti techniques, and employing a Recycling Education Officer at £30,000 a year, it is not necessarily surprising that they are in need of a large public relations campaign to appease the overburdened taxpayer footing the bill for this politically correct madness. 

So Islington is advertising today for this week’s non-job:

Head of Contact Islington
Up to £67,500

..We also want to make sure our staff have everything they need to deliver first class customer service, so information technology, and making the best use of it, is also very important to us.

You’ll take on the challenge of achieving these goals, and develop future plans for this high profile, high quality service. You’ll need to be a strong leader with an excellent track record in customer services, the ability to collaborate with people at all levels, and to inspire and motivate those around you. You’ll be keen to make an impact from day one, deliver results and continue Contact Islington’s success.

If you are sick of footing the bill not only for the politically correct madness of the council but also the spin used to cover it up, then let the council know.  They can be reached at:

Contact Islington
222 Upper Street
London
N1 1XR

And the local papers at:

Islington Gazette

Editor:  Tony Allcock

161 Tottenham Lane,
London,
N8 9BU,
United Kingdom

Email: nwlnews@archant.co.uk

Islington Tribune

Editor: Eric Gordon

40 Camden Road,
London,
NW1 9DR,
United Kingdom

Email: editorial@islingtontribune.co.uk

Blank Cheque

So just what are we taxpayers on the hook for? What exactly has the government's panic bank deposit guarantee announcement exposed us to (see this blog)?

Having trawled through the papers and official websites this morning, it's entirely unclear what's actually been agreed. The official HM Treasury merely repeats Darling's TV announcement:

"Should it be necessary, we, with the Bank of England, would put in place arrangements that would guarantee all the existing deposits in Northern Rock during the current instability in the financial markets."

"Put in place arrangements". Like what? Will all deposits be covered? Retail and wholesale? What about say a roll-over facility - is that a new deposit? The reality is probably that they have no idea.

Also, which institutions are covered by the broader guarantee? We only found out about that after Darling had spoken, when Treasury officials briefed journalists that "the same guarantee would extend to any other bank in a situation similar to Northern Rock, which asked the Bank of England for help after experiencing cash flow problems following the worldwide squeeze on credit." Had Darling simply forgotten to mention that huge extension, or hadn't it occurred to them until they were later asked?

The message - strongly reinforced by the bumbling performance of the FSA's chief executive on this morning's Today programme - is that they are making this up as they go along. All they know is that they will do whatever it takes to stop the nightly TV reports of Weimar Republic style panic in the streets.

But it's our money they're chucking around. We need to know what it will cost, even if they're beyond caring.

Let's assume the guarantee will only apply to UK bank deposits held by UK private sector residents. At present, they amount to around £2 trillion. So straight off the bat, Darling has signed us up to guarantee £2 trillion of deposits. That's a big Big Liability- even bigger than the £1.7 trillion debt mountain this government has already built up (see this blog).

But of course, they might argue the actual cost is not this total potential liability, but the value of the free insurance cover they're handing out.

In the absence of detail it's rather difficult to tell what this amounts to, but one indication might be the US deposit insurance scheme, which is being widely trawled as the model for us.

That's operated by the Federal Deposit Insurance Corporation (FDIC), and guarantees most deposits up to $100,000 (£50,000), some up to $250,000. It's funded by insurance premia paid by the participating banks themselves.

Looking at the FDIC's latest report, we find that in 2006 it insured $4.1 trillion of deposits on a premium income of only $32m (a mere 0.0008% of deposits). Which sounds like a knock-down bargain- until you recognise the FDIC has been going since 1933 and has built up huge reserves over that time. They now stand at $50bn, still only 1.2% of deposits, but a pretty chunky war chest compared to the zero we have in the UK.

So what might that imply for us?

A straight read across from the US says taxpayers would need to put aside an immediate reserve of £25bn and an annual premium of £16m pa. Well, that's not too bad you think- why didn't we do it before?

But given all those panicking queues, and NR alone with twenty odd billion of retail deposits, that doesn't sound right, does it. Not nearly enough.

And of course, it isn't.

In reality, the FDIC's premium rates go up and down depending on recent loss experience. During the recent boom, losses have been minimal (zero actually). But back in the late eighties and early nineties recession, the losses racked up ($15bn in the worst year). The premia then went much higher. A read across from that experience suggests the implied premia costs here would currently be of the order of £4-5bn pa (equals 0.2%- 0.25% pa of £2trn).

Remember too that the FDIC guarantee is capped - Darling has given an open-ended guarantee no matter how big the individual deposit.

The bottom line is that we can't really tell how much of a blank cheque the government has written, because as per they haven't worked out what their "plan" actually entails in the real world. But as of now, he's increased public sector liabilities by around £2 trillion, and he's committed taxpayers to providing free insurance cover costing perhaps £5bn pa.

This morning's press says Bank Governor King will take the rap for this and will shortly be removed. But the real culprit has been keeping a very low profile in No 10. He's the one who split responsibility for managing bank stability between the Bank and the FSA, and he's the one who presided over Britain's debt explosion.

But we're the ones who will have to pay for it all.

Beyond Parody

So that's what the non-jobbers do all day...

Weekly Waste Watch- 74

Let's just keep this between ourselves

In the news this week-

Labour's union sweetheart deal costs us £4.468bn- "The cost to business of Labour's backroom deals with its union backers now runs into the billions... the true cost of the so-called Warwick Agreement, signed by Tony Blair to secure £8m of union funding and support ahead of the last general election, is only now becoming apparent. The Government estimates that one pledge - to increase statutory holiday entitlement to 28 days, in a series of phases starting from October 1 - will cost business up to £4.4bn a year. Additional maternity and paternity leave and pay, introduced in April, is already costing up to £58m a year... Taxpayers have also forked out £10m for a union modernisation fund to meet a separate pledge to "work in partnership with strong, modern trade unions and to help unions grow". (Telegraph 11.9.07)

£90,000 wasted on Stalinist bulldozer survey- "FURIOUS residents have clashed with the council after branding a development survey for their estate as a shambles and misleading. The consultation on plans to bulldoze homes and gardens to make way for new housing on the Barnsbury Estate in Woking... took six months to complete and cost taxpayers £90,000. Council officers will now consult residents again, at yet more public expense, after it was accepted the consultation did not reflect the desires of the people... Growing pressures from Westminster to up the number of new homes being built in the south are causing dismay in communities such as Barnsbury... Cllr Bellord said: “We have central government dictating the terms and flexing their muscles with their vision of the south east. They’re happy to tell us what we need. Stalin is alive and well in central UK government.” (Woking News and Mail 13.9.07)

£98m runaway road project- "Four years ago, the Welsh Assembly Government pledged “over £30m” for the Porth Relief Road in the Rhondda but, unveiling the road yesterday, First Minister Rhodri Morgan revealed the final cost was £98m. The figure – which works out at £21m a mile – had never previously been quoted by the Assembly Government, Rhondda Cynon Taf (RCT) council or builders Costain. In 2003, Economic Development minister Andrew Davies said: “We are investing over £30m in this road development which will bring environmental benefits and improve access to employment opportunities.” In the programme for yesterday’s ceremony, the cost was put at £65m. Even yesterday morning, it was still being reported elsewhere that the final cost was £85m, but by the time Mr Morgan addressed representatives from the various companies involved in the scheme the price had soared to £98m." (South Wales Echo 4.9.07)

Lavish lunches cost £25,000- "The man charged with ensuring public money is used properly has spent almost £25,000 of taxpayers' cash on dining out in the past three years. Sir John Bourn, head of the National Audit Office (NAO), has run up an average restaurant bill of £154 during 160 meetings since 2004. Details of his lavish expenses, which were revealed after a Freedom of Information request, come just months after it was disclosed that Sir John had spent £336,000 on a series of trips to destinations around the world." (Mail 16.9.07)

Total for week- £4,566,115,000

Yours!

Congratulations! If you're a taxpayer you're now effectively the proud owner of Northern Rock's mortgage book.

Northern Rock has been a crisis waiting to break. They have been just about the most aggressive mortgage lender: they have been lending at very high income multiples, and they have been prepared to top up their mortgage loans with further unsecured lending. Just in the first 8 months of this year, despite the toppiness of the housing market, their net mortgage lending increased by 55%, driven by their low rate mortgage deals (see their emergency statement here).

To fund this lending, they have been very heavily dependent on the wholesale money markets. Whereas the Halifax gets more than half its funding from retail deposits (ie personal savers), NR only gets about one-quarter. The rest has to come from the markets, the same markets that have now refused to lend.

So we lucky taxpayers have had to step in.

Darling has emerged from his hole to assure us there's no need to worry. Well, for depositors at NR, that's certainly true- they're now guaranteed by us taxpayers (declaration of interest- the author has a small residual deposit with NR).

But we taxpayers should be anything but calm.

What if the collateral against which we're now lending to NR turns out to be worth less than NR claim? How confident can we be about the value of those highly geared mortgages in an environment of rising rates and (probably) falling house prices? What about their £15.4bn of other assets, including exposure to CDOs, SIVs, and SIV-lites (see this blog)- how secure are they? The answer is nobody knows- which is precisely why the money markets no longer want to lend to them.

Of course, there's no way NR can now maintain its independence. Other banks have been looking at it for some time, but reckoned it was overpriced. Now that the shares have plumetted (down 20% today, and 60% from their peak earlier this year), a buyer may be more interested. Analysts at Credit Suisse comment:

“We assume Northern Rock will cease writing new business. The lack of new business flow and a penalty cost of funding will have a detrimental impact upon Northern Rock’s earnings ... Northern Rock is unlikely to remain independent but the value of the company to an acquirer may be significantly below the current share price.”

No doubt "the authorities" are right now frantically trying to strongarm someone into taking them over. And no doubt the possible buyers are saying they will need some form of government guarantee on that dodgy loan book. And maybe the authorities will offer some form of... what shall we say... douceur.

But there's one thing we must be absolutely insistent on.

Before taxpayers are required to shell out a bean, the NR shareholders must lose everything. As we argued here, they've had the upside, and now they must pay the price.

Bosses And Beds

Is this what you want? Bosses need proper beds

I hate to break this to you, but the NHS has a serious problem: there aren't enough beds to go round.

As you know, the NHS aims to provide one bed for each of its administrators. That way, even when they all get fatigued at the same time, they can each have a separate bed to take a well earned nap. Any halfway decent employer would want that.

But according to the Department of Health, there are now 261,000 NHS administrative staff. Which is a problem because, as the new Wanless report tells us, there are only 176,000 beds. With 1.5 administrators per bed, that means they either have to sleep on the job, as it were (see pic), or adopt the unsavoury and highly unhygenic practice of hot-bedding.

The really scandalous thing is that NHS commissars should have known about this problem years ago.

When they nationalised our hospitals in 1948, there were about 450,000 beds. But it should have been obvious to everyone that an inefficient nationalised industry would never be able to maintain that many, which is why today there are only 176,000 left (a fall of 60%). Here's the Wanless chart for the last two decades:

What the commissars totally failed to grasp was that their ambitious long-term programme to make the NHS a world leading administrative affairs industry was in fatal conflict with this run-down in beds. How can you possibly be expected to administer properly if you can't lie down?

There's more bad news. According to Wanless, the number of non-clinical staff grew consistently faster than clinical staff from 1998 to 2003 and they almost became the majority. The ratio has now mysteriously slipped back:

What is going on? It's all very well for Wanless to say this reflects nothing more than a paper-shuffling outsourcing of non-clinical jobs, but it plays havoc with an essential management information metric. How are we to be sure that the administrative growth programme remains on course?

The only redeeming feature of this entire sorry saga is that the number of managers and senior managers in the NHS has shown commendably strong growth. Despite a slight dip last year, it's up by around 50% to 30,000 just in the last decade:


Jolly well done to all concerned!

Now, can we just do something on the beds? On my calculation, 85,000 administrators do not currently have their own bed. I therefore propose the immediate purchase of 85,000 Relyon Marquess single divans, priced at a very reasonable £1,010 each. For £85 mill we could have the problem sorted.

Why oh why can't the commissars come up with innovative ideas like that for themselves?

Footnote: Back in the real world, the NHS provides us with just about the lowest number of hospital beds per head of any country in Europe. According to OECD figures quoted by Wanless, we have 4.1 per 1,000 population, compared to 7.5 in France and 8.6 in Germany. Which means NHS patients have to wait longer, travel further, and get kicked out earlier (hence the increase in emergency readmissions). Overall, we were much better provided with beds before health was nationalised. Although it is true we were much less well provided with administrators.

Government Project Disasters

"Only" £100m... but hardly a snip

An excellent new paper today from the IEA. It's called They Meant Well, Government Project Disasters, by Prof David Myddelton.

We've not read it in detail yet, but Prof Myddelton has looked at six great disasters from the last 100 years:

• The R.101 airship (1922 to 1930)
• The groundnut scheme (1946 to 1954)
• Nuclear power (1955 to 1978 to . . . )
• Concorde (1956 to 1976 to 2003)
• The Channel Tunnel (1964 to 1975, and 1985 to 1994 to 2007)
• The Millennium Dome (1994 to 2000)

These will all be familiar to regular readers of BOM, but Myddelton goes into the nitty gritty of each one, looking at how on earth they ever got started, and what went wrong.

He also pulls together the cost figures, which he has adjusted to 2007 prices on the basis of RPI inflation. For future reference, this is what these disastrous projects cost taxpayers in 2007 money:

• R101 - £100m: amazingly cheap, but then, it was made of old bedsheets and bits of prototype Meccano
• Groundnuts- £1,150m: that's assuming the residual assets finally handed over to the Tanganyika Agricultural Corporation were worth £50m, otherwise the cost was £1,200m
• Nuclear power- £32,000m: that's a "minimum figure", and represents the losses, not the total costs
• Concorde- £9,600m: that's light compared to BOM's £20bn estimate: we'll come back to that below
• Chunnel- £3,000m: the tunnel itself cost £9.3bn and was built with private money, but the Channel Tunnel Rail Link has had a £3bn taxpayer sub
• Dome- £1,000m

Grand total- £46,850m. Or nearly two grand for every British household.

Doesn't sound enough? That's because Myddelton has adjusted to current day values using the RPI- ie prices only. Fair enough, but to get a more meaningful feel of what the extra tax burden of all those projects would mean in today's terms, we reckon it's more useful to adjust their costs for the rise in incomes.

Real GDP approximately doubled between the late forties and early seventies, and then doubled again up to now. Adjusting roughly for that, BOM's back of envelope says the burden is roughly equivalent to £120bn (with Concorde on £20bn). Which puts the burden per household at more like five grand.

Either way, Prof Myddelton's paper is well worth looking at. It's our new bedtime reading.

Non-job of the week

Last week Tower Shamlets council was exposed by the Centre for Social Cohesion for stocking its PUBLIC libraries with Islamic fundamentalist literature.  Not only was taxpayer’s money spent on books by Abu Hamza, the convicted fundamentalist, but that there were disproportionately more fundamentalist texts than moderate books.  So you’ve got to laugh when Tower Shamlets council advertise for our non-job of the week: a “Hate Crime Policy and Partnership Manager”.

Tower Shamlets council ‘prides’ itself on equalities and community cohesion yet stocks its libraries with books aiming to set one community against another.  Perhaps the library fiasco has compelled the council to recruit someone to “further develop our hate crime strategy”.  I doubt it.  In a borough so wrapt in political correctness, they daren’t challenge (or offend) the real forces of hate brewing beneath the surface that, as the Centre for Social Cohesion found, are having their propaganda publicised with taxpayers money.

So our highly paid, taxpayer funded, ineffective non-job of the week, straight from the Guardian, comes from Tower Shamlets council:

“Hate Crime Policy and Partnership Manager
£39,738 - £42,231

Tower Hamlets is a distinctive, unique London Borough that is home to a diverse, vibrant, multicultural community.  The Council has a strong commitment to equalities and community cohesion, having achieved level 5 of the Equalities Standard and Beacon Status for promoting racial equality and community cohesion.  We are working hard to make the Borough a better place for living safely, with a strong partnership approach to reducing crime, anti-social behaviour and fear of crime.  We have taken an integrated approach to tackling all forms of hate crime which is a priority in our Crime and Drugs Reduction Strategy.

We are seeking a committed manager to further develop our hate crime strategy.  You will have a clear vision for building a coordinated response to all forms of hate crime, comprehensive working knowledge of legislation, policy and best practice in the field of equalities and hate crime, a proven track record in designing and delivering partnership projects and strategies with diverse communities, political sensitivity and strong communication, influencing and leadership skills.

If you have the skills, experience and determination to make a difference and want to work in a mature partnership environment with a strong commitment to tackling hate crime and building community cohesion we look forward to hearing from you.”

Is it just me or are they talking about a completely different place?  Tower Shamlets is a mismanaged borough where the authorities haven’t a clue what’s going on.  So let the people know, let the lions governed by donkeys know what is going on, that the council turn a blind eye to Islamic fundamentalism whilst spending taxpayers money on the wasteful gesture of a job advertised above.  Write to:

Letters Editor
The Tower Hamlets Recorder
182 - 184 High Street North,
London,
E6 2JD,
United Kingdom
Email: john.finn@newhamrecorder.co.uk (specify that the letter is for the Tower Hamlets Recorder letters page)

And the leader of Tower Shamlets council, Denise Jones, at:

Cllr. Denise Jones
Leadership Office
Mulberry Place
5 Clove Crescent
London, E14 2BG

Tel:  0207 364 4993
Email: layla.richards@towerhamlets.gov.uk; cllr.denise.jones@towerhamlets.gov.uk

Wanless Shocker

Spending now up to EU average... but results are not

The highly respected King's Fund have just published Sir Derek Wanless's new NHS report. The media reaction hardly does it justice- it's a real shocker.

The bald facts are these. Since his first report in 2002, total NHS spending has surged by nearly 50%, or £43.2bn. That's a real terms growth of 7.4% pa, and takes us close to the EU average for health spending as a percentage of GDP. So as of now, nobody can argue the NHS is substantially underfunded.

But as we've said many times on BOM, spending money is easy: it's what you get back that's counts. And across 321 weighty pages Wanless confirms that we've had abysmal value.

To start with, getting on for half of the increased spending (£18.9bn) was gobbled up in those big pay and price increases (see many previous blogs on the NHS pay deals). More money has been poured into hopeless projects like the NPfIT, where the report demands a full drains up.

Second, although there has been a huge increase in NHS staff numbers - up by one-third to 1.3m - their productivity has fallen sharply. Here for example is what's happened to hospital admissions per consultant:

Third, the top politicos and their ranks of health commissars did an appalling job at directing the splurge. Wanless produces the following scorecard, and it's well worth clicking on it to enlarge so you can take in the full enormity of what he's saying. Under virtually every single heading of the Cabinet Office's own criteria for good policy making, there has been total failure:

And even where their general policy direction might have been sound, their execution was dire. For example, they had a plan to recruit more clinical staff- good. But they ended up recruiting far more than they planned, as this table shows:

Obviously there was insufficient home-grown supply because training takes time. So many recruits came from overseas, with all the attendant language difficulties you can now see in any NHS ward. And guess what- when our own expensively trained docs and nurses finally did become available, there were no jobs left. Indeed, some of the earlier over-recruitment was having to be trimmed, at huge redundancy cost.

What a shambles.

If we needed any further proof of the commissars' unsuitability to run our healthcare- or indeed anything else of consequence- this is surely it.

With our "health outcomes"- including cancer survival rates and infant mortality- still woefully below EU averages, how dare they pretend they're just about to address "the last few issues". As this report so graphically highlights, even when money is unlimited, they have neither the insight, interest, nor ability to do better.

A major opportunity has been bungled, and now the cash screw is tightening, all we can look forward to is further pontification, further destructive orders from the command bunker, and futher non-delivery.

PS This report is a goldmine of facts and figures, and we will be blogging other extractions in due course.

Indefensible

Waste Watch on defence spending

Today's PAC report on defence procurement reminds us just how poor the MOD is at managing its budgets. As we've blogged before, its 20 largest weapons projects - including the MRA4 Nimrod, the Type 45 destroyer, and the Astute class sub - are running a combined £2.6bn over budget, and 36 years behind schedule.

But the report also highlights something else we've spotted- the MOD's appalling and hamfisted attempt to cover up.

They claimed that through careful husbandry they had cut the cost of these 20 projects by a combined £781m. But it later emerged that most of those "savings" actually comprised accounting fudges that shifted costs out of the heavily scrutinised 2o major projects category into the big black pot of other spending.

The PAC says only £242m comprised real savings, and Chairman Sir Edward Leigh comments:

"More than half of the sum which the MoD has claimed to save has simply been loaded on to other budgets. We have no idea what cuts will have to be made to other activities of our Armed Forces as a result of this massaging of the figures."

At a time when British troops are dying for want of proper kit not included in those 20 major projects, that is utterly indefensible.

In the private sector, heads would roll. But government never works like that. As the PAC observes:

"Key staff are neither held to account for a project's failure, nor rewarded for its success."

Once again those mighty Whitehall warriors get off scot free.

Weekly Waste Watch- 73

Inconveniences, more like

In the news this week:

£15,000 flushed down pan- " THOUSANDS of pounds have been flushed down the pan refurbishing public toilets, residents have complained. The loos at The Cross in Royston were closed for more than a month in the summer while £15,000 of maintenance work was carried out, but people who have used the newly- reopened block claim the work was a complete waste of taxpayers' money. Residents say they are baffled as to why it cost North Hertfordshire District Council so much... Terry Hutt, spokesman for Royston Pensioners' Action Group, said: "What they've been doing there I have got no idea." (Cambridge Evening News 7.9.07)

£2.3bn for MOD consultants- "The Ministry of Defence has spent £2.3 billion on consultants since Labour came to power. While British forces in Afghanistan and Iraq remain short of helicopters, weapons and other vital equipment, the MoD's spending on management consultants and external advisers has rocketed since 1997: £2.3 billion could pay for an aircraft carrier, 51 Apache helicopters or annual salaries for 17,000 generals... During 2005/06 the MoD bought accountancy services worth nearly £20 million and spent £4.1million on external lawyers and £47.2 million on consultants to advise on PFI and other initiatives linked to privatisation. In one year, it spent more than £3 million on health and safety consultants for its civil servants. EDS, the IT giant blamed for problems at the Child Support Agency and HM Revenue & Customs, recently landed a 10-year contract worth £2.3 billion to overhaul the MoD's computer systems." (Sunday Telegraph 9.9.07)

Regeneration chiefs blow £120,000 on junketing- "THE company behind the regeneration of Edinburgh's waterfront spent tens of thousands of pounds of taxpayers' money on foreign trips, lavish entertaining and bicycles that no-one has used. A confidential report... raises questions over more than £120,000 worth of spending by Waterfront Edinburgh. It includes expenses claims for two trips to a property show in Cannes and business class flights for former chief executive Stephen Izatt and ex-board chairman Councillor Elizabeth Maginnis to attend Tartan Week in Boston. A further £50,000 was blown on two huge St Andrew's Night parties, while more than £5500 was spent entertaining guests at Murrayfield rugby internationals." (Evening News 3.9.07)

Useless £600,000 traffic lights- "A controversial £600,000 traffic lights scheme is to be dropped less than a year and half after it was introduced. The lights at the Cophall roundabout in Polegate, which became operational last May, are to be ripped out. Motorists have for months complained of long tailbacks and said the lights are confusing and dangerous... The system was installed... by the Highways Agency [which] has now admitted the lights will be removed - proving the scheme was a waste of hundreds of thousands of pounds of taxpayers' money." (The Argus 2.9.07)

Total for week- £2,300,735,000

The Buck Bounces Back

Our reporter on the trail... before he contracted foot and mouth

According to the "usual sources" (ie shameless leaks), the report on the Pirbright foot and mouth outbreak will finger the government's own virus lab, and not their nextdoor neighbour Merial.

Investigators have apparently identified five separate breaches of bio-security, including a broken waste pipe which seems the most likely culprit:

"The investigators reportedly found records indicating that for several years there had been concerns about the state of the pipe, but that no repairs were carried out, possibly because funds were not made available."

How outrageously public sector is that? Uninspected rail line? Ah well, doesn't matter- we'll fudge the records. Broken virus waste pipe? Ah well, doesn't matter- it's underground so nobody can see it anyway.

We recently visited a huge and very well known NHS hospital. It's undergoing a massive PFI expansion programme, yet its existing facilities are abysmally maintained. For example, there are expanses of flat roof which can be clearly seen from the wards and which are strewn with rubbish: not just old drinks bottles etc but also abandoned bits of unidentified hospital kit.

It's horribly depressing and screams "abandon hope". Yet it would only take two or three hours to tidy up. Predictably, none of it has been touched since we last visited a couple of years back- everything seems to be in exactly the same place.

Clearly roof cleaning has fallen down the gap between the box-ticking managers, the clinicians, and the outsourced cleaning company. In a top-down Stalinist world of Whitehall planning, performance targets, and contractural direction, it's nobody's actual job-decription job to keep the roof tidy. It's never been speced, approved, and documented, so it never gets done.

All shocking enough. Yet Pirbright also highlights another of the public sector's worst vices- not me guv management.

As you may recall, when government ministers rushed back from their hols to pose at the helm for the cameras, Defra span like crazy that it was all the fault of those damned yanks nextdoor (see previous blogs eg here and here). Well before any proper investigation, they passed the buck (and that included the supposedly lily-white Hillary Benn).

Well now the buck has bounced right back into their laps.

Will there be resignations?

Be serious.

Apologies? To Merial, the farmers, and the public?

Infected pigs might fly.

Financial compensation to Merial for gross reputational damage?

I'm sure their lawyers are even now on the case.

And you know who'll have to pay.

Update On Running Sores

The BBC's the one on the left and the RPA's in the middle

Updates on two of the running sores causing taxpayers so much discomfort:

1. BBC

The BBC has been panicked into axing its Comic Relief-style special about climate change. A spokesperson says:

"The BBC is committed to programmes about climate change but after Live Earth what audiences say is they are looking for programmes of a documentary or factual nature to explain the complex subject."

But if audiences want facts, they are most unlikely to get them from the blinkered BBC. As you will recall, the BBC's officially stated position is:

"The BBC has held a high-level seminar with some of the best scientific experts, and has come to the view that the weight of evidence no longer justifies equal space being given to the opponents of the consensus."

You and I may know that consensus is far from secure (eg see here), but the BBC likes it, so they use our money to promote it. We wonder what the dire micro-audience Live Earth cost us.

2. Rural Payments Fiasco

The Public Accounts Committee has finally issued its report on the Rural Payments Agency fiasco over the implementation of the EU's new farm subsidy system (see many previous blogs eg here).

The report lists 15 catastrophic howlers- everything from huge overcomplexity, to inexperienced low grade staff, to lack of planning, to rubbish IT, to disconnected secretive management. It's a useful if teeth grinding catalogue of virtually every management failure Whitehall routinely serves up.

Cost? The implementation project itself cost us £122m - 50% over budget- EU fines for bogging up will cost us £436m, and payments to the failed ex-head of the RPA (to get rid of him) cost us £219,000. Call it £0.6bn.

Other snippets-

• despite the unfolding disaster, the head of the RPA was actually paid a "performance bonus" of £21,000 in 2004-05 (see this blog on the broader public sector bonus farce);
• of those responsible, only Johnston McNeill, the RPA's removed CEO, paid any price at all: and even he only got "removed from post"- ie paid off. According to the PAC report, "no member of staff [has] received an official warning or been subject to any other disciplinary action over the project’s failure"
• Defra's Secretary of State subsequently got promoted to be Foreign Secretary, and Defra's Permanent Secretary, the unfortunately monikered Sir Brian Bender, got moved to run the equally useless DTI.

We couldn't ask for a more blatant example of power without responsibility.

Non-job of the week

This week’s non-job has been fed to us by a supporter, Donald Grant.  Epping Forest District Council is advertising for an ‘overpayments officer’.  Mr. Grant made an interesting comment in the email he sent us: ‘why don’t they just get it right in the first place?’  It’s one thing that the council admits to handing out benefit overpayments, but it adds insult to injury when taxpayers have to subsidise an officer just to oversee reclamation of benefit overpayments.  Let’s face it; anything they do get back won’t even come clear to covering the cost it takes to employ an overpayments officer.

Here’s the non-job of the week advert from Epping Council’s website:

“Overpayments Officer
£18,735 – £20,364

A vacancy has also arisen for an Overpayment Officer to work as part of a team concentrating on the recovery of overpayments of Housing Benefit.  You must have experience of working either within a Benefit Section or in a revenue collection capacity and preferably have a good knowledge of Housing Benefit and Council Tax Benefit legislation.  For both posts, it is essential that you have good computer skills, excellent communication skills, a conscientious and methodical approach to work and a commitment to delivering a quality customer service.  You should have at least 5 GCSEs at grade C or above or equivalent, including English and Maths, and have a good standard of written English”

Clearly the need for these jobs shows how complicated the tax and benefits system has become.  If councils are getting it wrong in the first place, what makes them so sure the overpayments department are going to get it right second time round.  We clearly need a simpler tax and benefit system.  Join the campaign and write to the Epping Forest Guardian about this non-job and the wider campaign for a simpler, lower tax system:

Letters Editor
The Epping Forest Guardian
8 Simon Campion Court,
High Street,
Epping,
Essex,
CM16 4AU,
United Kingdom
You can send in the letter electronically on their website here.

Weekly Waste Watch- 72

Council Tax supremos in Disneyland

In the news these last two holiday weeks-

Council Tax supremos spend £4.9m on junkets- "Council tax inspectors have travelled 200,000 miles to 12 countries as they explore ways to raise bills at home. Officially, they were on fact-finding missions looking at methods of recalculating bills, such as "spy-in-the-sky" surveillance technology and Big Brother-style computer databases. But staff from the Valuation Office Agency have been accused of squandering millions on their junkets, which included stays in five-star hotels, banquets and a visit to a Disneyland theme park. One bureaucrat even mocked taxpayers at a dinner. The Agency made 412 flights to countries including the U.S, Australia, Malaysia and Thailand between March 2006 and April this year. It spent £4.9million on travel and subsistence. " (Mail 28.8.07)

Micky Mouse degrees cost £40m pa- "Taxpayers are shelling out more than £40 million a year to subsidise "Mickey Mouse" degree courses such as equestrian psychology and baking technology. A rise in the number of school-leavers going to university in recent years has fuelled a huge increase in courses of "dubious academic merit", said the TaxPayers' Alliance. It identified 401 courses which it claimed were not suitable to be taught in universities. They include a course on golf management, offering students an understanding of the game, combined with regular trips to courses such as St Andrews and Carnoustie." (Telegraph 24.8.07)

£80m wasted on murder enquiries- "More than £80m has been 'wasted' on inquiries into murders and manslaughters by mental health patients... Failings identified regularly take up to five years to put right... Marjorie Wallace, chief executive of Sane, said this means that millions of pounds have been wasted on a system that is failing to protect patients or the public. 'The money's wasted because whenever you go back to trusts, the recommendations haven't made much difference or been carried out'. The most complex investigations can cost more than £250,000, Ms Wallace said, taking the total cost of investigations since their statutory introduction in 1994 to around £80m." (Health Service Journal 31.8.07)

Handouts to Eastern European migrants top £125m pa- "THE toll of Eastern Europeans claiming benefits has almost trebled in a year – costing the taxpayer more than £125million-a-year. Around 112,000 migrants who came to Britain to work are now claiming state handouts – the equivalent of one in six of those who have headed here since the EU expanded. It is a huge increase on the 42,620 who were claiming benefits at this time last year, which left the annual bill at around £46million. The numbers are only set to increase, as any migrant under the Worker Registration Scheme is eligible for benefits once he or she has been here for 12 months." (Express 22.8.07)

Another £1m to pay off surplus NHS bosses- "Two former Norfolk health executives have received pay-offs of more than £1m after losing their jobs in a massive shake-up of health services. The two lost their £110,000-a-year jobs - taking early retirement and redundancy - when a new Norfolk PCT was created from five former PCTs in the county last October... North Norfolk MP Norman Lamb described the payments as “the high price” taxpayers are paying for a “botched” reorganisation of the NHS. “It is not central government as much as the taxpayer that is paying for these all-too-frequent reforms, which have had little impact on improving the way care is delivered.” ( Norwich Evening News 23.8.07)

£100K to rebrand Scottish Exec- "THE Scottish Executive is to be renamed the Scottish Government this week in the biggest change to the country's political identity since devolution. First Minister Alex Salmond is to officially declare that, from tomorrow, all documents, letters and publicity material should carry the new name in what he says is a "common sense change"... Salmond will spend £100,000 on the changes, which they say will be spent on designing new signs and developing the new corporate image." (Scotland on Sunday 2.8.07)

Total- £251m