The crash of politics

The current national news of the public deficit, whether to borrow more or cut spending, has revealed the inescapable truth that politics has crashed into the buffers of economics..

‘Economics’ is an over simplification. The National Audit Office has long reported the lack of financial and managerial clout at the top of Departments of State.

The whole of the State apparatus, costly in itself,  is predicated on the primacy of the ‘policy’ and funds voted for health and education and so on. The revenue for this is then raised from taxation without thought of the dynamics of effectiveness and accountability. That Government walks away having voted the funds has been shown up as costly, dangerous and uncontrolled by the European court of Auditors refusal for 14 years to sign off their Accounts. I expect the same result when the first ever Whole of UK Government accounts are put before Parliament by the Comptroller and Auditor General later this year. This is not  to suggest that grants to Surrey County Council are lost to sight but without proper accountability processes we are not far from that.

It gets worse. In government there is an almost complete lack of the numerate, operational tool, and professional decision-making culture that the circumstances require. We have just been regaled with the unbelievable results from the PFI initiative. £302 to change a plug and the original capital cost deferred and multiplied down the years. Why is government unable to do these things for itself rather than pay so much to others. Does it not do the usual evaluations, such as discounting the cash flow, before setting off on that road ?

David Cameron has sensed or recognised this huge and very costly elephant in the room by seeking for government departments non-executive directors with clout from outside.

This whole problem is about to be worsened by the big society and ‘localism’. Who is going to do the management and back-office stuff ? And  just when the trend of human evolution and history is moving in the opposite direction. Ever larger infrastructures and standards require broader co-ordination.

The answer is to completely flush out of the system the present poor quality of dreaming and ineffective politicians. If we want to get back on track we shouldn’t start from here. But a changed centre of gravity would perhaps develop from a new department accountable to the Prime Minister whose function would be akin, for the ship of State, to a naval architect and chief engineer to design and maintain the system architecture.

The TaxPayers Alliance and locally in Surrey, STAG, can do much from our own experience to begin to change perceptions as to how government and the public sector should operate.

Let's learn to use the local authority auditor

Taxpayers are, or should be, considerably interested in  the work and opinions of the auditors of their local authorities and all other public bodies.

It is intended but not generally realised that assurance is given on value for money and resource utilization as well as the annual accounts.

This process is currently rendered largely wasted because (a) the financial statements are mired in detail and late, and of (b) bureaucratic language.  Similarly the value for money judgements when written up by auditors are  unintelligable to the lay reader and do not extend beyond  whether suitable arrangements are in place - not whether achieving.

In 2012 the Audit Commission is to be scrapped leaving the ‘market’ open for  privatisation but in ways that have not yet been worked out. At the same time there is to be the gradual decentralisation of public activity eg Private Health Trusts giving way to GP groups.  For example there are now some 11,000 such organisations accounting for some £200bn of public funds, some so small such as parish councils as not to feature even in their own minds as needing to account for our money.

We should be very concerned that developments do not weaken still further our ability to keep tabs on our money in a proper businesslike environment. We are also as a nation moving into a situation which in Europe has caused the accounts there to be failed by the Court of Auditors for 14 years. How will the first ever UK government consolidated Accounts, for 2009-10, fare when they see the light of day at the end of 2011 ?

Councils to set parking fees (News report 3rd January 2011)

At last. Eric Pickles, the Local Government Secretary says “we’re getting out of the way and it’s up to councils to set the right parking policy for their area”. That includes setting competitive local charges.

Up until now Government made it “unlawful” to use charges to “raise revenue or as a local tax”. Why ?

The Local Government Association still says “Councils can’t use parking as a revenue raising exercise but they should have the freedom to set charges at a level which covers the cost of providing parking”. In other words they mustn’t make a profit. Why not ? Especially if it is ‘ploughed back’ as it must be. And more especially because taxpayers paid for the car park in the first place.

But the LGA view is wrong at a deeper level. The first thing to realise is that in order to meet their requirement it is necessary to pass acres of legislation, codes of practice and so on to define what is cost and when a price is a cost recovery and when revenue raising. I haven’t dared to bury myself in the mountains of stuff trying to do that. In practice there is no difference.

Then Profit and Loss requires a cost accounting system. This is something, and the Audit Commission supports me in this,  which hasn’t yet come into government consciousness and practice. How do they intend to set prices ? Do they have to account for direct costs, direct costs plus overhead apportionment, marginal costs, or contributions  ? In practice "actual" cost is meaningless. Cost can only be defined by the question needing answer.

But set to one side those questions of management tools and technique. There is one simply stated  marketing approach which fits the bill.  Charges should be  set to achieve if possible say a 5% under-occupancy of spaces at any one time. Higher charges will deter to the detriment of revenue and lower will lead to perpetually full occupancy which also frustrates and may even so yield  less revenue. Of course quiet and busy periods might be differentially priced to advantage.

And there’s more. Optimised revenue gives council management choices. Either to stabilise or reduce council tax, or put a surplus towards development, subject to pay-back calculations, of more spaces and in turn more revenue.

Is there now some small hope that government may at last be seeing the light and will allow new behaviours which will relieve the  burden on taxpayers’ shoulders which has been added to exponentially in the past for little discernable benefit to anyone except public employees, managers and councillors.

We can't pin down our local elected representatives

We never seem to be able to pin down our local elected representatives. Council tax - it always used to be 'nothing to do with us guv' because the government fixed the amount of redistributive grant. This was the excuse for having set an exorbitant council tax increase to balance the books. "If you don't like it change the government". Council tax doesn't do what it says on the tin.

Having not entirely got past that one we turn our attention to spending and whether we are well governed. We are not but then we find that we  can't turn to Surrey MPs for support with council tax because there is a chinese wall between them and councillors. Not only that but we can't see what we are getting for the Party 'brand'.

So we think some more about this and conclude that we must face up to those who run things and are supposed to be accountable to us. Councillors say "we are elected to represent the people of Surrey. We are not managers." This seems to be an Upstairs/Downstairs idea that the elected ones are only concerned with strategy and policy while the appointed paid officers look after execution and administration.. This is an artificial and unreal distinction in the total system which embraces responsibility and delegated decision-making. It matters of there is bad policy and unproductive or unnecessary process.

The cost to us is compounded by the many committeess, select or otherwise, all requiring servicing, set up for Party political balance to monitor everything and in so doing dilute the managerial process.

This all represents a huge unproductive and wasted cost  which is nevertheless difficult to measure..

And when we go to the voting booth we are short of evidence to inform our judgement such as a timely Annual Report of activity, financial performance and state of affairs as is rquired by law. We are also short of the  CVs of those aspiring to take executive responsibility.

We are campaigning into this dimension and are looking for anecdotal evidence to make the case for better behaviour, and reform. Please give us your support because we want a better, less costly, county council. Register with us if you share our ambitions, it will not cost you one penny