March 04, 2007

Incompetence & overspending

This blog favours smaller government, partly because governments aren't cost-effective in the way they spend taxpayers' money.

To take some recent examples of waste, we learn this week (more detail here) that
  • Spending on temporary staff by Whitehall has run up a bill of £200 million over the past four years at a time when the Government is supposed to be firing thousands of civil servants
  • The Passport Service has spent almost half a million pounds of public funds – just to change its name.
  • Regional development agency One NorthEast has committed itself to spending up to £63,000 leading a delegation of property professionals for a four-day conference on the French Riviera.
  • A group of senior Royal Bolton Hospital managers is to travel to Barcelona for a three-day conference at a cost of almost £3,000 - despite hospital bosses preparing to axe 95 jobs to balance the books
  • A senior local government official is to be paid more than £100,000 in taxpayers' money on top of a £200,000 retirement package after convincing councillors to make him redundant.
This is incompetence at the operational level, with apparently no serious restrictions on how the units waste our money. Wat Tyler picks up on more incompetence - the clamp on NHS pay after previous government miscalculations, the lack of jobs for junior hospital doctors coming through the system, and the failure of the Home Office to record details of serious criminal offences committed overseas for at least 10 years. But the ramshackle machinery bumbles on at our expense.

Wat also picks up a withering piece by Matthew Parris about policy announcements by Brown that go nowhere but still cost us money: "Warning: incoming Brown ideas. Likely impact: zero".

Running such big organisations is a major challenge even for talented people with experience of how to get things done. This is not just a British problem. Maybe we shouldn't expect French presidential candidates to be awfully good at adding up the costs of their manifesto commitments, but there is a problem in Spain too, as The Financial Times reports.

They point to the present Spanish government's "inexperience, particularly in business affairs".
Mr Zapatero never worked in the private sector, having left academia to become a member of parliament at the age of 28. Joan Clos, minister for industry, tourism and trade, is a former mayor of Barcelona and an anaesthetist by profession.

Finance minister Pedro Solbes, a former EU monetary affairs commissioner, is the only member of Mr Zapatero's team with economic gravitas, and he spends much of his time sorting out the gaffes of his colleagues.
The ability to get things done in large organisations is an even more diffuse skill than "economic gravitas", and thus less easily recognised and valued. But the skill has to be found and cherished.

Lord David James has revealed the cost of some of the scams and incompetence which came about through putting people without the necessary skills in charge at The Dome.

Perhaps they are learning on the job? Perhaps we have to put up with Douglas Alexander telling lies about the road pricing debate while he finds his feet in a cabinet job (and incidentally is responsible for our transport system)?

But the trouble is, they don't learn. Government just doesn't see operational competence as precious, and is prepared to make ignorant decisions for the sake of good headlines without considering the operational drawbacks. Thus in the case of the Rural Payments Agency the failures were caused by decisions taken by ministers, but the officials had to carry the can while Mrs Beckett got promoted to be Foreign Secretary. It was ministers who decided to press on with this crackpot scheme, even though they had been told there was a 60% chance of failure, and the CEO - senior though he was - "only ever met Defra Secretary of State Margaret Beckett twice in his whole time as CEO. And the second time was when he was made to confess personally to her that the entire project had blown up. In reality there seems to have been virtually no contact between the important people up at Defra's plush Whitehall offices" and the operational arm at Reading.

Now The Financial Times tells us that Ministers have spent £6m on consultants for proposals to force house-sellers to pay for home information packs.
The pack includes an energy performance certificate, rating the home's energy efficiency. No cost-benefit analysis for the certificates has yet been released. No bodies have yet been accredited to train the assessors for the certificates. The regulations for the certificates and packs will not be issued until the end of this month.
Interested bodies are warning against it.
The National Association of Estate Agents said yesterday the "seriously flawed" proposals were being rushed through in a "nonsensical" manner, before the full results of pilot schemes were known. It accused ministers of taking an "unacceptable strategic risk". The Council of Mortgage Lenders said it remained "concerned about the overall impact of the packs on the housing market", while the Royal Institution of Chartered Surveyors has warned there are "insufficient working days available to train the requisite number of inspectors by June 1".
The government hasn't even followed its own policy on regulation.
The Better Regulation Commission urged ministers to "reconsider" the proposals last month, stating they "fall short of our expectations for good regulation". The watchdog warned that the government had failed to provide sufficient justification for its gold-plating of European requirements for energy certificates - a central plank of the packs.
But the government says this "should go ahead on June 1, given the importance of tackling climate change and cutting carbon emissions from homes. The date of June 1 was set over 18 months ago".

So this is partly another ludicrous new green policy, and partly testimony to the government's inability to set up a relatively simple (if misguided) system, even within 18 months.

The tragedy is that no political party is hounding the government over its waste and managerial incompetence, attitudes which - judging by this week's reports alone - seem to pervade the furthest corners of the public sector. Because it's not their money. It was ours.

In the US, political careers have been built on opposition to wasteful Washington bureaucracy. At the moment it seems to be just the gentlemanly Taxpayers' Alliance holding the ring. Nice people, but are there any other takers?

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