Massaging the picture

Tweet Peter Black shows a neat little graphic on his blog comparing the actual level of spending cuts being made by the coalition government with the level of cuts pledged by the various parties in advance.  It is, like so many Lib Dem graphics, simple, clear, effective - and utterly misleading.

The first way in which it misleads is by starting the scale at around £75billion.  Shortening the scale in this way gives the impression that the difference between the figures is much larger than is actually the case.  A scale which started at zero would give quite a different impression - it would show all the figures tightly bunched together around one point on the scale.

And if the figures being compared were those for total expenditure rather than simply the extent to which that expenditure is being reduced, then the bunching effect would be even more pronounced.

The second way in which it misleads is that it gives the impression - without actually saying so - that because the actual total is closer to the Lib Dems pledges than to the Tories' pledges, then the Lib Dems can take the credit.  That would be a wrong conclusion on two counts.  

The first count is that the actual figure isn't what the government was actually aiming it - it's come out lower than planned because the government has got its figures wrong, not because the Lib Dems have been clever and influential.  And the second count is that the reason that the government has got it wrong is because their underlying assumption - that the private sector would take up any slack - has been proved to be utterly wrong.  In effect, the government is simply switching public expenditure from productive - paying people to do things - to unproductive - paying the same people to do nothing.

There are two lessons which can be drawn, however.  The first is that the debate about different levels of public expenditure is concentrated - in London, just like in Cardiff - on a very narrow range, with very small differences being greatly exaggerated.

And the second is that government can't really control either the economy or the total level of public expenditure to the extent that they claim.  (Chris Dillow had a good piece yesterday about some of the reasons that they claim more influence than they actually have.)

Spin and fancy graphics are no substitute for substance.

Catching criminals

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There’s a certain inevitability about the way in which press coverage of lengthy reports will tend to highlight a few striking points rather than delve into the detail.  This report in yesterday’s Independent was no exception; faced with a 105 page report from the Policy Exchange (available here), no brief summary was ever going to do more than scratch the surface.  (Interestingly, the same report, almost word for word, appeared in the Western Mail as well as in the Independent)

One of the headline figures associated with the story was that “14,500 police officers in Wales and England made no arrests last year”.  It’s an eye-catching figure, but my reaction was to ask ‘so what?’.  Is the number of people arrested really the right criterion for judging the success of the police service?  I’m more interested in levels of crime – preventing and deterring crime is surely a better outcome than catching people after the event.

In fairness to the full report, it takes a much more rounded view of the efficacy of the police service than that one figure suggested, and the most important overall conclusion drawn, to my mind, was that increased expenditure on the police, and increased numbers of staff, have not resulted in a commensurate improvement in performance in terms of crime solving and reduction. 

But would we really expect it to?  There is no reason why crime should be different from any other phenomenon; the marginal cost of a small reduction is likely to get higher as the total falls.  Determining how much we are prepared to pay for a given additional level of further reduction is precisely in the sphere of political debate about priorities.

That doesn’t mean that the police service cannot find ways of doing some things more efficiently or cheaply, of course.  No organisation of that size is without potential for improvement, and the police must be subject to the same level of scrutiny as other services. 

In that context, the report raises some interesting points about civilianisation, and effectively questions whether the investigation of crime requires the same skill set and training (and subsequent salary costs) as those required by uniformed warranted officers.  It’s not the first time that question has been raised recently – there was a suggestion not long ago that the long-standing rule that all police officers of all descriptions have to start as ordinary constables should be revisited. 

The suggestion is anathema to many in the service, but that is not reason enough to reject it outright.  The UK approach to policing – as a single integrated service – is far from being the norm elsewhere.  Many countries have multiple police forces dealing with different issues at different levels.  Rather than concentrate simply on costs and efficiency, it might be better for us to take a more radical look at policing in general.

Funding Gaps

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Reaction to the publication of last week’s figures comparing educational spending between England and Wales was pretty predictable, with people seizing on the headline figures – Wales average £5595, England average £6200 – to make political capital.  There was more heat than light though, I felt.

Looking at the stats in more detail, I’m not sure that the real message is quite as simple as the headlines suggested.  In the comparison between Wales and the English regions, the one thing that leapt out to my eye was the huge disparity in spending between Inner London and any other area.  In Inner London, the spend per pupil is a whopping £9156, almost 50% greater than the England average.

That prompted me to look at different ‘types’ of authority in England, and there is a consistent pattern that metropolitan areas – the big cities – have a significantly higher spend per pupil than do the more rural areas.  So, are we comparing like with like?  The category of authority in England which is most similar to Wales is probably the shire counties (average spend £5789) or perhaps the unitary authorities (£6080) rather than the overall England average, and a comparison with those would reduce the funding gap to somewhere between £200 and £500, rather than the £604 quoted.

It’s also worth noting that the use of averages can sometimes hide rather than highlight useful data.  Not all schools in Wales would be better off if they were in England, which is the message some seemed to be giving last week.  Ceredigion’s average spend is above the England average, for instance – and in the same way, I’d bet that there will be some authorities in England which are below the Welsh average, although the data isn’t detailed enough to confirm that.

A gap is still a gap, though; and there’s no question that overall Wales is spending less per head than England.  Nor is there any question that the gap has grown compared to last year.  There are, though, two things where hard fact is not so easily ascertainable.

The first is the reason for the gap, and its growth.  The statistical report itself suggests some reasons, amongst which is that pupil numbers are falling faster in England than in Wales.  Another factor is likely to be the more extensive use of PFI in England, which will manifest itself as a higher relative revenue spend without necessarily having any more to show for it.  But there isn't enough data in the published stats to assess such effects, and it would be interesting to see a bit more research done into the underlying causes rather than responding with political sloganising.

The second is the effect of the gap on outcomes.  Does the gap contribute to the underperformance of Welsh pupils compared to English pupils?  Certainly, there is a problem with educational attainment in Wales, but jumping to conclusions about the cause (and therefore the solution) is not always the most helpful response.

The rhetoric says that there has to be a connection between funding and results, but that seems to be based more on a correlation between two sets of numbers than on any hard proof of a causal relationship.  It is too easy by far to blame lack of funds for educational failings, but throwing money at a problem doesn’t always solve it.  Again, more research would be helpful in understanding whether, and to what extent, the lower level of funding actually contributes to the lower performance levels.

As things stand, I honestly don’t know whether I should be praising the Welsh Government and local authorities for achieving value for money, or criticising them for depriving our children of opportunities by adopting a cheese-paring approach.  ‘Spend per head’ is not, in itself, a valid basis for judging performance.  And simply joining in the knee-jerk ‘my side good, your side bad’ response which we saw last week isn’t good enough either.

The real agenda

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The aspect of the latest forecasts from the OBR which have received the most attention has been the probable reduction in the number of public sector jobs which will be lost.  That’s natural, of course – it’s the most immediate impact seen by large numbers of people.

It wasn’t the only important aspect though.  The OBR also suggested that the Chancellor would have up to £6 billion available for tax cuts before the next election in 2015.

That goes to the heart of one of my concerns about the Coalition’s fiscal policy.  They have claimed from the outset that the cuts are about deficit reduction and are absolutely essential for that purpose.  I have feared that cutting the public sector was driven, at least in part, on ideological grounds in order to be able at some point to reduce taxes for the more well-off and shift the balance from collective provision to individual provision.  The OBR report provides a degree of confirmation of that fear.

There is, of course, nothing wrong with arguing for more individualism and less collectivism, although I’d take the opposite view.  But hiding that aim behind an entirely economic argument, and cutting more deeply and quickly than the economics requires in pursuit of an ideological objective, is not being entirely honest.

Carts and Horses

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The decision by the UK Government to put the electrification of the line to Swansea ‘on hold’ is hugely disappointing.  The Government’s argument that “it needs to decide whether to replace the intercity fleet with electric trains, or electric-diesel hybrids beforehand” looks like a classic case of putting the cart before the horse.

The fact that the rolling stock needs replacement is not new, nor is it a surprise.  Part of the justification for doing the electrification as early as possible should surely have been to enable the purchase of electric rolling stock, which would be faster, cheaper, more reliable, and environmentally preferable.  Taking the decision as to which trains to buy first looks like committing us to another 40 years of diesel operation.

Having said that, I’m not convinced about the sincerity of Labour’s response either.  It is increasingly clear that the ‘immediate’ start to preparatory work promised by Gordon Brown never actually happened, and in that context, it is hard to argue that his announcement was not a rather cynical pre-election ploy.

And, hand on heart, how many can people honestly and truly say that they are convinced that a CSR undertaken by a Labour Government would not have reached a similar conclusion?  After all, the difference in the total level of cuts proposed wasn’t that great.

Time to stop pretending

Tweet In the latter days of the Soviet Union, it was said that "the workers pretend to work, and we pretend to pay them".  It was quite a neat summary of the state which the economy had reached.  But pretence about the true nature of things isn't limited to the old Soviet Union.

Closer to home, we have, since the days of the Thatcher government, pretended that the railways are operated as profit-making companies in the private sector.  So Arriva Trains Wales receives something like £165 million a year from the public purse towards the cost of running its services, and pays out around £10 million a year in dividends to its shareholders as a reward for their 'profitable' investment.  It's nonsense, of course; the truth is that the services are effectively making a loss of £155 million per year; and not only are we as taxpayers making good that loss, we are also bunging the shareholders a £10 million bonus as well.  And under the sort of 'not-for-profit' proposal announced by Plaid recently, that pretence would end, and that extra £10 million would potentially be available for further rail investment.

It's been announced this week that fares are to rise by an above-inflation amount in the New Year, and I heard a spokesman for ATOC explaining this in a radio interview yesterday.  One of the points that he made was that this is a result of long term government policy to shift the balance of paying for rail services from the taxpayer to the rail user.  That isn't a policy which has been introduced since May this year, nor is it a response to the recession.

The idea that a service should be paid for by the users of that service is a valid viewpoint - it's the principle generally applied to private sector services.  It isn't the principle applied in general to public sector services, however (although successive governments have tried to move things more in that direction).  More specifically, it isn't the principle used for the main competitor to rail, namely road transport.  Trying to run railways as though they are a profitable enterprise is something which most of the rest of the world has eschewed - and with good reason.  We should stop pretending, too.

Efficiency savings explained

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I’ve noted previously that the phrase ‘efficiency savings’ is generally a euphemism for budget cuts.  The two are not at all the same thing.  An efficiency saving is doing the same thing with less resource; providing a lesser service may well generate a saving, but it has little to do with efficiency.

The difference is often not recognised, but it was made crystal-clear last week by one of the UK’s biggest outsourcing companies.  Capita have been busily re-assuring their shareholders and investors that government pressure on them to reduce costs won’t affect profits at all; they’ll simply provide a reduced service.

It highlights the different priorities depending on viewpoint - protecting services versus protecting profits.  But it’s also an honest and straightforward appraisal of what will actually happen.  In practice, exactly the same thing will be happening with services provided ‘in-house’, but I doubt we’ll see the process described so clearly.  It’s a pity, because an honest assessment of what budget cuts actually mean would enable a more enlightened discussion about whether they’re acceptable or not.

Nice little earner

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PFI has been a nice little earner for those companies who’ve been able to take advantage of it.  The theory is that it’s some sort of partnership between the public and the private sector; the reality is that one part of that ‘partnership’ has benefited, whilst the other has lost out.

Those cash-strapped public bodies who found themselves pushed into using the approach have found that they have got shiny new hospitals and schools which they could not otherwise have afforded, but are faced with huge ongoing annual costs about which they can do little.  And that, in turn, has constrained their ability for further investment in other facilities until the end of the contract period.

The companies, on the other hand, have found themselves with a guaranteed source of long-term income, whilst all the risk remains with their customers.  It’s a completely unequal partnership, and has been from the outset.

No real surprise then that the CBI – which represents the sort of companies which have benefited – is again pressing for Wales to use PFI.  From their perspective, it’s a neat way of transferring resources from the public sector into the private one.  But over the long term, it also means that the public sector gets less for a given amount of expenditure – the opposite, in effect, of what the CBI and other organisations have long been urging on government.

The Welsh Government is absolutely right to rule out PFI – and I hope that they will continue to do so.

Cut somewhere else

Tweet I can't remember the exact detail, but there was a Spitting Image scene where the budget deficit was being explained to Ronald Reagan.  It went something like, "Mr President, suppose you have ten apples, and you take away three trillion; how many do you have left?", to which Reagan replied, "Oh, I don't know, but there must be a few at least".

It came to mind when I read this report, or more precisely the comments of Paul Davies AM, on rural transport this morning.  Transport is a major issue in rural areas, of course.  And I agree with him that we need to increase the frequency of train services to Fishguard in particular and West Wales in general - although I still think that his repeated calls for dualling the A40 are a completely inappropriate response.  The point is, though, that rural transport issues will never be resolved by the private sector; they require a large dose of investment from public funds.  I recognise that, and am prepared to argue for the sort of public sector spending regime which can deliver that.

Mr Davies, though, does not.  Only yesterday, he and his party were arguing that health spending - note, spending, not delivery - should be protected from any cuts at all, which means larger cuts elsewhere.  He and his party have argued consistently that the public sector needs to be cut by a large amount and in a short timescale to rectify the deficit.  I disagree with him and his party on both of those; but there's nothing at all wrong with him putting those arguments.  There's something more than a little dishonest, though, about then calling for significant extra government expenditure in his own constituency.

It smacks of the all-too-common refrain of people who support cutting public expenditure, as long as the cuts happen somewhere else, and to somebody else.

It's an ill wind...

Tweet I can’t say that I’m particularly unhappy that the Defence Academy at St Athan has fallen victim to the cuts. It’s been a difficult issue for many of us from the outset – not least because Plaid’s Parliamentary Group and the Assembly Government both signed up to support for the proposal before the rest of the party had any opportunity whatsoever to discuss it. It left those of us who would have been natural and instinctive opponents of the scheme in considerable difficulty.

It was a symptom of an increasing degree of timidity and caution in the party, particularly amongst elected members keen not to be seen as being anti-British, anti-military, or anti-jobs. Opposing the academy was not necessarily any of those things of course, but there has, of late, been an excessive willingness to compromise rather than make the difficult arguments.

And the Labour Party in particular were only too happy to look for opportunities to accuse Plaid of all of those things, even though there were many members and supporters of the Labour Party who shared the doubts about the scheme.

Of course we want jobs, and it’s nonsense for anyone to argue that we don’t. But there’s nothing at all wrong with arguing that we want jobs which don’t come complete with incumbents (and their dependants to compete for any new jobs). Neither is there anything wrong with arguing that we want to be selective about the type of jobs we want to see. Indeed, there’s no point at all in pretending that we have a strategy for building the Welsh economy around ‘green’ jobs if we then welcome any and every project which takes us in the opposite direction.

It’s also worth noting that, for all the hype in the Welsh media about the thousands of jobs that the scheme would bring to Wales, no-one was particularly keen to talk about the thousands of jobs correspondingly destroyed at existing bases. It’s an aspect of the ‘job creation’ industry which has long worried me – moving jobs from one part of the world to another doesn’t ‘create’ jobs at all; in fact it often reduces the total.

There is an issue, of course, around the fact that Wales receives a significantly smaller share of defence expenditure than either England or Scotland; but it’s a mistake to see that in isolation. I don’t want to have our exact percentage of spending under each and every heading; I only want our fair share of the total. I’d be more than happy to forgo our ‘fair’ share of defence expenditure, if we got correspondingly more under another heading – such as research funding, for instance.

And that’s the real issue – we simply don’t get our fair share. It’s a campaigning point for a nationalist, of course – but the real solution is to take control of our own taxation revenue and decide for ourselves how to spend it. I’d bet we’d never choose a Defence Academy.

Wales as victim

Tweet I’ll admit that I’ve been surprised at the extent to which, and the speed with which, the Labour Party in Wales have adopted the ‘Wales as victim’ narrative in response to the planned cuts by the UK government. It is, after all, precisely the sort of narrative for which they have spent years criticising Plaid Cymru.

At a political level, it certainly seems to have had the effect of wrong-footing many Plaid spokespersons; it sometimes looks to me that they end up sounding like copies of Labour rather than promoting a different message – and I’m convinced that only the Labour Party will gain from that.

The problem though is that Labour seem to have the zeal of the convert – they’ve picked up on the negative side of the message, with no attempt to promote the positive. Pointing out the ways in which Wales loses by being governed from London has always been a valid part of a nationalist message, but it has never been adequate in itself.

Unless accompanied by a positive message about the advantages of self-government, it just sounds like whingeing – and that’s exactly the accusation hurled at Plaid by Labour over many years. I’ve never thought it an entirely fair criticism – but that doesn’t mean it’s entirely unfair either. It has often been the case that it is easier to get coverage for a negative, critical story than for a positive one setting out an alternative view. That in turn means both that the coverage of Plaid’s views never properly reflected the output of opinions – and it also encourages more negativity.

‘Protecting Wales from the cuts’ is not something with which I can disagree, of course. But it needs to be more than what it sounds like at present – which is that the cuts should fall on someone else rather than on us; it’s a narrative which seems to be saying that cuts are fine as long as they don’t affect me. And that’s a narrative which seems to be increasingly common – it’s a self-interested reaction to the situation rather than a collective one.

Given that the effect of Labour’s spending plans would not have been that radically different, I can see their problem in trying to put an alternative across; it’s much easier just to ‘go negative’. Plaid have no such difficulty; the party’s manifesto for the last election set quite a different direction economically.

A self-governing Wales could take a different view on the rate at which the Welsh deficit should be repaid; it could vary (downwards) the rates of business taxation to aid the recovery; it could decide on a different mix of cuts and tax increases; it could decide to invest in a number of small scale renewable energy projects instead of the grand schemes favoured by London; it could decide to spend public money on sustainable developments instead of huge military projects.

Far from being, as some claim, damaging to the concept of Welsh independence, the current economic difficulties are a real opportunity to put the case for an alternative, more decentralised and local, approach to economics. And not just whinge.

More dishonest arguments

Tweet I’m not in the least unhappy to see the plans for the proposed massive barrage across the Severn estuary consigned to the bin, although I’m disappointed that the government seem to have thrown out the baby with the bathwater by rejecting all schemes for the estuary rather than just the one. It is, though, another example of taking major strategic decisions on the basis of over-simplistic, and not entirely honest, economic analysis rather than on environmental grounds.

They seem to be saying on the one hand that they reject the barrage because the public purse can’t afford it, whilst they give the go-ahead to nuclear energy because there would be no public subsidy. Supporting that which requires no subsidy over that which cannot be built without subsidy sounds superficially sensible, but it depends on the validity of the underlying statements.

I can’t think of anyone who seriously argues that new nuclear power stations can be built without subsidy of some sort from the public purse. There is debate about the form and size of that subsidy – and there are ways of making it less obvious – but that there will be a subsidy, and a very significant one is surely beyond doubt.

And I don’t particularly object to a subsidy. Getting our energy policy right, and achieving significant cuts in carbon emissions, is an important enough objective for me to believe that it is right that we should be prepared to use public funding if necessary to achieve it. The question needing debate is about which energy policy is the best one.

Effectively, the UK Government have nailed their energy colours firmly to the nuclear mast. Public funds will be committed to new nuclear power stations rather than to renewable sources of energy. It’s a highly significant decision on energy policy (although in my view the wrong one), and it’s dishonest to portray it as purely a cost-cutting move.

Passport to where

Tweet The proposal to close the Newport Passport Office is a serious blow to jobs in that part of Wales. It would also, as a number of others have already pointed out, leave Wales without a passport office, and see all Welsh passport applications – including those submitted in Welsh – dealt with outside Wales.

An element of ‘special pleading’ on behalf of Wales is probably inevitable in a situation like this, but it leaves me a little uncomfortable. Not because I don’t think that Wales is, or should be, a special case, nor because I don’t want us to retain the passport office and the jobs going with it.

There is a danger, though, that ‘special pleading’ ends up sounding rather like ‘cut their jobs not ours’. And I’m not sure that an approach which starts to pit office against office is one which is in our own best long term interests.

I’m much more comfortable with an approach which asks why the cut is necessary at all. Are there really 300 people in the Passport service who are simply doing nothing? I find that hard to believe – so what’s the effect of cutting 300 jobs? Does it mean a reduced service - delays, backlogs?

One of the things which most concerns me about the programme of spending cuts is the extent to which it appears that most people are broadly supportive of cuts as long as they affect someone else. It’s a trap into which we should be wary of falling.

Pension reform is inevitable

Tweet The recommendation to end final salary pension schemes in the public sector can come as a surprise to no-one. If there is any element of surprise, it’s that it didn’t happen sooner; after all it was the previous government which presided over the closure of such schemes in large areas of the private sector. Indeed, it was a decision taken by Gordon Brown early on in his chancellorship which proved to be the final straw for so many schemes, and the public sector is no more immune to that decision than was the private sector.

Removing the tax exemptions from pension funds, and doing so suddenly with no transition period, raised billions of pounds in extra revenue for the then government. It also completely undermined the careful financial planning of pension fund managers. Coupled with diminishing returns, increasing longevity, and the reluctance of both employers and employees to pay more into their pension funds, something had to give.

That is not to say that I disagree fundamentally with Brown’s decision – in principle, he was simply ending a tax break which disproportionately benefited the better off. But it didn’t only benefit the better off, and, as ever, it is not the better off who will lose most in the end. His mistake, I feel, was in not giving notice and phasing the change in so that employers, employees, and pension fund managers had the time to make more gradual changes to ensure that schemes remained viable.

Reform is inevitable. It doesn’t have to be the simple abolition of defined benefit schemes, although I suspect that is the natural tendency of the present government. Higher contributions probably are inevitable, and there is room for debate about how much of that is paid by the employers and how much by the employees – and both sides need to recognise that proper funding of pensions is part of the total remuneration package of staff, and treat it as such. It’s not just some sort of ‘overhead’ which can be arbitrarily cut.

Even worse than the situation with funded pension schemes, of course, is the crazy situation of certain schemes – such as the police and fire service – where pensions are not separately funded, but paid for out of current revenue. This is madness, and the situation can only get worse. Putting it right by moving to a proper funded scheme will be costly, but the longer it’s left, the more costly it will get.

Doing it differently

Tweet Today's story about the potential impact on other services of Carwyn Jones' promise to increase education spending highlights an issue which I've posted on previously. To what extent should priorities and spending patterns be decided locally, and to what extent should local authorities be allowed to take their own decisions?

Peter Black, writing on Freedom Central, suggests that this will be a case where Labour and Plaid will "revert to their natural centralising instincts". I think he's being unfair. No surprise there perhaps; but the reason that I think he's being unfair isn't because I am utterly convinced that the government will not take a centralist line on this, it's because singling out two parties is turning a structural issue in politics into a bit of party political point scoring.

It seems to me that, on a range of issues, all Wales' political parties have an increasing tendency to believe that spending patterns and outcomes across a range of services should be consistent across Wales. And many MPs - mainly, but not exclusively, Tories – regularly draw attention to what they describe as unacceptable disparities between Wales and England.

If differences are, indeed, unacceptable, then there is a good case for centralising control. But if we want to retain an element of local democracy, then we also have to accept the possibility of different priorities being set – and different outcomes resulting. The alternative is that local 'democracy' becomes a solely administrative activity, and I'm not convinced that elections are the best way of choosing the best administrators.

I've seen politicians in all parties complaining about 'post code lotteries' in the provision of services, and the solution always seems to be more central control or direction. But if devolution – whether from London to Cardiff, or within Wales - doesn't include the right to do things differently, and therefore the inherent possibility that different priorities will lead to different outcomes, then what is the point?

22 of everything

Tweet The subject of local government reform is raising its head again, as financial tightening starts to hit local government. The Local Government Minister is quoted as saying that he can't see why we need 22 of everything, and I agree with him in principle. (Although in the case of one of his examples, I'm not sure that reducing 22 fleets of vehicles to a smaller number of larger fleets necessarily results in fewer vehicles overall. And even if it did lead to fewer vehicles, if they had to travel a significant extra distance to cover larger areas, the cost saving may turn out to somewhat illusory.)

What concerns me however, is the suggestion that we rush straight from 22 into some other number, and do so in a higgledy-piggledy manner with arbitrary cross-border service mergers based on joint filling of senior vacancies, and without giving any real thought to what the 'right' number is.

For political reasons which I can understand (to say nothing of the potential cost implications in the short term), the Welsh Government has fought shy of taking a thorough look at local government boundaries and functions. I think they're as wrong to avoid taking that big picture look as they are to try and rush into opportunistic changes. We're also not looking at what can and should be democratically accountable at a local level and which services might be better delivered nationally.

In the 2007 Assembly elections, I (and every other Plaid candidate) fought on the basis of a manifesto which called for a thorough review of the whole way in which Wales is governed – local government, health, etc. It's one of our promises which didn't get into the One Wales coalition agreement, more's the pity. Instead of a thorough review, we've had a piecemeal approach which delivers neither radical change nor stability.

Sooner or later, we need to face up to the question rather than continue to avoid it.

Let's have proper analysis, not ridicule

Tweet Yesterday's Sunday Times ran another of their fairly regular articles highlighting what they refer to as 'non-jobs' and 'waste' in the public sector. It was a large story – occupying a whole page – but it left me a little cold.

Picking on ridiculous-sounding job titles (and there are certainly some which easily fit that description!) makes for an easy story, but the article made no real effort to go behind the ridicule and seriously discover whether the jobs are wasteful or not.

To pick on just one example of their non-jobs – a "city events and international links officer" - I would have liked to know the answer to questions such as whether the events organised generate additional visits (and therefore spending) in the town or not. Is there, in short a net gain to the local residents? Without asking that sort of question, how can anyone form a balanced judgement?

One of the examples of wasteful expenditure they quote is the refurbishment of offices for the National Audit Office. The cost per head of furnishings certainly looks excessive to me, and the talk of marble flooring and leather sofas makes one wonder about value for money. But for me to make a proper judgement, I'd like to have known how suitable the offices were before the refurbishment - did they, for instance, comply with relevant legislation? Do we expect staff to work in poor conditions, just because they are in the public sector? I'd also have liked to know what the alternatives were, and how much they would have cost.

I would never argue that there isn't waste in the public sector, nor that there are no non-jobs which we could easily do without. It may even be that every single example quoted in the article fits into that category. But there wasn't enough information to reach that conclusion, and it ended up being just another 'bash the public sector' piece. In this case, it's the media leading the charge - but there seem to be plenty of politicans equally happy to seek a quick headline on a simlar basis.

People in Wales working in the public sector are in for a tough time, with jobs likely to go. They deserve to have their situation considered properly and thoughtfully during that process, rather than be subjected to ridicule and abuse purely on the basis of who pays their salaries.

Exporting jobs

Tweet It's not often that spam e-mails attract my interest, but one I received yesterday did. It was advertising this event, a conference to help the private sector to 'Prepare Now for the Coalition Government’s Significant Push on Outsourcing'. The e-mail also said that the event "will examine various outsourcing models (including off-shoring)".

I know a little about outsourcing. I found myself 'outsourced' in 1996, and then sat on the other side of the fence when I went on to manage parts of transition projects, as my new employers helped other companies to 'outsource' their IT in our direction.

In theory, the process allows organisations to concentrate on their core business – the bit that they're allegedly best at - and let experts in other fields take over the running of the rest. In theory, it allows the companies to which work is outsourced to gain benefits from economies of scale as they combine operations from a number of different organisations into larger teams, and share expertise. And, again in theory, that allows them to 'share' those savings with the outsourcing organisation.

The practice doesn't always live up to the theory of course. The companies taking on the work and staff, unsurprisingly, have more experience in drawing up the contracts and service level agreements than do their customers. And once the service to be provided is tightly defined, it's not unknown for the customer to find that 'contract variations' are expensive animals.

It's not going too far to suggest that, sometimes, it's the contract variations which make all the profit, after the base contract has been sold as a 'loss leader'. Such variations also make it difficult to know whether the original employer has actually saved money or not - they've often paid less for the defined service, but more by the time the 'extras' are added in. Whether there are real 'savings' often depends on how the numbers are presented – but I suppose that is what bean-counters are for.

There are other ways in which the contractors can squeeze profit out of the situation as well. One is by working the employees harder – more hours for no more pay, for example - and another is by worsening their terms and conditions. The second is supposed to be prevented by TUPE regulations, but staff wastage over time combined with new recruitment can reduce the average staff cost without breaking TUPE rules. And TUPE rules themselves are not as insurmountable as some believe.

The other aspect of all this is 'off-shoring'. It means taking a service currently provided by staff in the UK, and transferring it to another country, where labour costs are lower. There's no doubt that there are direct savings to the customer organisation and increased profits for the contracting organisation - but what about the wider economic questions?

If the staff made redundant are snapped up by other employers at similar rates of pay to those they previously enjoyed, then there can be an overall plus to the UK economy. But if they end up claiming JSA, then the 'savings' made by one government department can quite easily turn into increased expenditure for the DWP.

Clearly, there are those in the private sector who believe that government spending cuts will create new opportunities for off-shoring, and they will rush to seize them. But do we really want government to be saving money by exporting public sector jobs, which is effectively what this would mean? It'll be interesting to see how Conservative and Lib Dem apologists explain why this would be in the national interest.

Opening the books

Tweet After going all the way through the election without revealing the true scale and nature of the cuts and/ or tax increases that they were planning to impose, it was never going to be more than a matter of time before we heard the refrain, "Now we've seen the books, and the situation is much worse than we thought", or some variation thereon. (Although quite how Labour would have managed to spin that had they been re-elected must remain an unanswered question).

So Sunday's story came as absolutely no surprise to me. The precise list of issues which would be used to justify the claim would have been hard to predict, but the broad nature of the claim was as likely as night following day.

It's the sort of spin which is essential if they want to be able to explain an increase in VAT, for example, which is being widely trailed. And we can depend on the government's supporters to make the most of the claim to justify the forthcoming decisions (and I see that Peter Black is at it already).

There was one item on the list which did surprise me though, and that was the reference to the fact that the decommissioning costs for nuclear power stations have almost certainly been grossly under-estimated. The fact that they've been underestimated comes as no surprise at all - I think that those of us who have been opposed to future nuclear build have been arguing for some time that no government could possibly have a proper handle on these costs. No, the surprise is that the incoming government has drawn attention to it.

The larger coalition partner remains completely committed to new nuclear build, but keeps harping on about there being no public subsidies available. Exposing the fact that there are large backdoor subsidies and that they've been underestimated can hardly help their case. Not that I'm complaining.

Fifteen Reasons

Tweet A good day's campaigning in Pembroke Dock today, and a large team out in support. The Conservatives in Wales were also in town - handing out a little leaflet entitled "15 reasons to Vote for Simon Hart".

When asked for a Welsh version of the leaflet, the response given was that they didn't have any. No surprise, therefore, that 'support for the Welsh language' didn't make the top 15.

Opposing Plaid Cymru's policy on Independence did though. That was a surprise, but also a compliment in a roundabout sort of way. Listing opposition to Plaid's constitutional policy as one of the 15 most important things that they can do suggests that they give the policy more credence than is usual for the Tories.

Their policy on spending cuts is to make some - but the only list on the leaflet is those things which they will not cut; hardly helping to spread enlightenment and knowledge about their real agenda.