Pygmy politicians messing things up, pension shortfalls and PFI profligacy — so what’s new? asks our chief executive
The current economic crisis has me both frightened and bored. The incessant chatter and speculation seems to go nowhere and is so over the top that I am bored with it all. I have given up listening to the news.
I am frightened because I can do nothing about it. Like many, I feel the need to rein back personal spending but knowing that it will just make things worse. Shops and restaurants need our business just as our industry needs theirs and so it goes round and round.
I am also frightened because I don’t have any faith in those whose job it is to sort it out. The public are pretty badly served by the politicians we have, not just in the UK, but across the western world. Referring to them as political pygmies is perhaps an insult to pygmies, but the scale of the current task does seem to be overwhelming them.
The practical impact of their inability or unwillingness to take decisive action is clear to see. The recent nosedive in the stock market means that annuity rates are some 14% less now than at the start of the year. That is a major reduction in income for the rest of one’s life. So picking a time to retire is not so simple now. Not that this is an issue for those responsible for the situation, whose pensions are, in most cases, funded by the taxpayer.
The current round of party conferences seems to be an exercise in surreal nonsense where they already know the answers, but they still go through the motions of asking the questions and then providing answers as some fantastic revelation. It is a case of the pygmies trying to big themselves up. The trouble is, no one other than other pygmies is listening. Normal people are busy trying to cope with the consequences of politicians who are more impotent than important.
Closer to home we have the debate about the Private Finance Initiative (PFI) and the impact that is having on the health service. A recent Public Accounts Committee report severely criticises PFI, while the current government still plans to use PFI despite the criticism. Can they both be right?
The answer is yes. There is nothing particularly wrong with PFI as long as it is used in moderation with due care to the long-term consequences. The last government was anything but moderate in its use of PFI.
The challenge for the current government is what it does with the existing PFI projects — some are probably redundant only 10 years into a 30-year contract — and learn how PFI can be used effectively without replicating the mistakes of the last government.
The case for stronger and better project management of publicly-funded projects was also starkly put into context by the debacle of the FiReControl project, the aim of which was to regionalise the Fire Authority call centres. The project was launched in 2004, but following a series of delays and difficulties, was terminated in December 2010 with none of the original objectives achieved and a minimum of £469m being wasted.
A recent Public Accounts Committee report highlighted the inefficiencies and waste, but this is not the first time where the public sector has been profligate in its management of projects and costs and it seems lessons are not being learnt.
One must question whether, in a world that is changing at the rate it is, long-term PFI deals will continue to be appropriate in the future.
But politicians are creatures of habit operating in the short term. The desire to leave legacies and be re-elected provides the temptation for grand gestures and PFI is a good way of delivering today what you cannot afford. It remains to be seen whether this government reverts to type.
Thank you Chris for putting into print what the most of us realise and have been saying for years. The reference to the vicious circle of spending does not appear to be recognised by governments who think that the public sector can soak up the surplus unemployment created by the governmental job losses.
Wake up politicians!!! The public sector is suffering even more. For every 4 people made redundant, due to reduced spending capacity, a fifth loses his/her job in a service industry be it retail, the local pub, tourism or whatever. Think of all the lost tax revenue, both direct and indirect. More can be said however I think that Barrack Obama got it right when he said that he wants to get Americans back to work. Create an economy through wealth, when people have money they will spend it and therefore create tax revenue.
The spending has to be on projects that will benefit the future and create more wealth.