Public sector management

 

                    On Wednesday morning’s Today programme there was one of those most revealing moments that shows the underlying bias or assumptions behind so much of the journalism. The presenter was faced with the story that Northern Ireland’s water utility had let the public down, unable to deliver water by pipe into many homes following a run of burst pipes. The first unstated  reaction seemed to be to think it was a privatised utility, which would allow the usual condemnation of privatisation, and lead to cries of stronger regulation and extra taxes. He paused with doubt in his voice and asked on air for confirmation that it was still a nationalised utility. Once that was confirmed he mused that there was nothing you could do about that. The normal diet of threats and menaces suuitable for a private sector business was left unspoken. He  went off instead in  the BBC public sector direction, to suggest the problem was probably based on insufficient investment or public spending in the past. Rarely do they think that perhaps a part of the public sector could be badly managed or wasteful.

            Let me make it clear again, I do not belong to the school of thought which says all private sector institutions are good and all public sector ones are bad. I just get frustrated by meeting so many many who think the opposite, seeing the pursuit of profit by enterprise as wrong in principle and bound to lead to bad results. They are usually  hurrying to their  competitive supermarket to buy their food in their private sector  produced high quality car where every moving part was made by a profit maximising company.

              I dislike monopoloy, whether it be in the private or public sectors. It is monopoly that normally lurks behind poor service or high price. The performance of privatised Heathrow this winter did not delight me, any more than the performance of nationalised Northern Ireland Water. Both are monopolies of a kind. Heathrow still seems to have occasional  monopoly style thoughts based on the relative size and position of the airport.

             I dislike poor peformers amongst private sector companies, as well as amongst nationalised service providers. The private sector ones worry me less for two reasons. Most of them are not monopolies so I can go elsewhere. The private sector has an easier way of closing down poor performers – they run out of customers and money. State sector ones worry me more. I often cannot avoid using them as they have a monopoly. The more mistakes they make, the more I and other taxpayers and customers have to pay for them.

              The BBC should look more seriously at the plight of Northern Ireland Water.  No sensible person can say Northern Ireland has been short of public money in the last decade. Spending per head is well above the rest of the UK and has grown strongly. How can a nationalised monopoly end up unable to supply its customers with a basic service?

               The government needs to introduce competitive pressures wherever possible to public sector  trading services where customers pay for the service at the point of use. Competition is the best way to keep businesses honest and to keep prices down.

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49 Comments

  1. James
    Posted December 31, 2010 at 6:17 am | Permalink

    I’d completely agree that a simplistic “public-good, private-bad” attitude is naive and unhelpful, but I am not sure your concluding remark that “Competition is the best way to keep businesses honest and to keep prices down” should be allowed to stand without some data to back your assertion. In utilities, we seem to be paying ever higher amounts, and the more the train services are privatised, the higher the ticket prices seem to go (whether it’s legitimate for everyone to subsidise commuters is another discussion).

    What always worries me is that my understanding of capitalism and free markets should mean that if one private company is making too much profit, another one can offer lower prices and make a bit less profit – so true free markets should surely keep prices just low enough to make some profit. But the reality seems to be that many former state services are privatised and then a whole load of companies seem to all make sizeable profits (again, think of the utilities) which implies that there is an element of price fixing, not conspiratorially necessarily, but inadvertently. How else does one explain that all utilities seem to be making ever greater profits whilst the consumer continues to pay higher prices?

    I agree the NI Water situation is unacceptable and certainly worth a more thorough examination of how things have come to be so dreadful, but I think we need more evidence of exactly how privatisation has genuinely resulted in lower prices and better services?

    • Manicbeancounter
      Posted December 31, 2010 at 5:09 pm | Permalink

      The problem with water supply is that it is a natural monopoly. That is competition cannot easily occur, as it is not very easy to give a second source of supply to every household. In privatising the suppliers the government recognised this and created a tightly regulated market, including the prices charged and the service levels provided. The incentives for the utilities are to cut costs and to improve services. If they are not achieving this, then it is the regulator who is to blame for not setting the market structure correctly.

      Nationalised entities have greater conflicts of interest than a private sector company. What should be purely business decisions – serving the customer with the best quality product at the lowest price – can become political ones. The workers are also voters, so can provide political pressure no prevent job losses. Other objectives can come to the fore, and decision-making often lacks focus. With no clearly defined objectives, ponderous administrative procedures can come into play, and change avoided.

      Part of the problem nationally of lack of preparedness for this extreme weather is partly due to another nationalised industry – The Met Office. Despite having acquired one of the world’s most powerful computers just over a year ago, they did not see a significant chance of it being a cold winter. Yet independant weather forecasters were predicting a cold winter. I would suggest that the Met Office’s failure is lack of objectivity, brought on by a belief that the primary mover of climate is now anthropogenic.

    • StevenL
      Posted December 31, 2010 at 5:16 pm | Permalink

      “How else does one explain that all utilities seem to be making ever greater profits whilst the consumer continues to pay higher prices?”

      In the case of energy, ‘Vertical Integration’ explains it. The 6 energy utilities all own assets in the production, trading/distribution/wholesale and retail elements of the supply chain. So regardless of the price of gas or electricity, they can make a healthy profit somewhere in their business.

      • Simon
        Posted December 31, 2010 at 5:32 pm | Permalink

        StevenL ,

        Vertical integration might explain why they make a healthy profit but it doesn’t explain why the consumer is always paying more even when wholesale energy prices drop .

        Only wholesale price rises are passed on to the consumer , not price falls .

        I thought part of the deal where HM Govt would allow the cartel to continue was that the energy companies were supposed to invest in infrastructure to help meet the UK’s energy needs .

        If this is not happening then the regulator needs to clamp down on them .

  2. Phillip Youle
    Posted December 31, 2010 at 6:52 am | Permalink

    You state ‘The government needs to introduce competitive pressures wherever possible to public sector trading services where customers pay for the service at the point of use.’ As I understand it the water supply in Northern Ireland is free, now would i put up with no water and having to go to a standpipe on the odd occasions when there is severe weather, against paying £300-400 per annum for the prviilege, you bet i would!

    • brian kelly
      Posted December 31, 2010 at 5:33 pm | Permalink

      That occurred to me, too! Not 100% sure of my answer, though – look at the flood damage to property.

    • Simon
      Posted December 31, 2010 at 5:35 pm | Permalink

      They pay for it financially one way or another 🙂

      Give me a meter any day so I can pay for only what I use and not other peoples profligacy .

  3. Tim Carpenter, LPUK
    Posted December 31, 2010 at 7:11 am | Permalink

    A very sound post.

    The problem with Utilities is that there is a fairly strong case for a natural monopoly in DELIVERY. However, this does not extend to distribution nor generation. Had our water network been adapted to plurality of supply, then the problems during the recent floods (Gloucs, for example) might have been avoided when a towns only supply of fresh water was knocked out.

    NI Water should be about two things: delivery of water to Homes and the quality thereof, not the generation of water. A system with a plurality of suppliers would also lend itself to more resilience in the case of main failure. It would also mean the role of NI Water was pretty tight. Here in London we have Thames Water, a private company with a monopoly in generation, distribution and delivery. That is unhealthy.

    • wab
      Posted December 31, 2010 at 11:17 am | Permalink

      Although I agree that water, gas and electricity are natural monopolies at the consumer end, the idea that we should have a “plurality of suppliers” for water, for example, does not sound very pragmatic. What we need is tight regulation on these natural monopolies, for example on price, rather than “competition”.

  4. norman
    Posted December 31, 2010 at 7:35 am | Permalink

    Would that we could apply this thinking to health and education as well.

    Of course, we all know (because successive governments never tire of telling us) that the NHS is the envy of the world and delivers fantastic value for money.

    As for our schools, what odds on record exam results next year?

  5. Duyfken
    Posted December 31, 2010 at 8:08 am | Permalink

    If I were as articulate as you, I would say the same.

    You mentioned an aspect which applies to all services for the public and that is the level of long-term investment needed. If a utility were privatised, there must be enough governmental control to ensure there being adequate investment (and I fear that a number of the watchdogs (Of…) may have failed to do this.

    On the other hand, a nationalised activity can as easily be starved of funds, partly from the short-term outlook by politicians, and we have had many examples of these. How can we, the public, be confident of there being proper present expenditure for future security of the relevant service?

    On balance, it does appear the answer lies with privatisation, attendant with strict conditions of service, investment, prices etc, rigorously applied by an apolitical authority.

  6. lifelogic
    Posted December 31, 2010 at 8:22 am | Permalink

    BBC think is so engrained it their art lefty, Polly Toynbee/Guardian think mind set that it is difficult to see how to get them to change. Every single question comes from this state think direction. If someone went on and said they thought Mrs Thatcher, Dr Beeching and Rupert Murdock were actually quite good on balance I think they would all choke on their BBC tea for ten minutes and wonder how you were ever allowed in to the studio.

    Usually when private businesses fails it is because the regulation/enforcement they operate under are poor. The abysmal regulation of the banks banks for a prime example. In the case of airlines the legal compensation conventions enable them to loose luggage and cancel flights for weather with little cost to them so that is what they do. The nearly monopoly airports suffer little by closing for weather either. Probably cheaper than buying snow gear and having people on standby or taking any tiny health and safety risks.

    The public sector is very bad at buying things and very bad at privatising things too. It is usually this privatisation contract that is poorly structured often because it is not their money they are wasting or worse still (questionable procedures ed) in the contract awarding process.

    • lifelogic
      Posted December 31, 2010 at 1:09 pm | Permalink

      It is reported that the government is to force new drivers to opt into or out an organ donation scheme. So that is now three good thinks from this government. The M4 bus lane gone, the (only part alas) removal of the absurd HIP packs and this sensible organ donation plan.

      Not much for six months effort – just a few million more to go starting with halving the size of the state sector, a sensible energy policy and general reduced regulation policy and a banks that lend to business strategy.

    • Manicbeancounter
      Posted December 31, 2010 at 5:31 pm | Permalink

      From The Guardian of 30th December.

      “In September 2009, the utility regulator found Northern Ireland Water was half as efficient at delivering services as other UK water providers. It was ordered to cut £136m from its running costs for the following three years.”

      http://www.guardian.co.uk/uk/2010/dec/30/northern-ireland-water-utility-firm-crisis

      Part of service delivery is coping with extreme situations.

  7. Jonathan
    Posted December 31, 2010 at 8:28 am | Permalink

    The problem with water distribution is that it is going to be a monopoly either way, and I think I’d rather have a nationalised one where I can express my displeasure at the ballot box than a privatised one where I have no way of expressing my displeasure.

    Where it is possible not to have a monopoly, I would rather have it in private hands so I can express my displeasure much more quickly by not giving them any more of my money.

    • VIVID
      Posted January 1, 2011 at 1:30 am | Permalink

      Expenses ain’t going away is it.

  8. Ralph Musgrave
    Posted December 31, 2010 at 8:31 am | Permalink

    I heard the Northern Ireland water regulator , utility regulator or some such official saying that the English and Scottish privatised water companies were much more efficient than the Northern Ireland equivalent. The BBC will be in tears.

  9. Frank H Little
    Posted December 31, 2010 at 8:57 am | Permalink

    I’m with James to a certain extent. However, the fact of paying for water and sewerage does seem to exert some financial discipline. Welsh Water is a not-for-profit corporation and, as I understand it, Scottish Water is government-owned. Both have done rather better than the NI utility and no worse, I suggest, than the private companies in England, and both charge for their services.

  10. Geoff not Hoon
    Posted December 31, 2010 at 9:02 am | Permalink

    Mr. Redwood, I agree whole heartedly with your post but believe we have it wrong big style with the energy companies. The way in which the energy co’s increase prices ‘because of increases in wholesale prices’ leaves consumers no real alternative to go elsewhere because the other suppliers play leap frog with one other all using the same increase in wholesale prices. From my work in Citizens Advice already we are seeing a huge increase in energy co. debt which usually means the client is forced to accept the route of even higher prices with a coin meter. The problem is clearly going to get much worse before the next election and may well be an issue Labour seek to rattle cages with if ‘free market policies’ are left unchecked.

  11. Gary
    Posted December 31, 2010 at 9:13 am | Permalink

    There is a case to be made that under a free market, a monopoly is the exception and then fleeting. A monopoly usually requires protection from competition, thus protection from the continual creative destruction and innovation of the market. But, when special laws are passed to protect chosen businesses, and businesses are not allowed to fail, then you will certainly get monopolies like that of our present bankers. Even with water, for example, if someone tries to monopolize water and prices it to the point that a desalination plant or literally importing water becomes viable, then the monopoly is broken. A toll bridge stays a monopoly only until someone else builds another bridge. Every time I think the govt SHOULD monopolise something, I find more reasons why they should not. The problem is that privatising of these services and you pay upfront , and that cost seems high because it is so visible. But you only pay if you use them. People fail to see the true costs when the monopoly is financed by stealth through taxes. Usually the true costs are even higher. The NHS would be a prime example. IMO

  12. davidb
    Posted December 31, 2010 at 9:51 am | Permalink

    In the specific example of NI water, I doubt the ownership – present or historic – would have made a blind bit off difference to the effects of the recent cold weather on water supply. Perhaps if a program of constant pipework renewal had been ongoing for years then some pipes may not have burst this time, but it has been so cold for so long, that its hardly surprising that burst they did.

    What will be certain is that those people who had burst pipes the last time we had extreme cold will have drained their tanks and turned off the mains. And the plumbers of the land remembering the killing they made last time will have cornered the country’s supply of 15 and 22 mm pipe and fittings (as they did last time).

    If there are lessons in this problem pertaining to how enterprises are organised, then perhaps we should realise that small is beautiful. Giant banks have served us as well in the private sector are giant utility companies have in the public.

  13. JimF
    Posted December 31, 2010 at 9:52 am | Permalink

    I can’t find anything to argue with in this post.

    A classic case to show how breaking down monopolies can work is the telecoms sector. For the monopoly side of the business, we still wait several weeks for BT to add or switch a line when we move house, just as we did 40 years ago for the PO. Literally, flicking a switch in an exchange still takes 3 weeks. BT also has a month to de-activate a line when you move house, as we did recently, leaving our old line still “active”. The secondary suppliers, such as Talktalk etc., seem to have to live with this as a fact of life, dealing with BT.
    Yet we can walk into any one of a number of high street shops and walk out with a working mobile phone from an operator in a competitive market in a few minutes.

    It seems that competition not only drives commercial change but technological change more strongly than a monopoly.

  14. Mark
    Posted December 31, 2010 at 10:23 am | Permalink

    Having lived and worked in Northern Ireland I can vouch that there is no shortage of water and that its quality is excellent (my kettle remained pristine, use of detergents and soaps was low, the flavour was sweet). The supply is so ample I’m sure that Mr. Huhne could devise a system of rooftop collectors with a lavish feed-in tariff as compensation for the fact that unfortunately solar heating is totally impractical on account of the Northerly latitude and the high frequency of cloud cover.

    • Mark
      Posted December 31, 2010 at 10:30 am | Permalink

      A reminder that Lough Neagh is the largest body of fresh water in the UK.

  15. Scooper
    Posted December 31, 2010 at 10:55 am | Permalink

    Why are the BBC allowed to get away with such bias? We all see their reporting style for what it is, whether on politics, business, Israel, Global Warming or just pure spite against USA (unless it’s Obama of course). The point about poorly managed Public Sector utilities is important however, while they get an easy ride from the media it will be even more difficult to change anything.
    The BBC are the worst of the lot although refuse to acknowledge that their coverage is anything but fair and impartial. Now there is a tax payer funded organisation that needs a real enema.

  16. GJ Wyatt
    Posted December 31, 2010 at 11:25 am | Permalink

    Well said.
    The words of the NI water regulator should also have been instructive to BBC knee-jerks.

  17. wab
    Posted December 31, 2010 at 11:26 am | Permalink

    Heathrow is indeed a near monopoly. Of course the government has not helped the situation by refusing to allow extra runways at Stansted (also owned by BAA) and Gatwick. So it is up to the government to compensate the travelling public for this near monopoly by imposing strict regulation, for example on an acceptable level of flight delays, and on charges to airlines.

  18. Ragamuffin
    Posted December 31, 2010 at 11:40 am | Permalink

    The Green Party, beliving NI Water was a privatised water company, have tried to use the example as a criticism of privatisation! No one told them NI Water is publicly owned.

    “Before privatisaton the priority was collecting and distributing water. Now nothing can come in the way of making a profit.”

    http://greenreading.blogspot.com/2010/12/n-i-water-major-health-emergency.html

  19. Andrew Shakespeare
    Posted December 31, 2010 at 11:42 am | Permalink

    Competition is the best way to keep businesses honest and to keep prices down

    Well said, the day the train fares are going up again by far above inflation.

  20. Mark Wadsworth
    Posted December 31, 2010 at 12:13 pm | Permalink

    Yup, agreed. The Northern Ireland water thing ought to be a huge embarrassment, it’s ten times worse than our councils not gritting the roads properly.

    But it’s monopolies (whether arising for natural or political reasons) which are the problem, as you rightly say: “Competition is the best way to keep businesses honest and to keep prices down”. So what would be your preferred solution to keeping house prices down: allow more new construction, or accept that we have plenty of housing in the UK and make housing more affordable/encourage more efficient use of existing housing by increasing taxes on land value and reducing taxes on incomes and output?

  21. Daedalus
    Posted December 31, 2010 at 12:32 pm | Permalink

    I tried to listen to the comments on the Today show for Wednesday, but I cannot find a link so that I can listen to the complete show, only bits of it. The piece on the water shortage mentions that it is a govenment run utility as soon as the presenter starts questioning the politician, so I cannot really comment on how it seems to come across.

    Daedalus

  22. Alte Fritz
    Posted December 31, 2010 at 2:03 pm | Permalink

    There has, evidently, been under investment in N I water, but why, when, as you say, NI has had abundant funding. The answer is probably that it is an unglamorous and, literally unseen form of investment. Thirty odd years ago in Manchester it was common for gaping holes to open up in city centre streets becasue leaking pipes had opened up caverns. Road surfacces were supported by a lattice of redundant tram lines.

    A Victorian municipal system was giving up the ghost; a public sector which had spent fortunes on flashy projects had let the public down on the maintenance of infrastructure.

    The problem is less that of public services and servants than the politicians who ultimately pull the purse strings.

  23. alan jutson
    Posted December 31, 2010 at 2:06 pm | Permalink

    Listened to an interesting interview on Live 5 BBC this morning.

    Interviewer suggesting that latest Flu outbreak is as bad as it is (is it) because the Government have not put out adverts on TV about Flu this year.

    It would seem they thought that we need the Nanny State to tell us every year, not to sneeze over people, but into a tissue, and that we must wash our hands on a regular basis to help avoid germs spreading from hands to handrails and the like.

    In addition people over 65 and those who have a health problem, also need to be told every year that they should have a flu jab. Seems they may be incapable of remembering themselves, that they had had one in previous years.

    Kids also need to be educated by the State about spreading germs, because it would seem that parents are incapable of passing on this simple message to them.

    Almost forgot, if you mix with people who have the Flu, you may get it yourself unless you take precautions to avoid too closer contact.

    So there you are, we need to spend millions of pounds (which we do not have) each year, to re- educate people every year, about the same thing in case they forget.

    Is this what we have come down to now, are people that dim that they are not aware of the above, or do they simply not care, and are perhaps too lazy and inconsiderate to use commonsense.

    Makes you wonder how some people have lived so long, and manage to cross the road by themselves.

    Have we really as a Nation lost all self motivation and control to look after ourselves.

    Makes you wonder.

    Happy New Year.

    • VIVID
      Posted January 1, 2011 at 1:36 am | Permalink

      This year will be the year of ‘Natural wastage’ – so don’t fret.

    • Ken
      Posted January 1, 2011 at 1:06 pm | Permalink

      Hang on, regarding the comment about the flu adverts, there may be evidence that this news story was somewhat fixed by the BBC

      This is the main narrative from a peice on Biased BBC website (can’t provide the link as JR’s blog thinks it is spam)

      “On Tuesday this week (the 28th December) my wife made a comment on the BBC News website regarding the flu jab. As a pregnant woman she qualified to have the flu jab and following the issue being discussed on BBC Breakfast on Monday the 20th, she had the jab.
      Her comment to the BBC site was to the effect that despite BBC news announcing that the NHS was contacting “at risk” groups to advise them to have the flu jab, she had not received any such advice, despite seeing both doctor and midwife regularly for the past 4 months.
      Not a big deal but she had her say.
      Less than an hour after making the comment, my wife was contacted by the BBC asking for an interview for the evening news.
      However during a later phone conversation with the BBC, it became clear that my wife was being asked to blame the absence of flu jab advertising for not getting the jab until the previous week.
      When my wife made the specific point that she had commented to refute the assertion that the NHS were contacting everybody at risk, as her own (anecdotal) evidence contradicted this, the BBC researcher told her that she could “say that the lack of advertising had compounded this”.
      My wife then said she would not have time to do the interview and rang off.”

  24. Alan Wheatley
    Posted December 31, 2010 at 2:32 pm | Permalink

    I would add, in like vein, (that we could still benefit from more effective competition in fixed line telephony -ed)

  25. Bazman
    Posted December 31, 2010 at 2:58 pm | Permalink

    Water was introduced to Ireland as a luxury of the gentry. By the late 17th century, it had become widespread as a supplementary rather than a principal liquid, as the main drink still revolved around beer, whisky (etc). In the first two decades of the 18th century, however, it became a base drink of the poor, especially in during rainy weather. The expansion of the economy between 1760 and 1815 saw water make inroads in the liquid intake of the people and become a staple drink all the year round for the average person. (words left out)
    During the 19th century a new system for managing the councils water was introduced in the form of the “middleman system”. Water rate collection was left in the hands of the water company This assured the (usually rich) top Executives of a regular income, and relieved them of any responsibility; the water rate payer however were then subject to exploitation through these .
    Some sort of bonus scheme if it does not already exist, needs to no be introduced to incentive the top executives. This combined with water meters and all regulation and price capping/minimum wage removed will produce a world class water system. The rest can collect it in a barrel, drink bottled or use a still. How wet is Ireland? The next thing we will be hearing about is a potato shortage.

  26. Acorn
    Posted December 31, 2010 at 3:09 pm | Permalink

    Interesting to look at the IFS projections for government receipts up to fiscal year 2015/16. The numbers are in “nominal” terms, that is, current pound notes of the year. So in cash terms the receipts are planned to go up 43% by 15/16 compared to 09/10. That is 6.2% per year compounded. Gosh, are they expecting inflation?

    Keep in mind that headline (market price) GDP, goes up when you swap direct for indirect taxes, like VAT; even if they are revenue neutral. Its a good trick to make the government’s share of the economy look smaller. Factor cost GDP is the metric that tells the real state of the economy.

    http://www.ifs.org.uk/ff/revenues.xls

  27. Neil Craig
    Posted December 31, 2010 at 3:44 pm | Permalink

    The default position should be for privatisation. This is hardly a controversial position since it only means the market should be above 50% of the economy. Nationalised industries should be able to provide a strong argument why they are more efficient (National Insurance is good case as is most product testing) & the case should be regularly tested (there is a fair case for government making the initial investment in a new technology & then once it is established selling it off – Chunnel, communication satelites, nuclear power – though even there i think the case for funding by X-Prizes is better).

    The real problem, as you point out, is that the state controlled broadcaster is inherently incapble of showing the “due balance” its charter requires & that, even when it attempts some party balance it is always & everywhere the propaganda arm of the civil service & big government.

  28. Winston's Black Dog
    Posted December 31, 2010 at 4:59 pm | Permalink

    Utilities, whilst nominally privatised, are nothing more than a price fixing cartels.

    There is no genuine competition to the benefit of the consumer and a major reason for that is regulation from our Masters in Brussels plus gold plating from our own (un) Civil Service.

  29. stevered
    Posted December 31, 2010 at 5:10 pm | Permalink

    So in N.Ireland water is free. Is sewerage too? In England, as with university fees, we seem to be taken for mugs. In Devon, I have a small flat where water charges are £1100 pa. This is justified by the high sewerage costs because of the long coastline and the high number of rural customers. The water company charges only £550 if the property has one occupant and cannot be metered. The offices and works of South West Water must be ten times that of the individual authorities before privatisation.

    These private monopolies just love regulation and tightening of standards, which allows them to increase turnover and profits. The Regulator seems unwilling to oppose the process. In Sussex, we face big rises in our charges over the next few years. The reason is that Southern Water are happily building a new sewer from Brighton to Newhaven with high tech treatment works.

    This will have a huge advantages for a few sailboarders who complained about spashing through sewage when they chose to carry out their highly uncomfortable pastime off the present outfall at Peacehaven. The number of swimmers there is negligible, as the beach is almost non existent.

    The cost, in enviromental terms, is also insane. Apart from the CO2 involved in digging a large underground tunnel and the building works, the extra pipeline pumping and treatment will need increased electrical power permanently. As far as I know, this has not even been considered.

    Reply. Northern Ireland charges a fixed standing charge and a variable charge based on metered water use or property value,but I believe tax revenue has been used to pay these charges for some time.

    • Mark
      Posted December 31, 2010 at 7:06 pm | Permalink

      At £1,100 p.a. I’d have thought it worth your while to investigate the cost of your own private septic tank and commercial disposal. The water company can’t charge you for sewage disposal if you do it yourself.

      • Iain Gill
        Posted December 31, 2010 at 8:10 pm | Permalink

        oh yes they can sadly

  30. Iain Gill
    Posted December 31, 2010 at 5:27 pm | Permalink

    John,

    As ever a great post.

    Great will be the day when I can genuinely choose my health provider to spend my state backed health insurance payout rather than be forced into a state run provider of health care. And ability to change provider at any stage of the treatment cycle. Sadly giving GPs control of health spend is a waste of time the only improvement worth any toffee at all is giving control of health spend to the end consumers.

    Great will be the day when I can choose the primary school my infant enters, where the schools nobody chooses have to shut down from lack of money, and those that attract lots of pupils can expand. Its not going to happen under any party though is it?

    Great will be the day when we stop the state propping up failing Arts ventures, I don’t see the big rock tours asking for state payouts to subsidise them and I see no reason at all why their taxes should be subsidising unpopular arts.

    Great will be the day when I can choose where my international charity spending goes and not the government and its “aid” budget propping up some of the world’s biggest crooks.

    It would be good to have some competitive pressure on the regulators too! If I can prove serious breach of the Data Protection Act I should have somewhere else to go if the Information Commissioner decides “not to pursue enforcement action”. If I can prove serious repeated breach of the immigration system I should have somewhere else to go when the UKBA does absolutely nothing about the multinationals doing it! And so on. I see no reason why regulation should be a monopoly business, they should be paid on success.

    The best BBC output comes from the randomly excellent local radio folk on less than 30 K a year! The big spending politically correct dross in the middle on the big bucks are useless. In your position I would lay into the Today programme for the way it talks down to folk with working class accents and those without their PC pretensions, they only like equality when it suits their petty little agenda. Not for nothing is Clarkson and the Top Gear programme the biggest central BBC success, because it talks like normal folk and does not pander to the PC waffle we are force-fed everywhere else – its hardly a car programme at all these days.

    Happy New Year!

  31. Javelin
    Posted December 31, 2010 at 5:45 pm | Permalink

    There has been a lack of creativity by politicians when creating the public sector contracts. For example why not create two water companies in NI then which ever company invests more and has less leaks gets some benefit. For example directors dividends of one company are paid to the other companies directors on a pro rata basis based on a target. That way the Government can set targets each year. The shareholders will receive dividends as usual but there is a special class of shares called directors shares that are linked to shares in the other company. Simple and elegant.

  32. A.Sedgwick
    Posted December 31, 2010 at 5:46 pm | Permalink

    Competition and financial survival are the necessary kicks up the backside for many people and organisations. What happened in Russia after the revolution in 1917 says it all. It should be Government’s role to create competition not stifle or remove it. In some areas this is not possible and water should not have been privatised. One of the problems with N.I. will be underinvestment . My guess is people there pay much less than we in England do. My water/waste bill p.a. is greater than the electricity charge. There is no competition and whereas with heating you can economise, if you want to be clean there is no option. So it seems we have a choice of paying a high price for efficiently provided private water or have a leaky, inefficient state run system. This really sums up private v. public for me.

  33. Iain Gill
    Posted December 31, 2010 at 9:09 pm | Permalink

    The thing that occurs to me is that often there can be competition in the public sector

    There is no reason public sector provision needs to equal monopoly provision

    So many examples:

    Two navy ships competing in gunnery accuracy, two regiments competing on speed marches, as one sort of example

    It other countries, the USA and Italy spring to mind, there are often multiple police forces covering the same geographic area, the town police, the highway patrol, the state police, the military police often having powers over civilians, and so on – This probably sounds stupid. When I lived in Milan it became clear that it was quite a sophisticated system, and the public could call out the police force most likely to respond in the manner required. For instance they would call out the near military police to take on the violent thugs, and the local town police for someone who was just the worse for wear and just needed a gentle talking to and taking home. An amazingly effective system.

    I see no reason why schools and hospitals should not be in open competition, the thing is it needs extending so that failure leads to shutdown like it would in the rest of society.

    I see no reason why publicly owned utilities could not be set-up with some competition too. I also see no reason why different BBC stations could not be openly in competition, etc.

    In the same way we do have some private sector stuff that is near monopoly provision, and this needs sorting too!

  34. David B
    Posted January 1, 2011 at 9:17 am | Permalink

    NI water is a snap shot of how poorly the NI civil services serve the people of Northern Ireland. The civil service account for more than 50% of employment and they believe they know what is best. Everything is done to avoid private sector involvement to a minimum. I suggest anyone looks at the recent events surrounding the PPS at the department of regional development.

    Our politicians are now scrambling to avoid responsibility. It is a very poor way to run a country!!

  35. George Rowley
    Posted January 7, 2011 at 9:56 am | Permalink

    I agree with your comments about public good and private bad. I also think that a monopoly is a bad thing we need to have competition and that needs to be fair with everyone skilled and understanding it.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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