“Judge agrees costs capping in action over NHS accountable care organisations”

“Campaigners including scientist Professor Stephen Hawking have secured a costs order for their judicial review of the government’s planned creation of accountable care organisations (ACO) in the NHS.

In January the claimants gained permission to bring the case against Health and Social Care Secretary Jeremy Hunt and the National Health Service Commissioning Board.

Cheema-Grubb J held that the crowd funded campaign met the statutory test for a costs capping order, being a group of responsible individuals acting in the public interest without a personal interest in the outcome.

The campaigners will challenge the lawfulness of accountable care organisations, which they argue Parliament has not given the Department of Health the power to create.

During the January hearing the court declined to cap costs and the campaigners feared they could face a £450,000 bill were they to lose.

Cheema-Grubb J said it was highly likely that some of the concerns raised in the judicial review had a high degree of public interest and accepted evidence that the case would be dropped in the absence of a cost order.

The claimants could not be criticised for being unreasonable in not proceeding in a case with open-ended potential liabilities, the judge said.

She also noted that Mr Hunt and the NHS were publicly funded through taxpayers’ money in defending the case.

Under the order, if the campaigners lose their liability for Mr Hunt’s and the NHS’s costs would be capped at £80,000 each.

If they won, the two defendants’ liability to pay their costs would be capped at £115,000.”


New coastal communities fund open

“A further bidding round has opened for the government’s fund to promote regeneration and economic growth in coastal towns.

Successful projects in round 5 of the Coastal Communities Fund will share £40m among them. The money will be available to spend from April 2019 to March 2021.

The fund has allocated £174m to 295 projects since it began in 2012. It is for projects over £50,000 that will directly or indirectly lead to safeguarding and creating sustainable jobs.

Communities minister Jake Berry said: “Coastal communities up and down the country from Barrow-in-Furness to Brighton have been boosted by this funding which has spurred inward investment, sustainable growth, new jobs and exciting economic opportunities for local businesses.”

The fund has generated £8 for coastal area economies for every £1 invested, the minister said.

Successful projects have included a £1.95m grant to Cornwall to repair and re-launch the Grade II Listed Art Deco Jubilee Pool in Penzance as a year-round visitor attraction, a £2m allocation for Blackpool’s Lightpool project to improve its seafront Illuminations and Northumberland’s £1.8m award to turn Amble into a destination for devotees of seafood. …”

Swire’s questions

Swire has put in another Parliamentary question about East Devon – this time saying wouldn’t it be a great idea if tourism could attract less VAT.

However, Owl isn’t printing it. It’s been asked before, appreciative noises made and, of course, nothing changed.

So why isn’t Owl more positive about Swire’s bid to help the East Devon economy?

Well, it’s coming up to local election time (though not in East Devon this year, the closest being Exeter) and ALL Tory MPs are (coincidentally, of course) popping up all over the country asking similarly closely-targeted questions in THEIR constituencies …..

Next question?

“Tory ministers decide not to spend £72 million set aside for affordable homes despite housing crisis The money will now be spent on building houses for sale worth up to £600,000”

“Tory ministers decided not to spend £72 million set aside to build affordable homes because it was “no longer required”, despite the housing crisis gripping Britain.

Communities Secretary Sajid Javid was forced to “surrender” the cash and send it back to the treasury, as part of £817 million his department failed to spend last year.

Some 115 million people are on council waiting lists in England, almost a quarter of whom are in London.

But a government memo, explaining the department’s underspend to the Treasury, states: “Part of the funding allocation for the Affordable Housing programme has not been required in 2017/18.”

The document also notes that the £817 million figure – much of which would have been intended for social or affordable homes – will now be spent on funding the Help to Buy programme.

In 2016-17, just 41,530 affordable homes were built, the second lowest figure for a decade.

The majority of affordable homes are so-called ‘affordable rent’, where the monthly rent is set at up to 80% of private market rent.

The number of cheaper, “social rent” houses built each year has plummeted from 39,560 in 2010-11 – the year the new “affordable rent” definition was introduced – to just 5,380 last year.

Labour’s Shadow Housing Secretary, John Healey said: “Feeble ministers are selling families short by surrendering much-needed cash for new homes.

“If the Secretary of State can’t defend his Department’s Budget from the Treasury he should give the job to someone who can.”

A DCLG spokesperson said: “We are delivering the homes our country needs and since 2010 we have built over 357,000 new affordable properties.

“But we are determined to do more and we are investing a further £9bn, including £2bn to help councils and housing associations build social rent homes where they are most needed.”


Are EDDC Tory councillors having broadband problems?

Written Answers – Department for Digital, Culture, Media and Sport: Broadband: East Devon (26 Feb 2018)

Hugo Swire: To ask the Secretary of State for Digital, Culture, Media and Sport, what estimate his Department has made of the number of homes that have access to superfast broadband in East Devon.

Written Answers – Department for Digital, Culture, Media and Sport: Broadband: East Devon (26 Feb 2018)

Hugo Swire: To ask the Secretary of State for Digital, Culture, Media and Sport, what estimate his Department has made of the number of businesses that have access to superfast broadband in East Devon.

“east devon” : 1 Written Answer

Written Answers – Department for Digital, Culture, Media and Sport: Broadband: East Devon (26 Feb 2018)

Margot James: According to Thinkbroadband, currently 90.02% of premises in *East Devon* can access superfast broadband. This is up from 9.4% in 2012. DCMS does not hold data on broadband coverage which distinguishes between homes and businesses.

“The plan to cut MPs looks suspiciously like a power grab”

“Are we witnessing a power grab?

Six months ago, reports suggested that the Prime Minister had dropped plans to force through a cut in MPs, a cut linked with the ongoing review of constituency boundaries.

It turns out there has been a u-turn on the u-turn, with news emerging that the PM is set to reduce the number of MPs.

That’s despite the Public Administration and Constitutional Affairs Committee warning that moves to cut numbers to 600 are unlikely to secure the backing of MPs.

But why the fuss?

The issue comes down to a very ill-thought plan for new constituencies – alongside some clear democratic dangers when it comes to reducing voters’ representation.

The cut in MPs actually represents a cut in backbenchers if there are no plans to cap/cut the size of the executive or ‘payroll vote’ correspondingly.

Parliament will gain more powers after Brexit yet will have less capacity to scrutinise legislation. At the same time voters lose their representatives in Europe. That places a greater burden on the Commons and a lack of capacity poses significant risks.

The democratic dangers are clear. ERS research in 2016 showed that in a smaller, 600-seat Commons, nearly one in four (23%) MPs would be on the government payroll if the parties’ proportion of MPs – and the total number of ministers and whips – stayed the same – an all-time high, and up from the 21% at present (figures as of November 2016).

The more you look at it, the more cutting backbenchers at the same as bolstering the executive looks to many like a worrying power-grab.

But there’s another factor – the unelected Lords. It’s just common sense that the cut in democratically elected representatives cannot go ahead while the House of Lords remains the second largest chamber in the world, with around 800 members.

If the government are concerned about reducing the cost of politics, they would do well to deal with the over-sized second chamber.

Voters need real representation in the Commons to provide the essential scrutiny and capacity we need: both for now and when we gain new powers after Brexit.

But there are problems with the boundary changes regardless of the cut in MPs. For a start, the new boundaries will be based on highly incomplete as well as out of date data. For example, people who registered to vote for the EU referendum won’t be counted for the new boundaries – skewing representation.

At the same time, the government has set an arbitrary 5% maximum difference in the size of the new constituencies. That risks awkwardly splitting up communities or grafting very different towns/counties onto each other – just look at the controversial Devonwall proposals.

Finally, unregistered but eligible voters are not being considered when drawing up these constituency boundaries – even though they will still need support and representation from their MP. This disadvantages poorer constituencies – they end up with lower representation, often despite greater need.

Far from reducing political representation and weakening voters’ voices, the Prime Minister should cancel the proposed cut in MPs – and move forward with fair boundaries based on a properly resourced Commons.

Read the ERS’ full views on the boundary changes here:

https://www.electoral-reform.org.uk/campaigns/upgrading-our-democracy/fair-boundaries/ and here https://www.electoral-reform.org.uk/cutting-the-number-of-mps-will-have-consequences-lets-get-this-right/

Black mud in Teignmouth – is it from Exmouth marina dredging?

The photographs/videos on the Devon Live website do seem to show very dark-coloured material in the dredger that is licensed to dump it at Sprey Point:


The Marina is owned by F C Carter & Co, who also own the Greendale Business Centre.

Privatisation: National Audit Office calls out academy schools

“The National Audit Office has issued a report questioning the Department for Education’s ability to continue converting large numbers of maintained schools to academies.
The watchdog said that the DfE was “taking longer than intended to convert a sizeable proportion of the underperforming schools it believes will benefit most from academy status”.

At January 2018 the Department had converted 6,996 maintained schools to academies. The process has cost it an estimated £745m since 2010-11, of which £81m was spent in 2016-17.

The NAO report – Converting maintained schools to academies – highlighted how a much higher proportion of secondary schools than primary schools were academies. Some 72% of secondary schools, including free schools, were academies compared with 27% of primary schools.

“This leaves local authorities with responsibility for most primary schools and specialist providers, but few secondary schools. In areas where a high proportion of secondary schools are academies, it is more difficult for local authorities to take an integrated, whole-system approach to the education of children in their area,” the NAO warned.

The watchdog also found significant geographical variation in the proportion of schools that were now academies. This varied across England, from 93% in Bromley to 6% in Lancashire, Lewisham and North Tyneside. There were 23 local authorities (15%) that had 150 or more maintained schools, while 55 local authorities (37%) had fewer than 50 maintained schools, it said.

The report also found that:

Almost two-thirds of schools rated as inadequate by Ofsted and directed to convert, with the support of a sponsor, took longer than the nine months the DfE says it should take to open as academies. The NAO estimated that, at January 2018, there were 37,000 children in maintained schools that Ofsted had rated as inadequate more than nine months before but that had not yet opened as academies.

The Department had found it difficult to find sponsors for some of the most challenged schools. “In particular, small, sometimes remote, primary schools can find it challenging to attract local sponsors and integrate into multi-academy trusts.” There were 242 sponsored academies that were more than 50 miles from their sponsor. …”


Two unitary councils for Dorset: whither Devon?

With permission now granted for Dorset to move from nine regional authorities to two unitaries, politicians across Dorset are hailing it as the way forward to cope with continued austerity and income losses.

Which begs the question: if unitisation is so good, why are we stuck with a myriad of district and city councils in Devon?

Is Dorset right or wrong? Should we be following their lead? Are we following their lead in secret?

Or is our Local Enterprise Partnership Joint Committee our de-facto unelected, unaccountable, unscrutinised unitary authority already – with heavily-weighted Somerset taking the majority of its funds?


The swamp, the sleaze … coming to a government very near you

“The vetting process by which Toby Young was appointed to the board of the new higher education regulator was flawed and rife with political interference, according to the results of an investigation by an official watchdog.

The commissioner for public appointments’ report castigates the Department for Education (DfE) and regulator the Office for Students (OfS) for failing to delve into Young’s controversial writings and social media postings, and uncovers a high degree of direct meddling by ministers and No 10 Downing Street.

The commissioner concludes that the OfS’s board appointments, including Young, showed a “clear disparity” in the treatment of different candidates, and that parts of the process “had serious shortcomings in terms of the fairness and transparency aspects” under the code governing public appointments.

The report reveals Jo Johnson, who was then the universities minister, contacted Young about applying for the post and that his nomination was later queried by Justine Greening, the education secretary at the time.

The commissioner also detailed the involvement of Downing Street special advisers in blocking nominees for the “student experience” role on the OfS board, who were blacklisted because of previous involvement with student unions and their expressed opposition to the government’s Prevent counter-extremism programme.

“The evidence presented to the commissioner indicates that the decision on whether or not to appoint one candidate in particular was heavily influenced, not by the panel but by special advisers, notably from 10 Downing Street,” the report concluded.

Emails and memos “show that there had been a desire amongst ministers and special advisers not to appoint someone with close links to student unions, such as the National Union of Students”.

Young’s appointment was announced by the DfE at midnight on New Year’s Eve, when the powerful new higher education regulator was formally launched.

Young’s inclusion on the board immediately attracted sustained public controversy, with critics highlighting Young’s Twitter account, containing salacious and crude comments about women, and Young’s writing in support of what he dubbed “progressive eugenics”. Eight days later Young announced he would withdraw.

The commissioner found that while the DfE said it conducted online vetting of the candidates, “by its own admission, it did not delve back extensively into social media so it was not aware of the tweets by Mr Young”. The report adds: “However, the social media activity of the initially preferred candidate for the student experience role was extensively examined.”

The commissioner also revealed that departmental emails referred to “No 10 Googlers” in highlighting social media comments by the student candidates. “Notably, no such exploration or research was made on other possible appointees, including Mr Young,” the report states.

“Mr Young’s reputation as a controversialist, in itself hardly a secret, should have prompted further probing to examine whether what he had said and done might conflict with his public responsibilities and standards expected on the OfS board.

“Second, the rapid disclosure of what were described as offensive tweets in the days after his appointment suggests that it was not that hard to find them, that not much delving was required,” the report added.

The OfS and its chair, Sir Michael Barber, also came in for criticism for their part in the proceedings. Barber sat on the appointments panel, alongside two DfE officials. “Regrettably, and contrary to best practice, the panel for the generic non-executive roles was all male,” the commissioner noted.

The report also details the DfE’s repeated efforts to minimise or delay requests for information about the appointment process from the commissioner’s office.

Peter Riddell, the commissioner for public appointments , said: “My investigation uncovered a number of areas where important principles in the governance code were breached or compromised in the appointments to the board of the Office for Students.

“In my experience, this episode is unrepresentative of the hundreds of public appointments that take place each year, but it is important that lessons are learned – not least so that talented people from a wide range of backgrounds are willing to put themselves forward to serve on the boards of public bodies.”


What happens when developers pay planners for pre-planning “advice”?

Guardian letters today. We also have this “premium service” – our prices go from £150 (inc VAT) to £900:

Click to access pre-app-charging-schedule-jan-2017.pdf

The letter:

“Further to Simon Jenkins’ article (Wine and dine democracy is now on trial – and about time, 23 February), there is another facet of this situation. Milton Keynes council now offers its residents and prospective developers the possibility of a premium planning service. If we wish to ease the planning and development process we can peruse the biographies of its planning staff on the council website and pick a suitable one. Prices on the site range from £150 to £7,500 plus VAT. The council is “dedicated to building relationships with our customers and therefore have found that some Applicants and Agents like to have the continuity of working with specific Planning Officers”.

This may work very well in some cases by improving planning efficiency, but where is the oversight if Milton Keynes residents find that neighbourhood plans are ignored? The ethos of our initially well-planned town is disappearing while developers who ignore the unique character of the place are helped to get planning permission by a planning authority that has enjoyed a close, paid-for relationship with them.

No doubt the planners show impeccable integrity but, if there is insufficient oversight, the temptations must be there.
Gill Boothy
Milton Keynes, Buckinghamshire”


No vote allowed on May’s “cash for votes” for DUP

“Theresa May will hand out the £1bn in her “cash for votes” deal with the Democratic Unionist Party without MPs’ prior approval, The Independent can reveal, putting the Government at risk of legal action.

The Commons will only vote after slices of the funds have been allocated to Northern Ireland, and will be denied a single vote on the overall £1bn – despite the Government conceding last year that Parliament’s “authorisation” is needed.

The decision has been condemned for leaving MPs “cut out of approving the deal”, which gives Northern Ireland a huge spending boost in return for Ms May being propped up in power.” …

“South West ‘could suffer more than other regions’ after Brexit”

Good luck with that doubling of productivity, Local Enterprise Partnership! (see post below)

“The South West could be hit harder than other parts of England when the UK leaves the EU, according to panel members at a one-off Brexit discussion convened by CIPFA in Bristol.

High numbers of EU workers could be lost from industries in the region, which must get better at ‘fighting its own corner’, attendees at the event on Friday last week heard.

Kate Kennally, chief executive of Cornwall Council, pointed out the South West had a growing number of tech start-ups but it was not good at promoting its own industries.

“We have a big part of the UK that doesn’t have a big voice,” she said.

She added Cornwall voted leave because of “a sense of profound insecurities about public services” and that “this could be a moment where there needs to be a good deal of bravery”.

Kennally also pointed out: “Exeter, Bristol, Plymouth are the cities most reliant on exporting to the EU.”

Nigel Costley, regional secretary of the trade union federation the TUC, said: “I don’t think we are well equipped to respond to [Brexit].

“I fear we are going to be the losers in the South West. I do not see us fighting our corner very well. …”


Our LEP expects our productivity to double – something never done anywhere else in the UK!

“… The Productivity Strategy aims to double productivity in the area over 20 years, focussing on themes including leadership, housing, connectivity, infrastructure, skills and training. It looks at growth, capitalising on the area’s distinctive assets and maximising the potential of digital technology.

Cllr Fothergill said: “We can do some of this ourselves but some aspects will need the support from Government which is why the Joint Committee is so important. …”


Right! So, that’s ok then – the government will achieve something here they can’t achieve anywhere else!!!

Will dredging problems affect Exmouth’s water sports centre?

“Dredging from a marina in Exmouth is being halted after sands on Teignmouth’s beach turned black at the weekend.

The contamination was a shock to local residents and businesses ahead of the all-important Easter break.

The town has worked hard to drive up bathing water quality standards in recent years but local people were annoyed when the Marine Management Organisation (MMO) granted a licence for the disposal of thousands of tonnes of silt from the marina in Exmouth close to their beach.

The MMO said it was suspending the licence “relating to the dredging of Exmouth Marina and disposal of materials at the Sprey Point site”.

It added: “The suspension will be active immediately once the notice is served on the licence holder.”

Heavy seas have washed away most of the black silt in the meantime.”

17.48 hrs

Last legs for Thelma Hulbert gallery?

Owl says: The gallery, in Honiton, has swallowed up around £500,000 of our council tax money over the last few years. Could The Beehive (also a gobbler of funds in the past) perhaps house the gallery’s art and activities?

Or, here’s a thought: display it in the new £10 million HQ currently under construction in Honiton!

“Unprecedented increases in council tax starting in April will not offset cuts to services including children’s centres and libraries, local authorities have warned.

The Local Government Association (LGA) said councils in England would raise an estimated £1.1bn through higher council taxes in 2017-18, but this would not cover the £1.4bn lost through cuts to central government funding plus the higher wage bill of £1bn.

Nearly half of English councils with responsibility for providing social care for adults and children will increase council tax by the maximum 5.99% allowed – 2.99% for general council tax plus a further levy of up to 3% to pay for the care of older and disabled adults – but this will not prevent further cuts to services, according to the LGA.

Councils will continue to reduce or close services such as children’s centres, libraries, leisure centres, parks, museums and road repairs to plug growing gaps in adult and children’s social care and homelessness services, it says.

The widespread emergence of what some councillors have dubbed “pay more, get less” budget settlements comes as town halls struggle to balance the books after years of cuts in core government funding.

Northamptonshire county council effectively declared itself bankrupt earlier this month after admitting that rising costs and shrinking income made it unable to set a legal budget.

The council must set out revised plans for cuts at a meeting this week after an auditors report warned that its existing proposed budget plans were “not credibly achievable”.

Northamptonshire’s predicament highlights how councils are increasingly reliant on one-off measures such as dipping into reserves, or selling buildings and land, to meet the spiralling cost of social care. Those pressures are being compounded in some cases by the failure to deliver savings with existing cuts.

The LGA said 147 of the 152 English authorities that provide social care services would levy a 3% council tax precept from April to raise extra cash for the care of older and disabled adults. Although this will raise an extra £548m, it will be wiped out by the cost of meeting the national minimum wage.

These councils face additional costs estimated to be at least £400m over the next 12 months as result of a legal judgement that requires care employers to pay the minimum wage to carers working sleep-in shifts, backdated for six years.

Out of the 152 “social care” authorities, 108 also plan to increase general council tax by between 2.95% and the maximum 2.99% allowed. This will raise an estimated £548m. Five councils have said they will freeze council tax for 2018-19. …

… A spokesman for the Department of Housing, Communities and Local Government said: “As part of our finance settlement, we are delivering a real-terms increase in resources to councils over the next two years, more freedom and fairness, and greater certainty to plan and secure value for money.

“We want to work with local government to develop a new funding system for the future and encourage councils to submit responses to the review currently under way.”

England’s councils have experienced a 40% cut in central government funding since the start of the decade and face a £5bn funding gap by 2020.

The Local Government Information Unit thinktank warned this month that many English local authorities were teetering on the edge of financial crisis.”


“Extra council tax income in 2018/19 will not protect under-pressure local services”

“Communities across the country will see many of their local services face further reductions this year despite paying more council tax, the Local Government Association warns today. …

With local government facing an overall funding gap that will exceed £5 billion by 2020, the LGA is warning these council tax rises will not prevent the need for continued cutbacks to all local services this year. Councils will also have to continue to divert ever-dwindling resources from other local services, including filling potholes, maintaining our parks and green spaces and running children’s centres, leisure centres and libraries, to try and plug growing funding gaps in adult social care, children’s services and homelessness support.

The LGA said the Government needs to urgently address the growing funding gaps facing local services and provide the financial sustainability and certainty needed to protect the local services our communities rely on by committing to allow local government as a whole to keep every penny of business rates collected.

LGA Chairman Lord Porter said

“Since 2010, council tax bills have risen by less than inflation and other key household bills. But faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services.

“The extra income this year will help offset some of the financial pressures they face but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face. Extra social care funding will be wiped out by the significant cost pressures of paying for the Government’s National Living Wage and extra general council tax income will only replace a third of the central government funding they will lose this year.

“This means councils will have to continue to cutback services or stop some altogether to plug funding gaps.

“We have repeatedly warned of the serious consequences of funding pressures facing services caring for the elderly and disabled, protecting children and tackling homelessness for the people that rely on them and the financial sustainability of other services councils provide. It is unfair to shift the burden of tackling a national crisis onto councils and their residents.

“The need for adequate funding for local government is urgent. To maximise the potential of local government and protect local services from further cuts, funding gaps must be properly addressed and local government as a whole must be allowed to keep all of the business rates it collects locally each year to put it on a sustainable footing.”


“Party’s over for City jollies” but alas not for local government schmoozing

A short article in today’s Sunday Times Business section notes that new EU rules now forbid fund managers and analysts from accepting hospitality beyond a minimal level – it has to benefit “ordinary” customers and if over a reasonable limit it is considered “an inducement”. It goes on to say that most firms have set £100-150 a head as the maximum in London.

Fortunately, our local Tory councillors can rest easy as it does not apply to local government, so they can still take their Exeter Chiefs rugby tickets and their meals with developers and the like – which never seem to cost more than £25 a head when declared (where are they going – Nando’s or perhaps Frankie and Benny’s? And DEFINITELY t-total!).

Source: Sunday Times Business supplement (pay wall)

Dominic Lawson: Big bonuses the fault of former Chancellor and help-to-buy

Owl says: While Lawson blames Osborne it should be noted that May and Hammond have not closed the loophole … which could easily be done …

“At first he said he deserved his £110m bonus, and resisted all the pressure to assign a large chunk of it to charity. Then he said he would give some of it to good causes, but not how much (“a private matter”). Finally, on Friday, after three months of hectoring by the media and investors, he said he’d forgo . . . £25m.

I’m referring to Jeff Fairburn, chief executive of the housebuilder Persimmon and the principal beneficiary of a remarkably generous share-based incentive scheme that has sprinkled more than £500m of equity around 140 of the company’s “top individuals” as if from a fairy godmother’s wand. Except it doesn’t come out of thin air, but by diluting all the ordinary shareholders’ stakes in the business.

Their representatives — pension fund managers, principally — have spent those past three months moaning about it. But when the incentive scheme was drawn up in 2012 — linking the rewards to share price performance and dividend payments — it was approved by 85% of shareholders. So Fairburn’s resistance is understandable; and, indeed, Persimmon’s investors have done fine — since 2012 their shares have quadrupled in value.

But the main reason is not the ingenuity of Fairburn and his colleagues. No, if there was a fairy godmother in this, it was George Osborne. As chancellor, he launched the help-to-buy scheme, which economically crazy but politically astute subsidy supports about half of Persimmon’s recent house sales. We as taxpayers are not directly funding those £500m worth of bonuses, but we have underwritten the personal mortgages that made that colossal windfall possible. Don’t mention it, Jeff: happy to help.

The person most annoyed by this is actually a lot richer than Fairburn — and another housebuilding boss. Steve Morgan, the head of Redrow, complained: “For somebody who has not taken a salary for 20 years it sticks in the craw, being called a greedy housebuilder because of that one company.” And why has Mr Morgan not taken a salary for 20 years? Because he founded Redrow in the 1970s and is worth about £830m. He would be a billionaire (according to the compiler of The Sunday Times Rich List) had he not passed £226m of Redrow shares to his charity, the Steve Morgan Foundation, which supports disadvantaged and disabled people in north Wales and northwest England.

Here we see, in instructive proximity, the sort of wealth that compels admiration and the sort that provokes contempt. That stark divergence is not because Morgan has been philanthropic. It is because he has created his own business and, at the outset, would have been at personal risk if it had not worked out (perhaps, like so many entrepreneurs, he had offered whatever he owned as security for bank loans). Fairburn had a good story to tell, too: he began in the building trade as a youth training scheme apprentice, studying to become a quantity surveyor while mixing concrete. But he did not create the firm of which he is, after all, just another employee: he is taking the rewards of entrepreneurialism without the risks.

He is not, in the true sense of the word, a capitalist. But Morgan is. And the point is that while there has in the decade since the credit crunch been a gale blowing the sails of those who denounce “capitalism”, the public hostility is actually — and rightly — directed against those who are not capitalists (as Karl Marx defined them), but who have seized capital from its owners. After all, that is what the discredited banking executives, both here and in America, did. They leveraged the capital of which they were merely managers, to generate vast bonuses for themselves: when that blew up the banks, the exploded corporate balance sheets were rescued by the taxpayer . . . while the executives kept all their winnings.

In his latest book, Skin in the Game (which I review today) Nassim Nicholas Taleb calls this “the Bob Rubin trade”, in (dis)honour of the former US Treasury secretary who kept his $120m compensation from Citibank: “When the bank, literally insolvent, was rescued by the taxpayer, he didn’t write any cheque — he invoked uncertainty as an excuse.”

The risk — to the market system now under attack from the unreconstructed Marxists at the helm of the British Labour Party — is that the bonny baby of entrepreneurial endeavour will be thrown out with the dirty water of executive self-dealing.

Much of that self-dealing — which I first wrote about as long ago as 1989 in a Spectator cover piece titled “How the bosses help themselves” — is promoted by the argument that it makes senior managers behave more like proper owners, rather than mere time-servers. Specifically, the executive compensation committees of FTSE companies have argued that through the awards of share options, the interests of those managers are aligned with the investors who, collectively, own the businesses.

It is a theory generally accepted and, like many such established doctrines, false. The ordinary shareholders have actually paid for their equity, so if things go pear-shaped, they stand to lose what they have invested; and those who have created businesses can lose everything, even their homes. But share options are free. There is an upside, but as no capital is at risk, no real downside.

One result is that share option schemes have encouraged undue risk-taking by executives, for example by borrowing heavily to finance acquisitions — which is what happened at Carillion. It also encourages a more short-term approach to business-building than a true owner would adopt: share option schemes tend to last for a few years, not the decades that a good business should be measured in.

I should confess, at this point, to having been a beneficiary of just such a scheme. When I was an executive of the Telegraph group I was assigned, for the first and only time in my life, some share options . . . and within just a few months they were most unexpectedly realised when the majority shareholder decided to buy out everyone else. Without any effort on my part — other than just continuing to do my job of editing a newspaper — I was suddenly presented with a cheque sufficient to pay off my mortgage.

I was delighted, of course. But it also felt wrong, somehow. I suppose I might feel the same way if I won the national lottery, although that is most unlikely to happen, and not just because of the odds: I don’t enter it. At least the lottery winners have paid for their stake. We should expect our best-remunerated business leaders to have done the same.”

Source: Sunday Times (pay wall)