Playing catch up on contracting

OutsourcingThe Public Accounts Committee report on government contracting, published earlier this week, secured substantial press coverage. The focus was on the report’s finding that G4S and Serco continued to be awarded additional work from government while they were under investigation for overcharging. And this fact rather contradicts previous assurances given by the Government.

How these two miscreants were handled in the period during which their behaviour was being investigated is without doubt an important question. But it is only one issue that the PAC addresses in the report, and it probably isn’t the most important one.

The report is relatively brief. It builds on a couple of previous reports the Committee has produced in recent months, as well as a report produced in the summer by the Committee on Standards in Public Life. It repays close attention. [Read more…]

Economics in the bubble

414585868_2c8513d269_nMy plan was to write something following up last week’s Autumn Statement. But what with having to do other things – work and that – I’ve not had the chance.

In the interim there has been bucketloads of analysis. So I’m not sure there is more to say on the substance. All right thinking people are agreed that George Osborne, along with frontline politicians in the other parties, is suffering from what Gavin Kelly has christened a “candour deficit”. No one is being honest with the electorate over the scale of the cuts being planned. And, equally importantly, no politician is being honest about what cuts on that scale imply for unprotected services. Rick illustrates the point beautifully drawing on data from the OBR, the IFS and elsewhere (here and here).

Even Fraser Nelson is calling Osborne out for the sleight of hand he used to claim that the Government had cut the deficit in half. Fraser Nelson. Crikey! [Read more…]

Visible liberalism goes AWOL again

Group Of Business People With Their Mouths Taped ShutBack in 2011 Nick Clegg famously said:

you shouldn’t trust any government, actually including this one. You should not trust government – full stop. The natural inclination of government is to hoard power and information

It’s a position embodying impeccable liberal principles. It demonstrates a clear understanding of the dangers of concentrating power and, by implication, the benefits of pluralism. The heart of many a jaded liberal sang in response. Clegg circa 2011 got it.

I wonder what Clegg circa 2011 would make of the actions of Clegg circa 2014?

This week we have witnessed the all too familiar sight of Liberal Democrats in the Commons dutifully trooping through the lobby in support of an illiberal Conservative bill. This time it was Chris Grayling’s Criminal Justice and Courts Bill. In the process they overturned some wise amendments passed by the Lords, where a rearguard action had been fought to try to stop the bill achieving its primary objective of putting government decision making largely beyond scrutiny. In the Lords the Liberal Democrats supported these amendments en masse.  In the Commons the only Liberal Democrat to vote against the Government was Sarah Teather. It’s a sorry tale. Many liberal activists have been sent near apoplectic.

[Read more…]

The Universal Credit fiasco

4635240754_eb76ddc5e5_mWhen the history of this Coalition government is written a substantial chapter will no doubt be devoted to contrasting the vaulting ambitions of IDS’s welfare reform agenda with the incompetence and inhumanity of its implementation. Like some sort of inverted alchemist IDS has the ability to turn golden prospects into practices of base metal.

In his Times column on Friday Philip Collins offered a magisterial overview of welfare reform under the title Beware the march of IDS and his gothic folly. Collins likens Universal Credit (UC) – the centrepiece of IDS’s grand scheme – to the perma-delayed Sagrada Familia in Barcelona.  The completion date for the Church of the Holy Family has now been revised to 2028, having been started in 1883. The intricacies and expense of its construction continue to defeat successive generations. Whether UC will arrive any sooner than 2028 is by no means an idle question.

The proximate cause for this new outbreak of commentary on the manifold deficiencies of IDS and his reform agenda was the publication of the NAO’s second report on the progress of the UC project following the high profile, and unprecedented, project reset in 2013. [Read more…]

Fiscal foolishness

Budget Cuts sign with clouds and sky backgroundI’ve had an unusual and vaguely discomfiting experience. I found myself largely in agreement with a leader in the Economist. I may need a lie down.

I can console myself with the thought that what the Economist is saying – that the Conservatives’ fiscal plans for the next Parliament are damaging nonsense – would seem to be pretty much the majority, if not the consensus, view. Seeking to legislate to remove the deficit through slashing spending while at the same time delivering a tax cut is not the most impressively coherent agenda ever advanced. It will undermine public sector functions that are vital to the overall success of the economy. And it will almost certainly slam the brakes on the economy at the same time as inflicting further pain on some of the poorest in society.

The main difference of opinion seems to be around Osborne’s intentions. Are his proposals serious? In which case, he’s a bit of an idiot. Or do they signal an implicit acceptance that the Conservatives are not going to win next May? Osborne is simply trying to stake out a position he will never have to implement but which will provide a platform from which to mount an attack on the incoming government’s actions when they are, inevitably, less fiscally stringent. In which case, he’s a bit of an idiot.

Most commentators might think Osborne is talking rot, and that, at the very least, Labour’s proposal to exempt infrastructure spending from the self-imposed fiscal straightjacket is a step towards a more plausible policy. But fewer have offered alternative approaches towards bridging the gap in the public finances.

Here the Economist comes off the fence and sets out a distinctive proposal. [Read more…]

Policy unpacked #7 – What will make the housing market work?

Policy Unpacked 5Yesterday I took part in a panel discussion on the housing market as part of the Festival of Economics 2014. The panel was chaired by Julia Unwin of JRF; it comprised Kate Barker, Michael Ball, Diane Coyle and me.

It was an enjoyable event, with plenty of questions and comments from an informed and concerned audience.

I had arrived with rather more to say than could sensibly fit into my allotted time. So I ended up speaking rather fast, as a number of audience members pointed out to me after the session. I’m usually not too bad at timing these sorts of things, but clearly I was all over the place yesterday. [Read more…]

Speaking money

HowtospeakmoneyYesterday evening the Festival of Economics 2014 kicked off with the author John Lanchester in conversation with Izabella Kaminska of the FT. Lanchester, who is promoting his book How to speak money, had some very interesting and important things to say about the language of finance.

His key point was that the fact most people don’t understand or engage with the language and practices of finance has consequences. It means that bankers and economists are able to get away with obfuscation and mystification in order to hide their own ignorance or render opaque activities of very questionable social value. Because most people don’t really understand what is going on in finance they do not appreciate the risks that are being run or the ethics of some dubious practices. This lack of knowledge reduces public demands for greater regulation of the financial system, to the great benefit of the financiers.

But it is not simply the bankers and the public who are in the dark. Lanchester noted that last month the US bond market witnessed a seven sigma event – in terms of the volatility of short term interest rate movements. This is something which, if the models commonly used to analyze financial markets are right, is near impossible. The most obvious conclusion to draw, therefore, is that the models are wrong. So the analysts are in the dark as well. [Read more…]

Pathways to housing-related poverty

Affordable housing concept.The JRF report What will the housing market look like in 2040?, released yesterday, provided an eye-catching and headline-grabbing answer to the question that acts as its title. Presumably grabbing the headlines was the point.

The answer is that under plausible assumptions about future trajectories on tenure, costs and incomes we are looking at a future of higher housing costs, more private renting, and a substantially increased incidence of poverty. The authors, from Heriot Watt and Sheffield Universities, forecast that private renting will accommodate 20% of the population by 2040 and half of them will be living in poverty.

The authors argue that four factors, all to an extent under policy control, could combine to prevent this unhappy outcome. We need to see housebuilding in England rise to 200,000 homes a year by the 2020s and 220,000 by the 2030s. We need the decline in the proportion of households living in social renting to be halted. We need social rents to remain indexed as they are at the moment to prices. And housing benefit needs to continue to meet the same share of housing costs as it does at present. If the stars align favourably in this way then the unpleasant future sketched out might be avoided. [Read more…]

The apps that made it

A weekend post at Medium …

The apps that made it

Making the case for housing

case in collina#housingday will be marked for the second time on 12th November 2014. It is an opportunity for people in the UK to make the case for housing, and for social housing in particular. Social housing organisations and tenants will be sharing experiences and stories of the difference housing makes. You can find out more here.

My blogposts only rarely deal with housing at the frontline. The focus is more often on policy, politics and principles than on the detail of the difference good housing makes to people’s lives. Nonetheless, #housingday feels like a good opportunity to draw some thoughts together. I have therefore assembled a collection of blogposts – the first one I’ve done in nearly a year. This collection comprises a selection of nine posts since early 2013 on issues relating to the direction of housing policy and the importance of good quality housing.

I hope some readers might find it an interesting complement to the more grounded discussions and activities of the day. [Read more…]