The Bewilderness

The appearance of cuts....

George Osborne was buoyed along by reprising the reheated rhetoric of 2010 calling for further cuts in spending and no new taxes. Apart from one gimmick, the speech was light and lean, reflected the paucity of ideas at the heart of this administration. By invoking the prospect of further benefits cuts (their only popular policy?), Osborne flew into Liberal Democrat flak: the one political party that eschews popular coalition policies for their own idea of what people want (think Left!). Clegg was quick to chew his fat: cuts for taxes, rich for poor, mansion tax for reducing welfare.

However, in happier news, the OECD leading indicators appeared to show Britain decoupling from Europe and enjoying economic growth whilst the Eurozone plunged....

National Hell Service (for some)

When the Labour conference worshipped the National Health Service, their acts of exaltation and their accusations of sacrilege by the Tories (for daring to allow the wicked heresy of price to prevail), left them blind to its failings. And failings there are. Over a hundred and fifty people died of starvation or thirst in NHS wards last year. These are the most extreme cases. Underlying this is a cast of hundreds dying of malnutrition and thousands dying of infected wounds.

So, we have an elderly or incapacited person in the care of a profession, whose name defines their purpose as giving aid and comfort. Neither are achieved. Yet, we never hear of individual nurses or managers brought to account or struck off for this rollcall of daily neglect. How can teh sick, supposedly supervised and cared for on a daily basis, die of neglect? We know the root cause: a lack of accountability at a professional and at an institutional level. The Grauniad does not appear to cover the story.

The Insiders

Commentators will often leap on the slogan of the day and extend towards whatever pet hate they rail against. For Polly Toynbee, the utterance of moral hazard: private gain and socialised loss, is extended from the banks towards outsourced companies. Her whole column is swaddled with bows to her own lack of knowledge and bullish assertions, rendered without foundation.

Was Polly being ironic when she wrote,

What Thatcher began and Labour continued is an epidemic of evidence-free, faith-based policymaking. Politicians have been seized by a conviction that private is always better. With no public service for fair comparison, the weary old mantras of "monolithic", "sluggish" public services go unchallenged. Some are – but there is no evidence that siphoning profits into private companies is any panacea. One thing is certain. These contracts create moral hazard on a grand scale, where profits are private but losses are ours. 

Polly's argument is that complex contracts and poor drafting have left public sector organisations with their hands tied. Even if companies like G4S fail, they can just walk away, and the state has to step in. Outsourcers do not have to deal with their own failures, are opaque to public accountability and naver face losses if they fail to meet the requirements of their contracts. And, if there were a fair comparison, the public sector would win hands down because it is public. Not that Polly is biased, with an evidence free faith that public is better. No, hers is a reasoned and impartial view that would be changed if, say G4S faced huge losses and strong reputational damage for incompetence....(oh they did....) 

Bad contracts tell us more about the quality of the civil service than the effectiveness of outsourcing. Yet, competition for contracts and the bearing of loss surely embodies less moral hazard than a monopoly provider that faces no comeback if things go wrong, except an arbitrary court of public media. Even well-paid council executives become martyrs to the curse of Polly's moral hazard:

Local authorities are even more prone to bamboozlement. Council chief executives, often castigated as overpaid, are negotiating with companies whose bosses earn millions, aided by battalions of top-flight lawyers.

It is the moral hazard of monopoly: unaccountable bureaucrats running services without oversight and able to hide their failures that we need to break. Polly defends the insiders.

Hit me with your money stick, hit me, hit me, hit me hard and hit me quick

The subject hierarchy in mainstream media is a clear tool for editorial mischief. No doubt the website designers will argue that their pathways are efficient and designed to assist readers to the most appropriate subject. Inbuilt bias does not exist, and you tag the BBC especially for this. Sometimes irony can ensue, such as the Grauniad pairing "environmental" and "nuclear".

Only this newspaper could render the sour grapes of subsidy junkies newsworthy. Let's hear the renewable energy mewl and whine because they do not get enough money:

The developments are likely to fuel concerns among the many environmental campaigners who oppose nuclear power that the industry has unfair access to the government, as well as benefiting from hidden subsidies.

"They [government] have to come clean about all the money spent on assisting nuclear – and this would be part of that," said Mike Childs, head of climate campaigns for Friends of the Earth. "It's important ministers come clean about who they are meeting, when they are meeting, and the issues they are discussing."

After all, green lobbyists derive all of their financing from voluntary donations, so they would have us believe. In reality, the renewable energy industry and its lobbyists require subsidies to survive. So does nuclear energy. 

Itis particularly telling when they weep because their quango constituency is whittled down to one. The Chicken Littles wail that the sky has fallen because they have to compete on a level playing field of one quango each:

Concern about the preferential treatment given to the nuclear industry by successive governments is likely to be heightened by the decision last month to abolish the parallel Renewables Energy Board, which met every quarter at the department and once a year outside, as part of spending cuts. The work of the renewables board will be taken on by the Office for Renewable Energy Deployment, for which there is a parallel Office for Nuclear Development. 

There would have been a time when the Guardian, in its liberal days, could have stepped back from a story of quango competition and included the question: is this a good use of public money? The prevailing philosophy of the newspaper still recognised a link between tax and accountability. Not an argument that we could agree with but one that we could recognise.

What has changed over the last few years is the sense of entitlement from public sector professionals and their media sympathisers. State expenditure is unquestioned and arguments arise over the disposal of the spoils. The immoral, debauched class of New Labour becomes more visible at a time of illusionary restraint on the part of the Coalition.

Britain on benefits

The controversy over immigration has been a positive benefit to the political debate. With the government unable to provide accurate figures, further enhancing their lack of competence over our borders, attention shifted to what the immigrants were doing. Most were working, whereas the British were not, due to the comfortable existence of the welfare state.

For the first time, debates on immigration include the biggest problem of all, welfarism. Britain on benefits has postponed reform of the welfare state by shipping in workers to continue paying stamp for those who don't. As the ponzi scheme is now clear, New Labour have brought this area of the state, like all others, to the verge of reform.

Cameron's rhetorical wedding to Wisconsin welfare reform is welcome.  Despite the  nonsensical notion of a cap on immigration,  reducing welfare benefits will ease the debate, since it is framed in terms of public sector demand.  Then situations like this will end:

Tax credits alone have cost the UK more than £1 billion in fraud this year, it says, while an advertising campaign designed to encourage people to stop benefit fraud actually raised the numbers of fraudulent claims as people realised how easy it was.

Despatches from the state front

Here are a few of the stories pervasive to our dysfunctional state where incompetence is rewarded and initiative discouraged. Patients who are 108 are given eighteen months to wait for a hearing aid, and hospital trusts then hide behind bureaucratese:

Eastern and Coastal Kent Primary Care Trust said: "We cannot comment on individual cases but we are reducing waiting times.

"The priority is given to patients who do not have an existing hearing aid but we do accept our service needs improving.

"We apologise to any patient kept waiting for a new or replacement hearing aid."

Lack of common sense is coupled with the lack of supply.

The NHS is suffering from a chronic shortage of specialist beds which means seriously injured patients are having to wait for days in severe pain, according to a leading surgeon.

He said the hospital system was paralysed by red tape and funding disputes, which put thousands of patients waiting for treatment in specialist wards at risk.

As the National Hell Service lurches from crisis to crisis, we can see that the initial piecemeal reforms undertaken by Blair have failed. The costs of the payscales introduced have increased employment costs without any corresponding increase in productivity.

NHS staff have seen their wages increase by more than 10 per cent, with the basic salary of nurses rising by 15 per cent in three years.

However, the report says that the Government seriously underestimated the cost of restructuring the pay system. It claims that the new system "has exceeded all cost estimates" and, together with the new contracts for GPs and senior hospital doctors, contributed to half of the £900 million gross deficit recorded by the health service in 2006/7.

"Agenda for Change was intended to modernise more than a million NHS jobs and improve patient care," said Niall Dickson, the King's Fund chief executive.

"However, this limited but important study shows that as yet there are few signs it has delivered increased productivity or transformed practice and there is evidence that many staff are far from satisfied by the process. One of the most significant concerns raised by the report is the absence of an independent, robust evaluation of the impact of Agenda for Change - despite the fact that templates for such evaluation have been developed.

Since Brown is already rowing back from health service reforms, it is difficult to see short term solutions or sticking plasters to these difficulties, embedded as they are within socialised medicine. More suffering to follow....

The Poor Prospects for Public Sector Reform

It is reported in the Sunday Telegraph that there is a new divide between Blair and Brown over the issue of legacies and reform. The Prime Minister is concerned that Gordon Brown will not pursue his agenda on public sector reform. As usual, these reforms are pitched as the only course of action to stifle debate and tie the hands of his successor.

Mr Blair has already launched six separate policy review groups ranging widely across Whitehall, which will report in the spring. In private, he has complained to his allies that Mr Brown has only recently come "on board" this programme.

A source close to the Prime Minister said: "Tony believes he has to get his foot down on the accelerator hard enough so that it'll take someone slamming their foot on the brake to stop - not just someone taking their foot off the accelerator."

This is accompanied by various hints that Tony Blair will stay right up to the eve of the Labour conference in order to secure the public sector reform agenda. It places a question mark over accepted wisdom: the intention of Tony Blair to step down as Prime Minister.

The history of public sector reform in New Labour has been an unhappy one, mismatching expectations and reality. Four themes stand out:

• The need to raise standards in the public services through targets and restructuring. This has led to the increased involvement of consultancies, the initial loss of autonomy for public-sector professionals and institutions through the phase of state change called the 'audit economy'.
• The demand to raise standards was forced by the expectations fostered by the New Labour administration. They purported to recognise that consumers wished to treat their hospitals like supermarkets with greater choice and convenience. This rhetoric of 'consumer choice' in health and education was never met in reality, and has proved New Labour's Achilles heel.
• Without securing reform or curbing the 'producer interests' of public sector professionals, New Labour moved towards vastly increased  expenditure  through stealth taxes.  Their  changes, based upon a framework of centralised targets and  interference were designed to ensure that the funds renewed infrastructure and improved services. The funds enriched public sector professionals and failed to increase standards as promised. Brown's major contribution to public sector reform was a complete failure.
• Against a backdrop of middle-class disaffection, New Labour has attempted to resurrect the seeds of choice and decentralisation that began under the Major administration and formed the discourse if not the content of Labour's own spin on public sector reform. Retreading old ground with trust schools and hospitals, New Labour has returned to the 1990s, proving their ideological bankruptcy and stealing the clothes of their predecessors.

The policy reviews that Blair has established will not save his legacy since  his role  as a public sector  reformer  vanished as soon he advanced the cause of  Brownite autonomy. The problem with gradualist reforms, especially after a period of prolonged failure, is that they will not address the problems in the short-term. The government is held responsible for all failures by a population schooled by centralisation to blame the minister in Whitehall. (Is this a new constitutional convention on Ministerial responsibility) Brown's honeymoon will shorten if he allows public sector reform its head and his  instincts  for recentralisation will put paid to Blair's legacy. No Parliament or Prime Minister can tie the hands of their successor. 

National Hell Service

Who would entrust their frail parents to the National Health Service, when there is a possibility that they could be come malnourished or even starve to death. What is scandalous is that these deaths are not treated as a scandal by the government or the Opposition. Only those families, those sons or daughters who actually have to deal with these problems, understand the current outcome.

Ivan Lewis, the health minister, conceded that some elderly people were given a single scoop of mashed potato or served meals with plastic cutlery "best suited to picnics".

His remarks, made to a local Birmingham newspaper, went on to admit that a single scoop of mashed potato "masquerades as lunch every day".

"Plastic cutlery has its place at a summer picnic but not for everyday use. Yet some older people are still being served their dinners with plastic cutlery, even though they have suffered a paralysing stroke which makes it pretty impossible for them to eat properly.

"Some have a tray placed on the end of the bed, tantalising with hot food. It may be just an inch out of reach but it might as well be a mile. To a bed-ridden pensioner, it must seem like torture.

"We wouldn't put up with this happening to our children, so why should we find it acceptable for our older people."

This is not acceptable. However, it is an inevitable outcome of a system of rationing that masquerades as health. Those who are least able to demand the services they require due to frailty, age or dementia are overlooked by staff who have no incentive or inclination to care for them.

Piano teacher, Andrew Martyn, whose name has been changed to protect his identity, told The Daily Telegraph that his family went to hospital twice a day to feed his elderly father because there were not enough members of staff to do it.

His mother explained: "A doctor said my husband didn't have long to live. Maybe a week. Staff didn't have time to feed him because he took a long time to feed. We were told that if he gets fed, he could live a little bit longer.

The National Health Service is based upon limited resources and uses a system of triage in practice. Naturally, those who are considered to have limited value are deprived of resources, removing their dignity and perhaps condemning them to a painful death. The greatest criticism of the National Health Service is the way in which it harnesses, subverts and eventually destroys moral virtues such as compassion and kindness.

 

Brown Champions the poor (by creating more of them)

Reform have published an update on the welfare state by Nicholas Boys Smith, a former Conservative Party parliamentary candidate. Welfare expenditure is now more than the money spent on education, twice as much as law and order, whilst rivalling the National Health Service. Boys Smith concluded that the weaknesses of tradtional welfare: expansion, means-testing and the poverty trap had been built up and exacerbated by Brown's complex changes. It would be impolite to dignify these changes with the word reform.

Instead, Britain now has the deepest poverty trap in the Western world, with thousands of people stuck in low-paid and part-time work because any extra money that they earn by finding a better job or working longer hours would have to be handed over to the Treasury.

Just under 800,000 working parents lose more than 70p in every extra pound they earn, and nearly 400,000 lose more than 90p in the pound. About 34,000 people lose more than £1 for every £1 they earn.

We should welcome any report that brings public attention to the utter failures of the welfare state we're in. Yet, government's failure and the unfitness of Brown to continue in political office, only arises when we see Treasury's response:

A Treasury spokesman said: “Since 1997 the Government has lifted 700,000 children out of poverty, and employment is at record levels. Reforms of the tax and benefits system mean that families with children are on average £1,500 per year better off in real terms since 1997, and those in the poorest fifth are £3,400 per year better off.”

Their response is based on the premise that if you say something long enough, people will believe, even if it is not true. This may have acquired credibility in the early years of the administration but the drift between utterance and reality can only lead to cynicism and contempt if these problems are not grappled with.

Welfare reform will have to wait until Brown's personal and political failings lead to his fall. He is a divisive figure, unable to work in Cabinet, contemptuous of politician and people. The electorate is more intelligent than he thinks; Brown is more flawed than Labour anticipates.

New Labour: Ten Years of Tax

How long has this been going on?  About ten years.  So it is nice that they have just woken up...

Lord Lawson has led a chorus of attacks on Labour, warning that the Government is in increasing danger of driving off Britain's most profitable businesses, toppling London from its perch as Europe's leading financial centre.

Very late, but perhaps Lawson may wish to join the Taxpayers Alliance. Even the witless professionals are beginning to realise that state contracts cannot substitute for private endeavour:

The Chancellor's tax policy had also come under fire in a survey by accountants Baker Tilly.

Baker Tilly has found that two-thirds of lawyers and over a half of accountants think that fiscal drag – the technique used where tax allowances are not raised in line with wage inflation – is undermining the credibility of the tax system.