Department for Transport’s economics go off-track
Oct 2014 29

Today saw the publication of a quietly damning National Audit Office report into the ability, or lack thereof, of the Department for Transport to effectively analyse large-scale transport projects.

It does not make pleasant reading for anybody concerned about transport infrastructure in the UK.

The Department has failed, the report says, to adequately challenge economic analyses “where there is strong pressure and lobbying (by Government) for a programme to go ahead.” In short, in situations where politics has been put before policy. The estimated positive impacts of HS1 were said to be “over-optimistic,” and that the Department should have engaged in a “sense-check” before going ahead with the project.

On HS2 – and this is worth quoting at length:

“The original benefit-cost ratio for the first phase of the High Speed 2 programme at 2.4:1 was considerably higher than ratios for other programmes but the Department did not query why this was the case. Later on, it identified that errors in modelling had the effect of some benefits being double counted. After this was corrected and changes made to some other assumptions the ratio is now 1.4:1.”

Let’s reflect just for a moment on the fact that the Department for Transport, which along with the Treasury has signed off £50 billion of borrowed money to this project, made such substantial errors that they overstated the cost-benefit ratio of the project by almost double but refused to look again at this clearly unusual forecast until pressure from politicians and taxpayers forced them to commission another report into the strategy behind the project. There is also by no means a consensus that the new benefit-cost ratio is sound, with both the IEA and the IoD (full disclosure: the latter article was written by me for my previous employer) casting significant doubt on the ability of HS2 to regenerate the north or that it would address the concerns of business travellers. In a series of reports, we’ve demonstrated too the hidden costs of the project, that it won’t solve Britain’s capacity issues, and that it won’t deliver the jobs we are told.

 Adding to the criticism, the NAO suggest that “finance choices have been based on what the government can afford or on policy rather than value for money.” It’s no wonder that only 27% of business leaders think the project will deliver on the latter metric when it’s a third consideration for the Department.

The report concludes that the Department has “not made as much progress” on “developing clear strategic business cases and scrutinising economic analysis of the estimated benefits of new railways.” Perhaps more worrying, there is also the suggestion that the Department has not been “monitoring and evaluating benefits against (a) programme’s original objectives and using evaluation to inform future programmes.” If we’ve failed to learn the lessons from badly off-track the projections for HS1 were, one would suggest it’s unwise to bet £50 billion of taxpayers’ money that this time it might be different.

Taxpayers are entitled to feel concerned indeed that all parties are blindly pushing ahead with HS2 at a time that the Department is being criticised for an inability to properly analyse the impact it will have. Politicians enjoy announcing grand projects and cutting red ribbons at opening ceremonies. HS2 might make for a good press release, but it’s bad for Britain.

Flight tax fury shows how painful it is
Oct 2014 22

Just weeks after the TaxPayers’ Alliance campaigned against Air Passenger Duty (APD) at Bristol Airport, the unpopular tax on holidaymakers has become a political hot potato in the region. Last week, the chairman of Cardiff Airport tabled an amendment to the Wales Bill in the House of Lords, asking for the devolution of APD on all flights from Welsh airports. If this was accepted, Cardiff Airport could then cut the duty and gain an enormous competitive advantage over its closest rival at Bristol Airport.

On a standard rate flight originating in Bristol or Cardiff to New York, APD adds £138 to the overall cost. For a longer flight to South East Asia that can rise to £170, while a family of four travelling to Florida with economy flights can expect a whopping £276 in duty alone. To have the ability to scrap this extra cost would give any airport a distinct advantage over others in the UK.

Chief Executive of Bristol Airport, Robert Sinclair, is fuming at the proposal. “The two airports are less than 100km apart,’ he says. ‘Bristol is as convenient as Cardiff for many people who live in south east Wales, and we currently serve 25% of the market for air travel for the entire country. This is not about England versus Wales, it is about the market deciding where airlines wish to operate and passengers voting with their feet. Selective subsidies or tax systems which favour one government-owned airport over privately operated competitors are not only unfair, they are a waste of taxpayers’ money.”

Cardiff Airport has already proved controversial after it was nationalised by the Welsh government last year with £52m of taxpayers’ money, raising fears that it would benefit unfairly from state subsidies.

“The purchase price of £52m paid by the Welsh government, which is well above market value when compared to recent transactions involving UK airports, gives us concern that ongoing government involvement and support is highly likely,” said Bristol’s Robert Sinclair. “Bristol Airport has never been concerned about competition from Cardiff or other airports, provided that competition is on a level playing field without any form of state subsidy or government support.”

That airport bosses in both Cardiff and Bristol clearly think APD is a drag on their business should surely be good enough reason for the government to look again at scrapping this unpopular holiday tax and give every a passenger break—and boost business at the same time.

Tim Newark is the TaxPayers’ Alliance’s Grassroots co-ordinator in the South West.

High drama at the Arts Council for Wales
Oct 2014 22

The BBC has reported upon the cuts being made to the Arts Council for Wales (ACW) in a recent article. The article, which was constructed to act more as a pre-emptive tug at the heart strings of theatre goers, suggests that the £300,000 cut to the budget would represent “potential problems” for the Council.

I’m not at this point going to start bashing everything artistic. After all, the creative industry is a multi-million pound industry and our artistic work differentiates us from every other species, but there is no question that many grants have been given to art that is by no means inclusive to the wider populace.

But why is it that we now have ACW offering apocalyptic warnings to everyone as small as community groups up to and inclusive of the Welsh National Opera over their future funding streams? The Council handles nearly £33m of Welsh taxpayers money; it seems strange to despair at the warning that arts groups may have to rely more on the income they themselves generate.

As a taxpayer I would like to think that every penny of tax I pay is going to protect essential frontline services, but if the ACW believes that these groups can survive via the income they generate, then why were they being given money in the first place? Secondly, the ACW – despite the UK’s £1.3 trillion debt burden – still think that they can get by on the something for nothing band-wagon.

This non-essential spending should be completely cut. Welsh taxpayers should be getting value for money and not be subsidising small groups of individual hobbies or aiding with an individual’s claims of self-expression. The Welsh Government need to take a more robust approach to saving the Welsh Finances and one of the ways to do this is to further cut ACW funding.

Lee Canning is the TaxPayers’ Alliance’s Grassroots co-ordinator in Wales.

 

First-class expenses at Plymouth University
Oct 2014 15

While students are forced to take part-time jobs to help pay their way through university, some of the top staff at Plymouth University are enjoying the high-life at the expense of the taxpayer – including first class rail travel, designer chairs and a trip to Miami.

Over the past three years, Plymouth University’s vice chancellor has spent almost £15,000 on first class train travel. That’s been calculated to work out at an average of one first class journey every eight days. These include a trip on the Eurostar to Paris at £311.50 and numerous return journeys between London and Plymouth, each costing £242.00.

“While we understand that from time to time there will be a need to travel by train,” says a regional University and College Union spokesperson, “first-class journeys every eight days for three years does seem excessive, particularly at a time when the university was making staff redundant because of the need to make savings.”

But this is not the only cost to the taxpayer of vice chancellor Wendy Purcell, who is currently suspended from her top post, on full pay of £288,000, while being investigated over her recent conduct. A boardroom row involving a previous chairman and the vice chancellor has seen legal costs skyrocket to over £150,000 for seven months’ work. At one point, the university was footing the bill for £27,000 of legal advice for Purcell.

Then, if that wasn’t bad enough, news emerged that the scandal-hit Plymouth University has spent £150,000 on seven chairs, designed by top craftsman John Makepeace, for its graduation ceremonies, while a further £24,000 has been spent on sending six members of staff to Miami for a conference. All this against a background of threatened job cuts at the university.

“Ultimately, this is not about ‘chairs’ but a collection of contemporary design pieces by one of the world’s leading furniture designers,” says Plymouth’s deputy vice chancellor. “Even before launching the project publicly, the works have attracted the attention of one major museum which is interested in adding to its contemporary design collection.”

“No student has ever chosen a university because of its chairs,” says the baffled local Union rep. Students and low-paid college workers will need a sit down.

Tim Newark is the South-West Coordinator of the TaxPayers’ Alliance

Road repairs drive taxpayers up the wall
Aug 2014 06

South West TPA supporter Malcolm Leaver has been doggedly pursuing his local council for information on the cost to the taxpayer of street repairs in his neighbourhood—but has been given the run around by a South Gloucestershire Council (SGC) reluctant to cough up the details.

Replacing a footpath and kerb on a small stretch of a road near him cost a whopping £44,202, but he only found out the daily rate by mistake. ‘They sent me the time sheets in error,’ says Leaver. “They show rates of £850 a day for nine hours but these were not always worked as full days. Some of these days were not worked at all and some only part and casual. Some times I even noticed them shopping in the morning or sleeping in their lorry in the afternoon.”

“As you can probably appreciate,” came a response from SGC, “there is no system that can ensure that a workforce is fully engaged in productive work for 100% of the time on site and there will invariably be lost time or non productive time as there would be [in] any organization whether operational or office based.”

A nearby road surface was replaced, but within a year several parts of it had new cracks and these sections were replaced under a separate budget of £10,765. “SGC are of the opinion that their direct labour gangs are non-profit making,” says Leaver, “and even with the poor standard of work and costly repairs they infer the cost is cheaper than using an “outside contractor”. This road now has several “crazed/sunken” areas.”

Are local taxpayers getting value for money with these road repairs? From his research, Leaver doubts it. “If the cost is close to the budget, no one seems to worry.”

On another occasion, work was carried out on a nearby pedestrian crossing. ‘The work started with one man using a pneumatic tool to break up the pavement on the east side of the road,’ noted Leaver, ‘whilst the private haulier was parked on the grass verge on the opposite side of the road. One questions how much one man is going to break up to substantiate the use of a large tipper lorry privately hired? After that initial start, no work was carried out the next day or so.’

Again and again, Leaver has asked to see documents referring to the cost of these repair projects, but the council has not provided them or dragged their feet over several months. Following an official complaint to the council about this, their Head of Legal and Democratic Services acknowledged that SGC had raised expectations over the public inspection of documents that they did not meet. The council officer advised a payment of £100 in compensation to Leaver ‘in recognition of the frustration and inconvenience he has experienced in this matter.’

As for the lack of value for taxpayers’ money, the officer responded by saying “contractors and machinery are hired on a day rate (a 9 hour minimum period)” and that “such contractors would have to work around the progress of the scheme and would not be continuously working through the period… There are therefore times when there appears to be inactivity but this is a necessary requirement of completing a scheme.” Does that include sleeping in a lorry in the afternoon?

Peter Bazalgette, the Arts Council and their awesome responsibility to spend taxpayers’ money wisely
Jun 2014 19

Sir Peter Bazalgette, the chair of the Arts Council England, yesterday told a Centre for Policy Studies conference that the Government should continue give taxpayers’ cash to his organisation because the money is necessary to spend on ‘risky’ art projects. In other words, there are projects that profit-seeking companies and arts charities funded by charges and donations would see as a waste of their scarce resources. But this poor value for money isn’t a concern if it’s only taxpayers who will have to pay.

Bazalgette isn’t a poor man. For his chairmanship of the Arts Council, the annual report showed that he received £40,000 in 2012-13. He’s also a non-executive director of ITV plc, for which he received another £35,000 in 2013. As non-executive director of YouGov plc, he received another £32,917 in the year ending 31 July 2013. In addition, he enjoys several other interests and has had a successful career in television, most notably at Endemol, creating Big Brother.

So why does he insist that these projects must be paid for by people who don’t necessarily want to pay for them, most of whom earn much, much less than he does? Shouldn’t they instead be funded by people like him who think they’re a good idea? When people on modest incomes struggle to make ends meet thanks to crushing tax burdens are still having to pay tax and when the Government is running up an enormous deficit, the case for wasting other people’s money on ‘risky’ projects becomes even weaker.

When people want to spend taxpayers’ money, there is an awesome responsibility to ensure that it isn’t wasted. There are good reasons to spend taxpayers’ money on a variety of causes. But something being ‘risky’ isn’t one of them. If people want something ‘risky’ funded, they should offer their own money, not someone else’s.

Manston Airport’s closure is sad, but we can’t subsidise it
Jun 2014 19

Thanet District Council in Kent has come under pressure to issue a compulsory purchase order (CPO) for local Manston Airport, which closed on 15th May, with the loss of 144 jobs. This marks a low point in the airport’s recent turbulent history, which had seen it host a James Bond movie and target 6 million passengers a year.

Manston Airport’s closure has proved contentious. A petition launched by Roger Gale MP has already attracted attention, and even Nigel Farage has waded in, describing the closure as “economic vandalism”.  This support for the reopening of Manston Airport has culminated in the council’s consideration of a CPO.

That Manston Airport has closed is disappointing, not least for those who worked there. But it isn’t surprising. The airport has seen a series of owners, and none succeeded in making it viable. It is reported that Manston Airport had been losing £10,000 a day before its closure. Thanet taxpayers would therefore face a bill for £3.65 million a year if it were to reopen – and that’s before factoring in its price tag and necessary investment.

It would not be the first public body to purchase an airport with taxpayers’ money. Prestwick and Cardiff airports were bought by the Scottish and Welsh Governments respectively. Both have gone on to eat up millions of pounds. These examples should serve as a warning to Thanet District Council – a local authority not known for its aviation expertise – to focus on essential services.

If that’s not enough, then it should remember its other bad investments. Dreamland, a derelict theme park, was subject to a CPO in 2011. £6.8 million of taxpayers’ money has since been ploughed into the site without generating a single penny in return. The port at Ramsgate, meanwhile, has seen its revenue plummet under council ownership – yet still consumes millions of pounds in investment.

Central Government learnt the hard way in the 1970s that ‘picking winners’ becomes a game of subsidising losers. Thanet District Council, unfortunately, is yet to accept this. Losing Manston Airport would be sad, but throwing millions of pounds of taxpayers’ money at a white elephant would be tragic.

Big expenses at big NHS quango
May 2014 14

Another day, another example of wasteful spending in the NHS – this time with the NHS England board the guilty party. During the first year of the organisation’s existence, top-level officials managed to run up an expenses bill of almost £200,000 on travel, hotels and restaurants. All of that, of course, is charged to the taxpayer.

The biggest spender is Sir Tim Kelsey, National Director for Patients and Information, who claimed for an £46,000 on top of his £185,000 salary, including almost £7,000 on flying to conferences in the US.

Other members of the executive board were equally busy. Jane.Cummings, Chief Nursing Officer, has total expenses of £27,000, while Bill McCarthy’s £23,000 tab includes £491 for one night in a hotel following a £313 train journey. Together the three make up over a quarter of the total bill with the remaining balance shared between the 12 remaining executive and non-executive directors.

Andy Silvester, our Campaign Manager, gave the following comment:

These NHS expenses will be enough to give taxpayers a heart attack. The public expect their cash to be spent on doctors and nurses, not on train tickets and flights to Los Angeles. At a time when the health service is having to make much-needed savings, hard-pressed taxpayers will be wondering how bosses have managed to run up such a massive bill. We need a war on waste right across the NHS to make sure that the public are getting value for money from their health service.

With the NHS England board making such eyebrow-raising claims, eliminating waste in the rest of the system really doesn’t appear to be a priority.

£370,000 for the NHS chief who never left
Jan 2014 30

With the NHS no longer being handed inflation busting budget increases, you might expect a certain amount of belt tightening. Yet the world’s fifth largest employer continues to squander cash with another eye watering pay off for a former Deputy Chief Executive who never actually left.

The scandalous pay off was exposed in the Times as part of a revised list of 36 health chiefs paid a total of £10.2 million when 161 organisations were abolished under last year’s NHS reforms.

Rob Cooper of the Yorkshire and the Humber Strategic Health Authority was given a golden goodbye of £370,000 when the body was abolished. However, by then he had already found a new directorial role in a London NHS trust on another undoubtedly generous pay packet. NHS terms and conditions of service oblige staff to wait just four weeks before taking up new roles in the NHS if they are to be eligible for redundancy payments.

It is also in direct contrast with the words of NHS boss David Nicholson who has pleaded with managers to hold off for at least six months. But it doesn’t look like anyone’s listening. This certainly isn’t the first time such huge payoffs have been made either. Other former Chief Executives have received amounts of £290,000 and £340,000 under similar circumstances.

The list also exposes the underestimation of at least seven payments costing taxpayers a further £1 million.

George Osborne made a mistake in ring-fencing the NHS budget. Now he should heed the advice of the likes of Liam Fox and tear the fence down.

This is not the first time we’ve written about the public sector merry-go-round. It remains in full flow in at central and local government levels and it’s high time politicians declare war on this continual, inexcusable waste of taxpayers’ money.

A sour note for taxpayers as NHS spends £5,000 on jazz seminar
Jan 2014 06
NHS managers have splashed out £5,000 on an afternoon of jazz at taxpayers’ expense. The London Leading Health Partnership, which runs courses for NHS staff members, hired a pianist to present the 4 hour ‘Jazz Thinking for Transformational Leadership in the NHS’ course to managers, doctors and nurses.
Participants took part in a jam session, followed by a presentation, designed to help with “improvisation and communication”. The course applies jazz techniques to “enhance the art of transformational leadership”.
NHS staff members were advised to follow the example of Miles Davis who once said “there is no such thing as a wrong note”. That might be wonderful advice for saxophone improvisation, but taxpayers will wonder how relevant it is for managers, doctors and nurses in the NHS. Coming so recently after the Mid Staffordshire scandal, cover-ups and the revelation of 13,000 “excess” deaths last year, you would think that NHS bureaucrats would focus on improving patient care while showing proper regard for the taxpayers who actually pay for the service.
NHS managers have lost touch with common sense and it’s time they got back to basics and stopped wasting our money on ludicrous schemes like this.
West Yorkshire councils dip into budgets to fund the Tour de France
Sep 2013 27

It was revealed earlier this week on BBC Radio Leeds that Yorkshire councils will be dipping into various budgets to pay for the ‘Grand Depart’ of the Tour de France next year. The famous cycle race starts in Leeds next year on 5 July. Wakefield Council plans to spend £100,000 from its public health budget even though none of the race will take place in Wakefield. Kirklees Council is taking £672,000 from its jobs & growth fund, Bradford is dipping into its reserves to the tune of £731,000, and Leeds Council is taking £360,000 from its capital programmes. A total of around £6 million will be taken from various budgets by councils in West Yorkshire, and all of this money is on top the cash already spent to win the right to start the race in Yorkshire.

Councils will argue that the ‘Grand Depart’ will be a money spinner for Yorkshire and will showcase the county to the world. I don’t disagree with that assessment, however at a time when councils are reducing spending, why don’t they think of alternatives to constantly dipping into taxpayers’ money? How is taking £672,000 from the jobs & growth fund in Kirklees going to help jobs & growth there? This is what the leader of Kirklees Council, Mehboob Khan, had to say:

The return on our investment through the spending of the visitors expected in the region will be many times what we are paying. It is the biggest sporting event in the world and one billion TV viewers will see the Tour in Kirklees, in addition to all those who come here.

This still doesn’t explain how hundreds or thousands of new jobs are going to be created. I watch some of the stages of the Tour de France on television. To be honest, I couldn’t tell you where most of the stages take place. The cyclists race by at such a speed, you don’t have time to appreciate the surroundings. I can’t imagine many people around the world watching the race immediately thinking of taking a holiday in Huddersfield.

When asked what Bradford Council was getting for its £731,000, city councillor, Andrew Thornton, mentioned some of the money would be spent getting the roads up to standard, something the council should be doing anyway. (A recording of his interview and my response is at the bottom of this post)

The main benefit to those parts of Yorkshire staging the event will be cycling enthusiasts wanting to watch the race live. No doubt local hotels will be fully booked at the time, and bars and restaurants will have a roaring trade – at least for a couple of days. Then everything will go back to normal again. Some taxpayers’ money will inevitably be spent, but an additional £6 million out of already stretched council budgets cannot be justified.

Why are councils not thinking about getting commercial sponsorship to mitigate some of the costs? Surely many local, regional and national businesses would like to be associated with the Tour de France and would be willing to put their money where their mouth is? Last year’s Paralympic Games were sponsored by Sainsbury’s. Other cultural events are regularly sponsored by companies in the towns and cities they take place. Why haven’t councils thought of this?

Although it doesn’t make sense to me why the Tour de France is starting somewhere other than France, I am not a killjoy. All I ask is for councils to think of alternatives before collectively committing around £6 million of taxpayers’ money, taken from budgets it was not intended for.

What’s happened to those responsible for the disastrous South Yorkshire Digital Region?
Jul 2013 30

Dominique Lazanksi wrote last week about the disastrous project, ‘South Yorkshire Digital Region’. Thankfully the Government has decided to pull the plug so as not to expose taxpayers to even more losses, but what has happened to those people who were responsible for making the decisions?

In the Yorkshire Post last Saturday, some of those questions were answered. Jim Farmery was Head of Innovation at Yorkshire Forward, the now defunct Regional Development Agency (RDA). In 2009, Mr Farmery said: “I don’t have any sleepless nights over the business plan. I think if you ask people on the street if they could get five times the broadband speed, would they pay an extra £10 or £20 a month, most will say yes.” Clearly Mr Farmery didn’t go out on the streets and ask those questions. When Yorkshire Forward was wound up, he received a £70,000 pay-off and he now works as Director of Business Investment for Creative England.

David Holt was Digital Region’s first chief executive, paid around £100,000 a year. When the project was launched in April 2010 he promised a “very exciting few months”. Just a few weeks later, when the scheme was unravelling, he left his post. He know runs his own management consultancy business, ‘Improved Potential Limited’. On his LinkedIn profile he describes himself as a “proven business leader” who can “deliver high-performance results”. He also says he considers himself as “versatile, and capable of rapidly adapting to different business environments and situations to deliver results.”

The person not mentioned in the Yorkshire Post report was Tom Riordan. He was Chief Executive of Yorkshire Forward from 2006 – 2010, and had been with the RDA since its inception. Since 2010, he has been Chief Executive of Leeds City Council. As the man in charge of Yorkshire Forward at the time, and ultimately accountable for £40 million of taxpayers’ money being pumped into the scheme, why wasn’t he asking more probing questions?

Not that council chief executives were asking probing questions either. The Yorkshire Post describes Phil Coppard, the former Chief Executive of Barnsley Council, as evangelical about the scheme’s transformational impact. In July 2009 he said: “If anyone doubts the value of Regional Development Agencies… then let them look no further for evidence to the contrary than Digital Region.” He can hardly be described as a prophet! Neither can former Chancellor, Alistair Darling, who said the scheme would “stimulate economic activity” in South Yorkshire.

We are constantly told that we need to pay high salaries to these people because they are the best, and we need to retain their services to prevent them from moving to the private sector. With this disaster on your CV, which private company would want to employ you? Instead, the majority of those people connected with this failure will continue their public sector careers as if nothing happened. They will go on to retire on generous taxpayer-funded pensions whilst taxpayers pay the price in reduced services and higher taxes.

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