Nov 2007 13

The Conservatives have today laid out their new plans for giving people direct democratic control of Council Tax rises. The proposal is that any Council wishing to raise Council Tax by more than a nationally determined threshold would have to hold a referendum to get the electorate’s permission to do so. A system like this would be a great step in the right direction – localising tax control, increasing democratic accountability and bringing a number of other benefits.

Local taxpayers have suffered astronomical rises in Council Tax in recent years, rightly making it one of the most objected-to taxes in the country. The sums involved and the speed of the inflation have made life extremely difficult for many households, and that is reflected in Council Tax’s unpopularity. The thing that makes the recent trend seem especially unjust is that this is not one minority of taxpayers – smokers, motorists, drinkers, airline passengers – objecting that the majority is picking on them, it is a clear majority opinion that the tax is rising too fast and is already too high. Arms-length representative democracy has in this instance failed to respond to the electorate’s concerns.

Part of the problem has been the lack of accountability in the system. When taken to task and seeking to excuse high Council Tax, Westminster blames local councils and local councils blame Westminster. Neither, however, often propose viable solutions and neither should be allowed to escape blame.

In this case, localism has to be the answer.

Instead of the everlasting blame game, or simply allowing councils to force higher taxes on their electorates without adequate explanation or consultation, let’s do what democracy is about: ask the people.

It’s our money, and it is us who will be receiving the services it pays for – on principle, taxpayers deserve the final say on whether Council Tax should rise.

In practice, this is a good idea, too.

For a start, what better way to reinvigorate local democracy?

Few things succeed more in getting even the most apolitical people going than the money in their pocket (or being taken from their pocket). It is no wonder that local election turnout is so low when people know that their vote counts for very little when it comes to one of the taxes that effects them most. Give people a referendum on that tax and I think turnout would be very different indeed. It would be further bolstered by people voting on the basis of the spending proposals that would go with the different suggested Council Tax levels.

There would also be a renewed emphasis on medium and long-term planning in local authorities. If Councils knew their tax proposals would have to be justified and sold to the public not just in broad-brush terms at elections, lumped in with other issues, but in very specific referenda, then there would be an added impetus for clear thinking, accurate costings and good communication. Budgets year-on-year would have to link up. Regular sources of waste would not only stick out like a sore thumb, but would swiftly become deeply unpopular both with those running the councils and other departments who would not want their efficiency undermined by failing colleagues. Councils would have a good, in-your-face, practical reason to stamp out waste and failure.

Interestingly, any Council approaching a referendum would also need to prepare a Plan B, just in case they lost. Writing and costing that Plan B might well be an enlightening experience for some. I suspect there are quite a number of local authorities who genuinely believe they could not provide services more cheaply than they do, but have never actually tried – or been forced by necessity to try – doing so. It has the potential to be a refreshing experience, and one that would be pretty hard to object to. The people’s direct instruction can be quite politically difficult to dodge.

As well as being a good scheme for local democracy and local efficiency, it would be good from a taxcutter’s perspective. We know that people dislike Council Tax, and it would be rare that those who currently preach a high-tax gospel in the name of the people would find themselves backed up by those they claim to speak for.

Opponents of the plans have already started arguing against the idea. First comes the patronising and bizarre claim from the Local Government Association that:

"Local authorities should have the power to determine, without interference, the appropriate levels of council tax for their areas."

Without interference, you’ll note, means without the involvement of those inconvenient little people we know as “the voters”. You know, the ones that whom the elected Councillors who make up the Local Government Association are meant to serve, rather than view as an irritation…

The second line of attack is scaremongering that this will mean the electorate choosing to hand over as little cash as possible.

First, we have to ask the question – “so what if they do?” That is meant to be the way democracy works, by which people decide what they do want done and what they don’t, and what kind of country they live in. If the politicians or the civil servants disagree with the people’s opinion, that’s just tough.

In practice, though, the people can – possibly to the amazement of the nannying political class – make perfectly balanced decisions on their own. A good example is Milton Keynes, where they held a tax referendum a few years ago and rather than choose the rock bottom option or the high tax option they made the Goldilocks choice (neither too hot nor too cold) and picked the one in the middle.

So the plans bring with them several benefits to local democracy and the taxpayer. There is always room for improvement, of course – true localism would want to see powers returned to local or even referendum-based control, and central Government would still guarantee local authorities the right to a minimum tax rise – but it is a good start.

Nov 2007 13

Covcitycouncillogo Ken Taylor, the Conservative leader of Coventry City Council should be applauded for his comments in the Coventry Telegraph, stating that he will urge his group to reject the above-inflation pay increases recommended by an outside panel.

Many general council staff are still in dispute over single-status pay packages, and Coventry are looking at a shortfall of between £8million and £13million on next year’s budget.

With this in mind, voting to bring in rises of up to 38% for councillors’ allowances would no doubt be deemed greedy and unacceptable.

Taylor said: “I am very clear that we should not be approving new increases in councillors’ allowances and my cabinet colleagues agree with me.

We are facing difficult budget challenges over the coming year and may have to make some hard decisions about services to make sure we’re providing Coventry Residents with value for money.”

Consequently they will be taking a rise, but it will be less than 2.5% in sympathy with their colleagues.

It is a shame that it has taken the single-status pay fiasco to force this situation, but nonetheless it is highly commendable of Coventry City Council, who have a record of pretty good budgeting, coming out as the best council for mileage expenses in our recent report including all the councils in the region.

The fact does remain though, that budgeting is not something that should only be exercised once the spectre of financial disaster looms, it should be standard practice. A particularly successful and lucrative year might warrant some rewards, but in general, if a councillor is able to survive happily and do his or her job on an allowance increase inline with inflation or below, then that’s what they should do. This is not martyrdom – it’s called public service. Councillors should not stand to be elected for their own personal gain and their efforts should be driven by the desire to run a tight and efficient ship for residents. That includes providing the best possible service at the lowest possible costs.

Nov 2007 13

In a response to a tip off from a TPA activist, I issued a Freedom of Information request to the 5 Boroughs Partnership NHS Trust in the North West.  The issue was over their annual report, not so much the content of the report itself, but the brochure produced at the taxpayers’ expense. 


At a cost of £4 per copy, 1500 copies were produced, resulting in a bill to the taxpayer of £6000.  As you can see above, it’s clearly an expensive, hefty report.  My source was sent 3 of these by post, at a cost of roughly £8 postage – odd seeing as the Trust could easily have emailed the report to our activist.

Seeing as the Trust didn’t send any by email, this resulted in a total postage bill for all posted reports of £21.20.  That doesn’t sound that bad, but factor in that the Trust only posted 40 sets of accounts, it raises an interesting question:

1. If the Trust was only planning to send out 40 annual reports, why did they order 1500 copies?

Part of the answer lies in the Trust’s response.  To distribute the remaining 1460 annual reports, they were “taken to events and distributed in the organisation”.  So, we have to ask,

2. Why did the Trust order 1500 copies of the annual report seeing as only 40 were sent them and/or actively asked for them?
3. Couldn’t the report have been internally emailed within the organisation?
4. How many people work for the Five Boroughs Partnership NHS Trust?

You can ask these questions by contacting the freedom of information officer at the Trust and asking these much needed questions.

£6021.20 may not seem like a lot of money in the total budget of an NHS Trust.  It seems even less compared to the budgets of whole government departments.  But when we compare it to the £4,539.60p maximum basic state pension for a single person this year and suddenly we see the money spent on these annual reports could have made a big difference elsewhere. This report should have been internally emailed and sent electronically where possible to save money – ordering 1500 hardcopies therefore amounts to a gross waste of taxpayers’ money.   

It is precisely this culture of waste we need to root out and expose.  If politicians and public servants think that wasting one penny of taxpayers’ money is a bad idea, then they’ll be less inclined to waste thousands and millions of pounds of taxpayers’ money.  Think of it as Broken Windows Policing on the state sector’s spending, if we stop the low level waste, there’ll be no wasters around to squander huge sums of taxpayers’ money.

Nov 2007 13

Suddenly I feel unwell
Lifelong union man Alan Johnson was put into the Department of Health for one reason and one reason only: to buy off the fractious strike-minded NHS unions after the disastrous regime of Patricia Hewitt.

Obviously, your traditional union buy-off simply comprises dishing out taxpayers’ money in the form of big pay awards. But Johnson’s problem is that the money’s all gone.

So instead, he’s trying to placate the brothers and sisters by reversing Blair’s much vaunted "reform" programme.

The latest step is reported today:

"A pioneering £700m-a-year government scheme to buy surgical treatment centres and diagnostic services from the private sector is set to be more than halved by ministers.

The move means that the original £700m a year’s worth of business will turn out to be worth less than half of that – possibly as little as £200m.

The dramatic scaling back of the second wave of big central contracts will delight Unison and other opponents of the drive to involve the private sector in the delivery of NHS care."

It’s a U-turn that will cost taxpayers a packet:

"The late cancellations mean that the government will have to pay out up to £20m in bid costs to contractors, which include Netcare, Clinicenta and Alliance Medical. This is on top of £5m already paid out for scrapped schemes."

On top of that, we’ve already shelled out for procuring services we won’t now be taking:
"Aside from the private sector’s costs, the health department had by March this year already spent £72m on the procurement.

The department admitted last month that just eight of the 190 staff in the health department’s commercial directorate were civil servants. The remainder were external hirings costing a total of between £88,000 and £120,000 a day – or the equivalent of between £20m and £30m a year."

This whole fiasco highlights some familiar themes. The health service reform programme was inflicted top-down on a workforce that had never even been consulted, let alone won round. The staff were seen as the enemy, inflicting scars on the back of the Prime Minister, and obstinately refusing to recognise the brilliant sunlit uplands onto which they were being led. No surprise they’ve resisted to the last ditch.

And once again, a half-baked attempt to bolt private sector efficiency onto monopolistic state provision has produced a hideously expensive mishmash. We taxpaying customers have ended up paying millions for something we’re not even going to get. And the private suppliers are so hacked off they’re unlikely to play ball again anytime soon:

"One senior executive said the companies were now very wary. “There is a trust issue here,” he said. “We have been led up the garden path. We are not sure we want to go up it again”.

It’s the worst of all worlds. We’ve been left with an underperforming state monopoly, in thrall to embittered union throw-backs, and costing us well over twice as much as when Labour came to power.

Having used up all the money, they’re taking us right back to square one.
Nov 2007 13

From the Financial Times:

"A pioneering £700m-a-year government scheme to buy surgical treatment centres and diagnostic services from the private sector is set to be more than halved by ministers.

The decision – expected later this week – will not only mark another retreat from the use of the private sector in healthcare but will also see the health department forced to pay out millions of pounds in compensation."

The waste, £20 million pounds in compensation to private sector firms to cover the cost of bidding for contracts now cancelled, is a frustrating result of an insincere flirtation with involving the private sector in healthcare.  More importantly a glimmer of hope that we might see providers from outside the lumbering NHS bureaucracy involved in providing healthcare is now pretty much gone.  With the existing contracts more than halved – from £700 million a year to as little as £200 million – there is little prospect of this small step away from a politician and bureaucrat-led NHS being turned into important healthcare reform.

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