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.

Nov 2007 13

The Telegraph reports a study by researchers at Lancaster University that claims to show that the £3 billion spent on education reforms such as specialist schools has been wasted.

"By comparing results between schools, the researchers found the Excellence in Cities and specialist schools programmes boosted grades over the period by just two percentage points each."

It seems quite likely that the timid reforms of recent years, which haven’t really got politicians out of the management of public services, are failing to deliver.  However, examining this indirectly by comparing schools that have, and have not, been part of the Specialist Schools and Excellence in Cities programmes could be misleading.

One of the most interesting results of a study on Swedish school choice commissioned by Reform in 2005 is that not only the new, independent schools showed improved performance.  Faced with tougher competition and true parental choice the existing schools did better as well.  The same thing could be happening here.

Minor, tinkering reforms to services like education can often be expensive stunts.  That certainly appears to be the case with the government’s literacy strategy.  However, that is not necessarily proven in the case of the Specialist Schools and the Excellence in Cities programmes by this Lancaster University study.

Nov 2007 13

Q. If you were in charge of any ministry which one would it be and why?

I would like to be the last Minister for Europe. 

Q. What are the three most successful policies you can think of in the post-war era?

Privatisation and the “right to buy” council homes.  Both pushed economic power away to individual people – and got politicians and Big Government off people’s back.

The third most successful policy is the education voucher.  The tragedy for several generations of British school children is that no one has had the verve or the vision to try it here.  We need to be very careful to introduce it as a decentralising, localist measure – and not as an inadvertent centralising measure.

Q.  What are the three worst policy mistakes you can think of in the post-war era?

  1. Joining the European Union.
  2. Centralising control over town halls and their finances (rate capping, then debacle leading to the council tax, then nationalising business rates).
  3. The 1983 decision not to proceed with the education voucher.

Q.  Who do you think has been Britain’s most successful post-war minister and why?

Margaret Thatcher.  She understood – at a profound level – her Friedman, Hayek, Popper, Smith and others.  She was a rare thing – a politicians with real, not manufactured, beliefs – and with the skill to actually implement this agenda.

Q.  Who do you think has been Britain’s least successful post-war minister and why?

Ted Heath.  He was responsible for two disasters; EU membership and undermining the structure of local government.   

Q.  What do you think of moves by Gordon Brown and David Cameron to bring more outsiders into government?

Why are more unelected and unaccountable technocrats a good thing?  They are not.  If politicians are serious about bringing in outsiders, they should try including the 99% of the people who live in Britain who are excluded from the smug and smarmy Westminster village. 

We need open politics and direct democracy – not a few celebs and technocratic mediocrities posturing with self-regarding politicians.

Q.  If you were Prime Minister who would you bring in from outside parliament to help you and why?

I would bring in the people.  I would have a Citizen’s Right of Initiative so that they, rather than the civil service, decided the legislative agenda.  I would also allow a right of referendum Swiss-style so that if I was daft enough to bring in an unpopular law, the people could strike it down.

Q.  Do you think it is important that ministers have experience in the subject area they are appointed to?

No.   Expertise often prevents someone asking the obvious questions.  Moreover, if by "expertise" you mean someone who has spent their entire life in a particular profession or field, then I would say that they should be the last person to make the key decisions in that sector.   For example, just look at how the so called "experts" at the Foreign Office have signed us up to all sorts of awful obligations.  They may be urbane experts, but they are awful at determining the national interest.    

Q.  What lessons do you think Britain can learn from other countries about the structure of government?

Decentralisation and small government is the way to success.  China and India have decentralised economic (if not yet political) decision-making to the local level – and are booming as a result.  America has done so since 1766.  Europe has since the 1950’s moved in precisely the opposite direction and centralised unaccountable power.  It is stagnating. 

It is a sobering thought that in China today a university for 40,000 students can be built by local government without any input from Bejing.  In the UK such an innovation would be unthinkable.  We are so centralised a country that the central State dictates the minutiae of higher education.  It is not only higher education that is decentralised in China.  So is its legal system, provincial tax policy and so on.   

The UK needs to reduce the size of the State by decentralising the functions of the State.         

Q.  What lessons do you think Britain can learn from other countries about how to deliver public services?

In the US, they elect their police chiefs, and have real innovation in fighting crime.  We have Sir Ian Blair.

In the US, local States run education, and they have voucher schemes.  We have the highest percentage of young people in neither education, employment or training. 

In the US, they have localised welfare and the Wisconsin and Florida approach.  We have so many millions on long-term benefits.      

Localism works. 

Q.  If you were setting up a system of government from scratch would you choose the British model or that of another country?

The US.  The tragedy of 1766 was that the Americans were really fighting for our English liberties.  The US Constitutional settlement is not perfect, but it is better at reigning back Big Government than our failing system.  We used to be a Parliamentary democracy.  We have become an unelected technocracy.

Q.  Do you think Britain can realistically move towards such a system?

Yes.  The impact of the internet will be massive.  It will take time to be felt, but like the advent of the printing press, it will lead to radical political change.  Watch this space.

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