How national cuts are crippling local services

Tags

AEG, Aggregate External Grant, austerity, authority, benefit, CAB, Chancellor, change.org, Citizens Advice Bureau, Coalition, Conservative, consult, council, county, cut, debt, deficit, Democrat, employment, Exchequer, George Osborne, government, health, housing, Lib Dem, Liberal, local, Mike Sivier, mikesivier, national, National Health Service, NHS, people, petition, politics, Powys, public, puppet, subsidy, survey, Tories, Tory, unfair dismiss, Vox Political, Westminster

How many more underhanded ways can our underhanded Coalition government find to sneak crippling damage to public services in by the back door?

A particularly vile method has just been uncovered here in my own county of Powys, involving the collusion of councillors who are supposed to be independent (but you will see that their political colours are more blue than anything else).

The Coalition government has cut back its Aggregate External Grant to local authorities for next year – its subsidy to councils – by many millions of pounds. This means that councils need to cut huge sums of money from their budgets if they are to balance their books. In Powys, the total that must go is £20 million – around one-eleventh of the total budget.

The council launched a public consultation, asking residents for their views on which services should be cut and giving (in the broadest possible terms) examples of areas that could be changed. The total amount to be saved if constituents agreed to all the cuts was £16 million, with the rest to be taken from reserves – so there was no way to balance the books without making all the cuts listed in the document.

Hardly anybody was made aware of the survey in advance, and many have complained that they only found out about it after it had ended.

One of the “possible” cuts listed was to the Citizens Advice Bureau in Powys. The consultation document said all funding to advice services (£93,500 to the CAB, £36,500 to independent centres) would be cut, with alternative funding found from other budgets. This proved untrue.

As a trustee of the Powys CAB, I was told this week that the county council has no other budget that could be used, and that the intention is to cut the money no matter what the public consultation shows.

This means citizens advice services in Powys would be wiped out from the beginning of April.

You might think that’s not the end of the world. After all, who takes advantage of the services provided by this charity anyway – a few people with benefit problems and a few more who are in debt?

Wrong! Thousands of people go to Citizens Advice every year – and the numbers are increasing exponentially because of Tory and Liberal Democrat “savings” that were inflicted without consideration of the true cost on real people in our communities.

Not only will those seeking help with benefit entitlement and debt have nowhere to go, but those seeking advice because they are unemployed, have been unfairly dismissed, have housing concerns and the full range of advice that CAB provides through its proven quality advice will also have to struggle on their own.

There is a proven benefit to individuals’ health through the provision of advice; that’s why advice in Powys is provided through a number of GP surgeries. But that too will end, putting a greater burden on the National Health Service here in Wales (which is already under attack from the Tories in Westminster).

CAB brings millions of pounds into the county through ensuring benefit entitlement; there is also a considerable sum gained through renegotiated debts – the total comes to more than £11 million per year. This money benefits everyone in the Powys economy as it has been shown that it is generally spent locally – so there is a fiscal multiplier that can be added to it, meaning the total boost to the Powys economy could be as much as £20 million.

That’s the same amount as the county council wants to take out of the economy by cutting its budget. The total loss may therefore be said to be almost £40 million, just because a cut of less than £100,000 has been included in the council’s plans – 1/200 of the total amount of cuts.

If there is a similar knock-on effect attached to all the other cuts, the effect will be devastating.

You may think that it would be easy to seek advice elsewhere, but the nearest alternative bureaux are around 100 miles from the centre of Powys, in any direction – and they are already overburdened with their own clients.

You might think that councillors should be able to provide the necessary advice (especially considering they want to cut off the current source). Could you provide the kind of specialist expertise necessary to deal with difficult legal issues? No? Then you should not expect your councillors to manage it – they are lay people like yourself; they don’t have any training in these matters.

A petition has been launched to stop the county council from withdrawing its funding. If you are a Powys resident, I strongly urge you to sign it and ask your friends to sign as well. If you can’t be bothered, just ask yourself who will help you when the Coalition turns the screw again and you are the victim of its attack.

If you are not a Powys resident, consider this to be a warning. Is your own council planning to cut services? Will it launch a public consultation on what will go? And will that be as much a sham as the survey in Powys seems to have been?

Here’s the link: http://www.change.org/en-GB/petitions/powys-county-council-do-not-withdraw-any-grant-funding-to-powys-citizens-advice-bureau?share_id=annKPtMTpV&utm_campaign=signature_receipt&utm_medium=email&utm_source=share_petition

Above all, remember: This would not be happening if not for the Coalition government’s crippling programme of austerity-driven cuts which have had almost no effect in reducing the national deficit, even though we are told that is what it is for.

With its AEG, the government controls councils’ spending. Your local authorities are being used as puppets by the Westminster government, who can then wash their hands of the whole affair by saying the decisions were made elsewhere. And for what?

The deficit has dropped by a total of seven billion pounds – from £118 billion to £111 billion – in the time George Osborne has been Chancellor of the Exchequer.

You are suffering all the pain for absolutely no gain at all.

Why are you putting up with it?

Vox Political supports local services, targeted to meet local needs.
In turn, the site itself needs help to continue.
YOUR help.
You can make a one-off donation here:

Alternatively, you can buy the first Vox Political book,
Strong Words and Hard Times
in either print or eBook format here:

More fake statistics from the denial factory

Tags

benefit, benefit cap, benefits, bill, carers allowance, Child Benefit, Coalition, Conservative, cost, cut, Department, Department for Work and Pensions, disability, disabled, DWP, employer, Employment and Support Allowance, ESA, government, health, home, house, housing benefit, Iain Duncan Smith, Incapacity Benefit, Income Support, Ipsos Mori, Jobcentre Plus, Jobseeker's Allowance, living wage, making work pay, Mike Sivier, mikesivier, move, Pensions, people, politics, reduce, returned to unit, sick, social security, survey, tax credit, Tories, Tory, unemployment, Universal Credit, Vox Political, wage, welfare, work

One lie leads to another, as Iain ‘Returned To Unit’ Smith seems to have found out – now that he has started, he can’t stop for fear that he’ll be found out.

Tough. The evidence is available for all to see.

His latest attempt at hoodwinking the public is a press release, Public think benefit cap claimants should work or move, in which even the headline is a lie.

It aims to publicise the results of a survey by Ipsos-MORI, examining public attitudes to the cap. The survey was carried out among more than 2,000 people who were selected to be representative of the UK as a whole.

“The vast majority (70 per cent) of the public think people affected by the benefit cap should be prepared to find jobs or work more hours,” the piece begins. This is accurate, according to the survey being quoted – but it is based on the premise that the benefit cap should be set at £26,000 per year for a workless family, which is significantly lower than what was originally advertised by the DWP – the income of an average working family.

The DWP, imposing the cap, drummed up support by saying it would limit the amount workless families could receive to the same as the average income of a family in work, claiming that this was £26,000. In fact, a working family claiming all the benefits to which it is entitled can get £31,000 – so the cap means workless families are at least £5,000 per year worse-off, a huge gap of 16-17 per cent.

“Two-thirds (65 per cent) say they should be willing to move to a cheaper property,” the release claims – but the Ipsos-MORI report’s summary makes it clear that support for the policy drops to 44 per cent – a minority – and opposition rises to 26 per cent if it means those benefit claimants affected by the cap have to move to other areas to find more affordable accommodation.

The press release, which came out to support the government policy ‘Simplifying the welfare system and making sure work pays’, continues: “Independent research published today (10 October 2013) shows that 60 per cent support the cap even if it means that those affected have to take a job, regardless of the pay.” So now it seems that making work pay is not the objective; cutting wages is the real plan.

“The Ipsos MORI report finds around three-quarters of the public support the benefit cap in principle.” This, at least, is accurate and is no bad thing. Benefits should be lower than wages – they are a safety net that should enable people to carry on living while they find paying work. But in return, employers need to pay a living wage, ensuring that nobody in work has to claim any benefit at all. That, at the moment, is sorely lacking in the UK.

“58 per cent think that politicians needed to do more to reduce the welfare bill.” But they weren’t asked how they thought this should be done, or whether politicians were doing the right things.

“50 per cent think that benefits are too generous.” Among those who’ve received benefits this drops, but surprisingly only to 45 per cent. Among those who haven’t received benefits, 62 per cent thought them too generous.

“11 per cent think the benefits system is working effectively.” But they weren’t asked whether the Conservative-led Coalition was to blame for the poor performance.

At this point, the press release stops quoting statistics – but there is one further piece of evidence that people need to know. It relates to what the people who were surveyed knew about the benefit cap before they answered the questions.

Only 29 per cent knew even a fair amount about the cap before answering the survey’s questions. Of the rest, 42 per cent said they knew “just a little” about it, 18 per cent said they’d heard of it but knew nothing at all about it, and eight per cent had never even heard of it.

So this survey – put out by the DWP as a measure of public support for the Benefit Cap – is in fact a measure of public ignorance.

Why should anybody accept these findings as authoritative? How can we accept the 70 per cent view that people affected by the cap should be prepared to find jobs or work – that’s fewer than those who admitted they don’t know much about it!

In fact, none of these statistics can claim to be authoritative because only a tiny minority of those surveyed knew enough about the subject.

Now look at Iain Duncan Smith’s comment: “Today’s report makes it clear that the public support setting a limit on benefits and the successful delivery of the benefit cap shows we are committed to returning fairness to the welfare state.”

Lie. It shows that most of the public are ignorant about the limit. The successful delivery of a benefit cap set at 17 per cent less than average income shows that he is committed to returning unfairness to the benefit system.

“Claimants affected by the cap need to make decisions about work and housing and what they can afford, just as hardworking families do. We have made sure the support is there to help people back into work and the Benefit Cap and Universal Credit will ensure that work pays.”

Lie. The press release itself states that people are being pressurised into any work they can get – whether it pays or not. Support is not available to get people back into jobs because the jobs aren’t there. And Universal Credit does not work.

The release goes on to state: “Since claimants were first notified of the benefit cap in April 2012, Jobcentre Plus have helped around 16,500 potentially capped claimants into work.” The wording is very careful; notice no mention is made that they moved into work specifically to avoid the cap – Smith and others have been reprimanded over such claims in the past. But the context suggests that the benefit cap is what motivated these people to get jobs, and that is unsupportable as well.

What a shambles.

Follow me on Twitter: @MidWalesMike

Join the Vox Political Facebook page.

Vox Political needs your help!
This independent blog’s only funding comes from readers’ contributions.
Without YOUR help, we cannot keep going.
You can make a one-off donation here:

Alternatively, you can buy Vox Political books!
The second – Health Warning: Government! is now available
in either print or eBook format here:

The first, Strong Words and Hard Times
is still available in either print or eBook format here:

 

Screwing the facts: Tory website bid to manipulate views on welfare

Tags

benefit, benefits, borrowing, Conservative, debt, deficit, employer, exploit, fair, fatcat, government, inflation, Mike Sivier, mikesivier, pay, people, policy, politics, propaganda, salary, slant, survey, survive, tax, Tories, Tory, unfair, Vox Political, vulnerable, wage, website, welfare

Leading questions: Surveys have been leading respondents by the nose for decades, on many different subjects.

I learned about this trick years ago, when I was working for a broadsheet newspaper.

There had been a great deal of debate over its page size in previous years, but this had been settled by a survey, written by the paper’s bosses (who didn’t want any change).

You’re probably thinking the question was “Should this newspaper continue as a broadsheet or change to tabloid size?” If so, you’re a long way out. The actual question was this:

“Should this newspaper be smaller?”

Of course, the answer was a resounding “No!” People wanted value for money, and didn’t realise that they were being asked about the size of the paper’s pages and not the number of pages in the paper as a whole.

Today I was made aware of another survey that attempts to manipulate the responses it receives by cleverly-worded “leading” questions – except I’m referring to a survey on the Conservative Party website, so neither the questions nor their wording are particularly clever.

You can see it for yourself if you like but I’ll quote it verbatim here anyway.

“We’re interested in your view about the fairness of our benefit reforms” is the overture. I have to admit that, on reading this, I was overjoyed. At last a chance to let the Tories know how wrong-headed their approach has been! That they are hitting the vulnerable in society – and that their policies are in fact leading to the deaths of many of the most vulnerable. Fat chance.

“Conservatives in Government have made a decision that we will support people who work hard and that work will be rewarded.” This was the snap back to reality. Anyone reading this has to see that it’s a propaganda exercise. The only other response is to ask, when is this support going to happen?

“Labour say that benefits should go up by more than average wages – even though it will be the taxes of people in work that pays for this increase.” Whoa, whoa, WHOA, wait. The Conservatives aren’t about to lower the base rate of taxes (only the top rate, for the benefit of their extremely rich friends). Nor are they about to increase taxes. This is disingenous and manipulative. They are trying to say that their decision to depress rises in benefit payments is reasonable because it is in line with employers’ (and let’s remember the government is itself an employer) unreasonable decisions to keep their employees’ pay down (and we’ll get onto their own pay rises in a moment).

“We don’t think this is fair for the following reasons…

“1. A real terms increase would have meant that benefits increased more than the average salary.  Since 2007, benefits have increased by 20% whilst salaries have only increased by 10%. If the Government continued to increase benefits at a higher rate than salaries, this would not be fair on working people. The same working people who pay the taxes which fund the benefits to begin with.” Hogwash. Since 2007, benefits have increased in line with inflation and, as a result, people on benefits have been able to survive. Salaries may well have increased by only 10 per cent. I recall my own pay – before I became self-employed. Month after month, year after year, I saw my disposable income being whittled away in a series of poor pay increases, until I reached the point where continuing to work at the same company would put me into debt. That is the harsh reality of the British workplace in the 21st century, under the Tory-led Coalition.

“2. Working people are having their taxes cut. Changes to the personal allowance mean that working people will pay less tax and will keep more of their earnings. Anyone in work and receiving benefits will gain more from paying less tax, than what they lose from benefits not increasing in real terms.” This is simply untrue. 60 per cent of households attacked by the Tory-led government’s cuts to benefits are working households.

“3. To increase benefits in real terms would have meant borrowing more money. This Government is reducing borrowing and cutting the deficit. Labour would borrow more and add more debt to fund unlimited benefit rises. The Conservatives don’t believe that we should burden future generations with our debts in order to live beyond our means today.” The Conservatives are in fact borrowing more money now than Labour would have, if they had won the 2010 election – £212 billion more than planned, by 2015 alone. Using an expected increase in borrowing as an excuse to deprive the most vulnerable of their ability to survive adequately is plain disgusting.

“Have Your Say on Benefits

“We’re interested in what your think about benefits. That’s why we’re asking you whether or not you support two fundamental principles upon which our welfare policies are founded – many will say they don’t but many will also be in favour. Your responses will tell us what the majority think.

“Please also leave your comments.”

Here’s the first question. Remember what I said at the top, about the way the writers manipulate the wording of these things:

“Should benefits increase more than wages?”

See what I mean? The only possible answer to that is “No” – because they shouldn’t! That doesn’t mean that Tory welfare policy is right, though. It means employers aren’t paying their workers well enough (as proven by my own experience). Next question:

“Do you think it’s fair that people can claim more in benefits that (sic) the average family earns through going to work?” Again, the only reasonable answer is “No” – but again it doesn’t mean Tory welfare policy is right. It means this question – like the first – has been carefully worded to prevent anyone responding from giving an unwanted answer.

Never mind – there’s a box for comments, in which respondents may explain their answers. Here’s what I wrote:

“Your questions are slanted to produce a particular set of answers, I notice. My answer to the first is that they should increase in line with inflation. Wages should do that as well. The simple fact is that the majority of employers in this country seem to see fit to fill their own pockets with cash while depriving their workers. It is THIS imbalance that needs to be redressed. Company bosses have given themselves generous pay rises totalling 700 per cent over the last 20 years, while employees’ wages have risen by an average of just 27 per cent in the same period. That is completely unfair – and the reason it is possible for people on benefits to make more money than the average family earns by going to work.

“You don’t make work pay by cutting benefits to the point where people can’t afford the necessities of life – you do it by actually paying people in work enough money to make doing their job worthwhile.

“I don’t think it’s fair for people in benefits to have more money than the average family earns through work, but the answer is not to cut benefits; you must stop the ruthless exploitation of working people by fatcat business bosses. It isn’t rocket science. It’s common sense.”

I pressed the ‘submit’ button and immediately saw this message, in red:

“How do you think we could make the benefits system fairer? must have at least 0 and no more than 300 characters.”

Apparently they wanted an answer only a little longer than a tweet. In other words, one in which it is impossible to present a reasoned argument.

I tried again:

“Your questions are slanted to produce biased answers. Benefits should increase with inflation. Employers have increased their pay by 700% in the last 20 years; employee pay has increased by 27%. It is THIS imbalance that needs to be redressed. You don’t make work pay by cutting benefits – you do it by paying working people fairly. It isn’t rocket science. It’s common sense.”

It was still a little too long but I managed to shave a few bits off.

Sadly (for the truth), I don’t think it matters. It’s the headline figure – the number of people who answered “No” to the two questions – that will give the Tories what they want.

No doubt they hope to delude huge swathes of the voting population with their results.

That’s why I’m publishing my response – in full – in this article.

Please visit the site and see it for yourselves. Then – if you’re as disgusted as I am – make your opinion as public as you can.

Hunter S Thompson once said of Richard Nixon that he was so twisted he needed help to screw himself into his trousers every morning. That could also be said of the Conservative Party.

Let’s make sure they can’t screw the facts.

These people are an obscenity.

New benefit plan has no heroes – only zeroes

Tags

average, benefit, benefits, budget, business, Coalition, Conservative, Conservative Party, cut, debt, deficit, earnings, economy, False Economy, fiscal, George Osborne, Gideon, government, hindrance, inflation, Liberal, Liberal Democrats, linking mechanism, Mike Sivier, mikesivier, Nasty Party, NatCen, Parliament, people, politics, poll, private sector, public sector, recession, regional pay, regional settlement, salaries, shop, supplier, survey, tax, taxes, Tories, Tory, unemployment, uprating, VAT, Vox Political, wages, welfare

Shall we play a game? This one’s called join-the-dots. I didn’t really like it when I was younger and I doubt that you will, after you see the picture we’ll be creating.

We’ll start here: The government wants to cut another £10 billion from the welfare budget – that’s the bit of public spending that keeps millions of people off the streets, if only on the breadline. The government could, alternatively, try stimulating the economy to make that money in taxes, but policy seems to be pushing hard the other way, as we’ll see shortly.

So: cuts are coming. How to perform them? Draw a line to where the government announces it wants to break the link between benefits and inflation, and link them to average earnings instead.

George Osborne thinks this is a good idea because inflation hit 5.2 per cent last September, much higher than rises in earnings – remember, the man who won’t do what his initials demand (GO) has kept public sector wages frozen for the last few years and private sector wages are also stagnant. As a result, Gideon has been paying out more than he thinks he should to people who, honestly, deserve a break from his miserly administration.

Now draw a line to the results of the NatCen survey that came out earlier this week, stating that people do not want to see more money being spent on welfare than is being spent already. This is the excuse that Mr Osborne wants to use – he can say there is polling evidence that puts significant numbers in support of an end to so-called benefits uprating. Never mind that only 3,000 people were asked or that none of the main parties ever intended to increase the proportion of government spending that goes on welfare; this is his justification and he’s sticking to it.

I wonder what will happen if wages start to rise faster than inflation? Will the Nasty Party write a new clause into the contract, that benefits should rise along with inflation or wages, depending on which is lower? Officials have already stated that they do not want a huge increase in benefits if wages start to climb sharply, so they are already working on ways to ‘fix’ the linking mechanism. Evil, isn’t it?

Never mind; the current plan uses wages, so now draw a line to this: The government still wants to introduce regional pay settlements for the public sector. The Tories – sorry, the Coalition – believe that national pay settlements inflate public sector wages in certain parts of the country far beyond what their private sector counterparts can manage. They also believe that forcing regional settlements on us will save them a fortune in salaries.

Think what this will achieve: The ghettoisation of much of the UK. With regional pay deals, people will have less money available for things other than necessities, meaning fewer trips to the shops (which have already suffered thanks to the idiotic VAT increase to 20 per cent, which cut a large chunk of growth out of the economy). What happens then? The shops shut and their suppliers go out of business too. More people end up on benefits and looking for work.

You see, this right-wing government does not accept the simple fact that welfare benefits help keep the economy stable. Yes, government spending increases as payments are made, but businesses keep their customers, the economy stays afloat and the country as a whole avoids a terminal spiral of decline.

Cutting welfare, thereby reducing the incomes of society’s poorest, creates fiscal hindrance. As billions of pounds (£10 billion in this case) are taken from the active economy, businesses lose customers and lay off staff.

In a recession, increased welfare spending benefits national income so that each pound is worth £1.60 when it has worked its way through shop tills and paycheques. When welfare is cut, this works in reverse, so cutting £10 billion from benefits will increase the UK’s recession by more than one per cent.

This means a longer recession, a larger deficit and more debt. (The above information courtesy of the False Economy website, which has produced a handy factsheet for you to download, keep, and show to anyone spouting Tory propoganda)

Now draw a line to: The government wants to cut more money from the welfare budget.

Look at what you’ve drawn. A big, fat zero.

This is what the government’s plan will achieve for the people, and economy, of Britain.

Survey boosts ‘divide and rule’ agenda – and hate crime

Tags

bank, benefits, brainwash, business, campaign, cancer, carer, carers, Coalition, debt, deficit, disability, disabled, disadvantaged, economy, hate, hate crime, illness, immigrant, job, Labour Conservative, Lib Dem, Liberal Democrat, low-paid, migrant, NatCen, national debt, offshore, Penny Young, racism, safety net, sick, survey, tax, taxes, Tories, Tory, underclass, unemployed, wealthy, welfare

“I don’t know if anyone’s listened to the news/checked the papers today, but I’m sickened (although not surprised) the Tories are stepping up their hatred campaign against immigrants and the unemployed, by publishing exaggerated and out-of-context statistical reports. All they’re doing is fuelling racism and lack of compassion to get small minded people to support their agenda. Outrageous.”

That was the response of Alex – a very non-political friend of mine – to the data from NatCen Social Research today, that claimed people want to see less spending on welfare and benefits, and fewer immigrants.

The BBC’s report had NatCen’s chief executive Penny Young, who wrote the report, saying the public’s view on welfare was “in tune… with the coalition’s policies”.

Not according to Alex, sister!

He reckons Ms Young is part of a Coalition government agenda to brainwash us all into agreeing with schemes that are, even if only on the face of it, evil. And so do I. Who funded this survey?

Here’s a thing you might not have picked up in all the reporting: You may have noticed that Ms Young says, “For the first time since 2008, we’ve seen that the number of people who are prepared to see more money go on disability benefits has actually fallen.”

But that has never been part of anybody’s plans – Labour, the Tories, the Liberal Democrats or the smaller parties (to my knowledge). The problem is that the Coalition is cutting the amount of money being spent on disability – and other – benefits. Massively.

In doing so, it has created a new target for hate crime and a new underclass for society, presumably as a huge distraction from the real problem faced by the country – the Coalition’s mismanagement of the world’s seventh-largest economy.

There is plenty of money here, enough to help all those with illnesses and disabilities, feed all the children (see yesterday’s blog entry), and even to invest in new businesses and jobs. But it is being held by wealthy people – mostly in offshore bank accounts – and the Coalition is doing nothing to free it from their grasp.

Perhaps people think cutting the welfare benefit bill will lead to a cut in taxes. Think again, people! Even on the face of it – by which I mean according to what they’ve told us – the Coalition needs the money to pay down the deficit and cut back the national debt. What they’re really doing is anybody’s guess, but slashing the livelihood of the disabled will not save you one penny in tax.

And let’s take a moment to remember this important fact, posted on Facebook by Adele (not the singer): “Welfare isn’t just about people on the dole. It’s about people in low-paid jobs, people who are carers, people who are too sick or disabled to work, people with cancer and people who have lost their jobs and cannot get another. It is a safety net for those who are disadvantaged in our society. Everyone falls on hard times and just when it may happen to you and you need that safety net, you would want it to be there to catch you.”

Also attacked in the report are immigrants, with three-quarters of the 3,000+ people asked saying they wanted to see a reduction in the number of those coming into the country.

This survey looks like it was written by the editor of the Daily Mail.

The fact that it also suggests people don’t want any more cuts in public spending is meaningless, compared to the damage it inflicts with what I’ve reported above.

I predict a greater increase in hate crime against immigrants and the disabled because – and this is what the perpetrators will say – “It’s what people want, innit?”

Is it?

Over to you.

Public sector – good/private sector – bad

Tags

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.