Up to my eyeballs...

I'm steeped deeply in contract law at the moment. Blogging services are on the back burner.

Watching the Jacqui Smith car-crash and expenses fiasco that seems to be spreading like a bush-fire in the dry season is quite amusing, though...

Might I humbly suggest the application of an expenses litmus test for MPs: if you think you might get fired for doing it in the private sector, don't bloody claim it. Stop giving Parliament a bad name, you'll destroy all credibility in the system.

Blowing the budgets

Iain Martin’s blogpost over at the Telegraph this morning discusses how the latest poll results suggest that voters are broadly in favour of cuts to public spending, though not at the expense of core services. It is a bit woolly to think that you can simply cut administrative costs or jobs and all will be well – many of the support roles are critical to front-line delivery – however this does take the somewhat naive view that the boys and girls on the front-line are all doing sterling jobs. I don’t doubt that many are, but I also suspect that the threat of some cuts there would work wonders for productivity.

I eschewed my normal bike ride to work in favour of my car today. It’s the first time I’ve driven to work this year, and thinking about it, the first time in about nine months. As a result, I had the delights of Wogan for fifteen amusing minutes this morning. Nearing my office, the traffic report finished and Wogan jested that there will be lots of roads being dug up, because March is nearly over and all the Councils will be looking to spend all their budgets before the end of the tax year, lest the Government reduce their budget for the next year.

I’ve come across this before. It is something of a universally-accepted fact of the Public Sector that if you don’t spend your budget, next year’s will be cut back, and nobody wants that. When I worked for a recruitment company, we discovered all sorts of projects suddenly kicking off in Feb/March as IT managers suddenly needed extra hands to roll out new desktops and so on. It was a theme repeated year-on-year, as my manager explained, and was a great little boost to business.

That was a discovery I found despairing. Even at the time, I had a little shiver, and wondered why on earth people entrusted with public money could be so utterly irresponsible as to spend it for the sake of not getting as much next year. Profligate spending like that is an utter disgrace, and that is one of the reasons public sector spending is so out of control – they have a use it or lose it mentality, and rather than thinking of how they can make a little go a long way, the public sector seems determined to spend it lest they get a smaller budget for the next year.

One of my contractors had once worked on a few assignments at North Yorkshire County Council, based in Northallerton. He told me about their IT stores room, where they apparently had a stash of unused laptops. These were the sort which were meant for heavy duty activity; water-resistant, shock-resistant, hard-wearing. It transpired they had been purchased a few years ago, and had never been used, but that hadn’t stopped them ordering more. Someone clearly thought it would be nice to have some, so spent some of my taxes and their council tax levies on some IT Hardware which would gather dust, unused.

I remember my manager being delighted, because one of his NHS accounts had actually signed off budget from 2007 and paid us in advance of any actual requirement just to get rid of it before the year end, with the view of using it when the next project came live. That might seem efficient enough, but he wasn’t doing it for efficiency, he was doing it to ensure he got as big a budget next year as the year past.

David Cameron, should he win the next general election, is going to have a lot on his plate. The public sector needs a cull, and it needs a change in mentality. Somehow it needs to be reminded that taxpayers money is something you have to be responsible with, and blowing through a budget for the sake of spending is a poor show indeed.

As much as it galls me...

While I normally have very little patience for the Daily Mail and its offensive school of journalism, for once (and perhaps this is because I'm severely peeved at some jobsworthian witch for reasons that I have tweeted elsewhere), yes, for once I agree with Littlejohn.

If Harriet is so keen on the 'court of public opinion' all of a sudden, let her and her cohorts be hoisted by their own petard.

Added Bonus

It was probably inevitable. Actually, it was inevitable. I've been waiting for it to happen, and I've not been disappointed. Northern Wreck were first in the firing line, and now the other banks are following suit and announcing this year's bonus payments for staff.

Since the collapse of the sub-prime market triggered, or contributed, to the worldwide recession we are now sliding deeper into, Politicians who should know better have taken easy potshots at overpaid bankers and their obscenely generous bonuses. It is this bonus culture that blinded them , in their greed, to the greater and more dangerous risks they were taking.

And maybe they're right, maybe the bonus award schemes that some of these high-flyers were on did encourage reckless behaviour. As such, perhaps the way these bonuses are constructed needs to be reviewed, but I think that perhaps it is a little rich of the Government - who sang the praises of our Financial Services industry - to condemn them so roundly.

The morning press seems to have split its attention between Jacqui Smith (who 'denies all wrongdoing' - journalist speak for 'guilty as sin') and her immoral (if maybe not illegal) expenses fiddle, and Brown taking a tough stance on bankers' bonuses. Yvette Cooper's performance on the Today Programme blunted what would otherwise have been a strong moral argument (not helped by Jacqboot's startlingly brazen abuse of public trust), on which Iain Dale has a few words to say.

In this instance, Cooper called for bankers to exercise their moral judgement and not accept their bonuses, even if contractually their employer was obliged to offer one. Perhaps a fair point, but who are these bankers? The once high-flying investment monkey, the one who 'caused' this mess (rememeber him?) and his massive six-figure-plus bonus, or the teller in the branch, with a much more modest bonus related to customer service and product sales?

Chances are, the tellers, Customer Advisers, Mortgage Advisers and so on and so forth, are on relatively modest wages as well - their bonus makes a big difference to them, and is a reward for good performance. Who is to say that these front-line staff don't deserve their bonus? They've worked hard, fulfilled their contractual obligations, and it's time for them to get their reward. Whether or not my taxes are propping up their business or not - and let me make this clear, the money that pays that bonus has nothing to do with the money from the Treasury, operational budgets will be covering those payments, not the capital liquidity provided to encourage lending.

Much more thorny are the executives who stood by, fingers in ears and eyes tight shut singing "La la la" and hoping that the disaster would never come and the good times would never end. Have they performed well? Have the investment monkeys who took the risks and rewards and drove us to the precipice performed well? Do they deserve their bonuses?

Here's where I agree with Cooper, but not wholly. I'm not sure it's fair to ask anyone to turn down their bonus if contractually, they were only doing what they were encouraged to do. If we look at their performance review and it turns out that whatever the consequences were or have been, they have ticked all the boxes for what they were supposed to do, it is manifestly unfair of us to then move the goalposts and say they shouldn't have it.

Instead, given the noise being created over this, I would suggest that the banks need to review their rewards schemes to ensure that bonus payments can reward high performance but not encourage irresponsible practice. This is one area I think the regulators should have been involved, not just in terms of how the banks operated, but how their pay and reward systems were structured.

It would be dangerous, though to tar everyone with the same brush. Most of the bonuses paid aren't for the fat cats - but they'll certainly see the largest slice. Just don't let that blind you to those who really do deserve it.

UPDATE - entry by Dr. Eamonn Butler on the Adam Smith Institute blog, makes my point but a lot more succinctly.

EU Procurement law Vs. My taxes.

I received today an e-mail inviting me to attend a seminar on EU Procurement law. There have been rather a lot of seminars on this subject lately, but this one was going for an attention-grabber:

“The EU procurement rules are fraught with difficulty.

You are required to navigate between the black letter of the law and the commercial reality of putting together a procurement.

To manage the risk effectively you need rock-solid advice on what you can and can't do.”

It went on to list a number of the hurdles and complicated rules that can make a public sector contracting exercise something of a minefield, from when you can and cannot speak to suppliers during the process, when a framework is anti-competitive and thus non-compliant, and so on and so forth.

Normally these things get the ‘delete’ treatment without any further ado; however this framed the problem faced by contracts teams within the Public Sector very succinctly. Basically, there are so many pitfalls, red tape and ridiculous levels of bureaucracy designed at making the process as ‘fair’, ‘open’, ‘transparent’, ‘non-discriminatory’, etc, etc. as possible that it becomes an uphill struggle before you even get started.

I’m not saying that any of these goals are a bad thing. On the contrary, they are wonderful principles of a free market. Public money should be accountable, and we should not be awarding the contract to someone who isn’t going to offer the best value for money.

It’s also fucking difficult to argue against the rules. They make irritating sense to a free-marketeer. If followed, they stop protectionist policies and are intended to prevent sharp practice, all good things. In fact, you can’t even say that a public body should be able to spend its money in the local economy, because the whole point of the rules is that the best response to your tender will win the business.

In other words, if local suppliers want to win the business, then they need to up their game and improve. It also means that there should be no barrier to those local suppliers winning business elsewhere in Europe, if they decide to do so. Great, in theory.

So, does that mean I’m happy that my tax money is going to line a German, or Spanish company’s offers? Well the flipside is that their tax money could well be lining those of a British company, so you could argue that it will all come out in the wash.

What I’m trying to make clear here is that the spirit of the EU Procurement rules is something I agree with. My issue is more whether or not the sheer cost of implementing the laws, enforcing them, and even writing the damned things is actually delivering us any value for money, or if in fact is costing governments – and therefore you and me as the taxpayer – a huge amount of money that could be better off back in my pocket.

It also means that the UK Government can’t say to contracting authorities (basically a body spending public cash) that they should source locally and support the British economy. It has no say over where that public money will end up. Of course I should be happy that the most economically advantageous tender will win, therefore saving the taxpayer money. It’s very easy to end up in a circular argument on this.

When the House of Commons commissioned the construction of new offices for MPs, what was to become Portcullis House, the contract for the windows went to a British firm. The problem was that a French-owned firm, Harmon, had submitted the most economically advantageous bid. Someone at the House had decided we should buy British. Harmon challenged this under a breach of the EU Procurement rules and were awarded damages in court for £1.85m. There were other aspects they could also sue for, however the House of Commons settled out of court for an unspecified fee. So the taxpayer paid for the windows twice over, maybe more. Now, can you spell colossal waste of my fucking money?

Fine, you say, live within the rules. I question not the spirit of the rules, let me re-iterate that. What I do believe in is choice. The same choice afforded to the private sector, which has far more freedom to make decisions on where it spends its money. What I question is why that accountability seems to lie with Europe, and not with the UK taxpayer. Why the fuck are some overpaid bunch of bureaucrats allowed to tell our public sector that it can’t support local businesses if it chooses to do so? It may not be the right choice, but the point is that the public sector in the UK should be responsible to the UK taxpayer, not to fucking eurocrats.

I fail to see why we need another layer of bureaucracy on top of our own, trying to tell us what we can and can’t do – private or public sector. Big government is not a good thing. More big government above a big government is worse. We have enough crap from our own politicians, we really don’t need to be subsidising eurocrats as well, and we really don’t need more layers of red tape, processes and procedures that cost the taxpayer even more money.

Eurobarometer swings...

... Exactly where you'd expect it to, actually.

Just to crunch the numbers for you:

• 14% of UK residents questioned were aware that European elections will be held in 2009.
• 34% of UK residents questioned are even interested in said elections.
• 64% are not.
• 18 % of us 'would definitely vote'
• 28% of Brits have recently heard/seen something about the European Parliament on TV/Internet/Newspaper (the lowest of all members polled).
• 19% of us think we're well informed about European Parliament.

Oh, and apparently we have a European Anthem.

Anyway, the upshot of this would seem to suggest that the UK at large doesn't have much interest in Europe. The Czech seem to have noticed this.

To quote DK: "Can we leave yet?"

Hat tip to The Croydonian.

Smoke and mirrors. And Sat-Navs, nannies, mortgages...

Mr Eugenides has cross-posted on DK about a little smoke-and-mirrors at Westminster - namely, that the much awaited 'review' of MPs expenses, in a severely watered down format, was conveniently announced (without much ado) on the same day as the Heathrow runway debacle. John McDonnell's little performance served as a nice little headline grabber to draw attention to the fact that very little has changed.

The Times has the run-down here.

Scum and villainy

This story popping up on the BBC was particularly intriguing, and I know one or two people who will be interested to read about it.

It appears that a German company has been sending a ream of letters to all and sundry demanding money for downloading porn from P2P clients, pensioners included. Quite what interest a little old lady in Bedfordshire would have in 'Young Harlots' is quite beyond me.

Actually, scratch that.

Thieving son of a goat...

A number of blogs have been carrying banners for Axe The Beer Tax, and for good reason. If you weren't aware (and I imagine that's more than a few of you out there), 33% of the cost of a pint is tax. A THIRD. Buy three pints, and one of those was pure tax.

Not that the politicians are too worried about that.

What makes that even more hard to swallow is the other duties we pay on alcohol. As of the PBR, £1.57 of a bottle of wine in the UK is duty. That means that horrific bottle of plonk you picked up for £3.50 in the supermarket contains less than £1.93 of wine. That's before you count the costs of shipping and bottling. Spirits? On a bottle of, well, let's say Smirnoff (oddly enough, my text recognition software on my phone reads that as Poison before I get to the ff) at 37.5%, that's £6.03. Given that one can pick up a bottle of the stuff for about £15, that's about 40%.

And they think they need new laws to dissuade us from drinking?

Softly Spoken

The speaker 'regrets' that the Police had been able to raid Damian Green's office without a warrant. Apparently, yes, ladies and gentlemen, the House of Commons speaker really is that wet. He spoke not so much with conviction, but with a whimper. Grow a spine, man, and stand up for democracy!

In other news, amongst the other Bills contained in the Queen's Speech was the Savings Gateway Account Bill, whereby the Government intends to pay 50p for every £1 that low earners manage to squirrel away into this special new account, up to a maximum Government contribution of £300. Without massaging the figures, that's a 50% interest rate for the first £600 saved. Now I'm sure there must be stringent controls over how this works, but hold on just one second, I'm all for incentives to save, but isn't that what ISAs are all about?

It is important for people to have savings - you need that cushion for a rainy day. Furthermore, it encourages financial discipline, and in my opinion, saving for something makes far more sense than borrowing the money to buy it. Not only do you feel like you have earned your purchase, but you don't have to pay ridiculous interest on it.

So what we have here is the Government telling us to go out and spend (wait, isn't that how we ended up in this mess?), while at the same time telling us to save (which could contribute towards stagnating the economy) which it will encourage by spending taxpayers money at a time when we have a budget deficit. Talk about mixed messages.

I is payin fur mah guverment. I wantz refund.