Month: November 2007

The data loss at the Revenue has done one good thing. It has made the world wake up to a problem frequently highlighted on this blogsite the incompetence and waste of the UK public sector. Perhaps now we can have a proper discussion of how the public sector can be changed to give us a better service at a lower cost.

So many things have to change before we have a smaller and more effective public sector. Government has to stop prying into so many facets of our lives, and move away from the idea that Whitehall can manage all the schools, hospitals, police stations and other public facilities from the centre.

This government treats new legislation as just another press release, pushing too many Bills through Parliament at breakneck speed without proper scrutiny, only to fail to implement them or make them work properly. We need to legislate less, and legislate better. We need to reduce the volume of legislation on the books, and make sure what is left is well drafted and effective.

This government treats a press announcement of some new initiative as mission accomplished. Instead we need Ministers who understand that announcing a new measure is just an early step in a long journey. Successful Ministers have to supervise the implementation, and make sure the measure works and is well administered.

This government has introduced higher pay with performance elements for senior staff. The problem is the performance elements are not well designed, allowing too many staff to achieve the criteria for the pay out even when the underlying service is poor or when major errors occur. There needs to be an overhaul of performance pay, containing a personal element and a service wide element, and there needs to be tougher adjudication of whether the criteria have been met before making any payment.

Ministers need to take more interest in how their departments run, and learn to be clearer in setting objectives and sticking to them. Whitehall’s target driven culture does not work because there are too many targets and too many changes. Most departments do not know what winning means. If you set a department or an individual five targets you can assess their achievement and hold them to them. If you set them 100 targets they are off the hook, as no-one expects they can hit all 100, and there will be contradictions between the differing targets giving people a good argument as to why they have failed to hit any particular one.

We need to blend the best of the public sector ethos, with the best of the performance orientation of the private sector in a new way of managing the public service. Wherever possible the public service should have a choice of supplier. Where something is done in house it should be done by people who want to do more with less, not by people who think their aim in life is to spend more money and employ more people whatever the issue before them.

Old initiatives in Whitehall never die, they just fade into the background. When a Minister wants the department to do something new, he or she will be told it needs more staff and more money. He should reply that he wishes to shift money and staff from the old initiative that is no longer required, rather than allowing those officials to slip into the background but remain on the payroll for the old purpose.

The public sector is cost plus it always assumes dearer is better, and lower cost is impossible. The competitive private sector company either delivers more for less or perishes.

The public sector is regulation plus it always takes the longest way round to comply with its own regulations, is slow moving and cumbersome.

The public sector can be very jobs worth. Ministers have created a cynicism in their staff, which leads staff to think the best course of action is to argue This problem is not within my power?, or This issue is not within my budget? or I am going on holiday tomorrow so why bother to start this today? All too often my constituents ring public sector phone lines that are off the hook or permanently engaged. All too often they find the hours for client contact are very limited, data gets lost, phone calls go unrecorded. It is all evidence of a service which is badly led and does not have to compete to keep customers.

Senior staff are often moved around too much. As soon as a senior official gets to know his or her job they are likely to be promoted or moved sideways into a different role. Whilst career progression and development are important, if you change them every couple of years you never have people in post with high levels of experience. It means no-one is ever accountable for anything, as no-one has been in post long enough to have set it up and created the problems that occur. We need to slow down the movement, and give people incentive pay when they do a good job and have the experience to do it better.

We need a new generation of Ministers who wish to work with the civil service, but who wish to lead it to higher standards and less waste . These Ministers like making the announcements and appearing on TV and radio, but often do not help the civil service do the serious work of designing a good policy in the first place, and sorting out the detail of implementation and administration after the announcement. As a result they have allowed shoddy standards in too many cases, and bought the line that appointing more people will solve problems that require thought and management, not more staff.

If you have too many people in an organisation it becomes difficult to manage. The civil service is both too large and too little motivated. It sums up New Labour good at spin, hopeless at managing the government.

You don’t get much for ??550 billion these days. You just get a load of targets, a load of undigested new laws, and some very prosperous private sector consultants who are brought in to almost everything to sort out the mess or do the real work.

Did you notice there will be another consultancy contract as a result of the date loss? Poor old taxpayers.

Mr Cable cannot go on the media without saying something nasty about Northern Rock. Today he was accusing a leading shareholder of “blackmail”, when all the shareholder was doing was poiting out that this is a regulated solvent company according to the FSA and the Bank of England, still trading and with a valuable mortgage portfolio. Mr Cable should stop attacking it, and understand that there are ways to protect the mortgages, the deposits and the taxpayer loans without nationalisation. Any sensible person who cares about the living standards of people in the UK should want a successful outcome to the rescue, and would understand that attacking the current shareholders who still decide the future of this bank is counterproductive.

I am glad there are bids on the table that may offer a way forward. There is also the option of running the bank to ensure the taxpayer is repaid, following agreement on the timing of repayments, without a takeover. I still think the government should set out in public how much money it will advance for how long, so every bidder bids on the same basis, and so the taxpayer can see how his or her interest is going to be protected. The taxpayer also needs reassurance that the government/Bank have taken sufficient security over Northern Rock’s assets to protect the position. If they haven’t so far, they should do so now and publish how much collateral they have for the loans.

The absence of public information over how much the taxpayer has committed. Parliament should be told about this large sum. Those assessing the bids should also want to know that all bidders had bid on the same basis concerning the available public support, and should want confirmation that there are no misunderstandinbgs about how much money is on offer for how long. You cannot value Northern Rock shares today, as Mr Richards the shareholder said on the radio, unless you know how much public money is on offer on what terms.

The European Central Bank has decided to keep interest rates up and to threaten higher rates still. Meanwhile, the Fed is moving to recession fighting, with many expecting lower interest rates despite recent rhetoric. The dollar drifts lower, the Euro rises.

The higher Euro is making it very difficult for companies in many parts of the Eurozone to set competitive prices for their products in world markets. In the US there is an export surge underway, and European companies are coming to realise that the US is now a cheaper and better place for manufacturing than countries in Euroland.

Airbus is going to have to cut its European costs or put some if its manufacturing into lower cost places elsewhere. They should not expect immediate relief from the European Central Bank, and should remember that the stronger German currency needs higher interest rates than the weaker parts of the Eurozone.

European politicians like the French President are keen to take the Euro and European interest rate down, but many Europeans will want the counter inflation strategy to continue. Whilst Euroland battles over its future the US will enjoy being a magnet for investment and a stronger exporter. Airbus may whinge all it likes, but it needs to become more efficient.

An update – more policies and views announced:

Clegg: Adopt the EU constitution
Huhne: Adopt the EU constitution

Clegg: Probably enter the Euro
Huhne: Enter the Euro sometime

Clegg: More regional government in England
Huhne: More regional government in England

Clegg: Build more Council houses
Huhne: Build more Council houses

Clegg: Don’t apologise for the anti Huhne stories in the press, as they are nothing to do with him
Huhne: Apologise for "calamity Clegg" aphorism, as it was nothing to do with him

Clegg: Make climate change a priority
Huhne: Make climate change a priority

It’s a real cliffhanger, as the egg and spoon race roars into life with a genuine spat over the "Calamity Clegg" briefing.

I asked the Leader of the House today the simple question:

When will the government seek Parliamentary approval for the ??25 billion they have spent so far on Northern Rock, and the ??25 billion they have guaranteed and where did the Treasury and the Bank find the ??25 billion?

This should not be a difficult questions to answer. The Leader of the House is meant to know Parliamentary procedure. Every item opf public spending has to be approved by the House under a vote for an estimate. There was no estimate for Northern Rock when Parliament approved this year’s budget. Clearly the government is either going to have to put through a supplementary estimate for the money, or to seek to argue that it does not have to bother, on the spurious grounds that it hopes to get the spending back.

Clearly also, as the govrnment is already borrowing heavily this year, the money for Northern Rock was either borrowed or came from selling other Bank of England assets.I suspect it was mixture of the two. I suspect there is also a Treasury guarantee to the Bank of England.

It is high time Ministers worked out how they are going to report and control this massive spending, to look as if they know what they are doing. Miss Harman told us that the ledning to Northern Rock was made available, amongst other reasons, to ensure shareholders did not lose money. Has she looked at the share price recently? Wouild she like to apologise for getting that wrong?

On Monday we heard from the Chancellor about Northern Rock. He gave us no figures, but it appears they have already lent ??25 billion of our money to the mortgage bank, and have guaranteed maybe a further ??25 billion. This money is either borrowed, or will have to be borrowed if the guarantees trigger.

Later that day the hapless Chief Secretary to the Treasury came to push through a Bill to give away part of the UK’s rebate on EU contributions – one of Tony Blair’s EU poison pills for Gordon on takeover.

As we have come to expect, the very short Explanatory Memorandum supplied with the even shorter Bill cotained at least three errors, along with an errata sheet. Once again a Labour Minister had failed to supervise papers coming to the House properly.

Andy Burnham wanted to disguise the extent of the giveaway, but had to admit that the gross cost of the EU to the UK over the next seven years, after allowing for the remaining rebate, will be a massive ??70 billion. He and Kitty Ussher, the Economic Secretary to the Treasury, seemed to be find it difficult to grasp that it is the gross amount of our contribution (after rebate) that taxpayers have to pay. The fact that some of the money is subsequently spent in the UK does not mean that money is “free”. It either has to be borrowed and repaid with interest by taxpayers, or paid for from higher taxes in the first place.

So on the same day we saw the governemnt announce ??95 billion of extra borrowing – and more possible for Northern Rock – on just two spending items, the EU and a mortgage bank. They will argue that the EU money is already in their spending figures, but it is a sobering thought that they want to commit ??95 billion of money they do not have to these two causes. If we borrow the ??95 billion at 5% for 20 years that means UK taxpayers will pay ??180 billion, assuming we do not have to borrow the interest payments as well! Let’s hope if they get the money back from Northern Rock they use it to repay some debt.

How dare Mr Darling complain that the odd Conservative tax cut would create a “black hole” when he has two such massive black holes in his own figures.

(If you are interested in the EU contribution debate see the link to my speech in the debate )

When I was a Minister from time to time I needed to write to all MPs to inform them about something. Either I wrote a letter myself,or I adapted a civil service draft so it was relevant to MPs receiving it. Once the letters had been typed and printed, I then topped and tailed each one, writing "Dear Jane (or whoever)…Yours ever John" to show I had taken an interest and wanted to communicate with each of my colleagues.

Yesterday it was Jane’s turn (Jane Kennedy, Financial Secretary to the Treasury) to write to me. She apparently wanted to tell me that "all efforts are being made to ensure that such a loss (of personal data) can never happen again". The "Dear John" was typed in. There was no "Yours ever" or "Yours truly" or "Yours sincerely". The letter ended with a printed version of her signature, Jane Kennedy.

My name at the top of the destination address overprinted the "HM Treasury " that appeared on the headed notepaper. The Treasury’s efforts to keep a slightly long letter on a single page meant it did not fit. It started with the abrupt "You are aware of the Chancellor’s statement to Parliament regarding the serious breach of procedure leading to the loss of personal data…" How couod I be unaware? Had she not seen me at the Statement? Which MP did not bother to go to hear? Which MP has failed to see the headlines in the papers or hear the odd thing about it on the news?

The letter went on to tell me "I am conscious that you may receive enquiries from constituents". She then repeated some information from the statement, and told me I could always ring the Child Benefit helpline.

There was no apology.

What did this letter tell me about this government?

1. The Minister could not be bothered to top and tail the letter herself as she clearly did not think communicating with colleagues mattered that much.
2. I doubt if the Minister wrote the letter or if she spent any time thinking about the draft. if she had, she would have seen that it was not helping MPs do their job.
3. She does not mind how silly the contents are or how badly the letter is set out on the page.

It was symptomatic of all that is wrong with this government. Ministers are not doing the detailed work necessary to provide a good service to the public or to MPs. Jane Kennedy trusted the civil sservice, and the civil service hastened out something to tick the box and hit the target for "communicating with MPs". Public money was wasted on a useless letter, and any MP who read it should see it confirms the low standards we now expect from this regime.

Many people today have woken up to the news that this government is incompetent. For the first time many have had the scales taken from their eyes, as the dreadful truth sinks home that this time the government’s incompetence has left them personally vulnerable.

Every family in the land now knows they must watch their bank accounts nervously to see if the important private data the government has lost has got into the wrong hands. For busy families struggling to get to work on the government’s congested and useless transport system, trying to pay the higher mortgage and Council tax bills this government’s policies are visiting upon them, and trying to comply with the myriad forms, regulations and requirements of an ever more intrusive state, this is just the last straw.

Many of us already had personal experience of the government’s incompetence. Farmers have felt it as payments have failed to materialise when promised, and as the government’s mishandling of disease and floods left a grief stricken countryside and many dead animals. Estranged parents have felt it, as the CSA has struggled to get a grip on their caseload. Many recipients of Tax credits have been on the wrong end of it, as case after case emerges where people are asked to repay large sums they had been awarded months earlier. Northern Rock depositors have felt it, as the Treasury and the Bank failed to keep confidence in markets this autumn. We have all witnessed it at the Home Office, with farce after scandal over borders and prisons.

Too many people have believed that Gordon Brown was a talented Chancellor who ran the Treasury well. Now his successor has taken over we can see what a tacky inheritance he received. Gordon dined out on the soundbite that he had made the Bank of England independent and this was good for the UK economy. The first banking crisis to hit showed that far from making the Bank independent he had crippled it, so it was unable to handle the crisis itself and needed the involvement of the FSA and the Treasury. Under Darling this ring of three failed to head off the run on a bank, and failed to keep the markets liquid. They lost control of short term interest rates, and precipitated a credit crunch. The Conservative Economic Policy Review chronicled how Brown had damaged the Bank of England and how it left us vulnerable to a crisis, in a section written months before Northern Rock and published well before the bank ran into public difficulty.

Over the 10 years of Gordon’s stewardship the UK had to pay higher interest rates than our main competitor economies, and ended the period with higher inflation than our main competitors. He did not even make the Monetary Policy Committee truly independent, retaining the ability to appoint all the members either directly or indirectly, and refusing to answer questions about why some were reappointed and others were not. He overrode their policy by changing targets at a crucial time.

Of more immediate impact for many British people was Gordon Brown’s raid on pension funds, taking around ??5,000 million a year from them every year in additional taxes. He allowed a new supervisory and regulatory framework to create a system which few companies wanted to live under, so we have seen a flight from offering final salary pension schemes. Gordon’s lethal mixture of higher taxes and more regulation is denying a new generation of employees access to a final salary scheme, something their parents took for granted in most jobs.

The only thing the government has been good at is taking our money off us. Because this matters most to these Ministers, it is done with military precision. If anyone is five minutes late back to a parking place they are likely to face a ticket. If you dare to live without a TV at home you will be bombarded with aggressive notices claiming you are dodging the TV poll tax. The beefed up Customs and Revenue has been much more aggressive than its predecessor Inland Revenue in dealing with law abiding companies and individuals. I have more cases now of people being required to pay tax they do not owe thanks to errors and dubious decisions. Local Councils have followed suit, harassing people to pay Council Tax and to fill in regular records to maintain their single person discounts.

The casual incompetence and carelessness of this government is on display every day of my working life as an MP. Much of my office’s time is spent referring cases where the Inland Revenue or the CSA or the Immigration Service have made a wrong decision or have failed to make any decision at all. More time is spent chasing departments for answers, and chasing them again for a proper answer once the standard reply has come in. Papers and documents produced to Parliament are often error ridden. Bills are rewritten in great chunks just before Report stage. Ministers sometimes do not know the detail of the Statutory Instrument they are putting through so debate is fairly pointless with them. The Bank of England’s official copy of its last annual Report presented to Parliament and kept in the library of the House had several important pages missing which no-one at the Bank had bothered to check. Ministers do not appear to proof read anything themselves or to go over the detail beforehand.

In this environment the actions of the Customs and Revenue this week are neither surprising nor out of the ordinary. I was not shocked by it, as I would expect nothing less from a government that has so neglected the arts of departmental management and administrative discipline. I am very sorry for all those families whose data has gone astray, but pleased that this incompetence was so noticeable that maybe now more people will come to understand that this is the nature of this government. If organisations behave casually it is because the signals sent from the top are casual. Too many Ministers in this government fail to stress the need for accuracy and care at all stages of their department’s work. They live on the media and die politically on the media. They have still not learnt that as a Minister staying out of the papers is usually more difficult and more successful than getting into them. Papers mainly want to report mess up and conspiracy.

The first thought I had when I heard late yesterday morning of the government’s loss of sensitive personal data was this should be the death blow to the government’s expensive, intrusive and insecure personal data computer scheme with ID cards. I encouraged the Opposition to make that the main point for the future coming out of the Customs and Revenue disaster.

In a way the loss of Child Benefit data sums up this government. Its systems are intrusive and costly, yet they do not work properly. The very people who should be protecting us and our personal details are the most cavalier with our identities and our personal safety. It is this government which presides over hospitals where infection is so common, this government which fails to control our borders and keep out criminals, and this government which now loses the bank accounts, addresses and identities of every family in the country.

Why on earth should the public trust the government to hold all the crucial data about us on one central identity computer? Why should we believe next time they will look after it better? Why should we believe they will be able to control the numbers and details of our data on such a system, when they have issued many more National Insurance numbers than there are workers in the country, and when passport forgery or false issue is all too common?

ID cards have become a NuLab soudbite, the answer to every criticism of their lamentable record at keeping our borders secure and dealing with serious crime. We all know if they carry on with them they will arive late, massively over budget and unable to do the jobs they are said to be able to do. ID cards will not keep us safe. They will cost us more, make all the law abiding have to fill in yet another intrusive form, and allow the government to carry on running the borders and the criminal justice system badly.

Let’s hope there is a silver lining to the black cloud of yesterday’s news – that even this government now udnerstands the British people will njot put up with more of their money beign tipped down the ID drain, and will ot trust this government to put onto one massive computer disc all the details fo everyone in the country just feady for fraudsters and terrorist to steal it, hack into it or be sent it in the post.