Money to burn (fixing the economy part four)

I was browsing the web fairly aimlessly the other day (finding myself at a loose end and, it being Christmas, having little better to do) and I found a comment that has since buried itself in the ether, so I can’t quote it exactly. The gist was as follows:

This government keeps telling us there is no money – but keeps finding the cash for any crazy project its ministers come up with.

It’s pretty hard to dispute this, you know! Look at Andrew Lansley’s hugely costly and completely unnecessary top-down reorganisation of the National Health Service in England. Look at Michael Gove’s ‘free schools’ – what’s free about them? Look at Iain Duncan Smith’s pointless Universal Credit – his latest bid to make welfare unfair by using a computerised system that doesn’t work.

The simple fact is that cutting these vanity projects, and doing away with a few already-running schemes that have proved a complete waste of money into the bargain, would yield dividends for the UK. But nobody seems willing, even to talk about it.

I actually did a little research into this a while ago and came up with the following list. Some of the information may be a little out of date, for which I apologise – however, this should provide an opportunity for those of you who are better-informed than myself to offer up some illumination. Some of the suggestions may strike you as being barking mad – but we can discuss them as well.

First up: Why not save £3bn every year in user fees and interest charges, by replacing PFI schemes with conventional public procurement?

The idea behind PFI (Private Finance Initiative) schemes was simply to raise money for a new service by getting private organisations, firms or consortia to provide it. This meant the cost would not appear on the nation’s balance sheet.

However, and I quote from Bremner, Bird and Fortune’s excellent You Are Here: “The long-term value of PFI contracts may go down as well as up. Your public services are at risk if you don’t keep up the repayments. The return for consortiums running PFI projects may go up and up and up. Standard terms include: cost-cutting, short-term employment contracts, high management costs, huge legal costs. Every element must be a profit centre. Please note that after expiry of contract (typically 35 years) the consortium is under no obligation to renew the terms of the lease and can renegotiate at more favourable rates or move out of the public service sector and turn the property into a hotel or office block.

“PFI often means that an organisation which previously worked to a single goal is now in competition with itself, as different parts of the same system strive to outbid each other., the primary goal being to enhance profitability rather than to deliver a service.”

If you think this seems suspiciously like what Mr Lansley did to the NHS, you’d be absolutely correct. Some would say the major problem suffered by the NHS (until Lansley came along) was the risk of infection that has been incurred ever since cleaning services were contracted out to the private sector and substances that actually killed germs were replaced by those that smell nice.

So: £1bn could be saved every year by eradicating healthcare acquired infections from the NHS.

In other words, do whatever it takes to get rid of the parasites that are making a profit but failing to provide a proper service and make sure our hospitals and health centres are clean again. This would no doubt cut down on the number of complaints against the service from people who have – or whose relatives have – been inflicted with secondary infections after going into hospital, relieving the amount of stress on NHS staff, and contributing to the next possibility.

This is to adopt measures to improve the health and well-being of NHS staff, thereby reducing sickness absence and saving £500 million each year.

Discussion of parasites has reminded me of an irritant that I find particularly annoying: private sector consultants. These expensive know-alls seem to be proliferating like flies around a carcass (which is what, in many public sector cases, they might as well be). Let them get their teeth into a project and if it isn’t stillborn, it will be dead in very short order.

I have a friend who tells the story of a county council that had half a million pounds available to renovate a derelict industrial site. The consultants were brought in and, in the course of a very few extremely expensive lunches, managed to squander the entire £500,000 budget without a penny being spent on any actual work.

That council’s annual fee for private consultants stood at £6.1 million in the last financial year. Parasites.

So: Cut government employment of private sector consultants. The government could get better advice and ideas by engaging with its own staff and their trade unions.

Now we’re down to some obvious/controversial suggestions:

Cut Trident and other heavy military goods – what is the point of having a nuclear deterrent which we can’t use without the permission of the USA, and which exists to combat a nonexistent enemy? We also have two aircraft carriers on order, to be delivered in 2018 at a current cost of £5 billion, and an expensive new batch of Typhoon Eurofighter aircraft last estimated to cost £20 billion in 2003. The cost over the next 30 years is put at £120 billion – or £4 billion per year. I agree the nation must be defended – but there must be a better way than just splurging out money on these huge contracts.

Does anyone know if the Mini-Titan prison programme is going ahead? If so, it should be scrapped. The capital and maintenance cost of expanding prisons or building Mini-Titans to accommodate an extra 100,000 prisoners will be about £1.3 billion. Britain already has the highest per capita rate of incarceration in Europe; to raise it further would be a clear failure of social and economic policy.

If I were to sum up the theme of this article in a nutshell, it would be this: Get rid of the freeloaders.

Unfortunately we toil under a government whose Chancellor – the man who should be jealously guarding our money – has doubled the number of staff he employs on six-figure salaries.


  1. Joanna Terry December 29, 2012 at 8:43 pm - Reply

    You’ve missed a few, there is absolutely no need for the likes of ATOS or A4E to deliver services which were adequatley provided by the public sector. The work programme providers are absolutely disgraceful in their performance and seem to want their hands held to do their jobs. Go to the parliament website and look at the work and pensions commitee where they are discussing this issue and all you read are excuses from these sharks and their supporters. Lets get rid of the WCA which has blood on its hands and revert back to the perfectly sane system of allowing the medical services to assess claimants, much cheaper than all the appeals going through the system now. Cap rents where necessary to reduce the housing benefit bill and get people back to work, all that house building that needs doing and mostly for social use will make a big difference. Happy New Year.

    • Mike Sivier December 29, 2012 at 9:59 pm - Reply

      I’d agree with all of that.
      I think they’re points that other people have made before, in this blog, but you’re right – they should be made here, also.

  2. Angie December 30, 2012 at 10:44 am - Reply

    we could also cap the MP’s expenses why should they be paid for living where they work the rest of us are not, and stop subsidising the bar’s and Restaurants in the house’s of parliament, the working people don’t get there food subsidised at work. they don’t have the money to help those that need the help but they can find the money for the programs they keep coming up with.

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