Westminster government with ‘money to burn’ – why should Scotland care?

From stewartb:

We’ve been told we’re ‘better together’ but this strongly indicates otherwise.

The purpose of this is to aggregate and amplify findings from a series of recent House of Commons Public Accounts Committee (PAC) reports. It reveals not only the extent of Westminster government failings in the delivery of infrastructure projects but also the apparent inability of the House of Commons to hold this government to account and improve its performance following what are evidenced, repeated mistakes.

(For context, the PAC presently has a majority of Tory MPs.)

£1.35 billion lost through avoidable mistakes

We learned recently from the TuSC of a recent PAC conclusion that £1.35 billion has been wasted by the UK Ministry of Defence in its programme of ‘Defence Nuclear Infrastructure’ projects.

Source: https://talkingupscotlandtwo.com/2020/05/13/snp-mp-reveals-massive-1-35-billion-waste-of-tax-payers-money-by-uk-government/

The PAC states among other damning things: “UK cost overruns were caused in large part by AVOIDABLE MISTAKES, such as beginning construction work without mature designs. The three projects will not be delivered to the original plans, will be delayed by between 1.7 and 6.3 years, and will cost a total of £1.35 billion more than originally planned.”

And the PAC cautions us, the taxpayers: “The Department states that it immensely regrets the amount of taxpayers’ money lost as a consequence, but acknowledges that COSTS COULD CONTINUE TO INCREASE.” (my emphasis)

The report concludes: “It is unacceptable that the Department in other areas has REPEATED PAST MISTAKES, and has FAILED TO LEARN LESSONS from elsewhere.”

Source: https://committees.parliament.uk/publications/1057/documents/8763/default/

Not a one-off – the case of HS2

Hot on the heels of this revelation, the same Common’s committee has just exposed (again?) the scale of cost over-run by the UK government’s Department of Transport on the HS2 rail project.

Source: https://committees.parliament.uk/publications/1113/documents/9542/default/

The PAC report states: “The High Speed Two programme has gone BADLY OFF COURSE and is now estimated to cost up to £88 billion, significantly more than the ORIGINAL BUDGET OF £55.7 billion (both figures are 2015 prices).”  So that amounts to c.£32 billion more!

Tellingly the PAC report adds: “We are UNCONVINCED that there will not be further cost increases, such as those we have seen in Crossrail and many other programmes, ……”  Where have we heard that before?

This report from the PAC also states this which should worry us all: “The Department (of Transport) and High Speed Two Ltd (HS2 Ltd) seemed to believe that a LACK OF TRANSPARENCY with Parliament and the public on the problems facing the programme would in some way protect it.”

And more: “What we have seen about Government’s management of this programme IS ALL TOO FAMILIAR and we remain concerned that lessons from the delivery of other major projects are STILL NOT BEING LEARNED.“  Recognise this message from the same committee about the same government?

Remember Crossrail

This is from the PAC in July 2019: “Funding for the programme has already increased by around £2.8 billion to £17.6 billion and yet, THE FINAL COST STILL REMAINS UNKOWN. As Crossrail has not yet determined and agreed an opening date for the full railway, costs for the programme are likely to continue to climb.”

And it adds what surely what is gross under-statement: “… this is far from an unfamiliar tale, We have witnessed cost increases and delays on major rail projects several times over the past few years and the Department (of Transport) still does not appear to have got a grip on the problem.”

Source: https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/2127/212703.htm#_idTextAnchor000

Are there more?

My motivation to research more, more deeply is waning (at least for now) but see for example:

Thameslink rail project from 2018: “The Department and Network Rail have been slow to appreciate the importance of early planning for how the new services will operate, and how they will organise the rail industry to do this. The discovery that another £900 million of maintenance work is necessary to deliver reliable Thameslink services also raises concerns about Network Rail’s understanding of the performance and condition of the network.”

Source: https://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2017/thameslink-programme-report-published-17-19/

Great Western Railway upgrade from 2017: “The estimated cost of the Great Western Main Line electrification programme rose by £1.2 billion in the space of a year—an increase described as “STAGGERING AND UNACCEPTABLE” by the Committee.”

Source: https://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/great-western-railway-report-published-16-17/

Why should we bother?

At a basic level this is taxpayers’ money being wasted, Scottish taxpayers’ contributions included. Some but not all of the projects featured attract Barnett Consequentials so we in Scotland are shielded in part. But the sums wasted still contribute to the UK’s deficit and debt: Scottish taxpayers are allocated their share of the interest payments on that debt (although interest rates are presently low by historical standards).

But there are ‘opportunity costs’: the waste and the over-runs may constrain the UK government’s spend for other, more beneficial purposes. Our share of these wasted funds could have been spent in Scotland on things of benefit to OUR national economy and society, and if spent IN Scotland would have had an additional economic multiplier. 

And this account has only focused on a few rail projects and a nuclear defence programme. What about Westminster’s record on capital spend on other important aspects of infrastructure? What about the health system in England?

3 thoughts on “Westminster government with ‘money to burn’ – why should Scotland care?”

  1. PFI is a means of enriching the already rich at the expense of taxpayers. It closes NHS services in England and has a knock-on consequence on what the devolved governments receive in Barnett payments.

    “Failure is a product of successive governments’ policies since 1990: Kenneth Clarke’s introduction of capital charges and trusts, New Labour’s PFI policy, foundation trusts and payment by results, and now Lansley’s new funding regime and policies.

    Given how quick Lansley has been to lay the blame for PFI at Labour’s door, the question is why he has been so slow to open up the contracts to show the true cost of PFI. Why is he still sheltering PFI contracts behind claims of commercial confidentiality?

    The affordability problems caused by the high cost of PFI and debt finance are not new. Under New Labour, the Treasury and Department of Health signed off these PFI contracts, which lock the taxpayer into long-term debt. The chief executives of the trusts and PCTs were required to pass the affordability test set by the Treasury. In other words, they needed to show how the annual debt charge would be met from the operating budgets of hospitals and other services, ie the budget that normally pays for staff and supplies.

    Since the policy was launched in 1992, report after report over almost two decades has shown how each wave of PFI has been associated with trust mergers, leading to 30% reductions in beds; staff lay-offs; and closures of hospitals, accident and emergency departments and an untold number of community services – all because of lack of affordability. PFI, once trumpeted as the largest hospital-building programme, was in fact the largest NHS hospital and bed closure programme.”

    https://www.theguardian.com/commentisfree/2012/jun/29/pfi-crippling-nhs

    Liked by 1 person

  2. I really, really, really wish that government, ministers and journalists would STOP talking about ‘tax payers’ money as it is nothing of the sort. UK finance is not same as household finance and all that does is dumb down the population.

    Liked by 2 people

  3. Professor Richard Murphy has a question to ask.

    But apparently it’s not possible to ask that businesses enjoying £57.6 billion of funding do:

    Publish their accounts on a country-by-country reporting basis so we can understand their use of tax havens;
    Provide written explanation by country as to why they do not pay the expected tax rate of that jurisdiction;
    Have a rigorous tax policy in place that ensures that tax avoidance does not take place.
    Which is pretty odd when the companies in question will all be in possession of this information already.

    Why is it that the Treasury is so unkeen for us to know about the tax affairs of large UK companies? What have they got to hide?

    https://www.taxresearch.org.uk/Blog/2020/05/19/question-of-the-day-why-is-it-that-the-treasury-is-so-unkeen-on-us-knowing-about-the-tax-affairs-of-large-uk-companies/

    Liked by 1 person

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