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The Sunday Times April 02, 2006

Desperate dispatches from the banana republic of Great Britain

Simon Jenkins

Wolf! Wolf! has been the motto of the National Farmers’ Union for so long that
the British public can no longer tell a silo from a subsidy. Yet last week
England’s 120,000 farmers had a legitimate grievance. They were stunned to be
told that last year’s subsidy cheques are still not in the post. They may not
get them for another month, if then.

Only 20% of cheques have been signed, partly because a £37m government
computer has declared more than 95% of claims “unvalidated”. As a result some
£3 billion cannot be released from the exchequer. Ministry phones go
unanswered, forms are lost, banks are preparing to foreclose on overdrafts.
The BBC’s Farming Today programme is like a daily dispatch from a banana

England’s new single farm payment scheme has collapsed. Two weeks ago Margaret
Beckett, the relevant minister, declared: “I take full responsibility.” She
meant she had just sacked one of her officials, Johnston McNeill, so as to
save the skin of her farm minister, an obscure Tony crony called Lord Bach.
The latter had spent six months deriding critics of his scheme as “shoddy”
and creating “unfounded alarm and uncertainty”.

The shambles at Defra, the rural affairs department, might win more publicity
were a similar litany of woe not rising from every corner of Whitehall. The
health department’s extravagant pre-election pay rise for the National Health
Service has led to a £900m wave of health trust deficits. Accountability has
taken the same track as at Defra. No minister has resigned but Patricia
Hewitt has sacked an official, Sir Nigel Crisp, with the bung of
a “back-pocket” peerage.

Part of the trouble at health was also Hewitt’s extraordinary decision to
proceed with a £6 billion “choose-and-book” computer. This is an unnecessary
machine for which no health professional ever asked and which was sold to her
predecessors by the smooth-talking salesmen now beating a path to the softest
touch in global computer procurement, the British taxpayer. A leaked report
in February suggested that the NHS computer may end up costing a mind-numbing
£ 50 billion.

Meanwhile, the Commons public accounts committee has just declared the
maladministration of Gordon Brown’s new tax credit scheme “systemic”. As
computers struggle to “claw back” some £2 billion in overpayments from people
who have already spent them, post offices resound to hysterical claimants
trying to reach officials on mobile phones, having been denied money to which
they felt entitled.

The list continues. At the Child Support Agency a backlog of 350,000 cases and
a dud computer have led to uncollected maintenance of £3 billion. The culture
department was last month castigated by a Commons committee for its 24-hour
drinking law, “a shambles . . . dilatory and completely unacceptable”. The
education department has blown £1 billion on a “truancy and behaviour
initiative” from which government auditors could find no benefit.

John Prescott has spent £168m on “consultancy fees” involved in demolishing
150,000 houses in the north of England. The row over the principle of
identity cards has obscured a greater scandal: Charles Clarke’s gullible
acceptance of a computer contract whose cost is escalating past £12 billion
towards, on one estimate, £30 billion.

A forthcoming study of public sector IT (by Patrick Dunleavy and Helen
Margetts) has British government the worst of seven leading purchasers, with
the highest “scrap rate”, the least contract discipline and the most
unbalanced dominance by big suppliers. The American firm EDS has 51% of the
UK market and is invulnerable to its own failures.

Something is wrong with British public administration. Britons are not used to
having their central government so comprehensively trashed. Since the days of
Northcote-Trevelyan it was the envy of the world. The integrity of the civil
service was taken for granted and the accountability of ministers was the
rock on which the constitution was built.

The traditional partnership between ministers and civil servants has
collapsed, destroyed by Blair’s sofa government and his miasma of agencies,
consultancies and private firms. These lack continuity, leadership and
accountability. The relationship between Whitehall and such shadowy entities
as EDS, KPMG, WS Atkins, Serco and Capita seems immune to scrutiny. Yet Brown
has granted them multi-billion-pound contracts, some for as long as a quarter
of a century. Serco describes itself as having “a culture infused with the
spirit of public service”. It runs Britain’s speed cameras.

Rod Aldridge, chairman of Capita, calmly resigned last month rather than
embarrass his company over a £1m secret loan to Tony Blair, after a sequence
of lucrative contract fiascos. These embraced individual learning accounts,
London housing benefits, the Criminal Records Bureau and a mysterious
contract for a “government literacy and numeracy strategy” that cost £177m,
not a penny of which went on teaching. Capita’s turnover under Blair has
soared from £112m to £1.4 billion. Aldridge, “a government adviser on
outsourcing”, has become a multi-millionaire at our expense.

The establishment of “agencies” under Margaret Thatcher was intended to
spotlight executive objectives, not enrich the private sector. Responsibility
was clear. There was still a civil service profession, secure and trained
to “speak truth to power”. It had its failings, well satirised in Yes
Minister. Its virtues are becoming the more apparent by their absence,
leaving behind a regime more reminiscent of Paraguay or Peru.

The introduction of what a Blair aide, Jonathan Powell, called a “more
Napoleonic” style of government was meant to traumatise the old regime and
did. Civil servants were all but banished from the upper echelons of
government in favour of sycophants and entrepreneurs. Last year Blair
rejected the demand of the public standards watchdog to end “mistrust and
cronyism” by no longer letting ministers give top jobs to their friends such
as Bach and Lord Birt.

Privatisation shifted advice to ministers away from the civil service
towards “para-government”. What had been the work of officials is now
undertaken, at vast expense, by McKinsey, UBS Warburg, Price Waterhouse
Coopers, KPMG and others. Favouritism and waste run uncontrolled by
parliamentary or value-for-money audit. Fees paid by Brown to privatise the
London Tube ran to more than £500m — without buying a single train.

The Office of Government Commerce, supposedly charged with cutting 70,000
civil servants in three years (the “Gershon” cuts), has so far cut 3,000,
while increasing its spending on consultants from £5.8m to £9.2m in a single
year. When asked what it could cut, the health department said it could lose
£500m in overheads “with no loss of efficiency”. Meanwhile, anyone visiting a
London accident and emergency department might be forgiven for thinking
themselves back in Nightingale’s Scutari.

This is not public administration but public chaos. Downing Street is deaf to
the cry from across the public sector: please, no more reorganisation.
Primary care trusts are about to be reorganised for the umpteenth time, from
330 down to under 100; police forces from 43 down to 24; and planning offices
from counties to eight regional outposts of Whitehall. The trend of this
reorganisation is everywhere centralist, despite protestations from the
minister for making speeches about localism, David Miliband. The police force
amalgamations will cost £500m without buying a single extra policeman.
Upheaval buys consultants, not services. It is Trotsky’s “perpetual

If there is one thing this government hates being told, it is that someone
else does things better. Yet devolved government in Scotland and Wales has
implemented the new farm subsidy scheme a month ago with no trouble. The one
arm of government that is meeting the Gershon staff targets is not central
but local. No local government is running a deficit. The only public sector
computer project to be working properly is London’s congestion charge,
commissioned free of Whitehall involvement.

Last week British local councils went on strike. They did so because Brown had
conceded gilt-edged pensions to all central government staff, including MPs,
but insisted that workers in local government do an extra five years before
retiring. It was a class arrogance no Tory chancellor would have dared. As
snobbery it was magnificent. As public administration it was dreadful.