PAC Fiddles While Public Money Burns

This week saw the publication of two reports that highlight the woeful set of priorities that govern the activities of the Public Accounts Committee and the media bandwagon that follows it. 

The first was the repeat of PAC's outrage over Google's international tax affairs. It seems we really are expected to believe that (1) these MPs are unaware of the rules governing where a company is 'permanently established' under OECD/UN Conventions and other tax treaties; (2) that the amount of additional tax that Google might have otherwise paid on about £3bn a year of revenue during 2006-2011 would have saved the UK economy; and (3) the UK does not benefit from the application of these rules to its own firms in other jurisdictions.

The second report came in the form of the lastest Bumper Book of Government Waste (itself hardly 'new'), which highlights yet again the £120bn that the public sector burnt last year for absolutely no benefit whatsoever.

With priorities like these, we should add PAC's own budget to the bonfire.

Big Society: The Trend Continues

I must say I'm enjoying all this "Big Society" malarkey. The debate about what in the hell it means, the irony of Liverpool City Council complaining it doesn't have to fund its involvement (which is the point, after all), the claims that volunteering is in decline, the claims that volunteering is doing just fine.

Wavy Dave must be pleased that it's all travelling in the right direction.

Because the big idea in the "Big Society", if there is one, is really for the Tories to make political capital out of a number of trends that have been building and converging throughout the past decade. They know that faith in our institutions has been in decline, that various facilitators are enabling us to personalise retailing, entertainment, travel, finance, politics and now public services. They know that everyone (except investment bank executives) is focused on sustainability and how to achieve more with less. They know these trends are not going to ebb away any time soon.

But who cares if the Tories try to claim the credit? That's politics. I'm all for having more Big Society debates. The more we focus on the problems of how to deliver public services more cost-effectively and efficiently, the better.

Lifting The Lid On The EU's Finances

Congratulations to the Financial Times and the Bureau of Investigative Journalism on their exposé on the gross fraud, waste and ineptitude inherent in the EU's €347 billion 'structural and cohesion' funds.

Even putting fraud and waste aside, it's hard to understand how this approach is sustainable if Greece, Ireland, Portugal and Spain are anything to go by. Public sector largesse eventually seems to generate the need for public bail-outs, especially when local governments borrow to match the free money that's available. No wonder the new UK government has put an end to direct local authority funding through this mechanism.

Certainly all this porkbarrelling has done little for 'cohesion'. A recent poll found that only 42% of Europeans trust the European Union - reflecting a general disenchantment with EU institutions over the past few decades.

The seven year budget cycle and lack of provision for returning unspent funds to donor states also makes the scheme incapable of flexing to meet changing economic circumstances. The fact that a large proportion of this money is lying around simply unclaimed in the current environment is scandalous, and another blow to economic confidence.

It's a travesty that this money was raised in national taxes in the first place, let alone handed over to Brussels on the terms of this scheme.

The EU's budget for this nonsense should be slashed next time around.

Image from Forest's Fine Foods.

That Government Waste Report In Full

Isn't it annoying that the 'news' media 'report' on the results of research, but never provide a link to the source? Well, here's the link to "Efficiency Review by Sir Phillip Green", without any link to media reports. So there.

It's only 33 slides, and I urge every taxpayer to take it in.

My 'takeaways' are that nobody knows enough about how the public sector spends our money to ensure we get real value for it. So we don't even know how much money could be 'saved' by finding out. But Sir Phillip's best guess is that getting a handle on it all will be very worthwhile in terms of policemen, teachers and other essential front-line public services, if not outright spending cuts.

I hope they get on with it. Fast.

"Mad Men" Minister's Role Model Should Be Nanny McPhee

In this age of bold government budget cuts, it seems odd timing for "Equalities Minister" Lynne Featherstone to waste time and money recommending that British girls and women should aspire to be like some TV actress. How very New Labour.

Politicians like our Lynne should aspire to be like Nanny McPhee, who arrives only when desperately needed and knows exactly when to disappear into thin air. Like now.

Image from Total Film.

Spend Now, Cut Later - But Stop Wasting Money

Leading economist, Paul Krugman, continues to argue forcefully that Governments of economies in recession should spend now to support economic recovery and repair their giant budget deficits when the recovery has taken hold. If governments engage in "penny-pinching" now, he argues, economic recovery will take so long that the unemployed will become unemployable, and there won't be enough tax revenue generated to ever get the deficit under control.

This does seem wise, but also seems to assume that all government spending supports economic recovery. But surely idiotic schemes that employ few people and merely generate further cost are not going to aid recovery. Similarly, investing in ways to remove structural inefficiency would seem a better re-allocation of existing resources than simply waiting to fix the inefficiencies when the good times roll. Presumably this would mean re-assigning the management consultants who were tasked with dreaming up New Labour policy nonsense to improving public sector efficiency instead.

Or does Mr Krugman want us to keep wasting money at the same rate?

Image from Look Up Fellowship

Travels In The Blogosphere

Amidst quitting my Crackberry habit, and acquiring a mild case of iPhonitis, I've largely been lurking in the blogosphere this week, reading up on:

• Russian spammers and botnet-sympathisers;
• Opening up government spending data;
• Sampling Chris Marsden's new blog on Internet co-regulation and African mobile roaming exposé;
• Wondering whether wavy Dave can create as many private sector jobs as little Johnny Major;
• Digging into Vince Cable's war on red tape;
• Tearing the flesh off the bones of the FSA, despite it's mammoth fine for JP Morgan Securities' indiscretion with client funds.

Not to mention keeping a beady eye on our MPs expenses habit.

As with last weekend, I hope to spend some of this one writing the next instalment of Green, a literary experiment best described as a gradual story. Hope you like it.

Lessons In Waste: Where Do Your Taxes Go?

Too late, we've learned that senior civil servants turned state's evidence on their New Labour masters, marking an audit trail with "letters of direction" for the House of Commons Public Accounts Committee. According to Bloomberg:

"On 13 occasions between the start of 2009 and April 2010, civil servants asked ministers for a “letter of direction,” according to figures originally released by the Treasury in April. In the previous four years, only four such letters were requested, according to the Treasury."

The Public Accounts Committee's reports make grim reading for anyone interested in low cost government, tracing waste and ineptitude from early in the New Labour regime. For example, on 8 April it had this to say about an HM Customs & Excise private finance contract:

In 2001 the Inland Revenue and HM Customs & Excise, now HM Revenue & Customs (the Department), signed a 20-year contract with Mapeley STEPS Contractor Limited, one of several companies in the Mapeley Group, transferring ownership and management of 60% of its estate. At contract signature the Department expected to pay £3.3 billion (2009 prices) over the 20 years of the contract. To date it has paid 20% (£312 million) more than expected, and now expects to pay £3.87 billion over the 20 years. Moreover, signing a contract which involved tax avoidance through an offshore company has been highly damaging to the Department's reputation.

The sale of the public stake in British Energy was also revealed as ham-fisted, as has been the handling of the £1.85bn in overpaid benefits.

The sickening list goes on and on and on. And of course even more waste is featured regularly in Private Eye.

It's a crying shame to be pouring extra taxes into such a leaky bucket as the UK public sector. So, all the more reason to engage with Where Does My Money Go?

Image from the Open Knowledge Foundation

Dear Gordon

Thank you for my tax code for 2010-11. May I say how delightful it is - nay, what an honour and a privilege it is - to be given the opportunity to donate further to your profligate public expenditure programme. With any luck, some of my money might even go towards your last personal expenses claim!

Best
SDJ

MPs: Please Pay More To Vet Our Expense Claims

Surprise, surprise: the MPs' suggestion for keeping their own noses out of the trough is to create another Quango (number 191). They estimate this will cost the taxpayer £600,000 a year to run.

So, in addition to excessive expenses paid to date, we're now asked to pay even more, just to keep MP's honest.

These people aren't really in it for us, are they?

The Commons Fees Office is already "overseen" by a committee made up of MPs (WTF?) which is in turn "overseen" by the National Audit Office. One might flippantly observe that with so much 'oversight' it's easy to see how Swinegate happened. But seriously, where is the explanation by the alleged oversight committee of how it allowed Swinegate to happen on its watch? Where are the NAO's audit reports on the subject? I see that the NAO was called in to look at expenses abuse in 1995 by the Nolan Committee into "standards in public life". But clearly whatever action was taken only encouraged MPs in their audacity. It also seems from the report of its investigation into a blow-out in MP's expenses in 2005-06 that the NAO doesn't audit the exercise of the Commons Fees Office's discretion in approving accounts, merely the tally of those approvals against budget estimates (see House of Commons Members Resource Accounts). Does this mean there is no compliance audit function?

For the answers to these and other questions, one can always file a Freedom of Information Request on WhatDoTheyKnow.com.

Swinegate's Feeble Whistleblower?

For every scandal there seems to be an heroic whistleblower working tirelessly to expose the thing, ignored by all in authority. For the MPs' expenses saga - "Swinegate" seems apt - we can only look to Andrew Walker, who is said to have signed off MP's expense claims in his role at the Commons Fees Office. Apparently, he "told Speaker Michael Martin more than five years ago that he must act to curb excessive claims. But Westminster sources say the Speaker told him not to meddle, and 'punished' him by refusing to speak to him for weeks at a time." Ah, the poor, poor man.

Just as the revelation of Paul Moore's unheeded warnings to the HBOS board were enough to hole Sir James Crosby's career at the FSA below the waterline, so should Andrew Walker's warnings do for the Speaker - not to mention all the little piggies to the left and right who had their snouts in the trough.

But hang on. Five years ago?! You mean Mr Walker has spent 5 more years signing off the sort of expense claims that he once found unacceptable. You mean that, unlike Mr Moore, he did not continue to make himself a thorn in the side of those he was supposed to be reining in? If that's true, then sorry, Mr Walker, you too have to hit the road. No pay-off. No pension.

"Another soure" is quoted as saying:

"A while back it looked as if Andrew might lose his job and you can't blame him for thinking that he might as well keep his head down. Why should he sacrifice his career for the sake of others?"

This feeble rhetorical question sums up what Westminster is all about. To change that, we need an answer, and it has to be: if you stop doing your job properly, you are sacrificing your career.