How to make very bad council decisions – leave them to clueless councillors!

Owl says: Do you think this applies to Tavistock? Dream on!

“Auditors have blown wide open failings in the way plans were cooked up for a sprawling Premier Inn development in a leafy Devon town.

West Devon council chiefs have been criticised for the way they led multi-million plan proposals to build over a key car park in the heart of Tavistock.

A damning new independent dossier reveals how Invest to Earn – a team of three councillors tasked with leading the project – lacked crucial knowledge of the property market and received no training to ensure they knew every risk before taking decisions.

A lack of communication between elected members about the gravity of the development, ‘hostility’ on social media and a failure to access key documents online all inevitably brought down what many deemed a pipe dream, the public file reveals. …”

[read on for more shocking information how bad decisions got worse]

https://www.plymouthherald.co.uk/news/plymouth-news/premier-inn-tavistock-report-findings-2665718

Outgoing audit chief tells government some home truths

“I still get angry – and that is the word for it, angry – 10 years into the role, when I see badly-thought-through programmes and wasted public money,” says outgoing watchdog chief Sir Amyas Morse. “And the reason I’m angry is because the citizen ends up picking up the tab. They are the ones who end up suffering.”

For almost a decade, as comptroller and auditor general – the head of the National Audit Office – it’s been Morse’s statutory duty to keep an eagle eye on the spending of central government departments, holding ministers and civil servants to account for cost overruns, project mismanagement and profligacy with taxpayers’ money.

He doesn’t have far to look. As he prepares to leave his post in May, Morse’s final public speech at the Institute for Government last week included a damning list of failures: Crossrail costing £2.8bn more than forecast; changes to probation costing £467m to put right; the smart meters fiasco that will cost at least £500m more than originally estimated; and the Ministry of Defence’s latest unaffordable and unsustainable 10-year equipment plan going over budget by at least £7bn. And that’s just a selection from the past few months.

Morse looks back in anger at the billions that could have been spent on vital services, wasted instead through what he calls “inappropriate bravado” on the part of government ministers, lording it over cowed civil servants, behind an increasing amount of secrecy and spin. “We don’t need people jumping out of an aeroplane in the dark with a parachute of taxpayers’ money,” he says.

A proud Scot – his only meeting with Theresa May was a “brief conversation” at a No 10 Burns Night last year – Morse cares passionately about public services. While his upbringing has contributed to his concern for fairness, it’s his decade at the watchdog, to which he came from a senior position in consultancy PricewaterhouseCoopers via the MoD, that has fuelled his rage over the wasteful ways of too many government ministers. “I really realised that society belongs to us. We’re all paying for it.”

Public money is finite, he points out. There is no magic money tree. When money is lost in one place, it’s taken away from another programme, usually one that’s easier to cut. Every wasted £1bn, he says, is enough to run NHS England for three days, fund 625m A&E attendances, 135m day cases in hospital, or 4m ambulance attendances.

Morse has warned the government that it needs to invest more in the NHS and social care, to meet the needs of an ageing population. In 2016-17, the UK spent just over £170bn on health and social care – more than 10% of GDP, but less than the 11.2% of GDP Germany spent in 2015 on health alone. …”

https://www.theguardian.com/society/2019/mar/20/amyas-morse-head-national-audit-office-ministers-waste-taxpayers-billions

Shadow state – part 3

And now the Chartered Institute of Public Finance and Accounting agrees privatisation isn’t working. The National Audit Office and the Government’s own Public Accounts Committee have said the same.

Will this cause a change of policy – particularly in the NHS? Not a chance!

“The collapse of outsourcing giant Interserve will be “costly and disruptive” for the public sector, a public services commentator has told PF.

Interserve, one of Britain’s biggest government contractors, was due to file for administration this evening. This was after just under 60% of the company’s shareholders voted against a rescue plan earlier today.

The business holds thousands of public sector contracts, including for local government, cleaning schools and hospitals. It also runs catering and probation services as well as managing construction projects.

John Tizard told PF that public sector clients will need to “spring into action either to bring the services back into public management or to broker the contracts to other contractors”.

The firm’s collapse will likely be “costly and disruptive” for public services, he added. The ‘deleveraging plan’, proposed on Friday, would have seen creditors take control in a ‘debt-for-equity’ swap. It was rejected 59% to 41% by shareholders.

The rescue plan would have meant lenders being given the greater number of shares in the business with the shareholders’ stake being reduced to 5%, the BBC has reported. A US hedge fund Coltrane, which owns 27% of the company, voted to reject the proposals.

Tizard told PF: “It’s another question mark over the appropriateness of outsourcing particularly on this scale – to companies that have business models which are risky and fragile and where ownership changes.

“They are likely to go into administration because Coltrane has said they won’t vote for the deal, but can we really afford to have key public services decided by US hedge funds?” he queried.

Tizard said he had no doubt that contingency plans will have been drawn and added that it was now necessary for public sector clients to implement these.

Interserve employs 45,000 people in the UK. Its website also states that it provides probation services for 40,000 people on behalf of the Ministry of Justice.

A damning report from the National Audit Office recently highlighted the failings of prison reforms, which saw probation services transferred to the private sector.”

https://www.publicfinance.co.uk/news/2019/03/public-sector-likely-suffer-collapse-interserve

Privatisation: ” a shadow state apparatus run solely for profit”

“Oh, how we laughed. Failing Grayling, the transport secretary, Chris Grayling, the Mr Bean of contemporary politics, had awarded a cross-Channel ferry contract to Seaborne, a company that had no ferries and had never run a ferry service. Six weeks later, the contract was torn up.

The trouble is, the laugh’s on us too. For it’s not just Grayling who’s failing. The Seaborne style of awarding contracts – never mind the competence, just get the signature – has long been the public sector norm for outsourced work. The result has been scandalous services and collapsing companies.

Consider Interserve. It’s another of those corporations, like Capita, Carillion and Serco, with bland names, barely visible to the public, but which have become a kind of shadow state, providing much of Britain’s essential public services.The outsourcing of public services began as a Thatcherite policy in the late 1980s, became turbocharged under New Labour and was pushed further still by the coalition government after 2010. An Institute for Government report last year calculated that a third of government expenditure – £284bn – was disbursed to external suppliers handling everything from parking permits to immigration control to the maintenance of nuclear warheads.

But why should the same company be deemed capable of motorway construction and probation management, of sewer repairs and hospital catering? And why is this not as scandalous as a company with no ferries being awarded a ferry contract?

Interserve is not unique. Take Serco, which began life as the British arm of the US entertainment firm RCA. By the late 1980s it had changed its name and aggressively moved to take advantage of the market in government outsourcing. Within 25 years, it was running everything from out-of-hours GP services to asylum detention centres.

It’s not uncommon for companies to change strategy or seek new markets, but this usually involves having some expertise in the subject. When it comes to public service contracts, however, expertise appears to mean primarily the ability to win contracts. Serco’s “panache in the bidding process”, one report observed, allowed it to “beat out competition from specialist firms”.

Inevitably, this has led to a constant stream of debacles. From charging for the tagging of nonexistent criminals to accusations of neglect and sexual assault at Yarl’s Wood migrant detention centre, from allegations of data falsification in an out-of-hours GP service to disastrous work capability assessments, the one thing that outsourcing companies have never been able to outsource is the stench of scandal.

A decade ago, such companies were boasting about reaping the rewards of the financial crash. Paul Pindar, CEO of Capita, told the Financial Times that he’d be “deeply disappointed” if the company did not double revenues from government contracts within five years. In fact, within a decade, Capita was knee-deep in debt and issuing profit warnings. Serco’s profits had already plummeted. Carillion collapsed. And now Interserve is in administration.

Government cuts may have opened up new markets, but they also squeezed profit margins. Combined with greed and overstretch and never-ending scandals, outsourcing companies have been forced into a “bankrupt” business model of chasing new public sector contracts to make up for the razor-thin margins in the old ones.

Shareholders have seen assets disappear and creditors have lost money. But the real losers are NHS patients, benefits claimants, asylum detainees – and the tens of thousands of workers employed by such companies, often in gig-economy conditions.

It’s time we recognised that the policy of giving construction or facilities management companies power over health provision, welfare assessment or prisoners is as rational as awarding a ferry contract to a company that’s never ferried a bugger in its life.”

https://www.theguardian.com/commentisfree/2019/mar/17/we-scoffed-at-chris-grayling-ferries-but-his-way-is-now-a-public-service-norm

“Local bodies poor at securing value for money, says Public Accounts Committee “

“An increasing number of local public bodies are demonstrating “significant weaknesses” in securing value for money, MPs have warned.

Auditors found more than 20% of local authorities, NHS bodies and police and fire authorities in England did not have proper arrangements in place to achieve value for money in 2017-18, the Public Accounts Committee has said.

Central government’s measures to stop this were “limited”, the watchdog added.

NHS bodies, like Clinical Commissioning Groups and hospital trusts, were found to be the worst public bodies for assuring taxpayers’ money is spent effectively, according to the PAC report out today.

Qualified audit opinions – which signify weaknesses in an organisations accounts – were issued to 38% of NHS bodies in the last financial year, compared to 29% in 2015-16, it said.

In 2015-16 18% of non-NHS local bodies were given a qualified audit opinion, compared to 22% in 2017-18.

There were 495 local authorities, local police and local fire bodies subject to external audit, with responsibility for £54bn of net revenue spending in 2017-18. Another 442 local NHS bodies received funding from the Department of Health and Social Care of approximately £100bn.

Only 5% of local bodies had implemented changes to address weaknesses highlighted by auditors last year, according to information obtained by the National Audit Office.

The PAC noted that some bodies were failing to put enough information in the public domain, including reports from external auditors and suggested that central government should “make clear their expectations” for information that should be made public helping citizens hold bodies to account.

“Local bodies should also be taking auditors’ concerns seriously and addressing them promptly, but there appear to be few consequences for those who do not,” the report said.

The committee said that central departments were not doing enough to make sure that local bodies take “prompt corrective action”.

Meg Hillier, chair of the PAC, said: “Taxpayers must be assured that their money is well-spent but in too many cases local bodies cannot properly safeguard value.

“Particularly concerning are NHS bodies such as CCGs and hospital trusts: last year almost two in five did not have adequate arrangements.

“It is vital that local bodies take auditors’ concerns seriously, address them swiftly and ensure meaningful information on performance is made accessible to the public.”

DHSC and the Ministry of Housing, Communities and Local Government have been contacted for comment.”

https://www.publicfinance.co.uk/news/2019/03/local-bodies-poor-securing-value-money-says-pac

Retiring National Audit Office Chief: ministers with no qualifications and “inappropriate bravado when it comes to spending taxpayers’ money”

“The relationship between ministers, accounting officers and civil servants is currently not working, the outgoing auditor general of UK’s spending watchdog has said in his last speech in the role.

Some ministers “see themselves more or less as chief executive officers but without the qualifications”, National Audit Office head Amyas Morse told an event on accountability at the Institute for Government think-tank’s offices this morning.

The comptroller said this meant ministers sometimes made decisions prioritising a project “close to their hearts” – when they should be held accountable but are not – which “has led to the abandonment of good practice”, he said.

The problem rests with the “interaction between ministers, accounting officers and civil servants,” Morse said. “That really needs to be addressed. I don’t think the relationship is where it ought to be at the moment.”

He said he did not see ministers having a say in the appointment of accounting officers as producing a “healthy result”.

Accounting officers can only ensure value for money for the public purse “if they are in a position where they are sufficiently influential to assert the importance of public value”, he added, suggesting they currently do not have this influence.

Morse said the civil service had become much more professional over the past few years, partly through initiatives like the Infrastructure and Projects Authority. The authority is a centre of expertise for delivering infrastructure and major projects.

But he added civil servants, who he noted often feel they need to defend ministerial decisions, required “greater clarity” on how they were was supposed to work alongside those decisions.

Morse talked of the importance of transparency in public life and the “outbreak of secrecy” in government over Brexit.

This secrecy had “slowed down the ability of the civil service to react and may have helped create an element of distrust more widely in parliament,” Morse said.

He suggested there was currently “inappropriate bravado when it comes to spending taxpayers’ money”. He highlighted Crossrail and the probation service’s contracting as examples of where government had recently overspent. “I didn’t have to go far into my in-tray to find those,” he said.

Morse will hand over the reins as auditor general and comptroller to CIPFA fellow Gareth Davies on 1 June.”

https://www.publicfinance.co.uk/news/2019/03/outgoing-nao-chief-questions-ministerial-accountability-over-public-spending1

EDDC pouring £3m into new airport road

“The £3m scheme will provide sufficient access in order to develop the Airpark and will be forward funded by East Devon District Council.

The road that runs past Exeter Airport and down to Hampton by Hilton hotel is set to be widened – and will enable a new 17 acre business park to be built.

The Airpark – to be built next to the Flybe Hangar – is one of the four planned ‘Enterprise Zones’ – but the substandard nature of Long Lane and the limitations to current highway network are a direct barrier to it coming forward.

An enhancement scheme, which will see the widening of Long Lane from the Airport Terminal entrance, past the hangers and the FlyBe Academy/Hampton by Hilton hotel through to Harrier Court in the east.

While Long Lane is being widened, a new road to connect Silverdown Office Park to the FlyBe Academy access road, known as the “Silverdown Link”, will be built, and when the Long Lane works are finished, the Silverdown Link will become a permanent bus only link.

The cabinet on Wednesday night unanimously recommend to full council to borrow up to £3m against ring fenced business rate income to implement the scheme and enter in to a funding agreement with Devon County Council to deliver it. …”

https://www.devonlive.com/news/huge-plans-exeter-airport-road-2620576