Author: johnredwood

When the government decided on a lock down of the economy which was bound to produce the biggest fall in output and incomes any of us had seen, I argued that the government did need to take big and quick action to offset the worst consequences of the collapse in activity.

I argued here and elsewhere for generous furlough and income support schemes for those who were prevented from working by laws and guidance. I supported the idea of a big surge in public borrowing , and a further programme of Quantitative easing to make sure the government could borrow a large sum at low interest rates. These policies were adopted, unemployment stayed low, and many people got through lock down with help from government support schemes.

I also argued that you can only do this once, for a few months. There is no magic money tree to pay millions of people wages for doing nothing. There is no magic money tree to pay any losses any nationalised activity like railways runs up, year after year. The more features of economic life the government controls and interferes with, the more likely we are to suffer shortages, falling productivity, and financial problems.

If we look at an extreme example of Magic Money tree thinking we turn to modern Venezuela. Their resort to excessive and continuous printing of money has given them a massive inflation and chronic shortages of basics, with a domestic currency that has little value to buy imports. This country with the world’s largest oil reserves decided nationalising their golden goose would finance their governments wild excess. Instead under government control their output has slumped from a fairly poor 2.5 million barrels a day five years ago to a bare 400,000 barrels a day now. Their wells are run down or do not flow, and their oil transport system is in decay. Without the private sector to invest, produce and market they have almost lost their entire oil industry. The UK government understands western governments including itself need to stay well clear of such thinking and actions, as they wish to maintain the relatively high living standards people have worked hard to achieve.

From here the government is right to say we need to get back to work and avoid any further general lock down. They are right to ask the NHS to offer a full range of services, treatments and consultations again now the CV 19 numbers are much reduced. They are right to say we need all the schools back this September. They also need to start to rein in public spending and therefore borrowing. I have set out some of the ways of doing this, and will talk of others in the days ahead. The way to run a prosperous country is to allow people and companies the freedoms to make choices and supply needs given the demand and technology available.

Trains travel largely empty. Losses must be colossal. The railway has all the costs of the pre CV19 era, with the turnover of the post CV 19 social distancing era. Ministers need to seek a new plan and tell us how they will make the railways more useful and less costly to taxpayers.

For a long time the railway has been effectively nationalised. Network Rail is completely state owned and heavily subsidised. The private sector train operating companies have to run a timetable laid down by government, under heavy regulations that leave little scope for innovation or service change. Rail pathways are strictly rationed. It is little wonder many of them struggle to survive as management has little scope to cut costs or boost revenues. Trying to get productivity and service improvements is very difficult. There is a long tradition of industrial action against management induced change.

The railway normally prevents choice for passengers and competition to reduce fares and raise quality of service. Rail operators respond to requirements imposed by Regulators. Their remuneration in part depends on targets, where it may make sense to game the rules. Quite often the train operator fails to provide a reliable on time service owing to failures of the nationalised network operator. The whole system has out of date signalling which limits the numbers of trains per hour. Monopoly providers seek to prevent new challengers competing.

Instead of building a very expensive new line, HS2, the railway should accelerate digital signalling to increase track capacity by around 25%. The railway needs to reconsider what sustainable travel patterns are likely in this new world and adjust services accordingly . It is difficult to see how passengers will be attracted back and better served without private capital and competition in service provision. The nationalised monopoly based model we have been running for sometime is not delivering the services and quality we want. It is now sending unaffordable bills to taxpayers.

Dear Gavin

You were right to warn us that grade inflation can cause problems for universities allocating limited places to the best candidates. Grade inflation leads to demands for more discriminating higher grades, as with the introduction of the A* to offer some distinction between a large number of students who all came to qualify for an A grade.

It is important that next year the Examining Boards and Ofqual re establish a sound process for awarding grades to students that commands general confidence in the qualifications and allows universities to select the best students for the courses they offer. I am glad to hear that we will be returning to an exam based system. Awarding grades determined by the pupil’s own teachers places the teachers in a difficult position of having to defend the grade, and leaves open the worry that some teachers take a more generous approach to their own students than others. An exam is professionally marked by teachers marking the work of other people’s students, removing the chance of judgement being influenced by personal knowledge and relationship with the pupil. The grade arrived at is recognised as independent of the pupil’s own teacher and school.

Next year the Examiners and the Boards will need to ask themselves how to pitch the standards and the grade boundaries. Should they return to something like the level of 2019, or should they incorporate the grade inflation of 2020? It is an important issue because it will send out a message about how the Examiners see standards. If the best universities and courses stay with similar numbers of UK students between the two years it merely determines how high a grade any given pupil needs to achieve to get to the best institutions. If there are roughly the same total number of places grade inflation has an impact on grades needed to get a place at all.

There will also be questions to resolve over what to expect of A level candidates who lost some months of full time education in school this spring and summer. The Boards will also need to consider what impact if any complying with CV 19 guidance on social distancing will have on their education in the 2020-21 academic year. Will there be any adjustments to practicals, events in subjects like music and drama, foreign language conversations and other elements in some A level assessments? The Boards both need to be fair the class of 2021 and ensure that nonetheless they attain good standards that are comparable to other years.

One thing it should be possible to agree. Getting all exam year pupils back into school and offering them full teaching and good curriculum from here is essential for their education and for maintaining standards. I would appreciate details of your approach to the teaching and standards of exam for 2021.

Yours

John

There are a number of worries about the day to day management of public services by Departments and quangos. Ministers are responsible for policy decisions , for budget priorities and new legislation. They rely on the goodwill and abilities of many officials to supervise the day to day running of existing policies, to hire good people, to buy in necessary stocks, to distribute benefits, collect taxes and provide licences and approvals.

We have seen in recent months parts of the public sector struggling to carry out regular functions, It is true the lock downs were disruptive, but most of the things government needed to do could be carried out from home with suitable computer back up, and by a limited number of key workers continuing to go into offices and other government installations.

I have drawn attention in past blogs to the big shortfall in normal NHS work , and the shortage of work sent to the private hospitals which were contracted to undertake some of it. As the CV 19 hospital numbers came down there was a slowness in creating isolating units for the remaining CV 19 patients and returning most NHS capacity to the other needs. It appears the NHS is still well below capacity on many specialities , and it is taking time to restore full GP services in some locations.

It appears that the Passport Office allowed a substantial backlog to build up for UK passports. This is something which allows on line applications and processing and should be compatible with more homeworking. I also learn from the media that there is a backlog in issuing provisional driving licences to new drivers. Again it is difficult to see why this could not be done remotely.

I have not had reports of failures to issue cash payments to furlough employers, to benefit seekers or to small businesses under the new scheme. It shows that some parts of government were able to deal with large new surges in demand and to implement new programmes rapidly. It makes the failures in established areas more surprising.

We saw the failure of Public Health England to buy enough protective clothing and to establish a strong enough test regime quickly. We are now witnessing Ofqual’s inability to implement a policy which does uphold standards whilst being fair to young people when the ability to take examinations was removed.

I would be interested in your examples of where the public sector responded well to new circumstances, and where it failed even in areas where it was simply meant to be doing what it had always done, adapted to more homeworking and social distancing.

Ofqual issued guidance for appeals based on Mock exams on Saturday, only to withdraw it again late in the evening that day. It put out a terse statement saying “Earlier today we published information about mock exam results in appeals. This policy is being reviewed by the Ofqual Board and further information will be published in due course.”

The news programmes I heard on Sunday morning said no Ofqual spokes person was available to clarify. This was surprising considering the importance of their late night announcement and the great interest and concern it aroused in many students, teachers, and their families. Ofqual according to its published Organogram employs a Director of Communications supported by 10 people. It is odd that none of these were available on such an important occasion. If the Board had decided to overrule the staff after they had published some work, then it is surprising the Board itself did not appoint someone to put its case. The Chairman for example could have offered himself for interview.

Ofqual according to its website has 217 people in important posts on the Organogram to perform its role of regulating and supervising the Examining Boards with a view to maintaining the standards of qualifications. The inability on this occasion to agree a policy on appeals with the government and to implement it may have something to do with the different senior people and teams involved in policy. There is a Director of Policy and Strategic relations with six staff reporting. There is an Associate Director of Strategic Policy and Risk with seven staff, and a Director of Strategic Relations with eight staff, for example. The Board should set out the strategy on the advice of the Chief Regulator and senior management team. It is difficult to know what all these people do and how it contributes to maintaining the standards of qualifications. In the end standards come down to a mixture of judgement by the Board and Chief Regulator, and good data from the Examining Boards.

Ofqual owes it to students to move quickly to offer them a realistic appeals system to deal with injustices and mistakes thrown up by the current surrogate evaluations for the absence of exams. It is certainly not fair to keep students who feel they have been wrongly downgraded guessing about how and when they can appeal.

According to global figures 0.3% of the world population or some 20 million people have now had CV 19. Of these sadly 750,000 have died, a death rate of 4% of known cases. Given the shortage of tests in large countries like India and Mexico these figures may be an underestimate. In some other countries using the formula on death certificates of death with rather than death caused by CV19 there may be some compensatory overcounting.

The numbers do imply however that we are a long way off having the herd immunity some scientists talked about in the early days of the pandemic. The virus has not found as many superspreaders as feared so far. There is also medical and scientific doubt about whether someone who has had it is likely then to resist having it again. If it turned out to be more like flu or colds you could get it or a variant of it again.

If this is the case cautious scientists will continue to argue in favour of social distancing to limit further spread. The scientific community remains wedded to the idea of a vaccine, whilst accepting it could take a long time find a safe and successful one. How many readers here would not wish to take up the offer of vaccination if one were available?

Meanwhile the better medical news is Blood clot busters, steroids and anti viral drugs are all now being tested and some approved and mobilised to improve treatment and lower the death rate.

Over the last few weeks the two blogs that have attracted the most comments were about illegal immigration and the future of the EU.

I particularly enjoyed the indignant comments of a handful of contributors who daily condemn U.K. voters for voting to leave the EU. They argued I should never comment on the EU now we have left. It is apparently too delicate or precious to withstand normal analysis and comment. These are the same people who regularly condemn USA policy when the U.K. is not a member of that Union either.

I will return soon to the state of the project to ever closer union, as it is important and of general interest.

One of the areas to look for economies lies in Council trading activities. Some Councils spend large sums on setting up business activities in competition with the private sector. Particular favourites are to provide a wide range of leisure services. Where these become loss making , and subsidised, they can impede provision by the private sector whilst also lumbering taxpayers with liabilities. Councils claiming to be short of money should sell off businesses that the private sector can run better, transferring the risk of losses away from taxpayers.

There is a case for joint use facilities shared between secondary schools and the wider community. Swimming pools, gyms, courts, pitches and the rest can be reserved for school use during weekdays in term time, but made available to others in the evenings, at week-ends and during the school holidays. Good schemes can bring more capital to improve school facilities, with returns from charging the wider community. Councils can of course buy season tickets for free access for groups of people they wish to help.

Some Councils have large asset holdings offsetting large debts. Given the high level of total public sector debt there is a case for reviewing these holdings and drawing up a disposal programme to bring debts down where a Council claims it does not have enough money.

Council provision of car parking and waste services cause frictions with taxpayers. Waste disposal for households is meant to be a free service, covered out of general taxation and the Council Tax. Many Councils now have decided that garden waste, larger items and other specially designated waste should be paid for by the householder. Car parks long owned and paid for by taxpayers are used as ways of getting a substantial income out of part of the community. This can become a flare point with voters, and can put people off going into town centres where the parking is expensive and the enforcement often energetic and hostile. In both these areas there is a conflict between the concept of community service and the use of public assets with a wish by Councils to generate income to spend on other things.