Harry Fone: A browse through Council contracts shows the extravagant spending continues

26 Aug

Harry Fone is the Grassroots Campaign Manager for the TaxPayers’ Alliance.

The TaxPayers’ Alliance (TPA) frequently calls out wasteful foreign aid spending and we never have a shortage of examples. From “friendship benches” in Zimbabwe to a study of Latin American teenagers, millions of pounds go up in smoke every year. A common argument by those who defend overseas aid is that you can always cherry-pick profligate projects.

But I disagree. It shouldn’t be easy to find such examples because they shouldn’t exist in the first place. This brings me onto local authority spending. Despite many councils claiming there is no more fat left to trim from their budgets, one doesn’t have to delve too deep to find some juicy morsels. In what will be at least a two-part series I’ve put together a list of publicly tendered council contracts that are ripe for cutting to help put a stop to inflation-busting council tax rises.

Barnsley Borough Council is currently tendering a contract worth between £25,980 and £30,000 to buy 100 laptop computers which it will loan to European Social Fund (ESF) participants. If you’re not aware, the ESF “aims to improve employment opportunities in the European Union”. Now this may well be a remnant of Brexit that Britain still pays into but why Barnsley Council thinks this is a good use of local residents’ cash at a time like this is beyond me. Especially so considering that council tax increased by 3.4 per cent in Barnsley this year.

The TPA has previously called out so-called ‘Town Hall Pravdas’ – glossy council newsletters funded by council tax which are often nothing more than propaganda. Spending on these was bad enough before the pandemic but that hasn’t stopped Dorset council. The local authority offered a contract worth £225,000 for “the provision of a Residents’ Magazine Publication”. Dorset residents pay the second-highest Band D bill in the country at £2,223 – every penny of which should be going on statutory services not glorifying the council.

In this column, I’ve highlighted questionable spending by town and parish councils. My concern is that many are charging ever-greater precepts and becoming more grandiose in their ambitions. Leighton-Linslade Town Council in Bedfordshire is the latest example. It seeks suppliers to set up a “technology helpline” for those aged over 55 in the community. This is very noble but is it the role of a town council? Especially when the cost is upwards of £30,000. Add to that there are countless private sector organisations already providing training (often for free) and you have to question if this is good value for money.

This next area of spending is interesting to say the least. Both Doncaster and West Lancashire Borough Council have awarded contracts for “terrorism insurance” worth £80,000 and £13,038 respectively. I can’t be certain but I find it unlikely that councils were taking out this kind of cover, say, 25 years ago. Perhaps it’s a worrying sign of the times we live in. In this instance, I’m not saying this is outright wasteful spending either but I suspect many households would be more than a little annoyed to see their hard-earned taxes spent in this manner.

I’ll try and finish on a happier note, or perhaps that should be a ‘hoppier’ note? I’ve discovered that the Isle of Wight council plans to construct a “Brewery and Visitor Centre”. The contract doesn’t go into a huge amount of detail but we know that total value was £1.75 million for “the construction of a steel-framed structure to provide a Brewery facility incorporating a visitor centre, staff offices and storage warehouse.” Begging the question, why is the IoW council building a brewery? Given many councils have a poor track record when it comes to commercial investments one wonders if the council will be able to organise the proverbial in a brewery or will things fizz out?

This is just the tip of the iceberg, so far I’ve only scoured a small percentage of the thousands of contracts put out to tender by councils. In my next column I’ll show you even more wasteful contracts. At a time when the public finances are in dire straits, every penny of taxpayers’ cash matters. Councils can’t afford to waste a single penny. So if you’re concerned about your council’s spending I implore you to join me in this quest to root out waste. Do drop me an email with your findings.

What the Red Wall really is. But why it’s also a mindset – not just geography

24 Mar

Since the Conservative Party won its huge majority in 2019, newspapers have devoted a huge amount of coverage to “Red Wall” voters, who were widely credited for delivering the decisive election result. The phrase has become synonymous with traditional/working-class Labour heartlands, particularly in the North, where people somehow decided Etonian Boris Johnson was the man for them two years ago.

How could this be? It seemed remarkable that voters that had historically rejected, even despised, the Conservatives had such a change of heart. Many Tories have spoken about the need to repay these voters; that they lent them their vote and so forth, hence the endless promises of “levelling up” in the North and other parts of the country. Labour, too, has been trying to win back “foundation seats”, a new term for the Red Wall, through a strategy that recommends “use of the [union] flag, veterans [and] dressing smartly”.

At the same time, increasing numbers of political pundits have pointed out that there’s been a tendency to generalise Red Wall voters, in terms of who they are and what sort of politics they go for. The Red Wall actually covers quite a large part of the UK, yet the term often treats voters across it as a homogeneous entity, all wanting the same things. Writing for The Critic, Lewis Baston says the “mythical wall was a way of making a patronising generalisation about a huge swathe of England (and a corner of Wales)”.

What’s interesting is how much the Red Wall definition evolved from when it was first coined by pollster James Kanagasooriam in August of 2019. He used it to describe a geographical stretch running from “N Wales into Merseyside, Warrington, Wigan, Manchester, Oldham, Barnsley, Nottingham and Doncaster”, whose constituents, based on education and economic factors, might be expected to vote Conservative but tended to go for the Labour Party.

In his 2020 blog, Anthony Wells, Director of Political Research at YouGov, says the reason many such areas vote the way they do is due to “cultural, historical and social hostility towards the Tories”. In former mining communities, for instance, “the legacy and memory of Thatcherism and the dismantling of industry in the North in the 1980s” has lingered. Merseyside is “still extremely unforgiving territory”, he writes.

But the Conservatives were able to break down many other barriers in 2017 and 2019, in parts of Lancashire, Country Durham and Derbyshire. The most obvious explanation for the Conservatives’ big majority was its message of getting “Brexit done”, which unified voters across the political spectrum. Many were also turned off by Jeremy Corbyn, who projected a lack of patriotism among other things. Clearly the Conservatives’ manifesto and messaging appealed to a lot of new demographics.

But here’s where it gets trickier as the Red Wall was not just about Brexit, or any of the other variables it is sometimes attributed to. As Baston points out there are lots of marginal seats in the Red Wall, such as Bury North, which has “only voted twice since 1955 for the party that has not won the popular vote (1979 and 2017).” So it cannot be taken as evidence of an epic Conservative breakthrough. Others point out that there has been a “long-term structural shift against Labour in these constituencies.”

Of course, the Conservatives should be proud of making headway in new areas, but the Red Wall narrative has become too simplistic. Furthermore, Kenan Malik made an interesting point when he wrote that, “the red wall is deployed less as a demographic description than as a cypher for a certain set of values that working-class people supposedly hold, a social conservatism about issues such as immigration, crime, welfare and patriotism.”

Increasingly it seems to me that people use the Red Wall as a synonym for a worldview. We might say, for instance, that the Red Wall voters like displays of patriotism, such as the union flag. But you could say that for lots of people around the country. Dare I say sometimes the Red Wall is used as a way of getting an “unfashionable” view across (“but I doubt the Red Wall is enjoying the latest BBC programming”), where others might be worried to say it themselves. Perhaps the Red Wall is more mindset than geography.

Andrew Gimson’s PMQs sketch: Johnson wishes to remain in office for another ten or 20 years, so goes on the defensive

10 Mar

“Who does the Prime Minister think deserves a pay rise more?” Sir Keir Starmer began. “An NHS nurse or Dominic Cummings?”

Brevity is the soul of wit, and Sir Keir is getting briefer. Johnson could have retorted that it’s much cheaper to raise the pay of Cummings than of NHS nurses, as there’s only one of him.

The Prime Minister might have added that Cummings is worth every penny of the pay rise awarded shortly before his departure from Downing Street, for he had previously devised two slogans of genius: “Take Back Control” and “Get Brexit Done”.

But Johnson wishes to remain Prime Minister for another ten or 20 years, so instead declared that “we all owe a massive debt to our nurses”.

He did not proceed to say the massive debt will be paid by giving them a more than one per cent pay rise. But he did say “we will look at what the independent pay review body has to say, exceptionally about the nursing profession, whom we particularly value”.

Can it be that the Government will give ground on nurses’ pay, in order to distract the nation’s attention from pay restraint elsewhere in the public sector?

Sir Keir was not mollified: “He clapped for carers, then he shut the door in their face at the first opportunity.”

Johnson insisted that “we have massively increased funding for our amazing NHS”. The Prime Minister long ago decided, probably on Cummings’ advice, that the NHS is a national religion before which it is essential to bow down and worship.

Sir Keir accused him of being a hypocrite, who only pretends to venerate the NHS: “The mask is slipping.”

Johnson played safe, resorting to a tried and tested line: “We vaccinate, he vacillates.”

Dan Jarvis (Lab, Barnsley Central) bowled another short question: “If the Prime Minister is serious about levelling up the country does he honestly think that favouring the Chancellor’s Richmondshire constituency over Barnsley for financial support is the best way to do it?”

A moment’s hesitation from the PM as he worked out how to block this delivery: “Mr Speaker, we’ve, er, we are devoted to levelling up across the entire country, and that goes for Barnsley as well as everywhere else.”

Labour has not yet found a way to beat Johnson, but it does sometimes throw him on the defensive.

Neil O’Brien: Introducing the new Levelling Up Taskforce – and its first report on how we can measure progress

7 Sep

Neil O’Brien is MP for Harborough.

Were you still up for Penistone? One of joys of election night last December was winning so many seats we’ve not held for decades.

The constituencies we won over in 2019 are quite different from the party’s traditional base, in the deep red bits of the map above. Seats we gained last year don’t just have lower earnings than the seats we held, but earnings five per cent lower than Labour seats. Of the bottom quarter of seats in Great Britain with the lowest earnings, more are now held by us than Labour. Compared to seats we gained, homes in Labour constituencies are a third more expensive.

Many of the places we won have felt neglected for a long time. And led from the front by the Prime Minister, the new Government has committed to “levelling up” poorer places. But what does that really mean? How can we measure if we are succeeding? How can we get the private sector growing faster in these places, making the country stronger overall?

To help the Government answer these questions, I and 40 other Conservative MPs have formed a new Levelling Up Taskforce.

Our first report is out today, looking at how we can measure progress. It also examines what’s been happening in different parts of the UK economy over recent decades.

Income per person in London (before paying taxes and receiving benefits) grew two thirds faster than the rest of the country between 1997 and 2018: it’s now 70 per cent higher in London than the rest of the country, up from 30 per cent higher in 1997.

While the divergence seen since the 90s has been a story of London pulling away from all of the rest of the country, it follows decades in which former industrial areas in the north, midlands, Scotland and Wales fell behind. Between 1977 and 1995 South Yorkshire, Teesside and Merseyside saw GDP per person fall by 20 per cent compared to the national average, and most such areas haven’t caught up that lost ground.

Why does this matter?

It matters, first, because opportunity is linked to the economy. There are fewer opportunities to climb the ladder in poorer places. Not just fewer good jobs, but less opportunity in other ways.

In London, over 45 per cent of poorer pupils who were eligible for free school meals progressed to higher education in 2018/19. Outside London there were 80 local authorities where richer pupils who were not on free school meals were less likely than this to go to university. Overall, more than 60 per cent go to university in places like Kensington and Chelsea and Westminster. But less than a third go places like in Knowsley, Barnsley, Hull, and Thurrock.

It also matters because more balanced economies are stronger overall. In an unbalanced economy, resources like land and infrastructure are overloaded in some places, even while they are underused elsewhere. This might be particularly true where cities have seen population shrinkage, and have surplus infrastructure and land. If there are greater distances between workers and good job opportunities that makes it harder for people to get on: not everyone can (or wants) to move away from family to find a better job.

More balanced is stronger overall, but on a wide range of measures the UK is one of the most geographically unbalanced economies. In Germany 12 per cent of people live in areas where the average income is 10 per cent below the national average, while in the UK 35 per cent do. It is very striking that there is no industrialised country that has a more unbalanced economy than the UK and also a higher income, while all the countries that have a higher income have a more balanced economy.

What are we going to do about it? Well, that’s the question our new group will try to answer.

The answer isn’t any of the traditional Labour ones: pumping public sector jobs into places, or subsidising low wage employment, or trying to hold back successful places: we’re interested in levelling up, not levelling down.

Different things will work in different places.

For example, transport improvements might make a bigger difference for remote areas. The ONS defines certain places as “sparse”: the north of Devon and Cornwall, most of central Wales, Shropshire and Herefordshire, most of Cumbria and the rural north east, along with large parts of North Yorkshire, Lincolnshire and North Norfolk. In these places income levels are 17-18 per cent lower. Even controlling for the qualifications and age of people living there, these sparse areas have income levels between £600-£1,300 a year lower, likely driven by poor connectivity.

In other places, the answers are different. I’ve written before about how the way we spend money on things like R&D, transport and housing is skewed towards already-successful areas, creating a vicious circle. We should change that.

But tax cuts could also play a bigger role in helping poorer areas. There’s actually been convergence between regions at the bottom end of the earnings distribution, driven by things like the National Living Wage, tax cuts for low income workers, and things like Universal Credit, which have reduced the differences between places by levelling up the poorer areas more. In poorer places, more people benefit from these policies.

The reason there are growing gaps between areas overall is divergence higher up the income scale.
Looking at the gap between earnings for full-time workers in London and the North East, the pay gap shrank for the bottom 30 per cent of workers, but grew for those higher up. For those at the 10th percentile the pay gap between the two places shrank from 32 per cent to 20 per cent. But for richer folks at the 90th percentile, it grew from 62 per cent to 88 per cent.

So how do we get more good, high-paying jobs into poorer areas? There are a million different specific opportunities, but one that’s relevant in a lot of Red Wall seats is advanced manufacturing.

Over recent decades, Chancellors have tended to cut capital allowances (a tax break for investment) in order to lower the headline rate of corporation tax. I’m not sure that was a good idea: Britain has a lower rate of fixed capital investment than competitors and our tax treatment of investment is stingy. But either way, this change has had a pronounced regional impact: it favours services over manufacturing, so helps some areas more than others.

One way to blast our way through the current economic turmoil would be to get businesses investing again by turning capital allowances right up (“full expensing” in the jargon). That would be particularly likely to help poorer areas. Indeed, when we have tried this in a targeted way before it worked.

Government should think more about how tax and spending decisions can help us level up. It should produce geographical analysis of all budgets and fiscal events, setting out the different impact that tax and spending changes will have on different areas. The Treasury’s Labour Markets and Distributional Analysis unit should have geographical analysis added to its remit.

This whole agenda is exciting. But a lot of people are cynical, because they heard New Labour talk the talk – but not deliver. We’ve got to deliver. So let’s hold ourselves to account, and set ourselves some ambitious goals.

Let’s get earnings growing faster than before in poorer areas. Let’s get unemployment down in the places it’s worst. They say that “what gets measured gets managed.” So let’s “measure up” our progress on levelling up.