The TaxPayers' Alliance - Burning our Money

Non-job of the week

How many times have you been told by government to ‘go green’?  You must walk to work, take public transport (especially on subsidised Venezuelan oil) and recycle.  Such is the self-imposed need to lecture us taxpayers to go green that government has spawned yet another taxpayer-funded industry, this time in the field of climate change.

Part of the reason your council tax bills are going up is down to the government’s nannying addiction over climate change.  Each week in the Guardian jobs pages (where else?) there’s a drip-drip of green jobs coming out of our councils at an enormous cost to the taxpayer.  Our non-job this week is one of these jobs, not because it’s ‘green’ but because it has the added bonus of being extraordinarily hypocritical.  See if you can spot it:

Green Infrastructure Officer

Heritage and Environment Service, £29,728 - £32,436 pa + Relocation Expenses + Essential Car User Allowance

Creating Sustainable Communities

Bedfordshire is a wonderfully rich and varied county, with the Chiltern Hills and Woburn Abbey, attractive river valleys, market towns and villages, and an industrial heritage that includes hat factories and brickworks. It is at the centre of government growth areas and is planning to provide 59,000 new houses and 50,000 new jobs by 2021. Your challenge is to combine the two and help make the county an even better place to live.

‘Green Infrastructure’ is being built into plans for the future and will provide a network of landscapes, wildlife and heritage sites, public open spaces and routes. It will enhance people’s quality of life and sense of place.

The Bedfordshire and Luton Green Infrastructure Consortium - public and voluntary bodies including national agencies, local authorities and countryside projects - takes the lead. You will work with the Consortium and other partners to promote the Strategic Green Infrastructure Strategy, secure funding and deliver significant amounts of high quality green infrastructure.

A degree (or equivalent) and a proven track record in related work are essential. You must be able to build consensus across a range of partners, have the presentation and communication skills to represent the Consortium, and be a strong and successful advocate for green infrastructure.”

Did you spot it?  Of course you did, alert readers.  Your council tax is going to pay for yet more local government perks.  With honourable and – here’s the important point - voluntary organisations out there with advice for those who want to go green, why does government feel it needs to divert taxpayers’ money from frontline services to fund car-driving climate change officers? 

Feel free to make this point, and others you might have, to the Bedfordshire on Sunday newspaper by emailing the editor at: editor@lsnmedia.co.uk

As always, this is your campaign because it is your money at stake.  Keep up the fight in holding government to account!

Council Spending Uncovered 2: Middle Management Pay

• Average local authority employs nine times as many people on £50,000-plus packages as ten years ago, an increase three times larger than growth in the wider economy.
• Average local authority spends £4 million on employing people earning over £50,000.
• The total bill is almost £2 billion - almost £1 in every £11 of total council tax revenues.
• 12,600 local council officials earn as much or more than an MP's salary of £60,277.

The first paper in the Council Spending Uncovered series – which investigates wasteful and frivolous town hall spending – revealed a £450 million town hall publicity machine.  This second paper examines the increase in town hall spending on middle and senior managers – those being paid at least £50,000 per annum. Local authority accounts reveal that over the past decade councils have hired a new class of middle and senior management and then increased their pay and benefits packages much faster than the economy-wide average.

It is of course quite normal that wages should increase above the rate of inflation in a growing economy, and, over time, we would expect more people to earn £50,000 and above.  But the increase in the number of local authority employees being paid more than £50,000 per annum has been phenomenal, far outstripping the rate of increase in the economy as a whole.

Key Findings:

• The average local authority is employing over nine times as many people on £50,000-plus packages as ten years ago – 66 people in 2006-07 compared with 20 people in 2001-02 and 7 people in 1996-97.
• By contrast, in the economy as a whole, the number of people earning more than £50,000 has increased by less than three times over the past ten years.
• The average local authority spent over £4 million employing people on £50,000-plus remuneration packages last year. 
• The total bill for council middle and senior managers on £50,000-plus remuneration packages was almost £2 billion last year almost £1 in every £11 of total council tax revenues.
• The remuneration of local authority middle and senior management is racing past that of MPs.  There were 12,600 local authority middle and senior managers being paid at least £60,000 last year – equal to or exceeding the £60,277 salary of MPs in November 2006.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“With council tax doubling in the past decade, it’s extremely disappointing that town halls have chosen to hire a new class of middle managers, many of whom are being paid more than MPs.  Local authorities should study these findings carefully to see where savings can be made, instead of using their half billion pound PR machine to obscure their finances from taxpayers.”

Download Council Spending Uncovered, No. 2: Middle Management Pay (PDF)

More On Slumping NHS Productivity

We've taken a closer look at the Office for National Statistics' new analysis of NHS productivity (first blogged here yesterday by Matt Sinclair).

The Big Picture is that since Labour turned on the spending taps, value for money has collapsed. In the most recent five years studied (2001-2006), spending increased by 54%, but output only increased by 19%. Which means that in just five years, for every pound we spend, we're getting nearly 30% less. Just imagine how long Tesco or M&S would survive if they served up that kind of value.

Between 2001 and 2006, annual spending increased from £58.4bn to £89.7bn, a rise of £31.3bn. Where has all the money gone?

1. Excessive NHS cost inflation

Inflation gobbled up £9.7bn. That's a cost inflation of 17%, compared to 9% on the government's much vaunted CPI measure.

Actually, most NHS costs went up even more than that: labour cost inflation was 25%, driven by those notorious pay settlements (average earnings in the private sector increased by just 16%). The only reason the overall average comes down to 17% is that the unit cost of GPs prescriptions has fallen dramatically, by nearly 20%, apparently reflecting greater use of generic drugs.

2. Slumping productivity

Since 2001 NHS productivity has been falling by 2% pa. That's a 10% loss in five years, equivalent to £9bn pa at 2006's rate of spending.

And abysmal NHS performance contrasts starkly with the broader economy, where productivity rose by 10% during the same period.

We should also note that in the period before the spending taps were turned on, NHS productivity was actually much better: from 1995 (earliest year in study) to 2001, a period of more modest spending growth, productivity was roughly flat.

Once again, boom and bust political management ramped up spending far faster than a decrepit old nationalised industry could handle, and much of the cash was simply wasted.

3. Weak output growth

The bottom line is that a 54% increase in NHS spending since 2001 brought forth a mere 19% increase in health output.

Bad enough, but when you probe deeper, you find it's even worse than that. Because by the far the fastest area of output growth was GPs prescriptions, which grew by a staggering 65% over the five years. So despite the fact that they comprise less than 10% of NHS spending, they accounted for nearly 6 percentage points of the total 19% output growth.

Which means that everything else- new hips, angioplasties, radiotherapy etc etc etc- only grew by around 14%.

Conclusion

Once again, despite considerable efforts by our health commissars to obfuscate the figures, the gross inefficiency of the NHS is laid bare. Productivity has continued to slump.

But there's also a much bigger message struggling to get out. Labour inherited an NHS budget growing at 5-6% pa. In the five years from 2001 to 2006 they ramped it up to 9% pa. Yet output performance barely changed, increasing from c 3% to just c 3.5% pa (even less excluding GPs prescriptions).

Why is that? Could it possibly be (as the recent TaxPayers' Alliance paper suggested) that the key driver of healthcare improvement in the NHS is not how much we spend, but worldwide advances in medical technology?

And if that's the case, why are taxpayers being made to spend all this additional money? We surely all understand that a nationalised healthcare system will never match the efficiency of systems based on choice and competition. And we surely also understand that a tax-funded free-at-the-point-of-use healthcare service will always need rationing.

Instead of pretending the NHS can deliver it all, perhaps we should consider a cheap and cheerful tax-funded safety net, coat-tailing on foreign technology. Which of course is pretty well what the NHS has been for some considerable time... except for the cheap and cheerful bit, obviously.

Open-Ended Breastfeeder

No good comes of too much suckling

“The kind of open-ended breastfeeding of a private institution that goes on at the moment is the worst of all possible worlds.” (para 198)

Thus Professor Willem Buiter explained to the Treasury Select Committee how the hopeless Brown/Balls bank regulatory system has landed taxpayers with an open-ended commitment to prop up the Crock and all its various shareholders.

Most unusually the Committee's initial 181 page Report on the Northern Rock fiasco was published on Saturday. Possibly the Labour Chairman hoped thereby to muffle the explosions. Some hope.

The Report blasts the Brown/Balls system, not just in its operation during the crisis, but also its very design. The Financial Services Authority takes the most severe roasting, its multiple failures of regulation spelled out in detail. But the Tripartite system itself- with responsibilities shared between the FSA, the Bank of England and the Chancellor- is also found to have failed and to require urgent surgery. And all the problems were compounded by lack of preparation and dithering.

Key points in the Report:

• "The FSA... failed to tackle the fundamental weakness in NR's funding model and did nothing to prevent the problems that came to the fore from August 2007 onwards. We regard this as a substantial failure of regulation." (Paragraph 42)
• "It was wrong of the FSA to allow Northern Rock to weaken its balance sheet [last summer]"(Paragraph 45)
• "The current regulatory regime for the liquidity of United Kingdom banks is flawed" (Para 52)
• "It was the responsibility of the Financial Services Authority to ensure that the work of the Board of Northern Rock was sufficient to the task. The Financial Services Authority failed in its duty to do this." (Paragraph 59)
• "The FSA appears to have systematically failed in its duty as a regulator to ensure Northern Rock would not pose... a systemic risk, and this failure contributed significantly to the difficulties, and risks to the public purse, that have followed." (Paragraph 66)
• "The Tripartite authorities and Northern Rock ought to have strained every sinew to finalise the support operation and announce it within hours rather than days of the decision to proceed with the operation... the Tripartite authorities and the Board of Northern Rock ended up with the worst of both worlds." (Paragraph 148)
• "It is unacceptable that the terms of the guarantee to depositors had not been agreed in advance in order to allow a timely announcement" (para 165)
• "The cumulative effect of these failures was to delay the guarantee until the evening of the fourth day after the run started and thus to make the run on the deposits of Northern Rock more prolonged, and more damaging to the health of the company, than might otherwise have been the case." (Paragraph 166)
• "Responsibility for the legislative framework rests with the Treasury. Two years ago a weakness in that framework appears to have been identified and by late 2006 had been classed as requiring “urgent” action. Between late 2006 and mid-2007, the measures to rectify this weakness appear to have been pursued by the Tripartite authorities with insufficient vigour." (Paragraph 280)

There's much more in similarly devastating vein.

The bottom line is clear: as we've blogged many times, the Brown/Balls Tripartite system is unfit for purpose. Moreover, those operating it- not least the Chancellor himself- are simply not up to the task.

The crucial missing institutional elements are spelled out in the Report's recommendations, and they're hardly rocket science:

1. No proper deposit insurance, so punters panic on the pavements- the coverage needs to be much greater, much more clearly explained, and properly funded
2. Nobody in overall charge
3. No FDIC-style special resolution regime for busted banks (which allows the bank to be taken into special administration, the retail depositors paid off, and the bank sold or run off over a period)

Why weren't these things thought about in 1997? That's right- it's the usual story of half-baked institutional changes, cooked up behind closed doors and dropped down from on high without consulting the practitioners at the coalface (cf those disastrous NHS reforms, or regional government).

Another hallmark of Brown's governing style is obfuscation over figures, and on that, the Committee highlights the fact that we still haven't been told how much taxpayers are in for:

"State support for Northern Rock has involved the Government entering into contingent liabilities on a very large scale... The Government... should not have relied upon either the Bank of England or the Northern Rock to be the sole sources on the scale of the State commitment. The House of Commons should be updated about the scale of the commitment on a quarterly basis."

Remembering this is our money Brown's committing, and it would be nice to be told how much. Especially since we now know taxpayers will be supporting NR with huge amounts of money for the next five years, and quite possibly longer (see previous blogs here, here and here).

As for the future, we're unconvinced by the Committee's plan for a semi-independent Deputy Governor working inside the Bank of England. A much cleaner solution would be a fully fledged independent depository insurance operation, like the FDIC, working independently.

Apart from that, the Committee has done a surprisingly thorough job.

Even if they won't help us sleep any better.

PFI Plug Sockets

How much the Simple Shopper will pay for an electric socket

The National Audit Office has just reported on yet another hidden PFI cost. It seems the public sector has been getting ripped off over changes to PFI service contracts.

The problem arises because, although public sector requirements are specified at the outset of a PFI contract, over the course of 25 to 30 years of operation changes will inevitably be needed to the services and assets provided. And as anyone who has ever had building work done will know, once you vary from the originally agreed spec, you can find yourself looking at some serious additional cost.

In the case of PFI, that unplanned additional cost is already running at £180m pa (2006). and that's on top of the £5bn pa being paid out in base PFI charges.

Now you might have expected that even the Simple Shopper would have anticipated such issues, and incorporated appropriate safeguards in the initial contracts. Forget it. The NAO says:

• "Changes to operational PFI deals are often poor value for money"
• Large changes are not always competitively tendered
• Even where they are, because it's the private sector PFI "partner" doing the tendering, and the public sector paying, cost management will not often be a top priority- it's not their money
• Small changes are often expensive and late- as the chart above shows, the cost of installing an additional electrical plug socket, a very common requirement, varies from £30 to £302, an extraordinary tenfold variation; again, the labour cost only for fitting a whiteboard ranges from free to an extortionary £150.
• Changes attract £6m pa unjustified fees- "most private sector PFI partners charged additional management fees, typically 5-10 per cent, on top of those made by service providers to cover their overheads and profit, which were very often not justified in terms of the work needed to process small changes., It is estimated that, in 2006, these fees cost the public sector £6 million"

The Report also highlights a point very familiar to BOM readers- the staff handling these negotiations for many public sector PFI customers are simply not up to the job. They report "poor control of change requests, inadequate job briefs, no checks or challenges over costs and disputes over relatively insignificant matters."

As we've said many times, having the public sector intermediate itself between us and those sharp private sector operators is a recipe for rip off.

Northern Rock- A Warning From History

e Decommissioning kit for the Crock

As Brown and Darling dither over nationalising Northern Rock, still trying to find some fudge that will avoid outright nationalisation and hide the costs (eg see this blog), taxpayers should remember the dismal precedent of British Energy.

British Energy is the nuclear power producer which hit the rocks in September 2002 (see this blog). But it wasn't put into administration, and neither was it nationalised. Instead it was simply bailed out by the taxpayer.

It was in fact a classic muddle through Third Way: a taxpayer supported restructuring, leaving a significant slice of the assets with the existing owners and bond holders. According to the subsequent National Audit Office drains-up, the creditors received "new bonds and 97.5 per cent of the share capital in the restructured company", while the remaining 2.5 per cent was left with the original shareholders.

Why was the government so generous? After all, according to the NAO, "given the prevailing low wholesale electricity prices and the scale of British Energy’s nuclear liabilities no credible and qualified purchaser existed".

And what about those nuclear liabilities? The estimated £5.3bn cost of dealing with all BE's nuclear waste and eventual plant decommissioning was parcelled up and pushed over to the taxpayer.

The truth is that the BE bail out was fudged so that the government could avoid a repeat of the bungled Railtrack confiscation the previous year. That had received horrendous press, massive compensation claims from dispossessed shareholders (yes, including legal action from a private equity firm under European Human Rights laws), and had ultimately led to the resignation of Stephen Byers. The government didn't have the backbone for nationalisation.

So instead- and just to hammer the point home- the government bailed out the company using taxpayers' money, it lumbered taxpayers with the company's literally toxic liabilities, yet it left the bulk of the equity with private investors. All taxpayers got was a share in future net revenues, convertible into shares if those future revenues actually materialised.

Now, in the case of British Energy, taxpayers have been bailed out to some extent by the subsequent sharp increase in energy prices, boosting the company's net revenue and triggering the share conversion. But that was luck: nobody was predicting such a recovery in 2002, which was why there were no private sector buyers. And however you spin it, taxpayers have still been left with the toxic liabilities.

Lessons for the Crock situation?

Once again, we have a bust company being bailed out by a bungling back-foot government anxious to safeguard its own political interests, rather than to cut the best deal for taxpayers. And once again, we have a company with liabilities it's incapable of managing, and which it wants to palm off onto the taxpayer: deposit and bond guarantees might not be nuclear waste, but they can easily turn out to be just as expensive. And once again, there are no credible and qualified private sector purchasers.

But this time, taxpayers should be better prepared. Nobody would start from here, but in current circumstances we should insist on nationalisation without compensation (see here). Yes, of course the Tories are trying to make political mischief with it, but that doesn't stop it being the least bad course.

Non-job of the week

Here we are again.  Another week passes us by and we find another local government non-job wasting your money, a job that needn’t exist because it is either done in the voluntary sector or could be done by another government department or body.  The latter is the focus of this week’s non job and here it is from Coventry City Council:

“Crime Reduction Co-ordinator
£37,543 - £42,332

A specialist on crime and disorder issues, you will support the development of policies and strategies to reduce crime, the fear of crime and anti-social behaviour.

An excellent understanding of statutory requirement and good practice in relation to community safety and experience of managing people and finances will be vital.”

I said this here, and I will say it again:  Bureaucrats sat behind a desk do not cut crime.  You want a crime reduction strategy, then here’s one – put more police on the beat.  A police presence cuts crime, fear of crime and anti-social behaviour.  Simple.

To add insult to injury this bureaucrat will get paid more than a starting police constable and even an experienced police sergeant.  Is it no wonder the police are furious at being denied a pay increase when the government mandate councils to employ these types of officers who can’t have anything near the effect to reduce crime as an on-the-beat policeman can.

So, hopefully you’re riled enough to get campaigning on this.  There’s a selection of ways you can hold Coventry City Council to account on this one.  First you can contact Cllr Tony O’Neill, the Deputy Leader of the Council who also happens to be cabinet member for Value for Money, and ask him whether taxpayers’ are getting value for money from a high paid bureaucrat rather than an on-the-beat policeman.  You can ask Cllr Andy Matchett, Cabinet member for Community Safety, whether a bureaucrat can reduce crime and fear of crime better than a visible police presence.  Finally you can write to the local Coventry newspapers and raise the issue with Coventry’s taxpayers:

The Coventry Telegraph
Corporation Street,
Coventry,
West Midlands,
CV1 1FP,
United Kingdom
Email: martin_1_smith@mrn.co.uk

The Coventry Observer
4 The Quadrant,
Coventry,
CV1 2EL,
United Kingdom
Email: editor@coventryobserver.co.uk

If you're successful and get any responses, do email them to me so I can keep track of our campaign activity.  Your action can always spur potential TPA activists to take up the campaign themselves and get involved.  We need your help on this one, folks!

Crock Latest

Man sprouts twigs while waiting for action

For taxpayers the New Year has brought no good news on the Crock. Brown and Darling are still dithering in the headlights, while we remain on the hook for over £50bn of loans and guarantees. Hopes of a cost-free exit diminish by the day.

There is now no chance of the Virgin or Olivant "bids" working for us- they have been unable to raise the £10-15bn they claimed, and as we've blogged before, that wouldn't have been enough to pay off taxpayers anyway.

In an attempt to bridge the gap, Goldman Sachs was hired by the Treasury to come up with alternative finance, but if the leaks are to be believed, they've failed. Restructuring the £25bn taxpayer loan as a bond issue, which would then be sold to private investors, would only work with a taxpayer guarantee, or a prohibitively expensive "credit wrap" from a commercial insurer. Which gets us precisely nowhere.

Meanwhile the raw meat eating hedge fund players who bought up c 20% of NR's equity stock back in September and October, are threatening to sue us when we nationalise the bank without compensation. They reckon we should pay them around £4 per share, which is the Bank's notional book value. Just to highlight how ludicrous that is, here's the share price chart:

They're also attempting to stop the existing NR directors "succumbing to political pressure", in particular by selling off assets to repay the Bank of England loans.

And on that point, the Rock last week did indeed sell a £2.2bn mortgage portfolio to Tony Blair's new employer, JP Morgan. These were well secured "equity release mortgages", and among the Bank's most high quality assets. Yes, they made a £50m profit against their book value, but we can understand why the shareholders are concerned they may have been sold off cheap.

Taxpayers should be concerned about exactly the same thing. As we all surely understand by now, the Bank only remains in business because of our loans and guarantees. And when we finally have to pick up the pieces, we do not want to find all the Canalettos and the Georgian silver have already been flogged in a fire sale.

The end-game is now clear. It's a state managed work-out. Darling has to nationalise the Bank without compensation, repay depositors, sell off the assets, and close down operations (as set out eg by Anatole Kaletsky two months ago).

One reason he's been holding back is that he doesn't want the embarrassment of adding NR's £100bn liabilities to the National Debt. According to this morning's Telegraph, he's therefore pursuing some kind of partial nationalisation.

That would be a serious mistake. Not only are the National Debt figures a fiction anyway (see many previous blogs), we've had  more than enough confusion already, which has cost taxpayers a fortune. Simplicity, transparency, and tough decisions are what's needed now.

We learned over the weekend at least he's appointed someone to run the nationalised bank- ex-Lloyds head Ron Sandler. So now he just needs to pull the trigger.

And the longer he leaves it, the more it's going to cost us.

IT Gusher Still Blowing

Thar she blows! And we're paying

The Guardian has surveyed the cash wasted on Whitehall's abandoned IT projects. According to their survey, the known cost of projects abandoned since 2000 is now £2bn. They highlight:

• Downing St led projects- "the much-derided £486m computer upgrade at the Child Support Agency (CSA), which collapsed and forced a £1bn claims write-off, and an adult learning programme that was subjected to extensive fraud"
• Department for Work and Pensions- "responsible for squandering more than £1.6bn by abandoning three major schemes — a new benefit card which was based on outdated technology; the upgrade... which could not handle 1.2m existing claims; and a £140m streamlined benefit payment system that never worked properly"

The article doesn't detail all the abandoned projects, but notes that £2bn will be a significant underestimate of total costs. That's because there is no official record covering everything, and also these figures exclude the cost of unworkable systems that are not abandoned per se, but which incur huge modification costs to coax them into some stuttering form of life. Examples include the disastrous NHS Supercomputer, and the hopeless system for the Rural Payments Agency (see many previous blogs for both).

The Guardian figures also exclude two projects abandoned just in the last couple of weeks. The Police Portal was a web-based system for members of the public to report "non-urgent" matters. Despite reportedly working properly, it's now been abandoned- wasting up to £60m (blogged here).

And just yesterday we learned that a wildly ambitious £1bn system for "integrated prisoner tracking" had been abandoned by the Ministry of Justice. It's probably safe to assume the Guardian's £2bn total has racked up a good few notches.

Meanwhile over at the State Child Directorate, they've decided to do some more Simple IT Shopping. Schools Minister Jim Knight (see many previous blogs) has been put in charge of negotiating a good deal for broadband with public spirited Internet Service Providers like BT, Virgin Media, and Sky.

Knight reckons a million poor children don't have access to a computer at home, and they need one for all the usual arm-waving education reasons. So the commissars are going to force all parents to get one, along with broadband. But the cost will be split three ways between the parents, the internet providers and yes, you guessed it, us taxpayers.

Now, see if you can guess what proportion of the cost will be borne by each. In an entertaining article, the Register gives us some clues. Under the excellent headline "Schools minister touts 'one interweb per child' pork barrel", it reports:

"The minister said he reckons the negotiations will be "crunchy", but that the government will effectively recruit millions of new customers for broadband providers. Which is jolly sporting of them.

The Department for Education, Schools and Families said it could not provide any more information on the talks, their schedule, or anything else about the plan. "There might be something more next week," a spokesman told us.

A spokesman for BT told us that it "keenly welcomed" the talks, but said they were "at a a very early stage", and refused to comment further."

We'll just bet he did.

And what's more, as the Register points out, it's only a month since Balls was blaming too much time spent on computers for our abysmal showing in the recent OECD reading tests (see this blog). Plus, there could be "child safety concerns in households where parental supervision might not be A-1".

There's more. Knight promises: "Technologically we can deliver the ability of parents to be able to log into a school intranet, be able to see what homework has been set or look at lesson planning, whether the child is attending, see what the timetable is like, all of that is possible."

Reg says: "Possible, but is it likely given Westminster's track record on massive IT pork fests? If the Knight and co. can bring down the cost of IT to even anywhere near private sector levels, they'll have succeeded where dozens of projects have failed before them.

Still, with the stock market headed south, we're sure the industry will be very glad to be handed the public purse again."

We couldn't have put it better.

Non-job of the week

Some people never learn.  Our report into local government publicity spending revealed a half billion pound industry promoting local councils.  This taxpayer-funded pat-on-the-back for local politicians and their council officers brought outrage from taxpayers, and rightly so.  Help the Aged found that 10% of pensioners have to forego buying food and heating just to pay their council tax.  The Joseph Rowntree Foundation estimated that two million taxpayers struggle to pay their council tax bills.  Yet Stockport Metropolitan Borough Council hasn’t listened and they haven’t learned either.  They are still content to ratchet up the public sector wage roster, spending more of your money on their own self-aggrandizing propaganda and not essential services or tax cuts.  So we present to you this week’s non-job of the week:

“STOCKPORT METROPOLITAN BOROUGH COUNCIL
Assistant Chief Executive (Communications)

We've lost our voice.

Package up to £90k

We are officially a top performing Council and improving well, something we are very proud of, because it confirms we are serving the public of Stockport well. We are also recognised as a leading Council for communications, and are determined to keep it that way: we want the Borough's achievements to be the talk of the town. That's where you come in. Reporting directly to the Chief Executive, and as a key member of the community of senior officers, you will head a 20-strong team to lead all aspects of corporate communications: campaigns, reputation management, press relations, on-line content, public consultation and emergencies, working closely with senior councillors and officers. You will need political nous, excellent written and oral presentation skills, a strategic mindset, great judgement, good management skills, and the ability to work under pressure.”

It couldn’t be clearer.  Stockport’s taxpayers are paying ever increasing council tax to employ spin doctors to hype up the council’s reputation and to constantly make up excuses for their own existence.  All this job does is add to the £1.1 million publicity budget at Stockport Council.  They already have 20 spin doctors, why do they need one more?  So when your councillors attempt to justify another council tax rise, you know where the money’s going – to spivs and not services.

So spread the word.  The Manchester Evening News reported the story when we released our report into publicity funding.  Write to them at:

1 Scott Place,
Manchester,
M3 3RN ,
United Kingdom

Or send an email to postbag@men-news.co.uk

Additionally you can contact the Stockport Express and Stockport Times by sending an email to stockportexpress@menwn.co.uk.

Do keep up the pressure.  We are getting a larger media presence and a more intensive grassroots operation.  It’s time to hold these politicians to account and demand lower taxes!

Bridging Finance

Victorian engineering wins

So who's going to pay for the new Forth road bridge (nearest in the pic)?

In case you missed it, the existing road bridge (middle one) is falling apart. And the damage is so bad, Scotland's SNP government has decided it will be cheaper to build a whole new one alongside. So at an estimated cost of £3.25bn -£4.22bn, that's exactly what they're going to do. The new bridge will supposedly open in about 2016, and the old bridge will be closed.

For taxpayers, alarm bells should be ringing.

First, how come the existing bridge is falling apart so badly it can't be economically repaired? The thing is only 40 years old and was supposed to have a design life of 120 years.

We've been told it's being pounded from carrying more than its theoretical vehicle capacity. That was 30,000 vehicles per day, whereas today's traffic is approaching an average 40,000, with weekday peaks of up to 60,000. Then again, the Golden Gate Bridge now carries 100,000, having initially carried less than 10,000.

But the key reason the Forth bridge is falling apart doesn't seem to be traffic per se, but corrosion. A couple of years back they took a close look at the cables and discovered 22 of the individual wire strands (out of 11,000) had snapped. As we can all imagine, that's somewhat less than ideal in a suspension bridge, and in this case, it turns out to be terminal.

But why did they design it like that? Hadn't they realised the Forth estuary is a tad on the damp and salty side? And how come they'd never thought of looking inside the cable coverings until a couple of years ago?

I'm no engineer, but the old GG seems to have managed to survive an equally damp and hostile environment.

Second, how come the cost has already escalated from the initial 2005 wishful thought of £500m (A Darling when Scottish Sec), through last June's £1.5bn (government appointed consultants), to today's £3.25-4.22bn? And which end of that range do you think it will be? Given our normal rules of thumb on project over-runs (eg see this blog), we reckon the final cost will be £5-8bn.

Third, who will pay?

The previous bridge was tolled, but the Scottish government has already said it's against tolling in future.

So who does that leave? Scottish taxpayers? Yes, certainly them. But given the way Scotland depends on fiscal transfers from England for c10% of its national income (see previous blogs), English taxpayers will also be called upon to dig deep. And they almost certainly won't want to.

Finally, there's the question of financing structure. Given the bare fiscal cupboard, this has to be another PFI deal.

PFI is well established for bridges and can work pretty well (eg the Dartford Bridge and Second Severn crossing). Because of their local monopoly, operating risk is contained, and pricing should be correspondingly keen. Except that is, with the Simple Shopper representing us at the negotiating table, none of us should expect anything approaching a fair commercial deal.

A combination of tax-funding and PFI would therefore be alarming. Taxpayers- especially English taxpayers- should insist the bridge is fully tolled.

How fortunate we are that our wallets are not in the hands of a Prime Minister from one bank of the Forth and a Chancellor from the other. Who are under extreme pressure North of the border from an infinitely superior political operator who's in charge of the Scottish government.

Oh just a minute, they are.

PS Just for fun, here's an Open University style home movie of that famous Tacoma Narrows bridge collapse. Its replacement opened in 1950 (built on same foundations and anchorage points as the original), and it's still going strong- albeit with a second parallel bridge alongside to handle traffic growth.

Labels: PFI, Scotland

New Year Waste Round-Up

Which just leaves death and taxes

Some waste stories from Christmas and the New Year:

Outsourcing overruns cost £9bn- "Research by the European Services Strategy Unit shows that 105 outsourced public sector ICT contracts have significant cost overruns, delays and terminations. The unit examined large outsourcing contracts, PPPs, PFIs and strategic service delivery partnerships in central government, the health service, local authorities, public bodies and agencies over the last 10 years. It found that cost overruns amounted to £9bn for the 105 projects, with an average percentage cost overrun of 30.5 per cent. It also revealed that 30 per cent of contracts were terminated and more than half (57 per cent) had cost overruns." (Kablenet 24.12.07)

Mrs Martin blows £4,280 on cabs- "Michael Martin, the Commons Speaker, will be asked by MPs to explain why his wife has claimed about £1,000 a year in taxi expenses even though she is not employed by Parliament. Mary Martin claimed £4,280.20 for taxis since May 2004, which were “entirely in connection with household expenditure that supports the Speaker’s duties”. According to the Speaker’s spokesman, she needs to take taxis to shop for food for official functions... [but] a large Sainsbury’s is close to Parliament Square and the Oxford Street branch of Marks & Spencer will deliver food to the front door." (Times 29.12.07)

Scouse wedding already £20m in hock- "ON the eve of Liverpool’s year in the spotlight as European Capital of Culture 2008, the city has run up a £20m debt, leading the head of its arts programme to liken preparations to a “scouse wedding”. The deficit is so large - almost as big as the entire £22m budget for arts projects for the year - that Liverpool council has asked the government to bail it out." (Sunday Times 30.12.07)

£150m wasted on teenage sex campaign- "Every year, almost 50,000 girls under 18 fall pregnant, leading critics to claim that government-led efforts to encourage safer sex are backfiring. The number who conceive is at its highest level since a multi-million-pound teenage pregnancy crackdown almost a decade ago. As a result, Britain tops the league table of teenage mothers in western Europe, despite also having a record number of school-age abortions. This comes despite the Government investing more than £150 million in an attempt to stem the tide of conceptions - and pledging to cut teenage pregnancy rates by half by the end of this decade." (Sunday Telegraph 30.12.07)

£30m for wannabe pop stars- "More than £30 million of taxpayers' money has been spent on a government scheme to help aspiring pop stars to make it in the music industry. Since its launch in 1999, a total of 13,463 unemployed musicians have taken part. But new figures show only 3,880 of them went on to "sustained employment" in the industry. That works out at £7,731 for each job found. A further £269,000 has been spent on producing workbooks on subjects such as jobs in the music industry, recording, copy­right and performing. Critics last night dismissed the scheme as a "bureaucratic waste of money" and said Britain's booming music scene would have enabled most of the participants to find jobs without the Government's help." (S Telegraph 30.12.07)

Total for the season to be jolly- £9,200,004,280.20