Yesterday I met local FE College Heads. Top of their list of issues is the sudden cessation of money for their building plans, brought on by the incompetence of yet another government quango that “funds” them. Ministers cower behind their quango, denying responsibility and making sure the well paid CEO leaves, presumably with plenty of freshly printed fivers to see him over the next few months.
They asked me what a Conservative government would do about their bids for more money if elected next year. I told them that currently we have two parallel and totally different approaches to public spending.
On the one hand the business of government goes on as if things were still normal. FE Colleges, hospitals and schools compete against bureacrats, spin doctors and management consultants for limited sums of “new money” in a traditional budget round. The Colleges are currently losing. People argue over just tens of millions of pounds, as if they were significant to the public accounts.
On the other hand, the cuckoo banks now in the public sector ask for hundreds of billions. They are asked in turn if that will be enough. Hundreds of billions are showered on them in the form of loans, guarantees and new share capital. The government doesn’t argue over the odd ten milliion or even the odd hundred million. We have moved from considering tens of billions to now considering hundreds of billions.
The government seems to think bank money is different from other public spending. The sad truth is they are the same. They are all spending which taxpayers have to pay for, ultimately through taxes. If the cuckoo banks take more, other types of public spending will take less.
So what can the Conservatives afford? They can only tell you that when they have got in charge of the banks, and turned off the money taps to them. The sooner the banks are told to sort themselves out, the sooner we might have some money for more worthwhile purposes. At the moment the government’s answer is they cannot afford new building schemes for FE Colleges, and the ungrateful banks are reluctant to lend to some FE Colleges as well I was told. There’s the final irony for you.
As readers of this blog will know, you can only understand UK public finance in the age of public sector irresponsibility if you see it as two large banks with a medium sized government attached. The two bank cuckoos in the nest got there well before spring. They now determine the future of public spending and the prospects of the rest of the brood.