‘Abolition of the Bedroom Tax’ Bill is launched in Parliament

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Ian Lavery launched his ambitious Bill to abolish the Bedroom Tax yesterday. [Image: Daily Mirror]

Make no mistake about it – the purpose of the legislation tabled yesterday (Wednesday) by Labour’s Ian Lavery is to discover how many Liberal Democrat MPs are redeemable and how many have been irreversibly corrupted by their current alliance with the Conservatives.

The Bill to abolish the hated Bedroom Tax is unlikely to gain Royal Assent unless Liberal Democrats who supported the imposition of the Bedroom Tax reverse their point of view. There is even the possibility that some Conservatives may now realise that they, as Mr Lavery put it, “underestimated the real consequences of walking through the Government Lobby to support the introduction”. He also said: “It is an olive branch… I would hope that my Bill would receive support from members in all parties.”

MPs voted almost unanimously for the Bill to be brought in, with 226 votes in favour and only one against – but readers of this blog will be familiar with the fact that this happened with Michael Meacher’s motion for a commission of inquiry into the impact of social security changes on poverty. The House approved; the government did nothing.

So don’t get your hopes up too high.

Mr Lavery was the only person to speak on the subject, and his words are well worth noting here.

“The full and sole intention of this Bill is to sweep away the dreaded bedroom tax,” he said.

“It seeks to restore justice for up to 660,000 people — some of our country’s most vulnerable citizens, two-thirds of whom are disabled. They have been inhumanely let down by the Government’s reforms to housing benefit in the social sector. The tax has caused heartache and devastation to thousands of residents up and down this country. It is a tax whose forced implementation has put extreme pressure on councils, housing associations and social landlords. It is a tax that has put extreme pressure on the ordinary working people who are forced to deal with those unable to move and those unable to pay.

“On the introduction of the tax, Ministers argued that the changes would encourage people to downsize to smaller properties and, in doing so, help to cut the £23 billion annual bill for housing benefit; would free up living space for overcrowded families; and would encourage people to get jobs. Significantly, it has achieved none of those objectives.

“At the same time, the Department for Work and Pensions has trumpeted the measure as ‘returning fairness to housing benefit’. The words ‘fairness’ and ‘bedroom tax’ should not be uttered in the same sentence.”

He said: “This tax is a problem in each and every constituency up and down the country; this is not simply a problem in Labour-dominated authorities. I was contacted only last week by a distraught resident from the Tory shires who is hoping that my Bill will be successful, because he, a disabled man, is living in a three-bedroom property and has just received an eviction notice for bedroom tax arrears. He is not alone. The bedroom tax sufferers in Liberal Democrat and Tory constituencies number around 250,000. Perhaps we should ask them whether they think this abominable tax has restored fairness to housing benefit.”

Mr Lavery said his Bill seeks “to restore fairness and to end the misery that the bedroom tax has caused”. He said there are hundreds, if not thousands, of “appalling” examples of suffering, mentioning (but not naming) mother-of-two Stephanie Bottrill, a woman suffering a crippling illness who committed suicide after realising that she could not pay the bedroom tax. Her family received correspondence later saying that she should have been exempt from the charge.

He also mentioned a case he said was “hard to comprehend; it really is difficult to try to get to grips with”. He said: “The family of the 1999 child of courage, who spent years battling multiple cancers, is suffering at the hands of this horrible reform. These people are not living a life of luxury in palatial properties; they are living in a place in which they feel safe and which they call home. It is time to listen. I am sure that most fair-minded individuals would agree that a bedroom is not spare when carers sleep in it, when couples use it because one of them has health problems and they cannot share a bed, or when it houses vital medical equipment, yet this indiscriminate tax deems it so.

“The reality is that yet another measure introduced by this Government is in total and utter chaos. It lies in tatters, with the victims left to pick up the pieces. As thousands suffer, there is a real risk that the bedroom tax will end up costing more than it saves. The National Housing Federation has said that the savings claimed by the Government are ‘highly questionable’, partly because those who are forced to move to the private rented sector will end up costing more in housing benefit.

“Surely, as politicians and members of the general public, we are entitled to question the motives behind the introduction of the bedroom tax. The tax does not deal with the problem of under-occupation. In fact, the Government’s costings on the yield raised from the bedroom tax explicitly assume that people will not move into smaller properties. There are simply not enough smaller properties for people to move into.

“Some 180,000 households were deemed to be under-occupying two-bedroom homes, yet only 85,000 one-bedroom homes became available during the whole of 2012. The savings projections of the Department for Work and Pensions assume that not one of the 660,000 households affected would respond to the policy by moving to a smaller home. Put simply, this is yet another example of the Government balancing the books on the backs of the disabled and the vulnerable. The tax must be scrapped now.

“Housing associations say that tens of millions of pounds are likely to be lost through the build-up of arrears. Reports this morning estimate that 144,000 people have fallen behind with their rents since the introduction of the bedroom tax and that 14 per cent have received eviction notices [20,160].

“Was that really meant to happen? Was this eviction of the poor really the plan of the Government?

“In October, research by the University of York, which was based on data by the housing associations that have tenants affected by the bedroom tax, suggested that the policy could save up to 39 per cent less than the DWP had predicted. In the past week, it has emerged that more than half of the £500 million that the Government claim will be saved by the hated tax will be spent on re-housing disabled people. These are vulnerable people who already live in properties that have been adapted for their needs and who have built up local support networks with their friends, family and neighbours. The future for them lies in communities that are unknown and foreign to them. They have been cast out like the proverbial dog in the night.”

Interrupted when he mentioned the loophole that exempted Stephanie Bottrill from paying the bedroom tax – another member said that the loophole had been closed – Mr Lavery continued: “As Ministers scramble to mop up the mistakes, another challenge to the hated tax has arisen. A judge has overturned the tax in the case of a Rochdale man who argued that one of his bedrooms was used as a dining room. The appeal was upheld on the basis that the dictionary definition of a bedroom is a room that contains a bed that is used for sleeping in. An avalanche of appeals is on its way.

“I am proud to see that, only last week, the Scottish Labour party shamed the Scottish National party into abolishing the bedroom tax. I must put it on the record that I am also proud that one of the first acts of a future Labour Government will be to end this full frontal attack on the vulnerable. However, we cannot afford to wait until the general election of 2015. I urge the supporters of this tax to think again.

“The question is this: Are they happy to see the misery and social disruption of the vulnerable and disabled? I began this speech by expressing the view that those who voted in favour of introducing this dreaded bedroom tax may have underestimated the human suffering that it would cause. That is no longer in any doubt, so I urge them all to do the honourable thing and support my Bill.”

That really is the question for members of the public to consider, along with MPs. If your MP votes against Mr Lavery’s Bill, then you will know that they are, indeed, happy to inflict misery and disruption on the vulnerable and disabled.

Do you want to live in a country where people like that are allowed to rule?

Make no mistake: This legislation is unlikely to succeed without support from people who previously helped bring the Bedroom Tax into law. As such, it might not work.

But this is also legislation that should help you decide how you will vote in May next year.

We can hope that our MPs – and you yourself, dear reader – choose wisely.

The Bill will have its second reading on February 28.

 Labour’s Chris Bryant took the opportunity afforded by Mr Lavery’s motion to bring a point of order – that Iain Duncan Smith, Esther McVey and Lord Freud had been using false statistics. He said: “Earlier this year, when asked how many people had been affected by the loophole in the bedroom tax legislation, the Secretary of State for Work and Pensions… said that the number was between 3,000 and 5,000. In a written answer, the Minister of State… (Esther McVey)… said that she did not know how many had been affected. Lord Freud, a Minister in another place, said that it was an insignificant number. Today, however, he told the Work and Pensions Committee of this House that the number was 5,000.

“We have been doing their work for them, and from Freedom of Information requests to local authorities in England, Wales and Scotland, we already know, from just the third that replied, of 16,000 cases.”

Debbie Abrahams, a member of the Work and Pensions committee to whom Lord Freud provided the false figure, said committee members will be pursuing the matter.

Follow me on Twitter: @MidWalesMike

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No protection from Bedroom Tax for the vulnerable as it would cause ‘political embarrassment’

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access, adult, bedroom tax, benefit, benefit cap, benefits, care, change, child, Coalition, Conservative, council, cut, Department, disabilities, disability, disabled, DWP, exempt accommodation, Freud, government, Habinteg, landlord, local authority, Mike Sivier, mikesivier, minister, Pensions, people, political embarrassment, politics, provider, Reform, social security, support, supported housing, Tories, Tory, unintended consequence, Universal Credit, Vox Political, vulnerable, welfare, wheelchair, work

Vulnerable children and adults with disabilities or high support needs may be forced to pay the Bedroom Tax, despite protestations to the contrary by Lord Freud, after it was revealed that creating more protections would cause ‘political embarrassment’.

Current rules mean some supported housing is protected from the Bedroom Tax, benefit cap and the effects of Universal Credit (if a working version ever arrives) – but this accommodation is not exempted if the landlord is not the care provider or when the landlord is a local authority.

This means that, for example, supported housing provider Habinteg has 1,200 wheelchair-accessible properties for the disabled – but only 516 of them are exempt from the benefit changes.

Lord Freud, who is minister for social security reform, said last April that the DWP was working to ensure all supported accommodation would be protected from what he called the “unintended consequences” of the government’s changes.

Freud famously worked for Labour before the last general election, but turned against his former employers and switched his allegiance to the Conservative Party in 2009 – for which was rewarded with a peerage.

Now it seems the government has turned against him. According to Inside Housing, “in a letter sent to housing organisations… the DWP [Department for Work and Pensions] said that while it still wants to protect supported accommodation from Universal Credit and the benefit cap, it no longer wants to protect non-exempt accommodation from the bedroom tax.

“A source said the government was opposed to the move because creating more protections from the bedroom tax would cause political embarrassment.

“Civil servants cannot change the exempt accommodation definition without also adding extra protections for the bedroom tax. This means all plans to protect non-exempt supported accommodation from welfare reform are on ice.”

Anti-Bedroom Tax campaigners recently discovered that people who had been living in social rented accommodation since before 1996, and claiming housing benefit for the entire period, were exempt from the Bedroom Tax.

But the latest development proves David Cameron’s protestations that the disabled were entirely protected from the Bedroom Tax were false and, instead of changing the rules to rectify the error, the DWP has made a worse liar of him.

How much humiliation is Cameron prepared to take before he curbs the excesses of this out-of-control organisation?

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Sink, Britain, Sink! – the cost of privatising water management

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co-operation, co-ordination, commercial, companies, company, competition, cost, council, DEFRA, delay, Department, disease, divert, drain, drought, environment, extraction, farm, firm, flood, food, government, healthcare, house, housing, integrate, land, local authority, Mike Sivier, mikesivier, money, National Health Service, NHS, overcrowding, plain, plan, planning, policy, possessions, private, profit, rain, reservoir, river, rural affairs, sewer, storage, Vox Political, water

– This is a song by a local musician, here in Mid Wales, written during the last serious flooding. I make no apologies for opportunistically linking to it as it says a few choice words about the situation and the government.

“And the rains came down, and the floods came up” – The Wise Man and the Foolish Man (Southern Folk Song).

Some of you may have noticed we’ve had a few spots of wet weather recently. This is nothing new to our island nation.

The trouble is, having fallen on us all, the water hasn’t had the decency to clear off and drain away. Instead, it has built up and up and caused a huge amount of flood damage to land and houses that were not built in a safe place, as in the song lyric quoted above, but in flood plains.

This is a result of bad planning – by water and sewerage companies that have failed to implement successful drainage schemes or to divert floodwater from rivers in order to prevent overflow, and by planning authorities that have allowed housing to be built in the wrong place.

What were they thinking?

My guess is that the water companies were thinking about the money, and planning authorities wanted to ease overcrowding.

We live in a country where management of the water supply went into private hands several decades ago. When that happened, it became impossible to have any kind of integrated plan to deal with the supply of water, droughts, floods and storage. Water supply became a commodity to be bought and sold by rich people according to the golden rules of capitalism: Invest the minimum; charge the maximum.

So reservoirs have been sold off to foreign water companies, meaning we have no adequate response to droughts. None have been built, meaning we have no adequate response to floods. Concerns about river flooding have been neglected. There has not been the investment in extraction and storage of floodwater that repeated incidents over the last few years have demanded.

The government is reducing its budget for handling these issues. Not only that, but it is delaying implementation of a new policy on drainage.

This would be regulated by local authorities, who have responsibility for planning approvals. Some might say these authorities should have had a little more forethought before granting applications to build on flood plains, or for adaptations to existing properties that have prevented water from draining into the soil and sent it down drains instead, to overload the sewer system.

Some of these are matters of necessity: Planning officers may have gone to the limit of what is allowed, in order to allow housing developments that relieve the burden of overcrowding; in other matters, they may have been unable to apply any legal restrictions on applications.

In short, there is no joined-up thinking.

There will be no joined-up thinking in the future, either – unless the situation is changed radically.

Meanwhile, the cost racked up by the damage is huge – in ruined farmland, in ruined homes and possessions, and blighted lives. And what about the risk of disease that floodwater brings with it? The NHS in England is ill-equipped to deal with any outbreaks, being seriously weakened by the government-sponsored incursions of private, cheap-and-simple health firms.

Something has to give beneath the weight of all this floodwater. Change is vital – from commercial competition to co-operation and co-ordination.

Privatisation of water has failed. It’s time to bring it back under public control.

Is anyone opposed?

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Was Stephanie Bottrill a victim of corporate manslaughter?

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bedroom tax, benefit, benefits, Coalition, Conservative, corporate manslaughter, council, CPS, Crown Prosecution Service, David Cameron, Democrat, Department, DWP, government, housing benefit, Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006, Iain Duncan Smith, Joe Halewood, Lib Dem, Liberal, local authority, Mike Sivier, mikesivier, Pensions, people, politics, social security, SPeye, state under-occupation charge, Stephanie Bottrill, suicide, Tories, Tory, Vox Political, welfare, work

It’s what we all feared, as soon as we found out that people who have been in the same social housing since before 1996 are exempt from the Bedroom Tax:

Stephanie Bottrill, the grandmother who committed suicide because she could not afford to pay the Bedroom Tax, was one of those who should never have been asked to pay.

She took her own life by walking in front of a lorry on the M6 in May last year, just one month after the Bedroom Tax – sometimes called the State Under-Occupation Charge – had been introduced by Iain Duncan Smith. Her rent at the time was £320 per month, some of which was subsidised by Housing Benefit – but the imposition of an extra £80 charge, to come from her own money, was too much for her finances to take.

She left a note to relatives in which she made clear that she had taken her own life – and that she blamed the government.

She had lived in the same Solihull house for the previous 18 years (since 1995). Recent revelations by Joe Halewood at SPeye have shown that this meant she was exempt from paying the charge under the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006.

The government has a duty of care in these matters. It may not impose charges on people who are exempt under legislation that is currently in force, nor may it demand that local authorities should do so. If a person dies as a result of such action, then the government is guilty of a very specific criminal offence.

According to the Crown Prosecution Service, an organisation is guilty of corporate manslaughter if the way in which its activities are managed or organised causes a person’s death; and amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.

An organisation is guilty of an offence if the way in which its activities are managed or organised by its senior management is a substantial element in the breach.

It seems clear – from the suicide note at the very least – that this is an open-and-shut case.

Will we soon see Iain Duncan Smith – or better still, David Cameron – in court?

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Sleepwalking further into Police State Britain as law offers new powers of repression

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abuse, abusive, alarm, annoy, annoyance, Anti-Social Behaviour Crime and Policing Bill, ASBO, assembly, Coalition, company, Conservative, council, criminal, Democrat, Department, Department for Work and Pensions, disorder, distress, DWP, firm, free speech, freedom, government, harassment, insulting, IPNA, Liberal, Liberal Democrat, local authority, Mike Sivier, mikesivier, nuisance, Parliament, Pensions, people, petition, police, politics, power, private, public order act, public space, repress, Rowan Atkinson, Scriptonite Daily, security, state, threat, Tories, Tory, totalitarian, Vox Political, work

Scriptonite Daily has published a piece that everyone should read. It begins:

“The UK Government is about to pass legislation which will make any behaviour perceived to potentially ‘cause nuisance or annoyance’ a criminal offence. The Anti-Social Behaviour, Crime and Policing Bill also grants local authorities, police and even private security firms sweeping powers to bar citizens from assembling lawfully in public spaces. The Bill has successfully passed through the House of Commons without issue, and is now in the latter stages of review by the House of Lords, after which it will receive Royal Assent and become Law. Those who refuse orders under the new rules will face arrest, fines and even prison time.”

It seems to me that this legislation is being made partly to deal with concerns about section five of the Public Order Act. This, as stated in Vox Political‘s article last year, states, “(1) A person is guilty of an offence if he: (a) uses threatening, abusive or insulting words or behaviour, or disorderly behaviour, or (b) displays any writing, sign or other visible representation which is threatening, abusive or insulting, within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby” – but only applies if a person has been the victim.

It could not be used if an organisation had been subjected to abuse – as was claimed, in this case of the Department for Work and Pensions. Now, it seems, a law is coming into force that can.

This is entirely unwarranted. Abuses of the Public Order Act have clearly demonstrated that the law needs to be relaxed, rather than tightened. Your freedom is being taken away from you, including your right to free speech.

It’s no surprise that this is going on even after this blog, and Scriptonite, and others (I’m sure) have pointed out the problem. We are tiny islands on the media map; most people only ever visit the continents that are the TV news and newspapers, which are happy to pander to their prejudices.

The Public Order Act, as Rowan Atkinson stated in his (should be) legendary Reform Section 5 speech, has led to several alarming exercises of power, “like the man arrested in Oxford for calling a police horse ‘gay’.”

The new Bill introduces Injunctions to Prevent Nuisance and Annoyance (IPNAs) to replace ASBOs, which were also widely abused. Scriptonite quotes some of these abuses, including:

• Stuart Hunt of Loch Ness brought to court 100 times since 2007 for breaching an ASBO preventing him from laughing, staring or slow hand clapping.
• Homeless, alcoholic and mentally ill Michael Gilligan given a 99 year ASBO rather than the welfare support that might have made a difference
• A profoundly deaf 17 year old girl given an ASBO and a jail sentence for spitting in the street
• A 13 year old banned from using the word ‘grass’ in England or Wales
• Manchester Council applied an ASBO to prevent a mobile soup kitchen from feeding the homeless
• Councils placing ASBOs on homeless people resulting in prison sentences for begging ‘earnestly and humbly’
• An 87 year old man was given an ASBO threatening a prison sentence if he was sarcastic to his neighbours.

“The ASBO has allowed the line between criminal behaviour and annoying behaviour to become hopelessly blurred – and the IPNAs will only serve to increase the problem,” says Scriptonite. “We have seen the abuses permitted under ASBO legislation, the test for which included wording to the effect that ASBOs could only be issued where an actual act of ‘harassment, alarm or distress’ had occurred. IPNAs have a much weaker test, applicable where on the ‘balance of probabilities’ a person has or might engage in behaviour ‘capable of causing annoyance’ to another person. How many times a day could this legislation apply to any of us? Eating with our mouths open, talking too loudly into our phones in a public space, walking too slowly or quickly or belching without saying ‘pardon me’. All of this may very well cause annoyance – but soon it might well also be illegal.”

More to the point: If you had a complaint against a government department – no matter whether it was justified – and you publicised it… wouldn’t that cause annoyance to them? Would it not cause them a nuisance?

And, considering the reaction to one woman’s complaint outlined in the VP article mentioned above, would this legislation not give ministers the power to lock you up for it?

This is not a law that should be passed. It is an attack on your freedom, and mine. It is a badge of repression, to be worn by our police as they continue their metamorphosis into symbols of the totalitarianism into which the UK is falling.

There is a petition against this. Please sign it before the law is passed and this document itself becomes a nuisance or annoyance.

I can find no better way to end this article than by paraphrasing what I said before: Police intimidation of those who speak out against injustice is not only an attack on free speech; it is an attack on the entire philosophy on which our society is based.

Next article: Bedroom Tax Tories: What they said and why they were wrong – covering the debate on the Bedroom Tax (or state under-occupation charge, but never spare room subsidy) in the House of Commons on November 12.

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Living under the threat of welfare ‘reform’

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Atos, bedroom tax, benefit, benefits, blogger, carer, Coalition, Conservative, council, council tax, debt, Department for Work and Pensions, Department of Work and Pensions, disability, Disability Living Allowance, disabled, DLA, DWP, economy, Employment and Support Allowance, ESA, government, Grant Shapps, Liberal, Liberal Democrat, local authority, member, Mike Sivier, mikesivier, MP, Parliament, pension, people, Pickles Poll Tax, politician, politics, Reform, tax, Tories, Tory, UC, Universal Credit, Vox Political, welfare

If I could force Conservative and Liberal Democrat MPs, politicians, and supporters to read what follows, I would. It was sent to me today in response to my article, Bedroom tax will put people on streets while homes go empty, and details exactly what the author – a fellow blogger going by the monicker Clarebelz – expects will happen to her after the bedroom tax and other so-called welfare ‘reforms’ come into effect, starting in April 2013.

This is not fiction.

It is what this person expects to become her reality.

While you are reading it, please ask yourself: Do you want to live in a society that treats its most vulnerable like this?

“I went shopping today to my local town with my carers. I only go a couple of times a year to get necessary things that are not available either online or at my local village. I had to pay for these things with a credit card.

“As the deadline for paying bedroom tax and council tax draws near I, along with others commenting here and elsewhere, are feeling ever more hopeless about the whole situation. I just wanted to go to bed when I came back, unable to face another day worrying about how the hell I’m going to manage when I’m hardly managing now.

“I pay back out of my DLA and ESA to the local authority £3,000 per year (it’s a myth that people with no assets pay nothing for care). My care plan has just been reduced by 25 per cent, the LA justifying that by saying, “We don’t fund that activity/job anymore”. Initially they wanted to cut it by 75 per cent, but I took advice and fought it. The activities/jobs that they won’t fund I still need, which will cost in the region of another £1,500 per year. When I next have a financial review, if they don’t reduce my contribution to take account of this, and I’m forced to pay rent and council tax, this will wipe out my food budget.

“And, if I lose out under Universal Credit, then I may as well just end it all because I am not going to be forced to go cap in hand to family or friends to survive; I couldn’t stand the humiliation after all I’ve been through both personally and physically, and such a situation makes you very vulnerable to abuse. A friend of mine had her DLA taken away and because of her mortgage costs she was left with £12 per week to live on (she daren’t apply for a flat anywhere as most are in horrible blocks that are drug/thief ridden). Her so-called friends offered help willingly at first, then they started bullying her and taking advantage of her. She got her DLA back, but she is still in a terrible psychological state because of the way people treated her. No thank you: I’m not going to go through that!

“Prior to complete destitution, I intend to demonstrate/beg on my street. I’m going to make large boards with my message on it, and get my carers to wheel me onto the main road to sit all day if necessary, so that the whole community can see what the government are doing to the vulnerable. I refuse to be hidden away like I was many times before when I used to go days or even a week at a time without heat, light or food. And whole winters without heat. No, this time I’m going to make sure that everyone knows. I’ll have nothing left to lose.

“This disgusting, despicable government has stolen the last two years from me through fear. I’ve just started painting again and doing other creative things that I used to, but it’s really hard to feel inspired when you’ve had the life sucked out of you, especially when your illness leaves you with little life left to do anything.

“I say that I’ll end it all, but really, we need to stick around so that the public can see our predicament. It’s just like others, it all feels so hopeless.

“By the way, my care plan assessor inquired about the bedroom tax for me from someone she knows at the DWP. The assessor said that the bedroom tax hits those of working age, which I knew anyway, but – interestingly – she said that the DWP person told her that the government has informed them that, once they have dealt with housing benefit in relation to people of working age, they will then move on to apply the same sanctions to pensioners, because many larger homes belong to pensioners who won’t move.

“So yet again the government are liars. Two years ago this autumn, Grant Shapps stated in a TV interview that the new rules would not apply to existing tenants; obviously not true. You can’t believe a word they say.

“Well, sorry to go on and on, but it’s been one of those days when I feel like, “What’s the point?” My home doesn’t even feel like my home any more; I have recurrent nightmares of my clothes and all my belongings strewn in the street, and my coming home to find a family have just moved in.

“It’s a horrible feeling.”

Public sector – good/private sector – bad

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A4E, agency, Any Questions, bank, banks, BBC, benefits, British Rail, Conservative, consultancy, consultants, David Cameron, G4S, Geoff Atkinson, government, health, housing, John Bird, John Fortune, judiciary, Labour, local authority, London Underground, National Rail Trends, Olympic, Olympics, Owen Jones, PFI, police, Powys, Powys County Council, prisons, private, Private Finance Initiative, privatisation, public, Radio 4, rail, repairs, revolution, Rory Bremner, rosco, section, sector, security, services, stock, survey, tax, taxpayers, The Future of Transport White Paper, water, welfare to work, Westminster, You Are Here

Many of you may be aware that I live in a large county called Powys, that has a small population. This means that the amount of money the local authority receives from central government and local taxation is always stretched very thin, in order to provide the services required across – what is it? – 6,000 square miles.
Given that context, it should come as no surprise at all that some of the information I have been receiving about the way that money is being spent has raised concern.
It seems the county council has employed a consultancy to carry out a survey of housing stock – to pinpoint where repairs are required and carry them out. This consultancy has taken £1.5 million from the council’s budget and not one repair has yet been carried out.
In addition, it seems most of the council’s own employees at its benefits section have quit, to be replaced by staff from an agency. This organisation charges £20 per hour for each worker’s services, I’m told.
Is this value for money? I don’t think so.
I think it is a local symptom of a national malaise: the disastrous affair public authorities have been having with the private sector. It is an affair that has already led to the humiliation of the government in the G4S Olympic security debacle; an affair that has its roots in the Private Finance Initiative that was launched by the Conservatives in the 1990s and continued into the current century (to my shame) by my own political party, Labour.
I have recently become quite a fan of ‘lefty’ columnist Owen Jones. This may come as a surprise to some readers as not only has he enjoyed greater success than me at the same career (journalism), but he is 16 years my junior. Talented, young and successful – I should be green with envy rather than cheering him on, right?
In fact I’m simply glad that someone is around to say what I would have said, in his position.
You may have heard this gentleman speaking on the BBC’s Any Questions (Radio 4, last Friday and Saturday), on the very subject of private involvement in public services. If you did not, allow me to enlighten you.
“What’s happened with G4S has exposed the dogma of the last 30 years, that the private sector is good and efficient, and the public sector is wasteful. What happened when G4S failed? The state had to go in and fill the vacuum – and it’s not just there we’ve seen it. We’ve seen it with A4E, this welfare to work programe, this company that basically took taxpayers’ money to line the pockets of those who were running it; we saw it with PFI – started by the Tory government, continued under New Labour, that’s like paying for public services on a credit card, getting these private companies to do what the state should have done, apparently it costs up to £25 billion more, of our money. It’s the same with the London Underground; it’s the same with rail privatisation – we’re now paying up to four times more on subsidies for private rail companies than we did in the time of British Rail. And we’ve seen it recently with water. We just recently had a drought when rain was absolutely hammering the southeast. That’s because a water company sold off 25 reservoirs in the last 20 years.
“Public services should be run by the public sector, accountable to us, democratically-run, instead of taxpayers’ money lining the pockets of private companies who do not have our interests at heart; they just want to make profit out of our services.”
In support of that, let’s have a few facts and figures. Those I have at hand come from a book entitled ‘You Are Here’ by satirical luminaries Rory Bremner, John Bird and John Fortune, with Geoff Atkinson. It was published in 2005 so the information – accurate at the time – may be out of date by now and I would be happy to read any updates on what follows.
In 2005, this was the situation:
When the railways were privatised (by the Conservatives) it was decided that one company would own and run the tracks, one group of companies would operate the trains and another group of companies would own them. There are three rolling stock leasing companies – roscos – that lease their trains to the operating companies. These trains cost just over £2 million to build and are leased out for £500,000 per year. Their lifetime is anything up to 40 years – which is a huge profit margin.
But don’t worry – they don’t receive a penny of taxpayers’ money. No – the subsidy for the South Central franchise was set to increase by £342 million between 2005-2010. Of this, 80 per cent went to the roscos for new rolling stock – around £273,600,000. But it wasn’t taxpayers’ money by then. It was taxpayers’ money when it was part of the operating company’s subsidy, but when it was passed between that company and the rosco it was a simple business transaction.
That’s how they get away with it. You and I both know that the cash came out of our pockets, but because it went through a middle-man, these companies can call it their own.
You might be interested to know that the three leasing companies are (or were, in 2005) all owned by banks.
According to ‘You Are Here’, “The Future of Transport White Paper says: ‘The privatisation of the rail industry in the early 1990s assumed that private sector discipline and innovation would drive down the railway’s subsidy requirement and drive up the quality of service. In part this has been borne out.
“Rail users might well ask: In which part? The same document shows 80 per cent of trains arriving on time in 2004, compared to 90 per cent in 1998. The latest National Rail Trends shows total government support to the rail industry in 1995-96 of £431 million. For 2002-03 it was £2,588 million.”
Private Finance Initiatives were intended to bring private sector cash in to fund public services – which may seem like a good idea on the face of it. As ‘You Are Here’ states: The deal is simple. Money for the new service is raised privately in the money markets and thus kept off the country’s balance sheet… but like any free offer, it does come with small print.
“The long-term value of PFI contracts may go down as well as up. Your public services are at risk if you do not keep up the repayments. The return for consortiums running PFI projects” – on the other hand – “may go up and up and up. Standard terms include: cost-cutting, short-term employment contracts, high management costs, huge legal costs. Every element must be a profit centre. After expiry of contract (typically 35 years) the consortium is under no obligation to renew the terms of the lease and can renegotiate at more favourable rates or move out of the public service sector and turn the property into a hotel or office block.
“PFI often means that an organisation which previously worked to a single goal is now in competition with itself, as different parts of the same system strive to outbid each other, the primary goal being to enhance profitability rather than deliver a service.”
To enhance profitability rather than deliver a service.
In February last year (2011), David Cameron promised to deliver a ‘revolution’ in public services, in which he envisaged everything but the security services and the judiciary being privatised. You can read about it here. Private prisons; private police; private health services – we’ve seen these rear their ugly heads already, and I’m sure more is to come.
Considering the disastrous profit-driven performance of the private sector in public services, as detailed above, I cannot think of anything worse than letting private companies continue with what they’ve got, let alone adding anything new to their portfolio of travesties!
With this in mind, I have to ask why Powys County Council thinks employing a private firm to survey its housing stock, or workers for a private agency to administer its benefits, is an economical use of my taxpayer money.
It’s time the madness stopped, and if Westminster is too sick to do it, then perhaps local government should lead the way back to sanity.