Sunday, August 29, 2010

Creative destruction returns.

The pace of change and the complete lack of consultation is terrifying in its high-handedness, but it is also representative of a belief within the Tory party that 'public services would benefit from a period of creative destruction' - an idea proposed by Conservative parliamentary candidate Danny Kruger back in 2005. The outrage was such that he was swiftly removed as PPC for Sedgefield - hardly a likely Tory target given the then incumbent MP, some chap called Blair, if I recall correctly. Kruger didn't disappear into obscurity, though. An old Etonian, he ended up as part of the Cameron inner circle post-election before he left politics in 2007/8.

It seems that his Schlumpertarian views have held sway within the party since, hence the flood of proposals - not all of them manifesto commitments or even necessarily in the Coalition document - across local government, central government, health and education.

Health, in particular, is under attack. For all Cameron's professed love for the NHS, looking at Lansley's ham-fisted and untried proposals to carry out a root and branch restructuring of the NHS, which will take two years to carry out as a bare minimum and will take £2 billion from patient care in organisational costs, it seems that the aim is to remove both the national and service parts of the NHS. Targets are being scrapped and with them go the patients' guarantee of speed of treatment, the cap on private care within NHS hospitals is being removed, to make that an attractive option for NHS management, with the
outcome likely to be costs controlled by rationing and increased waiting lists. Look lovingly at the eighteen week treatment guarantee, because you won't see it again under this government unless you are prepared to pay.

I predict that the health service will be allowed to wither and the private sector providers - such generous supporters of the Conservatives - will be ready to step in to vacuum up the middle class patients who can afford insurance premiums that will catapult them to the front of the queue. Public dissatisfaction will be allowed to rise - with those middle and upper earners increasingly unhappy that they have to pay for a service that they don't use - until the government decides that the best thing will be some form of social insurance rather than a universal offering.

And the same will happen to education and the benefits system, regardless of social cost. The post 1945 welfare state, a triumph of that Labour government, is under an attack of a scale beyond the dreams even of Thatcher, all justified by a global economic crisis caused by the banking system.

As a great man once said "I warn you not to fall ill...." He was right.

Nasty and stupid

The government plans to scrap the NHS Direct telephone service, staffed by trained, qualified nurses and replace it with a call centre filled with agents who have had just three days' training. This is a service that is estimated to save the NHS service some £200 million a year - rather more than it costs. It also provides valuable advice and reassurance to thousands of patients every day, but none of that matters to the halfwits in government.

Nothing so demonstrates the utter ruthlessness of this Tory/Liberal Democrat government as how they are handling the lives of their employees. The fetish of slashing what the state does is more important than basic decency, let alone good employment practice, as ministers seem to believe that the media is an appropriate channel to let people know that their jobs are being scrapped - as staff at the Audit Commission can confirm.

John Prescott is on the ball, using Cameron's promise that a petition with 100,000 supporters will get a Commons debate. Time to sign it -

Saturday, August 14, 2010

Pickled again...

I'm stunned that Pickles has succumbed to his own inflated prejudices and scrapped the Audit Commission. Knowing what the big firms of auditors charge for their work in the private sector, you have to wonder if this will prove to be a judgement that will end up costing more.

Or perhaps we should abandon scrutiny of local authorities and their finances. That might just be easier. Not a good idea, but since when has that stopped them?

Tuesday, August 10, 2010

A summer of leaks and positioning?

The swift U turn on nursery milk may be more damaging than Cameron imagined. Far from being a quick fix to avoid a political embarrassment, it has set up the possibility of a long, hot and unpleasant summer of leaks and advance spin that will prove difficult to manage.

The leak of the letter from Anne Milton has been swiftly followed by a leak from the Ministry of Justice regarding a 25% cut to their budgets. The Tories could face a long summer and autumn of having to defend a stream of specific budget cuts in advance of the spending review.

For once, swiftly killing a story may prove to be a mistake as it gives heart to others with budgets to defend. Now's a very good time to be a governmental plumber!

A new measure of spin.

No, not rpm, but the Mandelson, deployed by John Eatwell, Professor of Financial Policy at Cambridge University in his comprehensive destruction of the Tory economic narrative. At least I hope that it is spin. If Osborne and Cameron actually believe their statements and aren't just spinning faster than Rumpelstiltskin on amphetamine, then they are even more dangerous than I first surmised.

Lord Eatwell makes a sound point about the assessment from the notionally independent Office of Budget Responsibility, highlighting forecasts that seem unreasonably optimistic, given the experience of history.

Private consumption is forecast to contribute only 1.1% of GDP growth over the next four years, compared with 1.9% in the relatively prosperous period 1999-2008. Even 1.1% is likely to be a generous estimate, as unemployment increases and real pay is cut. In its place, the OBR is forecasting that growing business investment will make a positive contribution of 1.1% to the growth of GDP, three times greater than it managed in the prosperous years. The contribution of investment in housing will be double that in the good times, and the contribution of net trade will be 1.1%, when it was negative in the earlier period.

It's difficult to believe, and the National Institute of Economic and Social Research doesn't believe it. In its July report, Prospects for the UK Economy, it finds that government spending cuts will reduce potential growth in every year from 2011 to 2015.

So how are we doing?

Retail sales grew by just 0.5% in July and while we may see some improvement in big ticket items in the run up to Christmas, January will be tough as the new VAT rate kicks in. We simply aren't seeing the short term boost expected. Even the internet has not been the powerhouse of growth to which we have become accustomed - the recent 20% growth levels have slipped back to 11%

RICS report falling house prices for the first time in twelve months - the ultimate big ticket item now facing the additional threat of higher rates for borrowing, despite record low central bank rates. Those appalling lefty chartered surveyors know where to place the blame, as one practice in the heart of socialist Shropshire puts it
The market is the worst it has ever been. The government's determination to balance the books has undermined confidence

A similarly left-wing surveyor in Lincoln adds
The large number of redundancies expected has had a negative impact on the market

You may recall that it was suggested that we might follow the example of Canada, with swingeing cuts being countered by massive boosts to exports. This should be helped by lower exchange rates for the pound, but as that environment looks to be coming to an end, it simply hasn't happened for us. Amazingly, the government may also be considering cuts to the organisation dedicated to helping exports and stunningly, although it has been three months since the election, we still don't have a Trade Minister to argue the corner.

Increasingly, it is looking like the spin is all we have. There's no policy to support it.

Tax needs to be taxing

The Tories need an enemy and as the unions don't want to play ball and stage massive national strikes this autumn, Dave has glanced at the Big Boys' Book of Soft Targets and is going after benefit fraudsters. Obviously, I'm not going to defend those who decide to rook the system, but are they the best targets?

I've always held the view that in any system, there will always be inefficiencies and while we should seek to minimise them, eradicating them is well-nigh impossible, just as the perpetual motion machine that overcomes friction is merely the preserve of fable. A system that did pretty much remove inefficiency and fraud would probably be so complex that it would collapse under the weight of administration and delivery costs, even if it did manage to pay anything to anybody. This is not defeatism, just realism.

Do we want a system that makes claiming benefits so difficult that people prefer poverty to making a claim? We already find that pensioners aren't claiming some £4 billion to which they are entitled and I'm prepared to wager that the government won't be deploying resources to deal with that injustice. Instead, we have Cameron kicking off a campaign that will have the consequence of deterring legitimate claimants and tarring all with the same brush.

It is also worth pointing out that of the £4-5 billion overpaid each year, most of that is wrongly paid because of errors on the part of the bureaucracy. About £1 billion ends up going into the pocket if fraudsters - too much, I know, but no government has cracked this tough nut over the past three decades. The blunt truth is that investigating fraud often costs more than is recovered. Clearly, that is not a reason to ignore it, but we have to be clear that real fraud prevention won't offer net savings of £1 billion and it would be unrealistic to suggest that.

Bur what if there was another target? A chance to take a share of a pot of money removed from the tax system estimated at £30 billion each year? Even nibbling at that will offer better returns than stopping benefit fraud completely. I'm talking about avoided or unpaid tax. It is odd that the same sort of person that will regard successful avoidance of tax as a sporting triumph will have nothing but contempt for those who drain a little from the system at the other end, when the reality is that both should be held in equal opprobrium. Yet, we find that HM Revenue and Customs plan to cut the number of tax collectors - a job that has been demonstrated to bring in more tax than it costs to run.

Not paying your fair share is as much an offence against society as trying to take money to which you are not entitled. Let's hear Mr Cameron say that and follow it up with action against tax fraudsters. Then we'll know that this isn't simply the Tories rounding up their usual suspects for PR value.

Monday, August 09, 2010

Measuring the cost of domestic violence

Last week, the Indy ran a story about Teresa May scrapping a trial of a new police power to ban suspected abusers from their family homes - a trial that had previously been given cross-party support, but is now being scrapped because
" tough economic times, we are now considering our options for delivering improved protection and value for money."
I wondered just how much a limited trial in two force areas could possibly cost and meant to look into it, but Unity got there first and has dissected it very thoroughly over at Liberal Conspiracy, showing that the maximum cost of the trials to be borne by the Home Office is likely to be around £700,000, a drop in the ocean of costs caused by domestic violence nationally.

The idea of the legislation is to allow a senior police officer to take action where they have good cause to believe that domestic violence is taking place, but where they may not have sufficient evidence to actually make an arrest. They would be able to issue a short term - 48 hour - exclusion order to the alleged perpetrator, which allows time for the victim to get their case before a court to consider a more long-term order, the provision of which is aso supported within the legislation. Clearly, there are civil liberties issues attached to this, but the whole point of a trial is to see how the legislation is applied and whether it has any effect in tackling this problem - which is notoriously difficult to deal with.

Cancelling this trial is a mistake and will leave women and men at additional risk from their abusers. Given the costs that Unity identifies, it seems unlikely that this measure would fail a cost/benefit analysis, let alone any assessment on the basis of common humanity.

Sunday, August 08, 2010

Got Milk? Apparently so.

"The complete withdrawal of free milk for our school children would be too drastic a step"
Margaret Thatcher, Secretary of State for Education, 1974

Last night, it was revealed that the Tories were thinking of scrapping free milk for nursery children, when Anne Milton wrote to her counterparts in the devolved governments that she was considering the status of the last remaining element of the 1940s Welfare Food Scheme - a step too far even for the Iron Lady herself.

Within twelve hours, a government that previously promised not to be dictated to by the twenty-four hour news agenda had responded to a building wave of opposition across the media and reversed a policy that had not yet been set in stone. The U-Turn was so swift that they didn't even give a warning to Two Brains Willetts, who started his appearance on the Andrew Marr Show this morning defending a policy that was changed beneath him as the interview progressed - it was left to the stand-in presenter to let Willetts know that the policy had shifted.

Thursday, August 05, 2010

Homes less?

Francis Maude said in a Guardian interview at the weekend that this government was more radical than Thatcher in 1979. How true and how terrifying that statement is. Thatcher was restrained in her first term because of a narrow majority and worries that she might lose the following election. It was not until the post-Falklands landslide that she was able to cut loose of the restraining moderates within her own party and to safely ignore the remaining rump of the Labour party.

Cameron and his more radical acolytes appear to be determined not to waste their opportunity and are setting about the elements of the post-1945 welfare state with abandon. The state education system is being prepared for a free market injection and increasing centralisation, the NHS is about to be subjected to a massively expensive gamble of a restructure - against a pre-election commitment - that will leave local GPs in the thrall of central government like never before and now the beady neo-con eye has lit upon the social housing sector.

Just as the centralisation is cloaked in the vague language of localisation, so the restriction of choice is framed in the language of freedom. People will cheer as Grant Shapps, the shining knight of the council housing revolution, releases them from the chains of their homes. It is a peculiarly Tory belief that the provision of a home by a local authority is some form of restriction of freedom, rather than a valuable level of social support. Perhaps we should also look forward to hundreds of thousands of civil servants being freed from their jobs - they are not unemployed, but time rich.

Cameron's proposal to time-limit new council tenancies was first floated before the election when the Tories went to great lengths to deny that any such plans existed. It marks the end of council housing as a service to society and instates it solely as a safety net of last resort for the unemployed and those too old or sick to work. It raises the joyous spectacle of people having to justify the continued occupancy of their home on a means tested basis, a proposal that could actually militate against social progression and trap people within low paid jobs or on benefits, for fear that they will be forced out of their council property and into the private rented sector or struggling to find a deposit to get onto the mortgage ladder.

This compares with the recent proposals over changes and reductions in Housing Benefit, which will force people out of their homes and into cheaper accommodation - away from their social and family networks, schools and jobs.

These proposals reduce people to commodities and their homes to mere storage units. While Cameron is talking a good - if currently nebulous - game over the Big Society, much of the Conservative/Liberal Democrat government seems happier following the Thatcher truncated line of their being no such thing as society and demonstrating a heartless relish in driving these policies through.

They are also missing the central point over housing. It isn't that there are hordes of pensioners blocking access to family homes, nor that stockbrokers and barristers are sitting pretty in affordable council property, the problem is that there simply isn't enough affordable housing in the social rented, private rented or mortgage sectors. With the demise of the regional spatial strategy which set down plans for building new houses to serve the demand, the removal of requirements to build affordable homes and the promise to give planning powers to NIMBYish local groups, there seems no prospect that this will be resolved.

Far from creating a Big Society, these proposals will contribute to a fragmented society, with social mobility even further impaired. The coalition are setting and dangerous and destructive course and we can only hope that they see the error of their ways before too much more damage is wrought. Family homes are not ideological playthings.

Monday, August 02, 2010

A great LEP forward? Or backwards?

Following the election, the Conservatives set about dismantling bits of the state established by the Labour government. In particular, all aspects of regionalism were sent to the scaffold - Government Office of the West Midlands, most of Business Link, the Regional Spatial Strategy all ended up on the funeral pyre. Most controversially, Advantage West Midlands joined the rest of the Regional Development Agencies in the queue for abolition, with the clock ticking away to final closure in 2012. The axe fell despite a hugely positive report from the National Audit Office, indicating that AWM's activities generate £8.14 for each £1 spent by the agency.

Of course, there are functions of the RDA that need to continue and even as Vince Cable did the dirty work dispatching AWM, they are to be replaced with Local Enterprise Partnerships, which are run by businesses and the local authorities, with the commercial sector providing the chair. Curiously, for a localist agenda, the workstreams on innovation and skills are being removed from the region and centralised in Whitehall, a short-sighted view that restricts the ability of the regional partnerships to influence key drivers for the future.

So, rather than a single organisation with a unified vision across the entire region, we will be left with a number of disparate units, bidding for funding from a national pool. The current proposals seem to indicate that there will be six LEPs across the region. Coventry and Warwickshire will form one, with Herefordshire, Shropshire, Telford and the Wrekin making up a second and both of those make some sense in terms of their size and industrial and political makeup. Staffordshire is slated to form a third, although the local authorities are in discussion as to whether North and South would be better off as separate LEPs - an unwise move. Worcestershire is under the impression that it can go it alone as a LEP, rather than doing the sensible thing and joining with the western rural arc of counties. Worst of all, though, the local authorities in the Black Country don't want to join a LEP with Birmingham and Solihull, fearful that Birmingham would abuse its power and take control of the partnership. This was always likely to be a problem in the Midlands, because of the unique issues with the size of the City of Birmingham, but the councils need their heads banging together, as this should be one region and dividing it will weaken both sides, given the interdependency of these sub-regional economies. Given that the LEPs are supposed to be led by business, the time has come for business to genuinely take a lead and form a single Birmingham, Solihull and Black Country LEP, daring the local authorities not to get involved.

None of that takes into account the hangover of AWM's assets, worth some £170 million, nor the need to retain the knowledge and skills of the West Midlands Regional Observatory, a treasure trove of useful economic data. There needs to be a legacy regional organisation to handle these assets and maintain the regional services. Additionally, the European Union likes to work at a regional level, not national or sub-regional, so some sort of regional co-ordinating body will have to exist to liaise on that level. I fully expect the LEPs to resolve themselves down from six to three or four over a couple of years and it will only be a matter of time before the idea of a regional organisation returns to prominence.

Central government has been exceptionally unclear as to what they want from the LEPs, which is helpful, as they are expecting firm expressions of interest placed by the start of September. It has to be said, that the LEPs won't fully replace the RDAs until 2012, so there is still time to iron these things out, but the middle of a recession is hardly the best time to reform the system, leaving eighteen months to two years with confusion over responsibilities and legacies. Yet again, we find ourselves in the middle of an experiment by the coalition government and yet again, it is the workers of the Midlands who are the guinea pigs. Ironically, they are the ones unrepresented on the LEPs. If this doesn't work, then we're all going to suffer.

Vinnie Nicholls and the Big Society

Apparently, the Archbishop of Westminster is in favour of the Big Society.

I particularly liked his comment
"The last government was too overarching. In attempting to create a state that provided everything, it ended up losing touch with the people it was trying to serve."

You should remember that this is the leader of the Catholic Church in England speaking - the same Church that forbade members from even discussing the matter in public. A vocal supporter of female ordination was the leading theologian Lavinia Byrne, who left her religious order in 2000 after being pressured by the Congregation of the Doctrine of the Faith to publicly affirm support for the Vatican's position on women priests, married priests and contraception. By the way, the Prefect of the Congregation at that point was one Cardinal Ratzinger, who has done rather well for himself since then.

This is also the Church that has wilfully and knowingly relocated child abusers to protect the good name of the Church and to conceal them from the authorities. This is the Church that recently insisted that ordaining a woman as a priest was the spiritual equivalent of child abuse. The Pope has described homosexuality as an 'intrinsic moral evil.' This is the same Church that opens the doors to married clergymen from the Church of England, simply because they cannot bear the idea of women as priests or bishops, not because of a genuine conversion to the tenets of Catholicism.

Matthew, 7:3-5, Cardinal.

He also feels that this government will listen more - which translates into 'listen and do what we want' - after Labour signally failed to alter legislation to permit religious adoption agencies to continue to discriminate.
"There is a fresh attitude on the part of the Government that seems to respect the integrity of what a faith group wants to do, and respect its language, so that a faith community coming into cooperation with others will not have to sing from their hymn sheet. It marks a shift from the last government, which required a high degree of conformity to its own theories. And if they clashed with those of a faith community then either the partnership came to an end or the faith group had to conform.”

And if you cannot perform your duties without regard for equality and human rights, then you should not be allowed to perform them under a public aegis. Sorry Cardinal, but that's the way things should be.