“White Elephant” Scheme Comes Under Fire in Bristol
Aug 2014 28

Bristol residents are angry at a £200m “white elephant” bus scheme that won narrow approval at a council meeting. Residents gathered from the north of the city to protest outside Bristol City Hall holding white elephant placards to protest at the huge, largely unwanted expenditure of taxpayers’ money. The scheme, which involves building a bridge cutting into much-loved Stoke Park, is profoundly unpopular locally.

“We have got to take this city into the 21st century,” said a local transport campaigner at a packed Council meeting. But during the decision-making session, protestors felt the real reason for Bristol City Council wanting to proceed with the expensive project was revealed. If they didn’t approve the application, the route would lose its allocation of Government – taxpayer – funding. The protesters believe this is frequently used as an excuse for bouncing councillors into making unpopular decisions because they just can’t resist any opportunity to spend lots of our money.

Protestors at the meeting complained about not being adequately consulted about the proposed bus route and at the loss of agricultural land. They also objected to normal road being replaced by bus and bike lanes as part of the costly scheme. In the end, their objections were ignored as the £200m scheme was narrowly passed by six councillors to four.

The good news, however, from Bristol is that Mayor George Ferguson’s shameless attempt to get his hands on the money generated by selling a Banksy work of art as been rejected by the artist himself who wanted the Boys’ Club, on whose building the graffiti appeared, to benefit from its sale and not the council. Hoorah! They’ll know how to spend the £400,000 windfall far more wisely.

“Unusual” decisions at Salford Council under the spotlight
Aug 2014 27

This morning saw Salford Council’s Audit Committee meet to discuss the findings of an internal report into the exact circumstances of a £164,000 taxpayer-funded “bailout” paid to the local rugby league club, Salford Red Devils, in 2013.

Journalists at the Manchester Evening News as well as other local writers have covered this story with aplomb. In particular, they have revealed that the council official – Martin Vickers – who signed off the bailout very soon left after the decision, taking up a position months later at the very same Salford Red Devils rugby club.

It appears from newspaper reports that not only was the bailout agreed without proper record-keeping, but that it was agreed by Mr. Vickers, the Mayor Ian Stewart and his deputy David Lancaster without the knowledge of Council Chief Executive Barbara Spicer, against Council procedure.

Even more remarkably, reports go on to say that Mr. Vickers soon after requested voluntary redundancy and, again without the Chief Executive’s knowledge, three days later a £79,000 “golden goodbye” was paid. This package, stunningly, included a Volkswagen Golf and an iPad.

At this morning’s Audit Committee meeting, it became clear that any spending decision over £100,000 had to have a proper paper trail and be made public. That was not the case, though the Council’s Monitoring Officer suggested this was due to “human error” rather than anything more sinister.

The Audit Committee voted to accept the recommendations of the internal report which places into procedure the various checks and balances which were already in place before this bailout was put together. Despite the Chair asking for the Committee to look into an independent inquiry into what occurred between Mr. Vickers, Mr. Stewart and the rugby club, it appears this matter will – at least officially – be laid to rest. This is despite the Monitoring Officer admitting this morning that the way in which the bailout was negotiated and the speed with which the redundancy package was paid was “unusual.” Apparently understatement is a key part of the job description for the role.

Regardless of the rights and wrongs of bailing out a private rugby club – and, when the Council was attempting to find savings elsewhere in the budget, it is difficult to justify the move – the lack of transparency and accountability will stick in the throat of taxpayers. Nobody should be allowed to hide behind procedure, regardless of whether they have – as in Mr. Vickers’ case – left the Council’s employment. It is wrong that Councillors have no ability to question him.

To quote Jennifer Williams, the Political Reporter at the Manchester Evening News, “the point of democratic process and transparency is to allow criticism.” That entire page, reporting on this morning’s discussions, is worth reading, as is the report by Neal Keeling, also from the MEN, on leaked emails which appear to show those in charge knew that they were avoiding due process.

We hope that individuals and the local newspapers will continue to put pressure on Salford Council so that taxpayers are able to understand how nearly a quarter of a million pounds without anybody apparently thinking to write it down.

Planning costs pile up for Mike Watts
Aug 2014 19

Good news to see that B&NES council leader Paul Crossley is finally congratulating Mike Watts for building his Kelston Toll Road and helping thousands of local drivers overcome the disruption caused by the closure of a short stretch of the A431.

“He has done something the council wasn’t able to do and well done to him,” Crossley told the Bath Chronicle. “He has used his initiative and taken a risk, using his money. He has also been working positively with the council to jump through all the necessary hoops, such as applying for retrospective planning permission.”

But last week, the council claimed Mike Watts had got it wrong when he said retrospective planning costs could come to some £30,000.

“Until we see where the site plan is actually drawn we cannot confirm what the fee will be,” said a council spokesperson, “however as a guide the road itself covers c.0.4ha therefore the fee is likely to be between £780 and the maximum of £1690. We do not know where the £30,000 figure has come from however this does not relate to any planning application fee—the TPA’s article is therefore factually incorrect and misleading.”

So I went back to Mr. Watts and asked him how much the Council planning demands on his toll road might cost him.

“The breakdown of costs for retrospective planning is as follows,” he says, noting that “there might be some variations but this will only be upwards. Planning Consultant £12,000; Architect £1,200; Ecology Report £1,500; Surveyor £800; Ground Report £5,000 (this could rise to £15k if more info is required); Application Fees £1,170; Total £20,500 (plus possible extra £10k = £30k). All above plus VAT.”

Now of course a number of these charges are not directly levied by the council, but the onerous planning regulations require the builder – in this case Mr. Watts – to pay them nonetheless.

Let’s hope B&NES sees sense and recognises the community’s gratitude to Mr. Watts and cuts him some slack and the costs don’t rise any higher.

Tim Newark, South West TaxPayers’ Alliance

Bath toll road hero hit by Council charges
Aug 2014 11

Mike Watts has hit national headlines for building the first toll road in England for 100 years – and he did it because Bath & North East Somerset (B&NES) Council have been too slow to re-open a vital section of the A431 between Bristol and Bath. So I went to visit him to find out the true cost of doing local motorists a favour, and heard how the council is charging him for helping out.

A landslip closed the road between Bristol and Bath in February, and B&NES has said it will take them until Christmas to get it re-opened at a cost to the taxpayer of £1.5 million. In the meantime local businesses have lost thousands of pounds in trade and residents have faced nightmare journeys. Mike Watts lives in the nearby village of Kelston and decided to do something about it.

“I used to turn left outside of my village and get into Bath in eight minutes,” says Watts. “With the road closed I had to turn right and it took me one hour twenty minutes to get in. Aside from the waste of time, my petrol expenditure went right up.”

B&NES refused to act quickly on re-opening the road and so Watts was forced to create his own mini-bypass on a field nearby. He’s had to put his house on the line to cover the £150,000 construction costs and £150,000 in running costs. “We need to get 1250 cars using this toll road every day to cover our costs,” he said.

It is to be noted that his construction costs are a tenth of the council’s estimate of taxpayers’ money needed to fix the road and he’s opened it six months earlier than B&NES could deliver. The private sector really is leaner and fitter at dealing with such problems.

One might have thought the council would be delighted at Watts helping them out to create an alternative route for local traffic, but they have refused to endorse his efforts and have carped about safety issues ever since. The really shocking point I learn talking to Watts is that B&NES now wants to make money out of his enterprise.

Watts had had to apply for retrospective planning permissions and claims the council have quoted some £30,000 for doing it – a tenth of his total costs. The Council has disputed the figure.

On top of that Watts has had to employ a planning consultant to navigate his way through the maze of regulations and that’s cost him a further £12,000, plus there are additional costs for surveys and signage. I think a grateful public would expect the council to waive or severely reduce these costs to Watts and let him get on with running the toll road to the benefit of the whole community. This story really makes one wonder what the purpose of local government is when it fails to deal efficiently with a problem like this in the first place and then wants to charge an arm and a leg to those who do help out. Shame on B&NES!

*This article has been amended from its original version after B&NES disputed the £30,000 figure, citing an estimate between £780 and £1,690. Mr. Watts was unavailable for further comment.

A sign of progress, but much more to do
Jun 2014 11

The Government’s Efficiency and Reform Group this week revealed progress in tackling wasteful spending, finding an additional £14.3bn in savings for the 2013/14 financial year. This builds on savings of £3.75bn (2010/11), £5.5bn (2011/12) and £10bn (2012/13).

Cabinet Office Minister Francis Maude and his team should be commended. Over previous decades, wasteful spending has skyrocketed. The public sector has too often spent over the odds, blowing taxpayers’ money on ridiculously expensive stationery, on poorly-managed contracts, on an army of consultants, on far too much. That money should have instead been spent on essential services – or simply not spent at all, and left in the pockets of taxpayers.

So news of successful moves to tackle inefficiency is welcome. Finally, some common sense is being applied to running central government.

But for this to translate to a better deal for taxpayers, this can only be the opening battle of a war on waste. Taxpayers worked 148 days this year just to cover their tax bill. Yet they still find wasteful government spending contributing to our enormous public debt, and eliminating waste is the first step in lowering people’s taxes across the country. That’s the thinking behind our War on Waste Roadshow, taking our message of transparency and accountability to 30 towns and cities across the country.

There is no doubting that, as Francis Maude himself has admitted, there is plenty more to do. An attitude that abhors waste and chases efficiency has to be the norm rather than the exception throughout the public sector if the Government is to deliver the value for money that taxpayers deserve.

Nick Clegg should remember whose money it is he’s talking about
Jun 2014 09

Nick Clegg announced two new fiscal rules that Liberal Democrats would implement should they form a new coalition after the 2015 General Election. The Deputy Prime Minister told an audience at Bloomberg that they will “significantly reduce” national debt as a proportion of national income each year until it reached “sustainable levels”, so long as growth is positive. The second rule would be to only run cyclically-adjusted balanced budgets after ignoring capital spending “that enhances economic growth or financial stability”.

So what do these rules mean?

The wording of Clegg’s debt rule is surprisingly tight. He’s not saying that the national debt won’t carry on growing. He’s just saying that it will grow less quickly than national income, and then only when the economy is growing. The main ambiguity concerns what “significantly reduce” means, and what “sustainable levels” are. Looking at Budget 2014, the OBR estimated that net debt would fall from 78.7 per cent of GDP next year to 78.3 per cent the following year. It would then fall by 1.8 and then 2.3 percentage points to reach 74.2 per cent in 2018-19. This is probably what Clegg means.

But what are the risks? These OBR estimates assume interest rates on gilts edging up slowly from 3.3 per cent in 2015-16 to 4.0 per cent in 2018-19. In addition, they assume GDP increasing at 3.9, 4.6, 4.5 and then 4.4 per cent in cash terms. This is important because most of the national debt is not adjusted for inflation. If economic growth slows down but by enough to suspend the rule, not only would that increase the debt-to-GDP ratio, it would also mean that tax revenues would disappoint, spending pressure would increase and interest rates on government borrowing might rise faster than expected. The plans also assume the Government will carry out cuts to welfare spending which it has penciled in but which remain unspecified.

Mr Clegg’s balanced budget rule is somewhat less tight. First, it only applies to ‘cyclically adjusted’ budgets. That means if the economic cycle is miscalculated too much spending or absent tax revenue could be cyclically adjusted away. It also only applies to current spending which is problematic for two reasons. It assumes any capital spending will recoup itself through stronger growth and because, as Mr Clegg said about spending under the previous government, ministers might be tempted to “slap the words ‘capital spending’ on anything and everything just so they could get away with borrowing to pay for it”.

The problem is that not all capital spending by government is so efficient and productive. And by including housing in our ‘infrastructure’, Mr Clegg began his campaign to spend much more of our money on his projects.

we cannot build a stronger economy and a fairer society where there are opportunities for everyone unless we are prepared to put our shoulders to the wheel and use the muscle of the state – if necessary through borrowing – to rewire and revamp our infrastructure. Nowhere is the problem more acute than housing.

We aren’t building the infrastructure we need, whether that’s housing, transport or telecommunications. But the problem is too much “state muscle”, as he puts it, not too little. Planning rules are stopping developers from building the homes we need in the places buyers want to live, and they are making it much too expensive to build them in the first place. And Heathrow is desperate to build a new runway to provide new capacity for our air transport networks in the place where they’re most wanted. But it can’t, because “the muscle of the state” has decided it wants to spend the years writing a report while spending billions of our money on a seriously flawed high speed rail project that no private business has any interested in building with their own money.

The problem is best summed up when Mr Clegg rallied listeners to the cause of spending taxpayers’ money on housing projects:

It’s time to put our money where our mouth is.

Mr Clegg, it’s not your money. It’s ours.

Is less government better government?
May 2014 28

Last night I debated ‘Is a Smaller State a Better State‘ at the Bristol Festival of Ideas, with Labour peer Maurice Glasman and the Observer’s chief leader writer Yvonne Roberts, chaired by the Observer’s assistant editor Julian Coman. The debate was interesting with three distinct views, but there were also striking areas of agreement across some of the topics discussed.

My argument was largely focused on the economics and ethics of high levels of spending and taxation, while also acknowledging various other regulations and prohibitions which affect people’s lives outside the tax-and-spend framework.

On the economic question, I talked about the overwhelming evidence linking lower levels of government spending and taxation with faster, more dynamic economies. There are countless studies in the academic literature which almost universally demonstrate that the size of government where the economy grows fastest is far below the 43 per cent of our national income which the government now spends. These studies have been discussed in The Single Income Tax on pages 104 and 132. The contrast between the economies of France and Britain, and between those two countries and Singapore and Hong Kong, demonstrates the results point with remarkable clarity:GDP as proportion of UK

Regarding ethics, I talked about the coercive nature of tax and spend, and how it eclipses personal morality, promotes special interest lobbying and corrodes individual morality and politics. I drew heavily from the excellent essay by Eamonn Butler in The Single Income Tax (pp 79-87).

There were many areas of disagreement, but also many where we agreed. Maurice Glasman, meanwhile, made the case that incentives to work must be strengthened and Yvonne Roberts spoke of the feeling that the state does things to people rather than with them. There was also universal agreement that taxpayers being forced to bail out bank shareholders was deeply unjust.

At the end of the debate and questions session, the audience was asked to vote on whether the state was too big, too small or about right. About a third voted for each proposition.

More funding for GPs would ignore the need for fundamental reform
May 2014 12

The Sunday Times reported yesterday that 800,000 patients were turning to A&E departments and walk-in centres because they are unable to get an appointment with a GP.

Predictably, the chair of the Royal College of GPs blamed a “funding crisis” and warned that the service was “teetering on the brink of collapse.”

With constant talk in the media of an NHS cash crunch/funding crisis (delete as appropriate), it’s important to understand some basics about the NHS budget and general practice.

Historically speaking, the NHS has received large, real term budget increases for a couple of years in a row, and then had a few years of lower spending. This changed around the turn of the century when the NHS was handed big budget increases throughout the 2000s.

According to the Institute for Fiscal Studies, between 1979 and 1997, NHS spending increased in real terms by an average of 3.2 per cent. Between 1999 and 2008, this figure was 6.3 per cent.

It’s hardly surprising that spending on healthcare has increased both in absolute terms and as a share of public spending as the population ages. It’s also hardly surprising that health spending isn’t being increased as aggressively as it was in the 2000s when it went up by 92 per cent in real terms.

So it’s disingenuous for GPs to complain that their funding has fallen by pointing out that as a percentage of the NHS budget, as it now represents 8.4 per cent rather than the 10.3 per cent it did in 2004. This just means they have a slightly smaller share of a much bigger pie.

Talk of a “cash crisis” isn’t anything new.  There were endless stories about impending financial disaster for the NHS during the years when it was handed unprecedented budget increases.

It’s hardly surprising that people struggle to get an appointment with their GP with the number of practices opening late or at the weekend falling.

The 2004 GP contract gave many GPs the ability to opt-out of providing out of hours care and many chose to do so. This trend has continued long after the contract was agreed, with a further 13.3 per cent fall in the number of GP practices offering weekend and evening appointments between 2009 and 2013.

The National Audit Office looked at the effects of the contract in 2008 and found that:

  • Between 2002-03 and 2005-06 the average pay of a GMS and PMS practice partner in England increased from £72,011 in 2002-03 to £113,614 in 2005-06 – a 58 per cent increase
  •  GPs are working on average seven hours less per week than in 1992
  • By January 2005, less than 10 per cent of GP practices delivered out-of-hours care under the nGMS contract. Out of hours is defined as the period from 6.30pm to 8.00am.
  • Practice nurses and salaried GPs, who form part of the practice team, have not benefited to the same extent with pay rises largely in line or indeed below inflation
  • 27 per cent of GPs work part-time

Simply put, in the UK we have a system which pays a small number of doctors a lot of money. Other developed countries have decided to pay their doctors slightly less, and have more of them:

  • The majority of GPs in the UK are self-employed. They earn 3.5 times the average wage in the UK, far more than in Australia (1.7) France (2.1) and Denmark (2.7). Along with Denmark and Poland, the UK is the only country in the OECD where GPs earn more than the average medical specialist
  • Consequently, we have fewer doctors than most developed countries, with 2.7 per 1,000 people. This compares to 3.3 in France, 3.6 in Germany and 6.1 in Greece

The other sacrifice we make is having less modern medical equipment than most other developed countries:

  • We have fewer MRI scanners per head of population than Slovenia, Estonia, Slovakia and the Czech Republic. Greece has four times as many
  • We have fewer CT scanners per head of population than every country in the OECD apart from Hungary and Mexico. Chile and Poland have more and Estonia has twice as many

If GPs’ pay fell more in line with the likes of Australia and France, there would be more of them, more out of hours care available, and fewer people using A&E departments.

Before coming up with proposals to charge for visiting a GP or demanding more money from taxpayers, GPs need to explain why they deserve to be paid so much more than their international counterparts, and why their high salaries are preferable to having more doctors and more modern medical equipment.

We need to incentivise work
Apr 2014 29

I run a small business in Wales. The company has grown from strength to strength in the past year, and since Christmas I have even been able to create a further five jobs. The positions created have in-house management training opportunities attached, there are no formal educational requirements – just the eagerness to learn and develop.

Many individuals claim that there are too many barriers to work, such as education, the availability of work and the flexibility of work. The five positions created all have flexibility, and as mentioned there are no formal entry requirements. However, last week I cleared my schedule so that I could interview a further batch of candidates nearly five months after the jobs had been created.

There is certainly no lack of applicants – approximately 50 per day. Unfortunately, though, the majority don’t answer their phones or return messages, and of the 20 applicants booked in for interviews this week alone, only one has shown up. And this after a lengthy telephone conversation and a confirmation text confirming our location and times.

As a small business owner, recruitment is the biggest drain on my time. Much of that time should be used to generate more business and grow the company even further, which in turn would create even more jobs and wealth. In recent weeks both the UK and Welsh Governments have been talking about reduced unemployment rates of 6.8 per cent in Wales (6.9 per cent nationally). But I would argue that the problem hasn’t disappeared, it has just moved.

The welfare state is a massive burden on taxpayers, and rather than the national or Welsh Governments tackling the problem they are merely exasperating it. A coherent approach to helping the unemployed back to work has to be adopted, rather than benefits for life. Alex Wild wrote in this morning’s City AM on conditional welfare – that would be a good place to start.

Windsor and Maidenhead cut Council Tax
Jan 2014 21

Windsor and Maidenhead Council today announced a 2 per cent tax cut proposal for 2014-15. The cut will represent the fifth successive year of rate reductions, during which time the tax burden has decreased by a considerable 26 per cent in real terms.

Councils like Windsor and Maindenhead which cut tax while providing efficient services serve as an example from which other councils should learn. For example, the council points to £7.5 million that has been allocated for the brand new Oldfield Primary School in Maidenhead, with another £3.7 million planned for the new Stafferton Way link road. Simon Dudley, the cabinet member for finance, explains their approach:
The Royal Borough has a track record of council tax cuts without cutting services… We run our finances knowing that it is residents’ money to spend prudently.
The borough has taken action to cut costs such as saving £220,000 through IT improvements which include moving to cloud technology. Councils across the country would do well to pay attention. If more focus was directed towards intelligent and necessary spending while cutting back on frills and waste, residents could access good quality services while lightening the load on long-suffering taxpayers.
COMMENT: The Chancellor cannot cut the deficit without tackling state pensions
Jun 2013 25
I wrote for City AM on the need for pensions reform if we’re going to tackle the deficit in the long term:
IT HAS been six years since the financial crisis began, and the government’s books are still in a mess. As the chancellor prepares his latest Spending Review, public sector borrowing will yet again exceed £100bn this year. And most of that isn’t even cyclical – it is structural. In other words, its annual accounts will still be in the red even when the economy returns to a normal state.
Private rail proposal could save taxpayers £1 billion
Jun 2013 20

The Government has recently set aside £500 million to build a rail link between Heathrow and The West and is likely to agree a similar figure for a line running south from Heathrow. But Windsor Link Railway, a private company, is competing to build the route and for a fraction of the cost. It is proposing the first wholly privately funded new rail line in over 100 years. According to its website, Windsor Link Railway’s proposals could save taxpayers over £1 billion.

This two phased project aims first to link Slough to Staines via Windsor and then to connect Heathrow to the Great Western Main Line and The South, significantly improving access to Heathrow and giving local people a much better service. It has support from local MPs including Michael Gove and Zac Goldsmith, Transport minister Theresa Villiers confirmed that it complies with the government’s specifications too.

What’s more, 95 per cent of local residents were in support of the scheme according to recent polling and over 100 local businesses have signed a letter declaring the project better than competing schemes.

The cost per metre of track is far higher in the UK than elsewhere in Europe, a problem exacerbated by shocking inefficiency of Network Rail and the complexities in building new rail imposed by the Department for Transport. So it will be interesting to watch this develop. If new private rail could see significantly improved services for passengers and better value for money for taxpayers then the option must be seriously considered.

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