economy

Catherine Staite

One benefit of spending many days mass catering and washing up over Christmas has been the companionship of Radio 4 news programmes. Sadly, I now feel a bit like those women who decide on divorce just after Christmas. Prolonged exposure to political reporting has left me feeling betrayed and irritated in equal measure.

Perhaps it isn’t Radio 4’s fault. Perhaps they can only do the best they can with the dross they have to work with. Perhaps the lack of substantial topics and forensic interrogation are products of the absence of principle and passion in political debate.

There is the obsession with retail. I like a bit of shopping myself but retail trends and their reflection of wider society and their impact on the economy are reported with mind-numbing and repetitive banality. If I hear more bland stories about ‘cash strapped families shopping around’ I’ll cry.

Why aren’t the world’s best journalists digging underneath these seasonal superficialities? What about the differences in spending power and standards of living between rich and poor? The poor are rarely mentioned, unless negatively and simplistically as ‘working age benefits claimants’. What about the places our goods come from and the people who make them? Whether we get our bargains from John Lewis or Amazon – they all come across the sea in big containers from the same places but the people who make them don’t get a fair return on their labour and are often brutally exploited. This only gets reported on when thousands die at one time, which makes the issue newsworthy – until it is promptly forgotten again.

Immigration is perhaps the topic where a lack of intelligent, questioning journalism is most evident. National politicians resemble small boys playing football – all dashing after the ball together with a woeful lack of strategy or even tactics. The ball they are all chasing is a nasty construction of xenophobia, fear and ignorance, held together by nostalgia for a misremembered past. At other times they resemble wildebeest (other herding animals with a tendency to mass panic are available). Is UKIP now a lion? Only if the wildebeest think so.

Where are the facts? How much do immigrants contribute to the Exchequer, our culture and our quality of life? Lincolnshire farmers could not harvest their crops without immigrant labour. Our hospitals could not function without immigrant health professional. So the answer has to be ‘lots’. How many of us – that’s us to distinguish us from them who come in ‘hordes’, determined only on scrounging and/or destroying our way of life – are immigrants or the descendants of immigrants ourselves? Lots and lots. Instead, we get a diet of unchallenging reporting of the prevailing narrative which is creating bias merely through repetition.

Reporting of the floods has not been accompanied by many facts. Bald statements about the money allocated to capital works and cuts to revenue leading to job losses leaves us no wiser about the costs and benefits of flood defences and the public policy choices to be made about the best way of allocating scarce resources remain uncharted waters. Cameron was reportedly issuing stern instructions to local government about fulfilling their duties – without challenge. No reporter questioned the authority of someone who couldn’t navigate his way out of damp carpet to instruct sovereign bodies to perform their expert functions.

Going back to work has been a welcome relief from shouting at the radio but I’m still suffering from a deep sense of dissatisfaction. There are questions to be asked and answers that really matter – but who is asking them?

Catherine Staite is the Director of INLOGOV. She provides consultancy and facilitation to local authorities and their partners, on a wide range of issues including on improving outcomes, efficiency, partnership working, strategic planning and organisational development, including integration of services and functions.

Ian Briggs

By 1830 the East India Company had grown in size and influence to be a government in all but name. It had control over a population that was at the time ten times greater than that covered by the British Crown and amounted in economic terms to over one third of the then British economy. The power of the company was such that it has led to a deep seated suspicion of the profit motive in the private sector and individuals that has remained in national and local government ever since – whichever political party has been in control.

By the end of the first decade of the twenty first century concern over public expenditure and a fear that ‘our’ money is not being spent with our interests at heart remains. The thousands of FOI requests now received by governmental organisations from both individuals and organised groups such as the Taxpayers’ Alliance may seem like an unreasonable challenge to the primacy of those who are our elected representatives and their agents. Yet, as seemingly no stone is being unturned in the search to lift the UK economy from recession, the question remains: what is reasonable profit to make from public sector activity?

The government is increasingly convinced that contracting with commercial and voluntary providers with payment by results (PBR) is a mechanism to ensure that positive social outcomes are achieved through stimulating the motivation to succeed. This has now extended to the Probation Service where providers will increase their revenue through meeting or exceeding performance targets. While it is clear the new innovative approaches such as this needs to be tried, what is unclear in this process is the means by which we decide whether the targets have been achieved or not, who has the power to decide, and what access to information they have.

The nature of contracts between governments and commercial providers can be said to be at best murky and if history is a good teacher then we should remain sceptical of the means by which performance is judged. To evidence this we have to look at the alternative method – that is where there are penalties within contracts that limit profitability to a commercial provider. For any regular rail traveller this game is all too readily apparent. Careful management of standing time at stations – often for what are termed operational reasons – can be seen as a means of ensuring that there is conformity with published performance expectations. However, for one regular journey I take, if the train were to leave a station at its published time it would have covered the distance from its last stop in a time that would mean speeds far in excess of that permitted for the line. Such quirks in the timetable exist to ensure that this train is never late at its destination and thus distorting the annually published performance report.

So if creative methods are employed to circumvent disincentives that detract from profitability, should we be equally sceptical of achieving positive results with a profit incentive that will always work in the public interest? In the same way that disincentives could have issues within power imbalances and transparency in contracting, so might profit maximisation incentives. No matter how robust a contact is, it will always bring into conflict differing interests and have certain power imbalances built in. Undoubtedly what the East India Company achieved was as much in the interests of the British Government of the time as it was in the interests of those who invested in it, but if we are to offer increased potential profitability to commercial interests through PBR mechanisms we have to be ready to have robust and open debate as to how those payments are justified.

For the Probation Service, social outcomes are at the very centre of its purpose – reducing recidivism is crucial to society but performance contracting is complex. We should perhaps remember the experience of the East India Company, becoming such a monster power at the same time that nearly all Transportation to the Colonies was undertaken on behalf of Government by private contractors. Those very contractors were well rewarded but once out of sight of land they behaved in a fashion that was more about maximising their income than meeting the contractual need established by Government. This was exemplified by the selling off of unused victuals for the journey to increase income – for them the answer was easy – starve the convicts!

So – to what extent is it reasonable to profit from the public purse? And are we putting in place a robust enough mechanism to ensure the interests of civil society are maintained?

Ian Briggs is a Senior Fellow at the Institute of Local Government Studies. He has research interests in the development and assessment of leadership, performance coaching, organisational development and change, and the establishment of shared service provision.

INLOGOV Blog

The Institute of Local Government Studies, University of Birmingham

Where have all the politics gone? On wildebeest, lions and other political animals

To what extent is it reasonable to profit from the public purse?