Picking Losers

The Tax Payers' Alliance has exposed one of the reasons why our council taxes are rising well above inflation every year - to pay big bosses. The number of local authority staff earning more than £100,000 jumped from 429 in 2005 to 578 last year, an increase of 35 per cent. Peter Gilroy, the chief executive of Kent, had the highest salary at £229,999.

Government

• The government is preparing to publish "a clear programme for further reforms" of public services. At Thursday's cabinet meeting the prime minister introduced the work of one of six policy reviews set up last October. The reviews, which looked at areas including criminal justice and the environment, are intended to guide ministers and departments as they devise future policy. The prime minister's official spokesman said the reviews would start being published this month.
• Heritage Protection for the 21st century - Tessa Jowell publishes Government white paper that proposes a 'simpler and more efficient system'.
  

It comes as little surprise that the public sector tendering process is not only costing the tax payer money but putting off contractors even applying for contracts in the first place making the process less competitive and poor value for money. This has become a particular problem with private finance procurements. The NOA has criticised the PFI tendering process saying that that NHS trusts and authorities are spending 75 per cent more than expected on external consultants and that many contracts are uncompetitive and involve only one bidder.

Government

• John Reid has announced new measures to prevent the employment of illegal immigrants. The enforcement strategy includes a 'watch list' of illegal immigrants to alert agencies if someone applies for services to which they are not entitled, and workplace enforcement teams to identify employers of illegal immigrants. There will also be schemes to use immigration data to ensure migrants pay for hospital care.
• The minimum wage will rise 17p to £5.52 an hour from October, the government has announced. Trade and industry secretary Alistair Darling said the increase, recommended by the independent Low Pay Commission, would mean the minimum wage had gone up by almost 30 per cent more than inflation since 1999.
• New small zero carbon 'eco-towns' built on brownfield land could lead the way in cutting carbon emissions and building affordable homes, Housing Minister Yvette Cooper said.
  

The hypocrisy of this government over the green debate continues. Whilst we are being taxed from the skies, off the roads and out of business the government is actually increasing its CO₂ outputs. The Sustainable Development Commission (SDC) criticises ministers and senior civil servants for failing to set the right example. The report analyses the performance of 21 government departments and agencies against targets on all aspects of green behaviour. It says: "No department can make a reasonable claim to have met the requirements of all the targets assessed." The report found that most departments are using energy less efficiently compared to previous years and that, on average, they generate more waste. Most were way off track to meet the target of reducing carbon emissions by 12.5% on 2000 levels by 2010.

Rather like yesterday's post about Gordon Brown and the Treasury, the attacks I am giving the NHS at the moment aren't borne out of partisan views or a fundamental opposition to the idea of free health. I believe it is very important that access for all to an efficient and effective health system is one of the most important aspects of a civilised and modern society. However, the days when the public purse can pay for the NHS alone and we can trust the Government (be it Labour or Tory) to manage and run the service efficiently and effectively are clearly over. The damage being done by refusing to enter real debate and worrying about a complete overhaul is far worse than the alternatives. And it's not just me or a few that think this, it is a view backed up by those who really know - those doctors and nurses who have to put up with a substandard environment every day.

Government

• The Government was forced to climb down and announce an immediate review of the new system for selecting junior doctors for training. The Medical Training Application Service has united doctors young and old into a revolt so powerful that it has forced the Department of Health into retreat. The service is supposed to handle applications for higher medical training, sifting them by a computer-based system to produce shortlists of candidates suitable for interview. About 30,000 junior doctors are competing for 22,000 training places. The British Medical Association and a pressure group, Remedy UK, have denounced the system as unfair.

Government  

• Communities Minister Phil Woolas offered grants totalling more than £4.3 million to 343 organisations to promote a common sense of citizenship. Ministers have set out the challenge for all living in a multicultural Britain of learning to celebrate our shared heritage while doing more to understand our individual differences. The announcement recommends funding groups with practical solutions to build capacity among faith communities to support inter faith work. The announcement follows bids from more than 1,200 organisations to the Faith Communities Capacity Building Fund. This is the second round of a £13.8 million fund to help organisations promote community cohesion and shared citizenship at a local community level.
• Plans to split up the Home Office could undermine attempts to improve Britain's national security apparatus, a report has warned. A study released by Demos on Tuesday concluded that home secretary John Reid's proposals for a security ministry and a separate justice department are "counter-intuitive" and could be "counter-productive". It also called for a national strategic vision which can co-ordinate the work of all government departments.
• Nine out of ten people support the idea of staying in education or training until the age of 18 - with the strongest support coming from grandparents - according to research published today by Education Secretary Alan Johnson. In a speech to the Sector Skills Development Agency Mr Johnson highlighted the research which shows public support for extending compulsory education.
• Greater clarity is needed on the government's plans to overhaul the post office network, MPs have said.A report from the Commons trade and industry committee questioned whether a proper analysis of the needs of the network had been undertaken. The current 14,263 is viewed as unsustainable by ministers, and trade secretary Alistair Darling has announced plans to close thousands of branches.
• Ministers and civil servants need take a more strategic view of policy and be more honest about future challenges, a report has claimed. MPs have called for parliament to receive regular reports of long-term policy thinking, a greater role for department heads in strategic planning, and better training for civil servants. The report from the Commons public administration committee - based on evidence from ministers, civil servants and experts - has been published as the government's policy review and process comes to a close.
• A new drive to cut long waits across the country for hearing services, was announced by Health Minister, Ivan Lewis. Improving Access to Audiology Services in England is published today and was developed in close consultation with a range of organisations, including the Royal National Institute for the Deaf (RNID).
• Public Health Minister Caroline Flint today announced that the Government is to fund a major study looking at why some gay men appear to be taking more risks with their sexual health in recent years. The results of the study will help the NHS and gay men's health organisations with their work to promote safer sex amongst the most at risk groups and assist with improvements to sexual health services for gay men.

Conservatives  

Government

• Gordon Brown has lifted the tax burden to breaking point and must slash public spending or risk plunging Britain's national accounts dangerously into the red, the International Monetary Fund warned. The alarm was sounded after the level of taxes reached its highest since the mid-1980s. The IMF urged the Chancellor to cut spending and to make "disciplined choices" in this summer's Comprehensive Spending Review. For the first time, the Washington-based institution said explicitly that it would be perilous to increase taxes any further, without driving away businesses and putting more pressure on households. http://www.telegraph.co.uk/news/main.jhtml;jsessionid=PIR5RBYPYVW11QFIQMGCFFOAVCBQUIV0?xml=/news/2007/03/06/ntax06.xml
• Motorists could find themselves facing a ceiling on the amount of carbon they are allowed to emit under proposals being considered in Whitehall. One option would see drivers buying and selling their personal carbon allowances if the Government succeeds in persuading the European Union to extend the emissions trading scheme to the roads. The idea was floated in a speech by David Miliband, the Environment Secretary, last night. Addressing an audience in Cambridge he said: "We need to consider whether surface transport could become part of the EU Emissions Trading Scheme." http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/03/06/ncarbon06.xml
• Young children are failing to get a good education in half the nursery and primary classes for three to five year olds, school inspectors warn in a report. They are making insufficient progress in language and literacy, the most able are not being challenged and boys are already falling behind girls, says Ofsted. Girls are achieving rapidly by engaging in creative activities but in too many classes boys are allowed to play with equipment or chase each other in "raiding" games. http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/03/06/neducate06.xml

Conservatives

Government  

• The Government presented a package of actions to deliver the step change needed to ensure that supply chains and public services will be increasingly low carbon, low waste and water efficient, respect biodiversity and deliver wider sustainable development goals. The UK Government Sustainable Procurement Action Plan, allied to the Treasury's recent "Transforming Government Procurement" report, forms the key response to the business-led Task Force report.  The Action Plan puts in place clear lines of accountabilities and reporting, and develops plans to raise the standards and status of procurement practice in Government which will strengthen delivery of these targets. Alongside the Action Plan, Government is also publishing an improved set of mandatory environmental product standards, that will ensure Departments procure the most sustainable commodities.  
• Jack Straw has said his proposal for a hybrid House of Lords can command a consensus among MPs. Ahead of the debate and votes in the Commons this week on the make-up of the second chamber, the leader of House has appealed for supporters of reform to compromise with each other. In an article for this week's House magazine, he said MPs must not risk a repeat of the process in 2003 when no one option commanded majority of support.  
• The home secretary has announced new funding for a series of anti-domestic violence initiatives. John Reid unveiled nearly £2m of cash for 40 multi-agency risk assessment conferences (MARACs) to continue their work and for a further 60 to be set up by March next year. The conferences involve local police, probation education, health and housing services sharing information and working with the voluntary sector on individual cases. In a pilot project for the scheme in Cardiff the level of reported repeat victimisation dropped from 32 per cent to less than 10 per cent in two years.  

Conservatives  

The attacks on Gordon Brown's high taxation, high spending polices are becoming more and more frequent on this website. It it not the intention of picking losers to target individuals nor is it partisan. However, it is of course more likely that attacks will be made towards the Government as they are the ones in power actually making and implementing policy. It is also not without good reason that this high level of scrutiny and criticism is directed at the Treasury at the moment. The International Monetary Fund share the view that Brown's policies are unsustainable and have issued a warning - one that Mr Brown will do well to heed.

The production of ethanol from corn as a replacement/supplement for petrol is coming under increased attack from environmentalists. This month's Ecologist and today's Independent both led with a destructive assessment of its merits.

I do not claim to know whether ethanol is a good or bad solution to our energy problems. But I do know that George Bush and Tony Blair don't know, and neither do Zac Goldsmith (editor of The Ecologist) and Simon Kelner (editor-in-chief of The Independent). Because they are trying to establish the case by claim, counter-claim and posturing, little light is shed on the issue. And because no mechanism exists that simply values carbon equally from all its sources, we have no way of discovering in a market the reality that is being obfuscated in discussion. As usual, sweeping generalisations ("this technology is good/bad regardless") that ignore changing circumstances are a good sign that people are busy picking losers rather than allowing the most efficient and appropriate solutions for the circumstances to emerge and evolve.

Sometimes the debates seem intended to confuse, not illuminate. Perhaps this is the real objective. For an alternative take on the ethanol debate in America and people's motivations in presenting their arguments, have a look at the What's That Smell? site. The author's hostility to a local development has produced a scathing analysis of the process by which politicians and lobbyists adopt and promote losers for their own interests. Just remember that the other side - opponents of ethanol - have their own agenda too.

Regional Agencies, aka Quangos, are costing the tax payer £360m a year to run, double the level of five years ago. The FT reports that the typical cost for each region is put at £23m for the regional development agency, £3m for the regional assembly and £14m for government offices, which act as Whitehall's representatives on issues such as education and transport. Adding in the regional cost of other state bodies, such as the Learning Skills Council and the Environment Agency, takes the annual administrative cost to £200m for each region or £1.8bn for England as a whole. £1.8bn for an extra tier of government.

And back to an old favourite. The NHS and IT systems.

You have to hand it to him, Gordon Brown is a highly successful opportunist. If it can be taxed, it will be taxed and the less people realise what he is doing the better. The Dour Scot is famed for stealth taxes but it's the way he makes the most of changing circumstances (and gets away with it, it seems) that is most impressive.

As we all know, house prices have been rising at an impressive rate over the past few years. However, the rate at which buyers pay stamp duty has barely moved. So a house that was free from stamp duty a few years ago, is now ripe for the Iron Chancellor's very large hands and deep pockets. A survey by the Halifax has revealed the extent of the problem. Nearly 300,000 purchases fell into the three per cent bracket last year as the number of properties sold above its £250,000 threshold soared. Their figures show that over the past five years there has been a 281 per cent rise in the number of home sales in England and Wales above the £250,000 threshold. Kaching!

Government

• An independent scientific audit of the UK's climate change policies predicts that the government will fall well below its target of a 30% reduction in carbon dioxide emissions by 2020 - which means that the country will not reach its 2020 milestone until 2050. The report condemns government forecasts on greenhouse gas emissions as "very optimistic" and projects that the true reduction will be between 12 and 17%, making little difference to current CO2 emission levels. The report is based on an analysis of the government's attempts to meet climate change targets. The authors argue that because much policy is based on voluntary measures, the predicted outcomes cannot be relied upon. It is released on the day the environment minister, David Miliband, delivers a speech on the UK's transition to a "post-oil economy". http://environment.guardian.co.uk/climatechange/story/0,,2026715,00.html
• A school in the government's city academy programme has given more than £300,000 to organisations linked to its multi-millionaire sponsor, with the approval of the Department for Education and Skills, which appeared to waive its normally strict rules on tendering out contracts. The Grace academy in Solihull is sponsored by Bob Edmiston, a car dealer and property developer who has donated more than £2m to the Tory party. The school awarded three contracts to the IM Group, a company owned by Mr Edmiston, without asking for bids from other organisations. It has also paid £53,000 in the past two years to Christian Vision, a charity founded by Mr Edmiston, an evangelical Christian, to promote the religion around the world. http://education.guardian.co.uk/schools/story/0,,2026666,00.html  
• The NHS will start recruiting alternative software suppliers to its troubled £6.2bn IT upgrade project this month, in a move which could see the government's vision for a single IT system for the health service in England unravelling. The move is a tacit admission that a fully integrated IT system may never be completed. NHS bosses had until recently discouraged hospital trusts from deserting the scheme. But disaffection is now so widespread and delays so long that officials are working on a list of accredited alternative suppliers, which is widely seen as a move to appease hospital trusts. http://business.guardian.co.uk/story/0,,2026498,00.html  
• Private sector contractors taking over a swath of the government's welfare-to-work programmes will be prevented from "creaming off" the easiest cases under proposals to be launched in Downing Street. Every new benefit claimant's ability to work will be assessed to ensure that first the hardest to help, then the long-term unemployed, are handed over to employment and retraining agenciesand not-for-profit groups. The vastly expanded role for the private and voluntary sector in getting 1.5m of the 3.5m long-term benefit claimants into sustainable jobs is the central recommendation of a review of welfare by David Freud, a former investment banker. http://www.ft.com/cms/s/ec64b5e2-cabe-11db-820b-000b5df10621.html  
• Regional quangos cost an estimated £360m a year to run, double the level of five years ago, a think-tank with close links to the government will reveal. A report from the New Local Government Network think-tank, to be launched today by Ed Balls and John Healey, the Treasury ministers, will call for a radical simplification of the plethora of regional bodies. The report forms a potential blueprint for a Treasury review of regional structures that will feed into this summer's spending round. This is expected to trigger significant changes to the way regional development agencies operate. http://www.ft.com/cms/s/53193ba6-cabe-11db-820b-000b5df10621.html  
• Middle income families are being hit hardest by Gordon Brown's taxes which will rise to their highest level for 25 years in two years' time, an influential think tank claims today. The report from Reform, a centre-Right group, warns that the Chancellor must cut taxes and spending in this summer's Comprehensive Spending Review or "take the UK backwards in the next decade". Its report reveals how middle income earners are paying more tax as a proportion of their disposable income. advertisement. A household receiving £28,000 a year in disposable income pays 47.9 per cent of that in tax, while earners in the top income bracket pay 46.9 per cent. http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/03/05/ntax05.xml  
• One homebuyer in five is now paying stamp duty of at least £7,500, representing nearly a fourfold increase in five years, latest figures show. Analysis by the Halifax bank found that nearly 300,000 purchases fell into the three per cent bracket last year as the number of properties sold above its £250,000 threshold soared. The survey of postcode districts also revealed a number of up-and-coming areas where the majority of purchases have been propelled into the higher rate, compared with only a minority that was subject to it five years ago. http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/03/05/nduty05.xml  

Liberal Democrats  

The Economist has been talking up prize-giving as a good way to get the maximum bang for your charitable buck. In response to a flippant remark, suggesting prizes to solve the riddle of the missing NHS billions, from the excellent Dr Steele of Unforeseen Contingencies, I have added a discussion on the merits of offering prizes and other ways of encouraging outcomes that are perceived to be for the benefit of society, to the thread in which the comment was made.

In short, prizes, grants and arbitrary, government-defined, incentivised targets are all as bad as each other, even if they are dressed up in market clothing. They are all forms of "picking winners" (i.e. losers). They dominate policy in the UK at least, and I suspect most of the rest of the world. We need to replace the massive infrastructure of state preference with institutional protection of property rights (including the extension of that protection to cover real "externalities", where the external impact of one person's activities has a material and uncontracted impact on another's person or property) and free access to markets.

Government

• OGCbuying.solutions has signed a new Memorandum of Understanding with SAP, a business software provider. This new agreement will offer all public sector organisations preferential pricing arrangements on SAP software and services. The agreement came into effect on 1st January 2007 and will deliver potential savings of £45 million over the three year duration of the agreement.
• The Chewing Gum Action Group, chaired by Defra, has invited local authorities to apply for paid-for advertising to support campaigns to tackle the issue of chewing gum litter, after the 2006 campaigns saw reductions in gum litter of up to 72%.

Conservatives  

Government

• Britain will be divided into a patchwork of road-pricing zones where drivers will be charged varying rates, under a government plan to make them pay by the mile without tracking them on every road. Ministers believe that a zonal system would protect drivers' privacy and deter them from rat-running in residential areas to avoid high charges on main roads. All roads in each zone would be charged at the same rate, regardless of how congested they were. A driver using empty side streets to visit a shop or take a child to school would pay the same price per mile as those queueing on the high street. Stephen Ladyman, the Roads Minister, gave details of how the system would work in an attempt to address concerns raised by the 1.8 million drivers who signed a petition against road pricing. http://www.timesonline.co.uk/tol/news/politics/article1459230.ece
• Gordon Brown yesterday risked a political backlash from Britain's nurses ahead of a possible Labour leadership battle later this year when he pegged pay increases for more than one million public sector workers to below 2% this year. Prompting threats of industrial action from health sector unions, the chancellor insisted that the state of the public finances and the need to keep inflation under control meant the government pay bill could increase by only 1.9% - well below any of the official measures used to calculate the cost of living. http://society.guardian.co.uk/publicfinances/story/0,,2024921,00.html
• Thousands of young doctors have been left without jobs because a new NHS training system has gone "disastrously wrong", it was disclosed yesterday. As much as £2 billion has been spent on the training of up to 8,000 doctors who find themselves without a new job under a Government initiative. Such is the fury at the scheme, called Modernising Medical Careers (MMC), that doctors have renamed it "Massive Medical Cull". http://www.telegraph.co.uk/news/main.jhtml;jsessionid=A5INC4FPT0OLLQFIQMGSFFOAVCBQWIV0?xml=/news/2007/03/02/nhs02.xml
• Britain must not go ahead with a new generation of nuclear power stations until it has a "clear and robust" plan in place for dealing with the twin problems of decommissioning and waste treatment, the world's leading energy body warned yesterday. The International Energy Agency also said that any new nuclear programme must be funded entirely from the private sector, without any government subsidy or market intervention. In its latest review of UK energy policy, the agency said that it supported the building of new nuclear stations as an important part of the country's future energy mix. However, it added that the Government's current proposals for dealing with issues such as planning and construction, long-term waste management and guidance for potential financial backers were "too vague to provide the required certainty". http://news.independent.co.uk/business/news/article2318799.ece
• Gordon Brown will next week give a clear signal that he would press ahead with controversial welfare reforms as prime minister, giving his full backing to a bigger role for the private sector in getting up to 3.5m benefit claimants back into work. In the first real indication of how he intends to overhaul the public sector if he takes over from Tony Blair later this year, the chancellor will join forces on Monday with John Hutton, work and pensions secretary, to unveil a far-reaching review of welfare-to-work policy by David Freud, a former investment banker. http://www.ft.com/cms/s/2ac75c26-c863-11db-9a5e-000b5df10621.html
• Ground-breaking research into cloned embryos has been brought to a near standstill by government regulation, a leading fertility expert claimed yesterday. Excessive bureaucracy imposed by the Human Fertilisation and Embryology Authority was prohibiting development in stem cell research and threatening Britain's position as a world leader in the field, Alison Murdoch, director of the Newcastle Centre for Life fertility clinic, said. http://www.guardian.co.uk/genes/article/0,,2024925,00.html
• Last year the England and Wales Cricket Board (ECB) awarded Glamorgan an Ashes Test match in 2009. Veteran Lancashire fans spluttered at the snub over their pints of mild in the pavilion at Old Trafford, which most people had expected to host the engagement. Cardiff swayed the ECB by bidding a rumoured £3.2m for the Ashes match, funds provided partly by the Welsh Assembly, and thus partly by the English taxpayers who subsidise public spending in Wales. The cricketing body was also impressed by plans for a redevelopment of Glamorgan's Sophia Gardens ground in Cardiff at an estimated cost of £9m. http://www.ft.com/cms/s/2db90ebc-c862-11db-9a5e-000b5df10621.html
• Millions of pounds of taxpayers' money could be saved if more couples were encouraged to resolve arguments by mediation rather than in the courts, spending watchdogs have said. A survey for the National Audit Office (NAO) found that one person in three who had been through a family breakdown case was not offered mediation. Of those, 42 per cent said that they would have been interested in the schemes, which allow families to resolve disputes such as divorce and child custody with the help of a trained professional. The NAO calculated that use of mediation would have saved the taxpayer £10 million in these cases. http://business.timesonline.co.uk/tol/business/law/article1459207.ece

Olympics

The NHS crisis is growing by the day - problems with IT systems, funding issues and misuses of funds, ineffective use of nurse and doctor resources, the list is seemingly endless. A story today has managed to combine all the worse parts of the NHS and highlights the desperate need for comprehensive reform of our health system.