Friday 19 August 2011

The New York Times attacks Cameron's riots response

Cameron's measures risk "long-term damage to Britain’s already fraying social compact".

Today's New York Times features a thunderous editorial attacking David Cameron's response to the riots. You can read the paper's leader in full here but we've pulled out some of the most notable passages below.

On Cameron's double standards:

Mr. Cameron, a product of Britain's upper classes and schools, has blamed the looting and burning on a compound of national moral decline, bad parenting and perverse inner-city subcultures.

Would he find similar blame -- this time in the culture of the well housed and well off -- for Britain's recent tabloid phone hacking scandals or the egregious abuse of expense accounts by members of Parliament?

On rioters' benefits and social networks:

He talks about cutting off government benefits even to minor offenders and evicting them -- and, in a repellent form of collective punishment, perhaps their families, too -- from the publicly supported housing in which one of every six Britons lives.

He has also called for blocking access to social networks like Twitter during future outbreaks. And he has cheered on the excessive sentences some judges have been handing out for even minor offenses.

On Cameron's populism:

Such draconian proposals often win public applause in the traumatized aftermath of riots. But Mr. Cameron, and his Liberal Democrat coalition partners, should know better. They risk long-term damage to Britain's already fraying social compact.

The Grey Lady also criticises the coalition's economic strategy, warning that the government's "wrongheaded austertity policies" have hit the poorest hardest. What Britain's stagnant economy needs, the NYT argues, is "short-term stimulus", not more budget cutting.

It concludes: "Fair play is one traditional British value we have always admired. And one we fear is increasingly at risk."

http://www.newstatesman.com/blogs/the-staggers/2011/08/cameron-britain-social-risk

PFI a costly 'drug' MPs warn Chancellor

Treasury select committee urges George Osborne to wean off PFIs as report shows them 1.7 times costlier than public purse
George Osborne must wean the Treasury off the "drug" of the private finance initiative (PFI), which offers poor value for money for Britain's taxpayers, according to a cross-party committee of MPs.

In a damning report, the Treasury select committee says that with the yield on government bonds at near-record lows, using a PFI deal for a new infrastructure project could end up costing up to 1.7 times as much as paying for it directly out of the public purse.

Andrew Tyrie, the committee's Conservative chairman, urged the chancellor to call an immediate review, and bring the costs of all previous projects on to the Treasury's balance sheet.

The independent office for budget responsibility recently estimated that the total liability from the capital costs of PFI projects alone was about £40bn, which would increase Britain's debt-to-GDP ratio by almost 3%.

The PFI was first announced by Norman Lamont in 1992, but the complex deals proliferated at Gordon Brown's Treasury. Private sector providers agree to build and run schools, hospitals and other infrastructure projects, typically over 30 years, in exchange for a stream of payments from the public purse.

But Tyrie said that instead of transferring risk to the private sector and cutting costs for the taxpayer, PFI had fooled the public – and Whitehall officials – into thinking they could get shiny new public services "on the never-never".

"PFI means getting something now and paying later. Any Whitehall department could be excused for becoming addicted to that," he said.

"It's like a drug. We can't carry on as we are, expecting the next generation of taxpayers to pick up the tab. We must first acknowledge we've got a problem. This will be tough in the short term but it should benefit the economy and public finances in the longer term."

The report finds that because they could be hidden off departments' balance sheets, PFI projects looked artificially attractive.

Allyson Pollock, professor of public health research and policy at Queen Mary, University of London, who has been a vocal critic of public-private partnerships over more than a decade, said: "The National Audit Office and the Treasury together have spent a long time promoting and advertising this policy, at home and abroad, including to some of the poorest countries in the world. It's time for a complete rethink."

She added that with PFI payments generally uprated in line with the RPI measure of inflation, which is currently running at 5%, the cost of many PFI-funded projects is rising rapidly at the same time as public sector budgets are being cut.

The select committee analysed one specific project, the Royal Liverpool hospital, currently in its procurement phase, and found that the higher cost of financing it privately could add £175m to the price over the life of the hospital. The yield on government bonds, or gilts, which determines the interest rate the Treasury pays on its debts, has slipped sharply since the credit crunch, making the argument against PFI appear all the more stark.

"The cost of capital for a typical PFI project is currently over 8% – double the long-term [30-year] government gilt rate of around 4%. The difference in finance costs means that PFI projects are significantly more expensive to fund over the life of a project. This represents a significant cost to taxpayers," the report finds.

Jesse Norman, a backbench Conservative member of the committee, called for an immediate one-year moratorium on the Royal Liverpool project. Pollock agreed, saying: "When you're in a hole, stop digging."

Business groups defended the PFI, however. Neil Bentley, deputy director-general of the CBI, said: "It's worth remembering that without PFI we would not have seen hundreds of much-needed hospitals, schools and homes delivered on time and within budget."

An aide to the chancellor said: "We have been saying for a long time that the PFI system we inherited was completely discredited and nothing more than a ploy to keep expensive projects off the balance sheet. That's why we are reforming it so it is genuinely transparent and only used when it provides value for money for the taxpayer." He added that PFI liabilities are now published as part of new Whole of Government Accounts, so they can no longer be hidden – but they are still not counted as public sector debt.

London Underground investment

Creaking along on ancient infrastructure, the London Underground was crying out for modernisation by the end of the 20th century. The then chancellor, Gordon Brown, decided to fix it with a 21st century solution: a public-private partnership. Labour traditionalists were furious that the maintenance and development of a prime public asset should be handed over to the private sector.

The £30bn project, due to run for 30 years, divided the upgrading and maintenance of the tube between two consortia: Metronet and Tube Lines. In exchange for carrying out complex work on a network that transported 3 million people a day, the businesses that made up the two consortia would receive a monthly payment that would increase or decrease depending on whether they hit targets for measures such as train cleanliness and reliability of services.

The collapse of the arrangement surprised even its most vociferous critics. Metronet went into administration in 2007 after racking up a projected overspend of up to £2bn, its costs not helped by the fact that it contracted work out to its five shareholders: construction firm Balfour Beatty, Thames Water, energy company EDF, engineering specialist WS Atkins and Canada's Bombardier.

Metronet was bought by the capital's transport authority, which by then was locked in an increasingly dysfunctional relationship with Tube Lines. The company did not have Metronet's overspend problems but it could not deliver an upgrade of the Jubilee Line on time and in 2010 London's mayor, Boris Johnson, bought it from its shareholders, Heathrow owner Ferrovial and US project manager Bechtel, for £310m.

Dan Milmo, The Guardian


MoD supply chain 'at risk of collapse'

The supply chain that provides vital equipment to frontline troops is at "critical risk of failure", MPs have warned in a damning report published today.

British forces serving in Afghanistan or around Libya could be hit by shortages within as little as 30 days if the system broke down, the Commons Public Accounts Committee revealed.

The committee said the Ministry of Defence accepted that the IT systems used to manage the complex military supply chain were "not adequate for the task" and thatits Defence Logistics Board rated the risk of failure of these warehouse inventory systems as "extremely high" and, at one point, "critical".

The committee chairman, Margaret Hodge, expressed exasperation at the failure of the MoD to get to grips with the problems.

The defence equipment minister, Peter Luff, said the complexity and challenges of supplying conflict zones should not be underestimated. "Ensuring our armed forces on the frontline have all they need is a top priority," he said.


Department of Health guidelines falsely inflate NHS costs

Over at False Economy (http://falseeconomy.org.uk/blog/hyped-up-nhs-treatment-costs-make-the-private-sector-look-cheaper) this article caught our eye:

In my last blog I talked about the Payment by Results (PbR) system where most treatments in an NHS hospital are paid at a rate called the National Tariff adjusted for local costs (essentially a London weighting) called the Market Forces Factor (MFF).

You can download the Payment by Results price list from the Department of Health. In this spreadsheet each procedure has a code called the Healthcare Resource Group (HRG) code, and the volume of treatments carried out by the NHS – listed by the HRG codes – can be downloaded from the HESonline website. You can combine these spreadsheets to see which procedures the NHS does most, and the cost of those procedures.

The Department of Health has recently produced a document called A simple guide to Payment by Results, which explains how the payment system works. Figure 1 caught my eye:

DoH payment guide

This suggests that an NHS hospital is paid £961 for a cataract removal. I know that this is not the case, so I investigated further. Figure 2 in the "simple guide" says that the cataract procedure has an HRG of BZ01Z Enhanced Cataract Surgery at a cost of £961. So I checked the National Tariff spreadsheet and found this:

DoH national tariff

Do you see what the Department of Health have done? They have quoted the higher cost procedure BZ01Z at £961 rather than the lower cost BZ02Z at £748. Perhaps this is because most cataract patients need the more expensive procedure? No. HESonline says this:

HESonline NHS treatments

In 2009/10 there were 320,000 of the cheaper phacoemulsification operations and just 6,900 of the more expensive "enhanced" operations. So why did the Department of Health list the less common procedure that is 30% more expensive? A recent study by the Journal of the Royal Society of Medicine says that the NHS is one of the most cost-effective systems in the world and not only does it cost less than most, it saves more lives per head of population than most.

The government intends to privatise parts of the NHS through its Any Qualified Provider policy, and so it is in the government's interest to make it appear that the NHS is more expensive than it actually is, and make it appear that NHS costs are closer to the private sector. The last government set up Independent Sector Treatment Centres, profit-making private companies that perform the more common procedures for NHS patients: the "cream skimming" that I mentioned last week.

Netcare Healthcare was contracted to perform cataract removal for NHS patients. Hansard lists the Ophthalmic Chain Cataract Initiative and gives the contract as £42 million over 64 months. For this money Netcare performed 44,735 operations or £939 per procedure. Hansard does not give the HRG code, but it is well known that ISTC contracts allowed the private hospitals to "cherry-pick" the easy cases and re-refer harder cases back to the NHS, so it is more likely that these operations carried out by Netcare were the cheaper BZ02Z operations (where the NHS would be paid £748) rather than the more expensive BZ01Z (where the NHS is paid £961).

So referring back to the Department of Health guide, it looks like the department lists cataract operations at the more expensive £961 to make it appear that the NHS is performing cataract operations more expensively than the private sector ISTCs, which the current government is pushing as Any Qualified Providers.

In the next few months, to fulfil its intention to privatise the NHS, the government will try very hard to show that the private sector is cheaper than the NHS. This document seems to be just one example of the government bending the truth.

Richard Blogger writes about the NHS and social policy at NHS Vault.


Friday 12 August 2011

PCS Update

CSCS ruling
You may have seen this week that Mr Justice McCombe agreed that our members had accrued their redundancy terms and that these shouldn't be interfered with, however he refused to rule that ministers had acted unlawfully in trying to impose new redundancy terms as they saw this as a legitimate way of tackling the deficit. We're seeking further legal advice on a challenge and further information will be circulated as we get more.
See our news piece and our comment piece on the judgement.
Relaunched pensions calculator
Earlier this week we relaunched our pensions calculator - www.pcs.org.uk/pensions to take account of the contribution increases announced by the government recently. We have produced detailed technical notes to inform members about the calculations. Please can you get the new calculator out to all your networks and encourage reps and members to use it.

Kids raised by single parents do just as well as other children

SOME politicians blame single mothers for a host of society's ills. But the latest research shows that children from single-parent homes often get off to a good start in life-and if they don't, the main factor seems to be their mothers' level of education, not the absence of a father.

In Britain, one in five children is born into a home where their mother is not living with a male partner. In the US, the figure is almost one in three. And some research has backed the popular impression that children raised by lone parents are more likely to do badly in school than those from traditional two-parent families.

Now Henry Ricciuti, a developmental psychologist at Cornell University in Ithaca, New York, has completed one of the largest and best-controlled studies into the issue. He concludes that much of the previous work is misleading, because it confuses the effects of lone parenthood with that of the mothers' level of education and their coping skills.

Ricciuti tested 1700 children between six and eight years old whose mothers were participating in a long-term, multiethnic study of young people. Children raised by lone mothers did just as well on vocabulary, reading and mathematics as those from two-parent families. And the single mothers didn't report any more behavioural problems in their youngsters than mothers living with a partner (Journal of Family Psychology, vol 13, p 450). "I did not find any evidence for single parenthood being a risk in its own right," Ricciuti says. "The question is, how come?"

When Ricciuti looked at single-parent families in more detail, he found that two factors predicted how well the youngsters did in school: their mothers' education and their "general ability", based on a standard measure of problem-solving skills.

The children Ricciuti studied all had relatively young mothers-on average, they had given birth at 20 years old. In contrast to some previous studies, there was no tendency for the mothers living with a partner to have spent longer in education and have had their children later.

The single-parent families did differ in one important way: more than half of them fell below the poverty line, twice the rate of the two-parent families. Since many other studies have found that poorer children do worse on tests of their educational attainment and have more behaviour problems, Ricciuti's results are even more surprising. "Although these mothers are much poorer, their children are still not showing bad effects," he says. Ricciuti concludes that a mother's level of education and her coping skills can outweigh the effects of poverty, at least for younger children.

Marsha Weinraub, a developmental psychologist at Temple University in Philadelphia, applauds Ricciuti's findings. "They're important because they fly in the face of our stereotypes and easy explanations," she says. She has done smaller studies and obtained similar results. "At least until they enter school, these kids don't seem to be different from children in two-parent families."

Weinraub says it's not clear whether this remains the case as children get older. "Something may happen to these kids after they enter school," she says. "But it's dangerous to conclude that they are automatically at risk."

Author: Robert Adler http://www.newscientist.com


A Moral Bonfire

David Cameron, Ed Miliband and the entire British political class came together yesterday to denounce the rioters. They were of course right to say that the actions of these looters, arsonists and muggers were abhorrent and criminal, and that the police should be given more support.

But there was also something very phony and hypocritical about all the shock and outrage expressed in parliament. MPs spoke about the week’s dreadful events as if they were nothing to do with them.

by Peter Oborne, The Telegraph 12th August 2011

I cannot accept that this is the case. Indeed, I believe that the criminality in our streets cannot be dissociated from the moral disintegration in the highest ranks of modern British society. The last two decades have seen a terrifying decline in standards among the British governing elite. It has become acceptable for our politicians to lie and to cheat. An almost universal culture of selfishness and greed has grown up.

It is not just the feral youth of Tottenham who have forgotten they have duties as well as rights. So have the feral rich of Chelsea and Kensington. A few years ago, my wife and I went to a dinner party in a large house in west London. A security guard prowled along the street outside, and there was much talk of the “north-south divide”, which I took literally for a while until I realised that my hosts were facetiously referring to the difference between those who lived north and south of Kensington High Street.

Most of the people in this very expensive street were every bit as deracinated and cut off from the rest of Britain as the young, unemployed men and women who have caused such terrible damage over the last few days. For them, the repellent Financial Times magazine How to Spend It is a bible. I’d guess that few of them bother to pay British tax if they can avoid it, and that fewer still feel the sense of obligation to society that only a few decades ago came naturally to the wealthy and better off.

Yet we celebrate people who live empty lives like this. A few weeks ago, I noticed an item in a newspaper saying that the business tycoon Sir Richard Branson was thinking of moving his headquarters to Switzerland. This move was represented as a potential blow to the Chancellor of the Exchequer, George Osborne, because it meant less tax revenue.

I couldn’t help thinking that in a sane and decent world such a move would be a blow to Sir Richard, not the Chancellor. People would note that a prominent and wealthy businessman was avoiding British tax and think less of him. Instead, he has a knighthood and is widely feted. The same is true of the brilliant retailer Sir Philip Green. Sir Philip’s businesses could never survive but for Britain’s famous social and political stability, our transport system to shift his goods and our schools to educate his workers.

Yet Sir Philip, who a few years ago sent an extraordinary £1 billion dividend offshore, seems to have little intention of paying for much of this. Why does nobody get angry or hold him culpable? I know that he employs expensive tax lawyers and that everything he does is legal, but he surely faces ethical and moral questions just as much as does a young thug who breaks into one of Sir Philip’s shops and steals from it?

Our politicians – standing sanctimoniously on their hind legs in the Commons yesterday – are just as bad. They have shown themselves prepared to ignore common decency and, in some cases, to break the law. David Cameron is happy to have some of the worst offenders in his Cabinet. Take the example of Francis Maude, who is charged with tackling public sector waste – which trade unions say is a euphemism for waging war on low‑paid workers. Yet Mr Maude made tens of thousands of pounds by breaching the spirit, though not the law, surrounding MPs’ allowances.

A great deal has been made over the past few days of the greed of the rioters for consumer goods, not least by Rotherham MP Denis MacShane who accurately remarked, “What the looters wanted was for a few minutes to enter the world of Sloane Street consumption.” This from a man who notoriously claimed £5,900 for eight laptops. Of course, as an MP he obtained these laptops legally through his expenses.

Yesterday, the veteran Labour MP Gerald Kaufman asked the Prime Minister to consider how these rioters can be “reclaimed” by society. Yes, this is indeed the same Gerald Kaufman who submitted a claim for three months’ expenses totalling £14,301.60, which included £8,865 for a Bang & Olufsen television.

Or take the Salford MP Hazel Blears, who has been loudly calling for draconian action against the looters. I find it very hard to make any kind of ethical distinction between Blears’s expense cheating and tax avoidance, and the straight robbery carried out by the looters.

The Prime Minister showed no sign that he understood that something stank about yesterday’s Commons debate. He spoke of morality, but only as something which applies to the very poor: “We will restore a stronger sense of morality and responsibility – in every town, in every street and in every estate.” He appeared not to grasp that this should apply to the rich and powerful as well.

The tragic truth is that Mr Cameron is himself guilty of failing this test. It is scarcely six weeks since he jauntily turned up at the News International summer party, even though the media group was at the time subject to not one but two police investigations. Even more notoriously, he awarded a senior Downing Street job to the former News of the World editor Andy Coulson, even though he knew at the time that Coulson had resigned after criminal acts were committed under his editorship. The Prime Minister excused his wretched judgment by proclaiming that “everybody deserves a second chance”. It was very telling yesterday that he did not talk of second chances as he pledged exemplary punishment for the rioters and looters.

These double standards from Downing Street are symptomatic of widespread double standards at the very top of our society. It should be stressed that most people (including, I know, Telegraph readers) continue to believe in honesty, decency, hard work, and putting back into society at least as much as they take out.

But there are those who do not. Certainly, the so-called feral youth seem oblivious to decency and morality. But so are the venal rich and powerful – too many of our bankers, footballers, wealthy businessmen and politicians.

Of course, most of them are smart and wealthy enough to make sure that they obey the law. That cannot be said of the sad young men and women, without hope or aspiration, who have caused such mayhem and chaos over the past few days. But the rioters have this defence: they are just following the example set by senior and respected figures in society. Let’s bear in mind that many of the youths in our inner cities have never been trained in decent values. All they have ever known is barbarism. Our politicians and bankers, in sharp contrast, tend to have been to good schools and universities and to have been given every opportunity in life.

Something has gone horribly wrong in Britain. If we are ever to confront the problems which have been exposed in the past week, it is essential to bear in mind that they do not only exist in inner-city housing estates.

The culture of greed and impunity we are witnessing on our TV screens stretches right up into corporate boardrooms and the Cabinet. It embraces the police and large parts of our media. It is not just its damaged youth, but Britain itself that needs a moral reformation.

Our view? Capitalism isn't working.


Wednesday 10 August 2011

Next to nothing?

One wonders what has so disaffected the youth of today that leads them to view high street stores with such contempt as seen in recent days.

Then we discover that Next, in Blackpool, in common with other branches around the country are offering the youth opportunities such as Apprentice Stockroom Assistants (Delivery/Stockroom Department). These are temporary positions, and are limited to 24 part-time hours a week. Fine so far as it goes. However, it is scandolous that this multi-million pound company is paying a mere £2.50 an hour to these young people, clearly using this scheme to exploit the youth as a source of cheap labour.

It seems we are sowing what we reap.

Tuesday 9 August 2011

HP to offshore DWP jobs

Workers employed on a sensitive government IT contract have begun industrial action over concerns that their jobs could be shifted to India.

Computer giant Hewlett Packard (HP), which has the contract to maintain the records of millions of people for the Department for Work and Pensions (DWP), has begun consulting over its plans to relocate up to 200 jobs overseas.

No final decision has been made as the plans are subject to approval by the DWP and the Cabinet Office for security reasons.

The Public and Commercial Services (PCS) union urged the government to intervene to prevent the jobs being moved abroad.

PCS members employed by HP on the government contract voted almost unanimously for action short of a strike over concerns for their jobs and the security of the information.

The industrial action means staff will refuse to co-operate with the process of exporting their work from sites in Newcastle, Lytham and Sheffield to Bangalore.

The union said that if the move goes ahead it could set a precedent as contracts do not forbid the transfer of government IT work overseas.


Monday 8 August 2011

Gold plated pensions?

The top company bosses retiring on £175,000 a year... but the typical worker gets just £6,000

Bosses of Britain’s top companies look forward to an average pension of £175,000 a year, while the average private sector worker will have to struggle by on less than £6,000.

A report has revealed the shocking scale of the pension divide in which company chiefs are retiring on the types of sums their employees can only dream of.

It showed the average FTSE 100 director has amassed a pension nest-egg worth £3.6million.

And, as if these giant sums were not enough, almost a third of executives are supplemented with additional cash payments averaging £161,000 – because they have filled their pension pots beyond the maximum allowed under generous tax relief rules.

Deborah Hargreaves, chairman of the High Pay Commission, accused bosses of hypocrisy for demanding that ordinary workers suffer cuts to their pension provision while laying up millions to finance a life of luxury in retirement for themselves.

NHS among developed world's most efficient health systems, says study

Report in the Journal of the Royal Society of Medicine finds health service second only to Ireland for cost-effectiveness

The NHS is one of the most cost-effective health systems in the developed world, according to a study (pdf) published in the Journal of the Royal Society of Medicine.

The "surprising" findings show the NHS saving more lives for each pound spent as a proportion of national wealth than any other country apart from Ireland over 25 years. Among the 17 countries considered, the United States healthcare system was among the least efficient and effective.

Researchers said that this contradicted assertions by the health secretary, Andrew Lansley, that the NHS needed competition and choice to become more efficient.

"The government proposals to change the NHS are largely based on the idea that the NHS is less efficient and effective than other countries, especially the US," said Professor Colin Pritchard, of Bournemouth University, who analysed a quarter of a century's data from 1980.

"The results question why we need a big set of health reform proposals ... The system works well. Look at the US and you can see where choice and competition gets you. Pretty dismal results."

The study will be a blow for Lansley, who argues that patients should choose between competing hospital services and GPs.

Read more here: http://www.guardian.co.uk/society/2011/aug/07/nhs-among-most-efficient-health-services