Tag Archives: Government Cuts

Does the Irish bailout teach the UK anything about austerity measures?

Ireland has bowed to the inevitable and accepted the necessity of a bailout.   There will be a lot written about the causes and blame for the sorry state of affairs.  Take your pick:  Reckless bank lending, reckless corporate and individual borrowing, reckless State spending, reckless lack of regulation, etc.   Folk will write very studious books on these events.  The headline conclusions will be the same old broad themes they have been after every financial crisis in history.  Initially people will earnestly take on board these lessons and kick off the new economic cycle.  The age old truth that the ‘collective memory’ is shorter than the ‘economic cycle’ will then slowly kick-in.   As time passes people will forget the lessons and again rationalise that the laws of economics ‘are different now’.  The whole thing will rise and collapse again – probably more than once or twice in our lifetimes.   It was ever thus.

Back in the here-and-now there are political points being scored as the Irish brown stuff hits the whirly thing.   An argument gaining currency amongst leftist commentators is that the Irish humiliation shows that austerity measures (read government cuts) do not work.  There is one example here.   This needs to be taken head-on.

At first pass there does sound a clear logic to their argument.  Ireland hit breaking point first so went first with austerity measures .  The measures manifestly haven’t done the job given the need for this bail-out.  Therefore, ‘logically’, austerity measures do not work.   Therefore, ‘logically’, they would have been better to keep pumping more state money around the economy to avoid this final meltdown.  Therefore, ‘logically’, the UK must take note and course correct.

It is a compelling narrative.  It is also dangerous.  If you  stop and think about it this argument  is no more or less a ‘logical’  as saying “A man was in a hole, he stopped digging, he found he was still in a hole, therefore he should have kept digging”.

We cannot let their spin distract us from the fundamental issue:  the nation was spending four pounds for every three that it brought in.   We have an unsustainable debt and government spending polices were making it worse.  You don’t solve a problem and delaying the inevitable for longer.  When you have a bubble – sadly you have to let it burst.  Pouring more soap into it doesn’t let it down gently – it just makes for a bigger bang when it comes.

Advertisements

6 Comments

Filed under Centre Right, Economy, Politics, UK, UK Politics

Sir Philip Green: Great Report – Wrong Conclusion

We don’t need a Ministry of Paper-Clips, Open Data is the Answer.

Sir Philip Green’s report on government spending  is now online.  Unlike most Government reports it’s a succinct thirty page slide deck in big print that can be read in five minutes.   If that’s too much then I’ll give you the gist:  he finds the government wastes money then concludes we must centralise buying.

I’ve no issue at all with his findings.  The examples he cites confirm everything we already suspected about wasteful and lazy Government procurement.  Some of the examples are jaw-dropping.  I’ve also no issue with his central theme that the Government has failed miserably to take advantage of its scale or credit rating.  On that he’s right.  He  obviously knows a trick or two about keeping hold of money so I feel a bit cheeky calling him out here –  but  I have to:  The findings might be good, the theme sound, but his conclusion is wrong.

It is nuts to propose that a problem of poor or lazy administration will be solved by more bureaucracy.   The Coalition Government is rightly extolling the virtues of localism at the core of its agenda.  There is an obvious intellectual contradiction between pushing localism and enforcing centralised procurement.  The last thing we need to do now is set up yet another Government Agency that would literally be the ‘Ministry for Paper-Clips’.  No matter how well intentioned it would fail.   I’ve spent long enough working with big business watching the pendulum swing back and forth from localised  business models to centralised models to know that the prize of lower procurement costs will come at the expense of agility and innovation.  It is in this agility and innovation that the very biggest prizes lie.

The diversity of Government activity is not comparable with running a chain of identical Top Shops.  If the proposal goes ahead you can imagine the scenario – a nimble cost-cutting  government department identifies a new way to deliver a service at a fraction of the cost of the existing way.  The project to implement it will need new kit.  Being new stuff, the central agency doesn’t have it on its catalogue – cue a tedious process to get into the approved kit list, another process to approve possible vendors, another process to then raise the purchase orders.  All these no doubt delayed because the new ministry is dealing with back-logs from every department and school and council and prison in the country for their regular stuff.  At the same time you would also be crushing the ability of SMEs to tender for government business as there is no way they would have the scale to operate at a whole government level rather than at a smaller niche.  Hurting that part of the British economy is not something we should be engineering.  Instead, we’re supposed to be marching into a brave new post-bureaucratic age and Green’s proposal runs counter to that end.

No, the answer to all the issues that Green has identified can be solved by removing the veil of bureaucracy  and accelerating proposals for complete transparency of  Government data on-line.   Every single contract and purchase order for more than £500 should be there for everyone to see.   It is our tax money so the spend data is our data.  Arguments by vendors about contract  ‘commercial sensitivity’ are a sham ,they don’t want it exposed they are ripping us off.  The public has a right to see that vendors are not charging the government more than they charge in the high street.  Overnight, by publishing all this data you would free-up departmental procurement officers to see what is the going-rate or a fair price.  More importantly you would allow commercial competitors to see the price they need to compete with. This more than anything  would continually drive prices downwards.  Rather than a procurement officer going to a vendor and saying “I need 10,000 of x what is our agreed price?”  You would have vendors ringing procurement officers and saying “I see you bought 10,000 x and paid y – in future I can do it z cheaper”.   You would stop at once the procurement officer who buys the slightly more expensive stuff because he gets more air miles or because the vendor sent him on a nice day-at-the-races during the bid.  The armchair auditors (or the press) would not allow it.  Transparency is to everyone’s advantage.  It will retain our localism agenda and leave space for agility and innovation in departments.  It will also mean we don’t need to waste time or money setting up a Ministry of Paper Clips.

6 Comments

Filed under Economy, Politics, UK, UK Politics, Uncategorized

NHS Direct: A Public Service Cut or Public Service Improvement?

It was with a little sadness that I noted the announcement of the closure of NHS Direct.  It was a service I used myself twice. Once they saved me a trip to the doctor and left me reassured. Once they advised that I see a doctor, at least leaving me guilt-free when I then booked an appointment that I would not be wasting the doctor’s finite time (a guilt that would never enter the heads of the huge swathe of our population who book appointments every time they have the smallest sniffle).  There was some genuinely innovative use of technology in both call-centres and the use of the internet by NHS Direct at the time it was launched and it was something we could be very proud of in the UK.  Sadly, over its lifespan the organisation didn’t quite keep up with the pace of technological development although its budget certainly kept up Government largesse.  Nevertheless, the concept was something I would remain keen to advance and champion.  A couple of months ago I was even, very briefly, in the running to be a Non-Exec Director of the organisation. It was a service I would wish well and a service I genuinely regretted first hearing was going.

Predictably (and as we shall see hypocritically) Labour have gone into full mock-rage at this cut.  The principal cheer-leaders are Two-Jags who has started a petition to ‘Save NHS Direct’ and leadership pretender Andy Burnham who claims it proof absolute that the Coalition (he really means the Tories) are hell-bent on dismantling the entire NHS.  Out there (here?) in the Blogosphere the parroting of this outrage by the red faithful fills many identikit rants.  For a flavour of the hyperbole in them take a look at this typical example from ‘Jay’s Political Blog’.  The common objections in all the Labour attacks boil down to two substantive accusations:

  • A)      The ‘111’ service that will replace NHS Direct will not be manned by medical professionals.  This will ‘inevitably’ lead to a poorer service.  The sound-bite attack is “Would you wish to be diagnosed by someone with no medical training?”.
  • B)      The Tories said ‘NHS Funding was ring-fenced’, this is a cut to the NHS, thus the Tories are evil liars.

Both charges need unpicking.  The attack by Labour on the 111 Service, particularly by Burnham, is so bizarre as to be perverse.  The 111 service was a project that was originally initiated by Burnham himself when he was Health Secretary. Labour, whilst in Government, were rightly troubled by the cost of NHS Direct.  In fact – they’d been caught a bit on the fly – in September 2008 they thought the average cost per call was £15.35 (source: Hansard).  The Lib Dems smelt characteristic dodgy Labour accounting and demanded more detail and asked the question again. A month later an embarrassed Labour Government revised its figures and accepted that it was actually costing the taxpayer £25.53 per call (Source: Hansard).  The troubling thing here is that at this point a call to NHS direct was actually costing more than seeing a GP.

Trying to figure out scope for lowering this cost you see that in order to minimise risk of mis-diagnosis calls were handled with a protocol-led workflow.  The nurse you were connected to at the call centre had a narrow script on a computer screen in front of them – he or she clicked options depending on your answers and this delivered the next part of the script.  This would culminate in a recommendation e.g. forget about it, or take a few aspirin and see your GP if it isn’t better in 48 hours, or make an appointment with your GP now, or go to A&E immediately or whatever.  They had only a little leeway to deviate from the script and make use of their professional knowledge.

One of the genuine achievements of Labour’s time in power was that Nurses now receive something comparable to a professional wage.  It doesn’t take the sharpest commercial mind to spot that if you are doing a role controlled by computer script and that in practice this role requires the same skill to deliver that it would to sell insurance or deliver any other call center script, then it does seem rather an extravagance to have professional equivalent people’s talent wasted performing the role – particularly if they may be better deployed on front-line wards.

Labour realised this and set up a trial for the 111 scheme.   The pilot has been a success.  It was in Labour’s manifesto (page 35) that they themselves would go with 111 if elected.  The Coalition are doing the right thing in picking up and running with it.  Rather than celebrating their success Labour are now disowning their own brain-child.  That, I guess, is everything that is wrong with politics.

The vision of NHS Direct was that via the telephone or internet you could have access to a 24 hour service that would triage your condition and stop you from making a needless doctors visit if unnecessary but quickly get you to the right medical help if necessary.

The 111 service does exactly that and more:  it also allows you to  book your appointment on the same call rather than having to make a separate call to your local practice afterwards (and then consume the time of another medical receptionist in addition to your own). It is also free (NHS Direct was charged as a national rate call). In short it does more for less.  In these tough times that is something to applaud.

I suppose the Government has invited these attacks by using the language of ‘cuts’ in the way it has positioned these changes.  Cuts to me (as the end user) suggests a service will no longer be available.  Having investigated what it means it seems the service I expected from NHS Direct will still be available and better – it will just be delivered by different people, under a new badge, at less cost to the tax payer.  I concede that it is genuinely a ‘cut’ from the perspective of current NHS Direct employees and I do wish them well.  But for the end-user?  At worst it’s no different, at best an improvement.

As to the charge that the Tories are therefore evil liars: the promise was that the NHS Budget was ring-fenced and will actually increase year on year through the life of the Parliament.  So far the Government  is on track to deliver that.  And if it can supplement this by doing ‘more for less’ in other areas of NHS delivery then again – it should be applauded.

1 Comment

Filed under Center right, Health, Politics, UK, UK Politics, Uncategorized