You may have thought that the £19bn ID cards project (see BOM’s cost primer here) was safely asleep in the long stinging nettles, but it isn’t. It’s alive and well and already costing us plenty.

Computing reports:

"The government has spent £53m on consultants for the national biometric identity card scheme, and continues to use 83 external contractors at a cost of nearly £50,000 per day.

The figures are more than double the value of the original £19m pre-procurement consultancy contract signed in 2004, according to data released to Computing by the Home Office under the Freedom of Information Act."

Why the cost over-run already?

Turns out the technology and the specs aren’t nearly as straightforward as Charles Clarke originally promised.

What a surprise.

Not. In May we surmised that moving from Clarke’s original all-singing all-dancing all-weather scheme to a Heath Robinson lash-up would still cost plenty (and see the original LSE expert report here).

As we’ve blogged before, the procurement deadline has already slipped by nearly two years (originally set for Oct 2005).

But it seems the money fire is already roaring away nicely.

(htp Heather Brooke)

Before you read this blog, you need to click here and watch the video.

ResultsPlus.

Glossy?

Certainly.

Slick?

Yup.

Blood boiling?

Arrrrgggghhhh.

We’re all surely aware by now that the government’s regime of school management via tests and tables has some serious shortcomings.

In particular, by building everything on a raft of "high stakes tests" for teachers and schools, it strongly reinforces their incentives to teach to the test, rather than the much more important job of teaching for understanding.

Take for example this fairly typical report from Times Educational Supplement about the infamous Key Stage 2 tests, sat at age 11 to make sure kids have mastered the basics before they move from primary to secondary schools:

"This year’s Year 7 intake to Cyner Afan comprehensive school… had the best collection of national test results ever.

So head Wynn Williams was taken seriously aback when his classroom teachers started to tell him that many of these level 4 students needed special-needs support because they could not read.

He gave them the latest version of the London Reading Test, as he does to every intake, and found the teachers’ verdict borne out: the national test results may have been the best ever, but the reading test scores were the worst.

"Some of these children are coming in with level 4 in all three subjects and they are barely literate," he says. "We haven’t seen any difference in standards, and yet the national test scores are going up all the time.

I can only explain it by saying that my colleagues in primary schools are doing an extremely good job teaching to the test. We know how it works because we are now doing the same thing with KS3 tests. Our results show a significant improvement but we know the children are no better. It’s just that our staff are better at teaching to the test."

And remember also, this is a game of statistics, not individuals. Success is the overall percentage of pupils who can be lifted above the magic hurdle rate, be it KS2 level 4 or GCSE grades A-C.

So for schools and teachers, the key is not to waste loads of time helping very poor performers who will never make the test grade. Still less is it the more fulfilling task of stretching very bright pupils. No, the key is to identify those pupils who are just below the pass grade, and to do whatever it takes to nudge them over.

As the Rowntree Trust recently reported, it’s called triage (see this blog):

"There is much research evidence for ‘triage’ within schools (concentrating resources on the students who can be helped to turn Ds into Cs, at the expense of the low performers and the best)."

So now it seems the exam industry itself has geared up to provide teachers with the tools to manage triage even more effectively. And very useful they look too, as all those awe-struck teachers in the video testify.

Unsurpising really, because this is the profit maximising private sector at work.

Private sector?

Yes, that’s right. Unknown to most of us, Edexcel, Britain’s biggest public exam setter, is now fully owned by Pearson Plc, Britain’s biggest educational publisher.

Now I have absolutely no objection to the private sector being involved in education- indeed I welcome it. But I think we can all see the faintest sliverette of a conflict there.

Even worse, what we’re getting here- yet again- is a bastardised institutional arrangement which is almost guaranteed to give us the worst of both worlds. Once again, a lumbering simple shopping state monopoly is subcontracting vital services to a sharp profit maximising private sector operator.

If end customers had effective choice, that would be fine: any serious failure by the school’s subcontractors would result in the school itself losing business. But in the absence of vouchers, the vast majority of school customers do not have that choice. They have to take whatever they’re given by the state, even if the state allows its subcontractors to foul up completely.

ResultsPlus. Remember the name, because we should be hearing a lot more about it.

(htp Rory Geoghegan)

Halfway across a severely swollen river is not a good time to let the tiller go. But that of course is precisely what Cap’n Alan Johnson is doing on the good ship NHS. Whereas Commissar Hewitt had it hard about, Cap’n Al has let it go all floppy.

Yesterday he told the Health Select Committee he was junking one of the Commissar’s most cherished but highly contentious policies:

"I don’t believe there is the need for another independent sector treatment centre [ISTC] procurement and there won’t be a third wave.

We will instead move towards greater local determination."

On one level this is good news for taxpayers. The contracts with these ISTCs have been classics of the Simple Shopper’s art, with taxpayers being required to pay whether or not the NHS actually uses the service. Their total cost is £1.7bn, they are on average 11% more expensive than their NHS equivalents, and 20% of their paid for capacity is not used. Brilliant. (Also see here for details of the £1m paid to a Chesterfield ISTC for orthopaedic operations not carried out because patients chose to use existing NHS services).

As we know, the whole DoH programme to get more private companies involved in healthcare has been a shambles of overpayment and poorly designed contracts. Taxpayers have paid through the nose, even if the services are not used or actually fit for purpose.

The scandal of hospital cleaning shows just how bad things can get when you try to manage top-down via boilerplate contracts: with nobody directly in charge on the ground, the critical business of real hygiene on the wards in the hospitals has simply fallen down the dirty cracks in between (eg see here for latest on C.difficile crisis).

And let’s not forget the great money pit that is PFI. When last sighted, the 83 PFI hospital contracts were set to cost us £53bn over the life of the contracts, compared to an actual value of facilities of just £8bn. Indeed, private sector refinancing profits have been so munificent that even the normally placid PAC Chairman couldn’t stop himself spluttering about the "unacceptable face of capitalism" (see this blog and others for details on the mega refinancing gains made by some PFI players).

So Johnson’s been put in to stop the whole thing- private money, contestability, reform, it’s all systems stop.

Obviously the unions are delighted (although not so delighted about the grim outlook for their future pay rises). But should we taxpayers also rejoice?

The answer of course is no. We’re locked into a whole load of expensive contracts designed to support a more open NHS, but Johnson is junking the programme before we’ve actaully seen any of the promised benefits.

Our once in a lifetime opportunity to reach the other shore of real choice and competion has been lost. Taxpayers may be spending £105bn this year on health (over £4,000 per household), but effectively the money’s run out. 80% of Labour’s increased spending has been frittered away on increased costs.

The Tories- even in the increasingly unlikely event they got re-elected- have already bottled out of the radical choice policies that would offer real reform. So there’s absolutely nothing else on offer.

We’re back to drifting downstream.

As we’ve said before, if you can possibly afford it, get yourself private health insurance.

Today.

These estimates were cooked up… sorry, put together, by consultants PWC and KPMG, using a survey based approach known as the "Standard Cost Model" (see Report Fig 6), And nice work it is too- consulting fees have so far amounted to £17m (para 2.2).

Of course, the consultants are not the only ones making a living from "slashing" red tape. The government’s own Better Regulation Executive (BRE) is "a dynamic force… tasked by the Prime Minister to minimise bureaucracy for businesses and front–line staff in the public sector and to help charities and the voluntary sector to make a greater contribution to society."

Dynamism, tasking… you’d almost think they were part of the old DTI. Except of course, that was so full of red tape it was abolished. So it can’t be.

Except… I’ve just noticed the BRE (numbers and costs shrouded in mystery) is part of the Department for Business, Enterprise and Regulatory Reform, which… well, blow me down… is just the old DTI with a new nameplate. The DBER is investigating itself: I have a teensy feeling we shouldn’t hold our breaths for action.

But there’s another Much Bigger problem. As we’ve already mentioned, red tape comprises only one part of the regulatory burden. And it’s unlikely to be the biggest part: that comprises the burden of the regulations themselves.

The British Chambers of Commerce produces a well-known annual running score of the broader regulatory burden: the Burdens Barometer:

"The BCC Burdens Barometer is compiled in partnership with academics from the London and Manchester Business Schools. The ‘Burdens Barometer ‘ calculates the compliance cost to business since 1998 of new regulations. It is calculated using the Government’s own Regulatory Impact Assessment (RIA) figures which means it reflects the Government’s own generally conservatively estimated costs. It has been calculated at £10 billion in 2001; £15 billion in 2002; £20.6 billion in 2003; £30 billion in 2004; £38.9bn in 2005; £50.27bn in 2006 and £55.66bn in 2007."

So using the government’s own conservative estimates, the BCC calculates the burden has increased by £55.7bn pa just since 1998.

And it sure wasn’t zero before that: indeed according to the NAO report, seven out of the 12 most onerous bits of regulatory legislation were enacted by the last Tory government (especially the Employment Rights Act 1995, and the Town and Country Planning Act 1990- see report Fig 9).

On that basis, the government’s estimate of £20bn red tape cost doesn’t come close to capturing the whole regulatory burden. That’s at least three or four times bigger.

So will the "targeted" 25% reductions even be noticed? You know the answer.

The NAO looked at other countries that have already tried the same thing, and the story is universal: proud government boasts that its reduction targets have been met sit alongside a real world where the victims don’t see a blind bit of difference (report Appendix Three).