News and Views

Senior Tories warn of tax rises

posted 20 Mar 2018, 04:48 by Peter Webb

1  This apparently unremarkable headline appeared on March 18th and after the Chancellor’s Spring Statement which  saw a light at the end of the austerity tunnel. 

2 Unbelievably the two MPs, Ken Clarke and John Penrose, have had to write to the Chancellor pointing out that “official figures” inaccurately and over-optimistically exclude from the country's so-called debt  billions of pounds in future payments, including on PFI contracts and government  pensions. Reference to the “deficit” focuses only on an ‘overnight’ cash balance. 

3 This demonstrates that, though the point is widely understood, our political and manderinate  leaders, and treasury,  are so out of touch and living in the past that they persist in believing that only borrowing in the form of gilts by the treasury is real. It also shows up the ‘stone-age’ government accounting. 

4 In fact taxpayers are committed to paying the much greater total of IOUs. The traditional "debt" is around £1.8trillion but the true debt approaches three times that.(See the attached one-page WGA summary). 

5 In simple terms as an example, the employer's contribution to a person's pension for completed service is money costed in tax that has not been set aside pending retirements but spent on other things leaving the liability as uncontrolled debt. It has been borrowed. There is no difference in essence between borrowing from public employees and from 'the market'. Together they add up to much more than the official "borrowing". Because spent there is no invested  income retention or capital protection. 

6 Admitting government accounting failure "No company CFO (Chief Financial Officer)  would last long if they only bothered with their firm's bonds and ignored all their other liabilities completely" say MPs Ken Clarke and John Penrose. But even that understates the point by some margin because ignoring management accounting.  The company CFO has a total unified accounting system. Without it delegation and feedback data flows wouldn't reconcile and 'scoreboard' and balance sheet totals wouldn’t keep up, rendering the whole  useless. 

7 The 'overnight' cash balance is quickly known. But the present Full Whole Government Accounts (WGA) disgracefully take 20 months without budget values and when available for decision-making, substantive consideration and management attention are disregarded by the Lords of the Treasury and unsupported by the unqualified Permanent Secretary. 

8 Accounting failure extends to the budget planning process. The Public Accounts Committee (PAC) and National Audit Office (NAO) know this but are faced with political and treasury paralysis. As reported here the PAC has asked for the right system to be installed but the treasury doesn't want to understand let alone act. Politicians mislead us and themselves  by claiming, priestlike, that the "deficit" means what it doesn't. The two MPs are calling on the Chancellor for a "full national balance sheet" at future Budgets.

Surrey Council tax 2018-19

posted 20 Mar 2018, 03:17 by Peter Webb

Capped Council tax invoices 2018-19 for Surrey at just below 6% have now arrived on our doormats. We are to assume that services and operations can be maintained. But back-up information is inadequate and recent media reports of the need for a 15% rate for 2017-18 have become obscured by hints that yet more savings still need to be made. Was that a Carillion-like profit warning?


There have been some references in the press to a ‘deal’ having been done which will keep back from central government for one year only more of business rates. Other than that we have to continue to trust in Leader David Hodge’s management in difficult circumstances.


Unlike private sector bodies we, as the risking investors, are denied an Annual Report at this point in the proceedings. This would ordinarily give us the plan going forward. Last year when testing the system it was  found that library copies were hidden from view quite apart from being published weeks into the new period. David Hodge did then at least issue instructions for visibility on reference section shelves. That is only a ‘small step for mankind’  on the road towards formal democratic accountability.


posted 17 Dec 2017, 10:10 by Peter Webb   [ updated 18 Dec 2017, 01:14 ]

It is not denied that there is a management void, no governing executive structure and no cyclical management accounting.  This is a constitutional fault and politically negligent. Operationally the Treasury is the weakest link. Accounting has not yet fully embraced accrual accounting which is thought to be a choice though essential for management accounting. 

Parliamentary supremacy does not extend to government machinery. The National Audit Office is not allowed to recommend at the apex. House of Commons Committees are uncoordinated, overlap and are non-executive. In this field they do not have full knowledge of accounting standards and technical know how. Political leadership is not interested and therefore does not drive change that would provide it with conventional and necessary management information. There is however full but powerless recognition of this need below that level. 

The Public Accounts Committee (PAC) has very recently "called on government to set out for the first time a properly integrated business planning, budgeting and performance system that endures”. That says it all, but sadly:

·        “government” does not locate responsibility.

·        “set out” presumably means only propose.

·   t the system architecture requires agreement first on the decision and reporting hierarchy.

·    the system must be designed for the Institution’s particularities and be installed. 

So, as over the centuries except in time of war, NOTHING CHANGES. Isn’t it time that ‘government’ stopped relying on others for “efficiency savings” and looked to itself. Blunders and waste and ‘not knowing’ cause poor performance and cost taxpayers £billions.

NEVER MIND THE POLICY FEEL THE PAIN from top to bottom of government

posted 30 Sep 2017, 04:35 by Peter Webb   [ updated 17 Oct 2017, 07:51 ]

Wasteful activity  in unsuitable structures is causing logistical blunders and losing £billions to the public finances. These are out of control. Resulting debt is unsustainable.

Evidence is clear and documented in government. Responsibility for failure to drive change of 'machinery' in well known ways  lies with the Prime  Minister in Cabinet, and the Treasury. 

1 Political leaders take no professional responsibility for the generality of government performance.  The top echelons of the Civil Service go unreformed.

2 Terms of discussion should be: objectives, resources,logistics and outcomes not ‘isms’ (fascism, capitalism, socialism…….). 

 3 Policy is decided without committing to a viable plan (budget  *). This political and treasury disunity causes uncontrolled debt. The IMF hadn’t grasped that. It is why the European accounts fail their audit. In UK devolution arrangements are compounding the felony. 

4 To 'government-speak' debt (borrowing in the market' - the 'overdraft - £1.7tn) must be added other borrowings such as PFI contract liabilities and under-funded accrued past-service public pension liabilities, all by now exceeding £4tn). 

 5 With no adopted plan (budget *) there is no management cycle completing with fed back Management Information.  That is flying blind through cloud.

 6 Formal accountability is missing from all levels. Parliament can’t get action to make sure that  it, “the people and ministers know how and why public money is spent”. Even that doesn’t cover consequences and context (the balance sheet) without which the picture is incomplete. But shame-faced politicians don’t want the people to be told.

 7 All it needs is for the PM to identify what she/he doesn’t know about what is going on and instruct the Cabinet Secretary to provide the regular Management Information  to show actionable variations from plan. Management accountants have the know-how and lead in this field. The narrative and numbers Annual Report is the vehicle for telling the people.

 ·        The government-speak budget is merely an allocation of funds. The ‘private sector budget is the forecast-aided adopted plan, resources and all. It then becomes the performance yardstick. The childishly named OBR (Office of budget Responsibility) only gets to the forecast stage and before their ink is dry the politicians have changed the assumptions. 

WHOLE GOVERNMENT PERFORMANCE and responsibility for it

posted 7 Aug 2017, 07:49 by Peter Webb   [ updated 7 Aug 2017, 07:59 ]

In August 2017 a Surrey County Councillor emailed: “Council finance is in difficulties but it is Central Government which is causing this by handing out responsibilities without funding”. The ‘Nothing to do with me, guv” syndrome. He is right. Ultimately the Prime Minister, Parliament or the Privy Council is responsible. It is not clear which. Most of funds come in the form of central grants and capped council tax.  Performance must accordingly be judged in the round and as a whole. In fact there is overwhelming recorded evidence of fundamental flaws: 

Politicians’ disinclination to be professionally responsible for the generality of government performance has produced a management void. Disunity between the political and the ‘treasury’ causes uncontrolled debt. This extends to Europe-wide real flaws of principle and in UK downwards to devolution arrangements.   

 The Prime Minister is traditionally not equipped for control of the public finances because not knowing and not managing. The ‘scoreboard is not up to date and budgets are not produced on the same basis. Long out of date figures and suspected qualified audit report have in medieval fashion been withheld  from electors' view during the general election and still haven't appeared. Constant resort to borrowing is not “Living within our means” and weakly suggests a real “magic money tree”. Context for voter understanding is accordingly left blank which is no help to the responsible governing authority. 'Government speak' is confined to a  cash "deficit" only. The true and larger expenditure deficit reflects borrowing from accrued past-service pensions underfunded, and PFI contracts.

 The Treasury and Cabinet Office fail to drive called for method and machinery change. This is as noted by the Public Administration and Constitutional Affairs Committee report "Accounting for democracy: Making sure Parliament, the people and ministers know how and why public money is spent".  The report opens "The House of Commons is supreme in matters of finance. Parliament can only exercise this supremacy if it understands….." and is fed from below.

 In fact Parliament, the people and ministers don't  know how and why public money is spent! Management accounting is unstructured and open-ended in the management void. There is no budget for comparison. Cabinet Ministers seem not to know what management information they need.  The specification would be properly determined given a fixed Cabinet agenda spot for period Treasury and departmental reports for minuted action or signing off.

 A letter has been forwarded to the Prime Minister stating this case and suggesting a directive to the Treasury and Cabinet Office. At the same time three questions have been forwarded to the Chancellor asking when changes in accounting and reporting will be made.

As the General Election draws near...

posted 2 Jun 2017, 09:40 by Peter Webb

….all the contenders ignore the issue described in the attached published letter. The NAO should call for "special measures".  But as already reported even the HoC Public Administration and Constitutional Affairs Committee can't get the Cabinet and Treasury to "drive change" prescribed. Leadership directives are absent. However sincere the emotive or inspirational rhetoric it  doesn't 'bring home the bacon'.   

We have to play along with the electoral entertainment for now even if Parliament and box-ticking elections are obsolescent. The Cortanas and Siris, Googles and facebook are with Artificial Intelligence taking over our thinking. Amazon is getting better at reading and feeding my mind for personal book choices right now. Cars are talking to each other now. Perhaps it is not a bigger more expensive and unwieldy NHS that we need but one that is allowed to continue to organically evolve without political interference and 'national debates' and 'conversations'. We will get a better all round idea of ourselves  and then for government decisions and machinery. Politicians, your spendthrift and uncontrolled debt days are numbered. You will not be needed for democracy, don't formally account anyway and will get in the way of the golden goose economy. 

Public Accounts Committee former Chair helps state the problem

posted 11 Apr 2017, 02:32 by Peter Webb   [ updated 16 Apr 2017, 03:41 ]

Public Accounts Committee former Chair Rt. Hon. Dame Margaret Hodge’s new book Called to Account draws conclusions from her razor-sharp and fearless examinations of government workings. Taken together with the revelation of a management void which she acknowledges in correspondence (attached) it can be concluded that: POLITICAL LEADERSHIP DOES NOT TAKE PROFESSIONAL RESPONSIBILITY FOR THE GENERALITY  OF GOVERNMENT PERFORMANCE. THERE IS A DEFINED MANAGEMENT VOID.  FORMAL DEMOCRATIC ACCOUNTABILITY IS ABSENT.

Yet Members of Parliament place themselves 'above the law and best practice',  sit in judgement of others in Select Committees and employ quangos. 

To resolve this a royal Commission would take too long. No new knowledge is needed. Suggested is a specific command from the Prime Minister to the Cabinet Secretary, preferably supported by the Monarch under the Constitution, for a standard Cabinet Meeting Agenda fed by Management Information and upward reporting. Additional observations are:

 Political science is dedicated to explaining politics. It hasn't much to offer the execution of policy and its management. It disjoints operational hierarchies ('Keep out. This is political').

 Politics seeks a happy populace by buying the vote with its (our) own money plus borrowings and accrued liabilities and obligations. Those unrecovered costs convert to  taxes or borrowings when falling due. Total liabilities including borrowing at 31st March 2015 of £3,558 billion are on a rising trend. They are out of control in the sense that government doesn’t  know what they were at 31st March 2016 or at the end of 2016-17. There is no plan (budget) going forward.

 The"economy" is the word used to imply a 'good' but only  to maintain activity by circulating money.  By default, policy has been for a 'lossful' economy(deficit). Printing money without value to match is not an option. "Quantitve easing" has unproductively channelled into inflated asset values, enriching some too easily. For the necessary objective of a gainfull economy with productive growth we have to trade and  manage the currency in competition. That produces infrastructure investment funds and reserve strength. Stop pussy-footing round “the economy” and go all out for resourcing and profit as is normal and healthy.

 Political and media  led public conversation over 'brexit' reveals how little understood even in high places is the business of running a country, or anything. Talk of a divorce settlement to be met by taxpayers may be partially relevant but so far forgets the normal course of dealings and work in progress which are continuous. There are liabilities and obligations which are what they are at any given moment.  There is  talk from Germany of a "calculation" and audit when what they mean is a conventional balance sheet. Politicians don’t do balance sheets. They don’t think beyond 'overnight' borrowing in fear of  "the markets". Presumably there is to be a difference between accrued liabilities and unassigned EU budget contributions. The settlement sum would simply 'fall out' of proper Accounts on departure day.

 Our WGAs (Whole Government consolidated Accounts) are immaturely claimed to lead the world. But we still await those for 2015-16. That delay certainly isn't the right example for the world outside government. And there is still no WGB for performance against budget as the primary management tool and policy adjustment prompt for the Cabinet.

As Budget Day on 8th March approaches with its proposals for tax

posted 24 Feb 2017, 11:35 by Peter Webb   [ updated 8 Mar 2017, 04:08 ]

 it is reasonable to ask what management information is available to the Chancellor. There has been news of an "improvement" in government borrowing (£1,680 bn) hinting at a loosening. But there has also been as if quite separate and a media hyped threat from Europe  news  of liabilities to be settled at or following brexit.

 But there is no difference  between the Chancellor's hand to mouth borrowing, whether on target or better, and the liabilities constantly building up by spending deficit and in the normal course including those due for settlement in Europe post-brexit.

 In both cases Whole Government Accounts might give the inconvenient truth but they are late and accounting is DEFINITELY not government's strong point. We don’t know of any estimate to 31st March 2017 or even the actual results back to 1st April 2015, when total liabilities were £3,558bn, as would be necessary for any industrial board meeting to decide the operating budget.

Surrey CC want a 15% increase in council tax

posted 21 Jan 2017, 13:43 by Peter Webb   [ updated 21 Jan 2017, 13:44 ]

WHO CAN DECIDE WHAT ?: Apparently, if it goes to a referendum, we decide either for the increase, or for "cuts". But it may not come to that if Surrey Leader David Hodge's threat of a referendum as  a negotiating ploy is successul and VAT and Income Tax is used instead of council tax. SOME MORE POINTS:

 Surrey Tax Action Group (STAG) was born some 14 years ago when Surrey Council tax last 'exploded', by 19%. Here we go again ! The main underlying feature was and is again a change in the balance of funding between central and local.  Last time Labour was in power. The  system has long been  riddled with nonsenses and needs to be sorted and simplified so that the facts can be made clear at all times. The more it goes unreformed the more it is corrupted by such as tax  base changes (like the increase in students in rented accommodation).  And Parliament or someone needs to sort itself out so that reform and redesign can be got on with for the longer term. Our MPs seem to look away all the time. How we the people can get action short of a payment strike  I am not sure.

 Assuming the referendum question is addressed to "residents" rather than council tax payers, the minority,  the vote  will be unfairly weighted.

 Last time we knew that the Council  was 'overweight' with inefficiency and profligacy. This time I believe it is less so.  It is still shamefully secretive though when it comes down to the 'numbers'.

 The Conservative Council has just confirmed, according to press reports, that it is an undemocratic political  Party  machine by holding secret meetings and making secret submissions including  to Conservative Surrey MPs. Perhaps the referendum threat is a negotiating ploy. If that doesn't work for us we should change the people and Party at the next election in May.

 Has the council considered increases in charges for the increasingly extensive and impressive means -tested social  services provided? If that means sorting out inter-authority arrangements so be it. They could do with a wholesale managerial consolidation and to become more commercially minded.

 An expensive  referendum shouldn't be necessary (How much will it cost?) Given that an election is due on May 4th at much the same time that should be sufficient. But the Council will withhold the 2016-17 Annual Report, which is normally a sort of referendum question, until after the election…..very clever !!!

 I notice that I personally spend each year about the same on council tax and energy with 'homecare'. I feel that the latter gives more direct benefit per pound with choices than does council tax as the  price for local services. But of course that is a national  tax not a price and we shouldn't forget it.

It’s time to update the HOW TO DO GOVERNMENT manual.

posted 18 Jan 2017, 01:32 by Peter Webb   [ updated 24 Feb 2017, 11:43 ]

 We really cannot afford to continue as we are. But following a letter from the Public Accounts Committee (correspondence attached below) it is possible to summarise the post-imperial and post war-footing ‘wrong turning’: Separation of policy making and machinery have left a management void.

Evidence and symptoms as already reported are, briefly:

1.     The standard management cycle for strategic planning and management is absent (NAO on p12  HM Treasury Overview  2015-16)                   
The Cabinet is ‘flying blind’ without management information (a consequence of 1 above)
Policy formation and the machinery are kept separate (Clerk of the Public Accounts Committee). A consequence is confusion and inhibition of system design and maintenance. (‘keep out this is political’ but is ‘method’ a policy or machinery? Surely the latter)
  1. Perpetual European Accounts failure of audit is attributed to the concept of shared management which leaves accountability in the hands of recipients of public funds. (MEP in published letter in 2008). There is no systematic feedback hence no management cycle
  2. The IMF has been criticised for failing to grasp that currency unions require treasur.y and political union or are vastly exposed to debt crises.
  3. UK Developing devolution reveals unconsolidated local financial results and uncontrolled debt-creating deficits (under 1, 2 and 4 above) creating the risk in 5. (Scotland has produced £billion pound deficits over two years; Surrey CC reports moving into deficit in the Autumn of 2016). Whole Government Accounts for 2015-16 are overdue.
  4. Formal accountability has not yet followed the universal franchise (Surrey and other councillors withhold the Annual Report from voters at elections).


Further anecdotal evidence is all around us. But why is there no sign of awareness at the top of government? Why do they accept 2 above? The solution could commence at the top of the Civil Service and particularly the Treasury. It’s not ‘rocket science’. 

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