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Senior Member
Join Date: Nov 2005
Location: Welwyn Hatfield (Herts.)
Posts: 1,878
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More waste
The Taxpayers Alliance blog comments
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As we fume and fret about the mounting NHS crisis, it's important for taxpayers to learn three key lessons. Lessons that must be committed to memory for the next time some plausible political fantasist tells us if we give him our wallets he can fix our public services.
First, loads more money doesn't work. Spending on the NHS has virtually doubled since 1999-2000 yet, from treatment rationing to hospital superbugs, the problems remain exactly the same. The simplistic socialist solution of more public money has not only failed but, by pumping up cost inflation, has plunged the whole bloated system INTO phpbb_financial crisis. And it will all get much worse when the public spending boom hits the buffers in 2008 (see the excellent Reform for more).
Second, top-down public service reform doesn't work. From the disastrously expensive new doctors' contracts, to the catastrophic NHS supercomputer, politicians and bureaucrats are seeking to impose yet more of their their one-size-fits-all systems. It's all they know, and it keeps the reins of power in their hands. But what looks good on a Whitehall drawing board rarely bears much relationship to the diversity and general messiness of behaviour on the ground. As was pointed out long, long ago, human beings are not chess pieces.
Third, administered consumer choice doesn't work. Bureaucratic brainwaves such as the "pick and mix" hospital booking system are never more than pale heavily circumscribed imitations of real markets. What's more, their costly and convoluted administrative infrastructures are notoriously fragile and prone to collapse, as we're already seeing with "pick and mix". Real markets cut through all that by putting the cash directly in the hands of consumers not politicians.
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Today the CBI has commented
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The Government is wasting millions of pounds on hospital projects that could be used on front-line healthcare because of sloppy procurement, according to a new CBI report published today (Friday).
The business lobby group is warning that although PFI means building projects are completed more quickly and guarantees greater financial stability and transparency, the relics of old-style public sector procurement, such as the failure to put a price on delay and poor planning, are holding back PFI's full potential to deliver for patients.
The report suggests extra costs caused by procurement delays are adding an average bill of £2.4m, or more than one per cent of capital value, to major hospital projects. To date, the extra burden is almost £100m, costs which end up on the NHS's balance sheet. With the likely overruns of ongoing projects, including Bart's in London, this figure could exceed £122m.
The financial estimate - based on the costs of employing architects, project managers and other staff while the causes of delays are resolved - is conservative as it excludes costs incurred by the Department of Health and to unsuccessful bidders, delays before bidding starts, and the impact of overruns in numerous small-scale NHS PFI projects.
The report, Buying the best for the NHS: ensuring smarter capital procurement sets out a number of recommendations to improve health procurement and secure better value for money. These include improved needs analysis by hospital trusts before commissioning; buyers - i.e. trusts - being responsible for paying costs of delays up-front; better mediation between parties; improved training for procurement staff; and a simplified bidding process.
John Cridland, CBI Deputy Director-General, said: "The private sector has delivered more facilities and services on time and to budget than the old system of public design and construction ever did.
"Yet unnecessary problems remain. When the projects are still in the public sector's hands, delays are commonplace and costly. The financial realities of schemes are often not considered until late in the day, so further time-wasting reviews are needed. On other occasions, the NHS doesn't know what it actually wants and so new and revised bids have to be submitted.
"All these avoidable delays to hospital building projects are costing big money and ultimately diminishing the effectiveness and reputation of the NHS.
"PFI has secured the biggest hospital building programme in the developed world. The Government must continue to give clear, unambiguous support for the PFI, but also recognise that all too often it is making inadequate use of what private finance offers.
“The cost to the NHS of poor procurement is already extremely high, and will only increase if action isn't taken to remedy the situation. Such waste at a critical time for the NHS must be avoided. Ministers and officials must work with business to make sure that these problems are overcome.
“PFI can and does deliver, but the public sector needs to raise its game if the public is going to reap the full rewards.”
Specific recommendations include:
* Conducting a health needs analysis in the area in which a facility is to be built. This should cover existing facilities, gaps in provision, financial factors and views of all relevant parties. It should take account of regional and national developments in technology and specialisation, and national policies such as payment by results;
* Setting out a clear procurement timetable for each project, calculated by the complexity of the scheme and agreed to by all those involved;
* The lead procuring party being responsible for paying the costs of any delays to the agreed timeframes to ensure these financial implications are recognised. These would be paid up-front to qualified bidders and contractors rather than over the life of the contract;
* The Government creating a mediation process to investigate informally procurement delays, help resolve disputes and ensure a level playing field between parties;
* The Government and the NHS ensuring procurement professionals are properly trained and retained. The Government should establish a national procurement academy to formalise training;
* There being a centralised database of pre-qualification information for complex projects. This should hold as much information as possible on bidders, including details of financial backing, in order to avoid unnecessary and expensive duplication during the pre-qualification questionnaire (PQQ) process. Bidders should revise their information annually, rather than for each individual PFI bid.
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The Telegraph adds that
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The Government has secured £1bn of funding to redevelop two London hospitals through a private finance initiative, after a delay caused by the Health Secretary's decision to review the project at the end of last year.
Investors put up the money to transform St Bartholomew's INTO phpbb_a cardiac and cancer centre and provide new facilities at the Royal London Hospital in east London, which should be in place for the 2012 Olympics.
The project was delayed when Patricia Hewitt, the Health Secretary, requested a review of the scheme as the NHS trust and developers Skanska Innisfree were about to sign the contract in December.
The NHS trust calculates that the delay will cost around £50m over the life of the project.
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Thus do they casually toss aside millions of our money. That was the UK government - which shows that leaving the EU is not a full policy, you have to tackle this stuff too.
But of course the EU's at it too - this from The Times
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Gone east: how €7bn EU cash melted away with the Cold War
By Anthony Browne, Brussels Correspondent
Children’s equipment goes to soldiers and regions are invented in latest funding
scandal
THE EU was mired in one of its biggest financial scandals last night after a €7
billion (£4.9 billion) aid programme for the former Soviet Union was damned by
the leading European budget watchdog.
Outraged MEPs said that up to €5 billion of taxpayers’ money had been misspent,
and they demanded that the European Commission should immediately suspend the
programme, known as Tacis (Technical Assistance for the Commonwealth of
Independent States).
The scheme has given about €500 million a year to 12 former communist countries
in Eastern Europe and Central Asia to promote free markets and democracy since
1991.
The European Court of Auditors said yesterday that it could not give a positive
approval of Tacis because the effectiveness of the funds was “very low”.
Responding to mounting concern about the aid programme, the auditors
investigated 29 representative projects in Russia, the main beneficiary of the
programme, and found that only nine actually achieved the objectives for which
the EU was paying. In total, only 5 of the 29 projects had any lasting impact.
The investigators highlighted a heating and power project for a city that did
not want it and another aimed at harmonising road standards between the Union
and Russia that failed because the EU itself had no such common standard.
Road-testing equipment supplied by the EU was unused.
One project invented a region on paper to meet the criteria for receiving EU
funds. An EU-funded laboratory remained unused because the recipients did not
have premises to store equipment while another was unused because the recipients
could not afford the materials needed to run it.
In another case EU-funded technical equipment was sold off by the recipients
because they did not know how to use it and did not have the necessary internet
connection. Fitness equipment aimed at helping children ended up being used by
Russian soldiers.
The report highlighted mismanagement, lack of financial discipline and
monitoring of EU funds, but stopped short of claiming any evidence of deliberate
fraud. Using the careful language of an auditor, Jacek Uczkiewicz, the author of
the report, said: “There was ineffective usage of European Community monies. Our
assessment is not positive. We think the situation is poor and requires a lot of
discipline and attention to improve.”
Hans-Peter Martin, an MEP on the European Parliament’s budget control committee,
said that the report showed that up to €5 billion of the total €7 billion given
since 1991 had been misspent.
“It’s a serious scandal in the EU,” he said. “Why didn’t the commission do
anything about it for 15 years? The commission should stop funding Tacis
immediately. It has gone bad. We are talking billions that have disappeared. All
the people who were working on those projects should be deeply ashamed.”
Chris Heaton-Harris, a Conservative MEP on the budget control committee, said:
“It’s lots of money going down the drain. The EU does not have a very good track
record of spending money well on these projects.”
The Commission acknowledged that mistakes had been made and said that it wanted
to learn from the experience but noted that the projects had been hampered
because they were launched during a particularly turbulent period in Russia. A
spokeswoman said also that recent reforms had improved the situation.
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More arguments for small government.
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21-04-2006, 12:07 PM
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