A “Green” of Truth ?

Sir Philip Green’s long-awaited report into Government waste has been seized on by many in Conservative circles as proof-positive of a culture of mismanagement and evidence (if any were needed) that there is or will be huge scope for savings and expenditure reductions.

The Green report tells a story but it’s less about waste and more about the nature of Government itself. As an interested observer from the local Government world, the Green report took me back some ten or fifteen years when the same faults of procurement and property mismanagement were prevalent within most local authorities. Individual Council departments functioned as autonomous fiefdoms operating as almost standalone businesses and taking decisions predicated purely on their own Service needs and ignorant (whether by accident or design) of what the rest of the Council was doing.

In the past decade or so, most Councils have undergone a fundamental transformation in their internal practices and procedures. Procurement and property mismanagement as well as a range of other services have been coordinated and centralised and huge efficiency savings have been made. The use of technology such as ERP systems has further streamlined the payment of invoices and the management of finances.

Green paints a picture of Government that few will recognise. There is a misconception of Government as a monolithic entity which the less charitable might view as a kind of inebriated dinosaur thrashing ineffectually through society. The true is more prosaic – Government is a loose confederation of (often) warring tribes much as Britain was before the Romans.

The paradox now confronting the Coalition is that making Government more efficient and driving efficiency savings will require a more concerted effort at centralisation than that attempted and failed by successive Conservative and Labour Governments. At the same time, the Coalition is pledged to devolve decision-making down to communities. Squaring the demand for efficiency with the commitment to decentralise won’t be easy.

In addition, the attempt to better manage property by driving out efficiency savings through co-location of services and the relinquishing of under-utilised assets is not without problems. A fragile commercial property market would be disrupted by a glut of ex-public sector property coming on to the market and the likely effect is to drive down values and thereby reduce potential receipts and savings.

There’s much to commend the Green report and plenty for everyone to think about but while the template for a more effective central Government machine can be seen in the way best-practice Councils operate, the journey to a more effective and efficient Government won’t be quick or easy and it will have significant ramifications in other areas of the economy and society.

Labour Moves On (or Back) to the Future ?

Congratulations to Ed Miliband on becoming the new Labour leader and only the 17th man to hold that title (apparently). In a tight election, he defeated his brother David by 50.65% to 49.35% by dint of winning most supporters among the Unions.

The manner of his election has (not surprisingly) drawn considerable fire from the Conservative partisan herd on sites like politicalbetting and elsewhere who have spent the last 72 hours in an almost continuous vitriolic onslaught on the man, his personal life and his policies.

No surprise there of course and of course the few Labour supporters have rallied to Ed’s defence in similar vituperative terms.

It is of course far too early to pass any kind of judgement on the man who is now leader of the Opposition. It is always better to win a clear-cut victory in any kind of electoral process than to scramble across the line in a near photo-finish but that won’t matter for long. The relationship of ANY Labour leader with the Unions is of significance given their huge financial involvement in the party. It’s little surprise that after the Blair years which saw the Unions marginalised that the movement has been making a comeback.

Despite the dreadful defeat (in terms of vote share) suffered by Labour in May, there seem no shortage of optimists in the anti-Coalition camp (both Labour and Conservative) who think that Ed Miliband could well be the next Prime Minister and they may well be right though much would depend on engineering an early downfall of said Coalition.

Interesting to note Ed Miliband’s support for AV and there’s little doubt that were Labour to stand wholeheartedly behind the AV campaign, it would have a good chance of success and it would begin the process of rebuilding relationships between Labour and the Liberal Democrats, ruptured as they were by the events of May. Pragmatic Lib Dems know that nothing lasts for ever and a coalition with Labour is a far from impossible future scenario under AV.

Miliband is going to suffer more vitriol in opposition than any leader since Neil Kinnock and it will be an unpleasant and demeaning experience but if he endures it, he will be all the stronger for it.

Conservative activists apparently opened the bubbly on the news of Ed Miliband’s victory on Saturday night but celebrations may turn out to have been premature.

Local Government Faces A New Reality…

A couple of developments which seem to have passed without much comment generally but which will have a huge impact on the future of local Government and local services need some analysis.

First is the Coalition Government’s decision NOT to proceed with a revaluation of properties for Council Tax. This is a cowardly and disappointing move and undermines those who have praised Communities Secretary Eric Pickles on blogs like politicalbetting and elsewhere. The Council Tax is at its core a property-based tax and was established in a panic by the Major Government in the spring of 1991 as their solution to the widely-derided Poll Tax, opposition to which had done much to fuel the fire which ultimately burned Mrs Thatcher.

The “solution” was a property tax, supported by a £140 grant to each Council from the Government. It meant that for every £1 spent by local Government, 80p would come from central Government and 20p from the rates. Properties were valued and banded with the median “D” band set at £160,000 and the eight bands arranged in blocks of £20k around the median.

The plan was for revaluations every five years and this would have been fine had the median moved with house price inflation. In other words, if your property goes up 10% in value and the national price rise is 5% you risk moving up a band but that’s fair enough as your capital has increased in value. Successive Governments have feared the political impact of a revaluation in England which would probably see houses in London and the South East rise through the bands while other parts of the country see bands stay the same or even fall but that’s reasonable given the appreciation in capital.

The other aspect is that rising house prices would allow Councils to raise a greater proportion of their income locally and be less reliant on central Government. Under the gerrymandered funding formulae of John Prescott, the Home Counties were progressively denied central Government funds leaving them now raising 60p of every £1 they spend locally and using central Government funding for the other 40p.

Other Authorities, notably urban Labour councils, are conversely almost wholly reliant on central Government grant and when these funds are withdrawn, they will feel the worst of the pain and that’s where the jobs will be lost and the most services cut.

Had successive Governments set up an independent revaluation process based on national house price inflation and applied this across England, things would be very different and Council Tax would be a very different beast. As it is, it is a tax frozen in time bearing very little relationship to the current property world and not allowing Councils to become less reliant on central Government largesse.

The second main development is the announcement by Suffolk County Council of a plan to outsource most if not all the Council’s activities. Now, we’ve heard this kind of language from other Authorities but they’ve always backed away from such a radical action.

The problem is there are those on the Conservative side who believe passionately that private enterprise can run public services better than local Councils. Now, I will gladly admit I don’t really care who provides the services but as they are public services paid for by residents and as such there has to be accountability if the service isn’t being delivered properly.

My experience of observing private companies running public services doesn’t fill me with confidence. The main problem is the contract under which the service is outsourced. In many instances, the Council acts from a position of naïveté and the private contractor runs rings around the local authority making it almost impossible for the Council to sack them or penalise them.

Another example is the naïveté from the private side. The Contractor thinks they can take the work, do it more efficiently and make a profit but they underestimate the amount of work the Council generates and they finish up either making a loss or having to go cap-in-hand to the Council for more money. The latter happened frequently in the dark days of Compulsory Competitive Tendering (CCT) when Councils had to accept the lowest offer for any work package.

More recently, I’ve seen instances of where Councils, believing they can achieve an economy of scale, have moved away from using a network of local Contractors for maintenance work, to a single national provider. In theory, a good idea but in practice the national Contractor, because they have a monopoly, start to overcharge for things like feasibility studies and basic repairs and the Council finishes up spending more than they would have by using local Contractors.

The secret of successful outsourcing is for the Council to operate a robust and expert client regimen and this may not be as cheap as the average Council would like or hope. I can only hope Suffolk, if they decide to go down the outsourcing route, look at each activity separately. The temptation will be to package a host of activities and offer them to a group like Capita but that is also fraught with risk and is far from being the cost-saver the Council might hope.

My final observation is that you can’t outsource a problem and expect it to go away. If there are problems with the service, externalising the service merely gives the problem to someone else. Robust client management and Member involvement is essential if accountability and service viability are to be maintained.

I wouldn’t say outsourcing is NEVER the answer but it’s not a panacea. Done properly and managed well, it’s an effective way of delivering public services in partnership and may allow several neighbouring authorities to co-ordinate and manage a common activity but it can go wrong with inadequate Contract preparation and inadequate Contract management. At best, the Contractor can run rings round the Council, at worst public funds can be needlessly squandered.

A Good Week for Nick Clegg..

It’s been a pretty good week for the Liberal Democrats and their leader, Nick Clegg. Many on the Labour side and among anti-Coalition Conservatives were predicting a bloodbath dominated by defections and discontent from activists.

That hasn’t happened.

Nick Clegg gave an extraordinary speech to Conference on Monday afternoon. Gone was the rhetoric, the empty points scoring and the aspiration. This wasn’t a speech attacking the Government and saying what it SHOULD be doing. For the first time, I heard a Liberal Democrat defending a Government’s record and saying what it WOULD be doing over the next five years. The reality of being in Government hit home for me during that speech. At last, we have the opportunity to get things we want done – not everything, that’s the nature of Coalition but as Simon Hughes offered, it’s better being on the pitch and playing the game than sitting on the touchline powerless.

Simon Hughes was excellent in support and other Ministers have spoken powerfully. Of course, the anti-Coalition media has tried to exploit the slightest anti-Government comment and this morning Vince Cable is in the spotlight. Vince has always been a thorn in the side of the Conservatives because he comprehensively outshone George Osborne during the worst of the recession. The attacks on Vince have become more vitriolic since the coming of the Coalition as Cable, who is ex-Labour and ex-SDP, is identified as a weak link.

Nonetheless, Cable has effectively verbalised the anger many have felt toward the banks and bankers and while there’s no doubt Government policy played a large part in the recession, there’s little doubt practices within banks played a role too and the behaviour of banks since the recession – not lending and accumulating large profits which, in some instances, have been paid out in bonuses to staff some of whom at least have been embarrassed by the largesse and the excess.

To be opposed to the excesses of the system is NOT to be opposed to business or capitalism or banks. However, those supporting the status quo have tried to portray the former Chief Economist of Shell as somehow being anti-capitalist.

It’s this kind of ridiculous distorted misrepresentation that passes for debate and analysis in parts of the anti-Coalition right-wing media.

It’s been a good week for the Liberal Democrats overall – elements of the party may be struggling with the transition from Opposition to Government but there is a real energy and passion in the party and a renewed desire to see the opportunity of enacting legislation taken up.

The Dawn of the Nerdocracy….

There were those who foolishly believed the Internet would lead to a new renaissance for participative and inclusive democracy. The open environment of cyberspace would lead to a new exchange of ideas and new thinking in the political world.

Alas, as a long-time blogger and contributor to political forums, that simply hasn’t happened. There WAS a time when politicalbetting.com and sites like it were full of heated debate, passionate argument and witty banter.

No longer I fear. The occasional intelligent and thought-provoking contribution is washed away in a tidal wave of abuse and repetitive tedious rhetoric. Each and every day the same old people come on and spout their tired old clichés and prejudices and pick fights with the same old other people who argue the opposite and decry each other’s viewpoint.

To make matters worse, not only are the arguments stale and boring, they aren’t even original. The Internet and blogosphere is plagiarised and ravaged 24/7 by individuals seeking some more erudite support for their worn-out inadequate thinking. Articles in any way supportive of an individual’s viewpoint are either produced verbatim or selectively edited to support the viewpoint of the contributor.

This is no longer democracy, it’s a nerdocracy where intellectual rigour is replaced by a good search engine and original debate and discourse is abandoned for repetitive tribal insults and partisan flag-waving. It’s little wonder the same old tired individuals post day in day out, the rest of us have given up and gone elsewhere…

Those who run sites like politicalbetting.com and other similar forums are as much to blame. They sit back in the relaxing armchair of free speech and claim there’s nothing they can do. Nonsense.

It’s time to moderate, to censor if need be because the quality of the debate and the quality of our democracy is too important to be sacrificed on the altar of free speech for a few sad individuals.

The blogosphere was meant to be in the vanguard of the revolution of our democracy – let it be so !!

Cutting to the Truth…

Nick Clegg, who continued to grow in stature as Deputy Prime Minister, sought last week to offer reassurance to those worried about the forthcoming spending review and the likely cuts in public spending. Indeed there was more than a hint that the cuts would be nowhere near as severe or radical as those on the Left fear and those on the Right hope.

The media coverage of the Comprehensive Spending Review (CSR) and its outcomes has been nothing short of lamentable. The received wisdom seems to be that there will be a 25% across-the-board next year with more cuts in the years to come. This was probably predicated on the leaked announcement earlier in the summer that Government departments had been tasked with looking at a range of cuts from 25-40%.

No one is seriously suggesting a 25% cut in 2011-12, least of all George Osborne. The cuts are due to take place across a four-year timescale with the aim of achieving a 25% reduction at the end of 2014-15 i.e.: by the next election.

Now, there is more than one way to skin a cat and if you have to reduce from 100 to 80 in four steps, there are a number of ways to achieve this. You could cut straight to 80 in step 1 and then stay at that level, you could cut from 100 to 95 to 90 to 85 and finally 80 which is another valid approach or you could cut from 100 to 90 to 80 and then stay at 80 in the last two steps and so on.

There are sound practical and political reasons why the first two (and seemingly most obvious options) won’t work. An immediate across-the-board 25% cut would be a severe shock to a fragile economy. Tens of thousands of jobs would be lost in the public sector with the resulting impact on consumer spending, supporting industries and the cutting of Contracts would severely harm elements in the private sector. Whether you like the public sector or not (and many on the Right clearly don’t), it has a symbiotic relationship with the rest of the economy. If the public sector sneezes, the private sector suffers too.

The risk of a severe slowdown and possible double-dip recession would be enhanced with all that would flow from it and I can’t see the rationale for that.

The more gradual approach is superficially attractive – it would certainly allow the economy more time to absorb the impact and mitigate some of the worse effects but there’s a political problem. The Coalition faces an election in May 2015 – I suspect David Cameron and Nick Clegg would like to go into the election on an optimistic with the cuts done, the deficit under control, the economy growing and even some room for the odd giveaway (perhaps a reduction in VAT back to 17.5%). If the cuts are still happening in 2014-15, it won’t augur well for the Coalition or its political prospects.

What we are likely to see then is a route somewhere between the two with the cuts front-loaded to the next two years and then easing thereafter. Will it be enough to prevent a double-dip recession ? Opinion is divided but I’m in the bullish camp and while growth will doubtless slow, talk of a second recession (unless some dramatic external event intervenes) looks overdone. Jobs will be lost and possibly many thousand in the public sector and there will be many unpleasant months ahead but over time it’s possible to argue that improved growth will create new job opportunities.

Politically, the next 12 months are going to be very tough for the Coalition parties and last Thursday’s elections in Exeter and Norwich showed just how bad the political impact might be but in the longer term I’m hopeful, even confident, that the improved economy will swing voters away from the narrow obstructionism and negativity of Labour and ensure BOTH Coalition parties do well in the 2015 General Election.

The Advantage of Being Boris…

I’m no Conservative as you know and at the last London Mayoral election, I found the contest between Boris Johnson and Ken Livingstone a fairly unenlightening spectacle but it was the contest the media wanted and lapped up to the exclusion of more able candidates such as the Liberal Democrat Brian Paddick.

Boris duly won and has announced his desire to run again. Any objective assessment of Boris’s tenure at City Hall would argue that while he has taken significantly more powers for himself than Ken Livingstone ever did (Boris now runs Transport for London and the Metropolitan Police as well as the GLA), he has actually done very little apart from a handful of gimmicks and has continued the major projects started by Ken Livingstone.

Now, life and politics aren't fair as we know – the Millennium Dome is widely regarded as a New Labour folly but it was commissioned and begun by John Major’s Conservative Government and Michael Heseltine was one of its biggest supporters.

Yet Boris remains popular and has a high approval rate among Londoners – why ? I’ve come to the view that Boris Johnson was the right man for the time when he became Mayor – he fitted the zeitgeist beautifully. At a time when the capital was heading in to recession, jobs were being lost and the general economic outlook was bleak, at a time when dour men like Gordon Brown and Ken Livingstone were in charge, Boris was a breath of fresh air. He offered if not hope then a positive antidote to the problems facing individuals but more than that he embodies the spirit of the modern Londoner – fun-loving, easygoing, not bothered by rules and regulations. Nothing seems to happen but things keep going and that sums up how many Londoners live in the early 21st century. It’s ordered by virtue of being disordered, a kind of unplanned progress.

Reading the vox pops in Friday’s Evening Standard, it’s clear that many, particularly in Outer London, still identify with Boris. Ken Livingstone, especially when he was an Independent and standing up to the Blair Government, was respected if not liked.  Everyone could see he cared about London but his methods became too intrusive, his regulations grated on a population which needs, indeed demands, a light touch and likes to live its life without edict.

A Labour candidate like Ken Livingstone won’t beat Boris – Oona King will struggle though she may make a better fist of it. Were I trying to find a candidate to beat Boris, I’d look for a female, well-known, media-savvy type, not daunted by Boris’s dubious charisma but able to point out the lack of action in key areas. Oddly enough, someone like Kate Garraway, who is married to Labour’s Derek Draper.

Another option would be a totally independent character – a kind of Martin Bell but with edge. This would be a candidate who could attack Boris but would be difficult to attack. Such a candidate, ideally a born-and-bred Londoner, would offer an alternative vision light on specifics but would bring a more London focus. Such a candidate would have to appeal to Outer London as much as Inner London and reassure the suburbs that it would not be Livingstone Mark 2.

In the absence of such a person and in spite of the tough spending cuts to come, Boris Johnson must still be strong favourite to retain the London Mayoralty next year.