Julian Le Vay: Thoughts on Government
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A NATION OF SELF-HARMERS

15/7/2018

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Napoleon famously described the British as 'a nation of shopkeepers'  - a people preoccupied with trade and prosperity, distrustful of great ideas and causes,  common-sensical, who would always find a practical solutions to complex problems. No more. A recent YouGov poll on attitudes to Brexit reveals a new Britain.

By large majorities, people think that both Labour and the Tories are badly divided, that neither party has a clear policy on Brexit, and oppose May's plan on Brexit (even though one third of them say they aren't following that story!).

A majority actually now think voting to Brexit was a mistake (46/41%) - a bigger majority than propelled us into Brexit to start with.

That does not mean we want a soft Brexit, though. Far from it. More think May's plan is too soft (40%) than think it too soft (12%), though a third just don't know. Three times as many think 'no deal is better than a bad deal' than vice versa.  Despite huge unhappiness with the Government's approach, there is a majority against having another vote on whether to accept the deal or not.

The most important Brexit issue is seen as control of immigration (28%) followed by not having to follow EU rules and not paying a sub (20% each). Tariff free trade is seen as less important (16%) and the ability of the City to continue to trade in Europe hardly figures.

A You Gov poll last year told an even more extraordinary story: that a large majority of Brexit voters are quite happy that significant economic harm to this country should be the price for Brexit. Though they think that, somehow, this won't or shouldn't happen to them or their family.


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So, a nation where a majority think Brexit was a mistake - but nevertheless want the hardest possible Brexit, are happy that it should cause serious economic harm to everyone except themselves,  and don't care much about trade with Europe or the future of the City, so long as we keep foreigners out. Above all, although not at all liking what is planned for them, they don't want any further say.

A nation of self-harmers, plodding towards that precipice with grim determination.

Note: I recognise that I do the Scot and Irish an injustice: they voted Remain by a large margin. It's the English and Welsh who are desperate to commit suicide.

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THE SERIOUS FRAUD OFFICE'S INVESTIGATION OF G4S/SERCO IS A SCANDAL [Edited 20/7]

7/7/2018

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 It is, unbelievably, 5 years since the then Justice Secretary, Chris Grayling, told a shocked House of Commons that he was referring to the Serious Fraud Office the conduct of G4S and SERCO in billing government for £200m of work (on electronic motioning of offenders) which they did not do.

And we are still waiting – the best part of 2,000 days later – for a decision by the SFO on whether to prosecute.

“Justice delayed is justice denied' is an ancient maxim.

This delay is outrageous.

First, the public interest is not being served. For five years, we have not known whether or not two companies whose contracts cover a massive range of public services, and to whom billions of public money are paid each year, are to be charged with criminally defrauding the public purse. And meanwhile, they get further contracts.

Second, it is oppressive. There must be people at the centre of this who have been under investigation, under threat of  prosecution, for five full years – with all the consequences of that in terms of stress, difficulty in getting employment and so on. Not just them, but their families.

Third, it threatens to defeat the interests of justice. At some point, delay of many years must affect the chances of a successful prosecution, if such is the outcome – memories fade of key events and discussions, and at this rate, witnesses may well die of old age before the SFO wakes from its slumbers.

The delay is unfathomable. The case lacks every dimension of complexity one can think of – multiple victims (only one); multiple jurisdictions (only |England and Wales); multiple contracts (two); intricate company structures (two); miscreants on the run (none known). In fact, the one victim, the Ministry of Justice,  stated publicly that it had no information to show dishonesty on the part of either company.

So how can it possibly take 5 years, not to complete a  trial, not even to start a trial , but to merely decide whether or not to hold a trial?

Perhaps savage cuts in the SFOs budget are to blame? Hardly: its Resource DEL last year was slightly above that for 2010-11.

It seems simply that the SFO doesn't think 5 years is a long time. [20/7: just received a FoI response which says, incredibly, that nearly one third of current SFO inquiries have been on the go more than five years. What do they do there?]


SERCO and G4S were the scandal. Now, the scandal is the SFO.

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NOT ON THE MONEY

6/7/2018

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Anyone hoping that the Justice Committee's questioning of Rory Stewart, prisons minister, and MoJ officials on 26 June would give a clearer picture of the Department's finances was emphatically disappointed (1). The event illustrated the limitations of the Commons Committee system, in which each of a dozen or so MPs is in turn given the chance to ask 'their' list of questions. When the answer is unclear or evasive, the questioning often moves on without the issue being resolved. Particular so, when complex financial matters are discussed (2). The effect is like watching a confused battle at night, where the occasional flash briefly illuminates something - but you are not quite sure what – or how it connects to the rest of the battlefield.

In my analysis of 14 May, I described MoJ's finances as out of control, bursting the settlement agreed in SR 2015 in many directions simultaneously, by, I estimated, as much as a billion a year.

Here's what we learned from this hearing - or didn't [my comments in italics]:


  1. MoJ got an additional £300m on top of the SR settlement for the 2,500 'extra' staff [i.e. 'only' about 15% fewer staff than in 2010. That is, £300m over 3 years or an average £100m a year. But it seems MoJ has simply to absorb the cost of breaching the 1% pay ceiling which was assumed in the SR, which I estimate as costing £116m a year more by 2020-21]
  2. the CFO said that the reason the SR settlement is impossible for MoJ to manage within, is that 2 key assumptions were wrong: that demand would fall and that more could be raised through charging. [Does not make sense: the 2015 population projections were actually higher than the 2017 projections; and in any case, none of these figures would have allowed remotely net closure of prison capacity, which is the only way of saving significant money: marginal changes up or down in overcrowding rates have relatively small financial consequences]
  3. MoJ say they are managing a £1.2bn hole over 2 years [unclear whether this is before or after the extra £300m, or the capex/revenue switch]
  4. if no extra funding is forthcoming, the £1.2bn hole would require 20,000 places worth of prisons to be closed [but how did you come to have a £1.2bn hole?]
  5. nevertheless the CFO is 'comfortable' with prison funding for 18-19 [ incomprehensible: implies that MoJ has filled the £1.2bn hole after all, without having to lose a single place or prisoner. Note also that the MoJ's Memorandum on the 18-19 Estimates stated that the budget was not yet set and was still in discussion with Treasury, so how could you be comfortable with a budget not yet set?]
  6. fortunately (!) the hugely ambitious building programme funded in SR 15 failed almost completely (3) – building hasn't even started now: so some £235m of unspent capital was switched to revenue in 17-18 and some, MoJ hope, rolled forward to 18-19. [It appears that there will be a capex underspend this year also of £292m. But it is unclear what the increase will be in the interim Estimate for this year, or in plans for next year in excess of the SR outcome and to what extent funding will come either from capital to revenue switches last year or this year or next year, and/or non capex underspend. If you think this is very confusing, you are right. Poor Marie Rimmer MP made a gallant effort to understand what the hell is going on but was sunk without trace, because the CFO could not explain the figures]
  7. it is not yet clear that bailing out the CRCs (because the volume assumptions made in the contracts were badly wrong) can be accommodated within the revised, higher SR settlement
  8. the failed Carillion contracts have driven costs up £15m a year above budget [Stewart seemed to argue that because MoJ has been spending £65m a year prior to contracting with Carillion, there was no loss from the failure. Yes there was: you reduced costs by £15m then increased them again. Odd remarks from Stewart implying that a contractor cannot cut the cost previously incurred in house without cutting the service: Corbyn's view precisely! Confusingly, then Stewart added that MoJ is now putting £100m a year into maintenance and that is double what it was 3 years ago – which seems unreconcilable to the £65m a year spend now proposed, which says MoJ is what they were paying before contracting out....]
  9. losing European Social Fund grants –  I recall the splendid pioneering work by Area Managers that drew that money in! - will cost another £32m, which is needless to not covered by SR15.
  10. MoJ claim that 'unless something astonishing changes' the prison population will exceed 92,000 or 93,000 [this is complete nonsense: 91,800 is the extreme worst case of the 2017 projections – a mere 5% probability! They don't understand their own projections!]

Questions posed by the Committee which the MoJ could not or did not answer:

  • What is the real terms increase over the SR period? [In a way, this is irrelevant: the SR settlement is no longer the basis for MoJ budgets]
  • Does the MoJ accept the figures in the paper I produced for the Prison Reform Trust on the funding gap, and if not, what are their figures? (3)
  • What is the source of funding for £175m for security and extra staff? [I assume the answer is the £300m extra referred to above, for extra staff – but what about security?]
  • Is the switch from capex to revenue £125m in 17-18, £245m in 18-19 and £185m in 19-20?
  • Will the extra funding of £245m for 18-19 continue in future years [this is surely currently being negotiated with HMT]

Confusion still reigns. However there is nothing here to suggest that my analysis of 14 May wasn't broadly right.

If I were advising the Committee. I'd say: don't take more oral evidence until MoJ have supplied a table showing:

a) the provision agreed in SR 15 and the main assumptions used, including prison population;

b) revised provision showing what increases agreed since the SR were for, including changed assumptions, and how funded;

c) what MoJ now thinks it needs next year and to, say, 22-23, separating capital and revenue, and the population assumptions it is using;

d) the revised building and closure programme, showing when new prisons will start and when become operational, how much capacity they will provide, and when existing prisons will close, the capacity lost through closure

e) to match d), all costs of the programme including building, fitting out and staffing and opening new prisons, estimated capital receipts from closure, transitional revenue costs of closure e.g. redundancy and of opening e.g. training, showing extent of double running (old capacity still operating while new is still not fully operational).

When the Committee has that, it could have a useful further oral examination. Trouble is, I doubt MoJ know half these things.

A final curiosity. The CFO told the Committee not once, but three times, that MoJ has a 'very strong system of financial management'. Now, believe it or not, I am very sympathetic to the position finance officials in MoJ and elsewhere in Government find themselves in. It is a far more challenging job than the one I had as FD of the HMPS around 2000, and to know that you are spending your working life systematically degrading vital public services, while publicly supporting minsters' pretence that funding is adequate to maintain services, must be hellish.

Still, when one considers that on their own admission, the last SR was disastrously mishandled, that on their own admission, maintenance contracts collapsed because MoJ didn't understand its own costs, resulting in additional spending, that MoJ as been forced to partially reverse deeply damaging cuts in prison staffing and hence exceed again the SR 2015 settlement, that probation contracts have become sustainable because MoJ didn't understand volume risk and this too may exceed the settlement provision, that MoJ's massive building programme has utterly failed, that MoJ cocked up increases in fees , that the court modernisation programme is costing more than budgeted but say the NAO may realise fewer savings than planned, that MoJ is so far adrift financially that its PUSS has had to tell Parliament he cant yet set a proper budget for the current year – when you consider all those things, then if I were the CFO, I would not go around telling Commons Committees that the MoJ has 'very strong financial management systems'.

Notes

(1) 
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/justice-committee/prison-population-2022/oral/86114.html
(2)       I made the same point in my book, regarding the PAC's failure to spot the MoJ's role in the SERCO/G$S tagging scandal (page 74)
(3)     http://www.prisonreformtrust.org.uk/Portals/0/Documents/Julian%20Le%20Vay%20paper%20FINAL.pdf


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    I was formerly Finance Director of the Prison Service and then Director of the National Offender Management Service responsible for competition. I also worked in the NHS and an IT company. I later worked for two outsourcing companies.

    Now retired, I write about criminal justice policy (or the lack of it), cultivate our allotment and make glass.

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