Local Government seems like the last game in town with amateur content. Professionalism in the treasury is in short supply. With a good chance of exit from Europe is our whole governance fit for the purpose of going it alone ? Here are aspects:

To all STAG supporters and correspondents (update from 16^th May). Read more about Surrey councillor allowances, smaller Surrey government, Waverley Borough Annual Report, Local audits, dialogue with C&AG (NAO), inquiry of CIPFA, and Whole of Government Accounts 2012-13 and astonishing implications.

 Surrey councillor allowances –“ MP calls for ‘rethink’ over allowances raise”. This latest news  headline in the Surrey Advertiser (20^th June) refers to Anne Milton but generally the picture is of all Surrey MPs squirming with discomfort at having to avoid the issue astride the chinese wall between them and their local  Party colleagues.

 That is pitiful because the real issue has not been addressed. What is the interface between councillors and senior officials ?  What activities  are councillors and officials “paid” for and which earn councillor allowances  ?  This whole sorry business of ‘jobs for the boys and girls’ with the majority of them granted “special responsibility” supplements must be set in context: They are succumbing to the “moral hazard” of undisciplined tax and spend by governments since the ‘60s believing that they could offer not guns or butter but guns AND butter. Compounding this some twerp opined that deficits adding to debt year on year are ‘alright’. Balanced budgets had up till then been common sense.  Even the conservatives will not come out and use language  to inspire confidence in this respect. If we want good governor/managers we have to pay them but they have to be of sufficient quality and competence. To avoid that judgement MPs supplement their depressed pay with expenses and  ‘amateur’ councilors vote themselves increased ‘pay’ regardless.

 Smaller Surrey government – abolition of the council was an option under the Banham Review in the 1990s. (see Gerald Gilbert’s Letter of the Week on 13^th June: Is it time to slim down Surrey’s government ?). Surely we would be amply represented by just borough councillors and MPs. Unfortunately Gerald’s historical research exposes the complete inability of political government, which we increasingly don’t like, to do anything about changing itself any time soon.

 I believe that Council Leader David Hodge could legally  reconstitute and run the show with a more industrial-type organisation structure. A ten point plan might include the abolition of all standing committees, re-definition of  elected and appointed roles and pay accordingly, operationally intelligent interfaces with boroughs, central government and laterally,   and submission annually to the electorate with Annual Report to inform voting intentions.  Or he  could go further and stand down the entire corporate and political structure of Surrey County Council to save at least £100m on internally self-feeding central functions.

 Waverley Borough Annual Report – I am making this a test case and have advised the NAO of action taken. To recap, Jeremy Hunt believed that he had only to pass on a request from me (on NAO advice) to Executive Director Paul Wenham, who is not accountable to us, for this to be produced. Over years of fruitless dialogue  a defensive Paul failed to explain to the Leader what is required. Finally I have  addressed the Leader who IS ultimately responsible and accountable. My letters to him of 10^th and 14^th June are attached.

 Local audits – the legislation abolishing the Audit Commission and privatising local authority rights to appoint has now come into effect. So what was that about ? One regretted  loss is the former ability of such as ourselves to question the District Auditor of old.

 Comptroller and Auditor General (NAO – National Audit Office)  - I re-started a passage of correspondence with Steven Corbishley the head auditor of the Whole of Government Accounts. He had explained NAO scope which  fails to embrace the whole financial dynamic  in the limited helping the nation spend wisely at their masthead. That dynamic is not simply spending but flows  in and out of assets and liabilities with term commitments all continuously reactively monitored. In acknowledging my published written evidence to the political and constitutional Inquiry on Voter Engagement in UK he sought to further re-assure me quoting Margaret Hodge (Public Accounts Committee) and using the buzz word risk and its evaluation in WGAs.  I further ask what about leakage in decision lead-time, that is, the day by day deterioration in decision quality for each day added to that lead-time (WGAs in draft even still take 14 ½ months on their way to 9 months) . I have now pointed out that the PAC Chair is not the one in charge and questioning whether anyone is at the wheel on this supertanker bridge.

 I further sought a NAO initiative to get an “appropriate leadership person to answer the question ‘what is money ?”  The answer needs to reach all the nooks and crannies of society and could well be spread in formal public accounting. On the one hand we peasants have some instinctive understanding that it is what we get in our pay packet or pension and give in exchange for necessities and so on;  if we have an overdraft we have to  pay it back.   On the other hand government uses a different commodity where borrowing and deficits are the norm apparently with no  limit on supply or care for the burden on future generations – just a reckless belief in “the economy” coming good. Perhaps for a start the treasury should employ more accountants and fewer economists.

 That leads me to feel that we ought also be given the facts and government intentions about national reserve financial and economic strength. This  because historically all revolutions and wars are  economically fuelled. We could not so long ago marvel at a naval review at Spithead. Now where are we ?

 CIPFA – I have asked the Chartered Institute of Public Finance and Accountancy to explain their ‘philosophy’ and work concerned with  the standard of government accounting and reporting. I have not been granted a reply but see below.

 Whole of Government Accounts  - those in draft for 2012-13 have surfaced still heavily audit qualified  with material omissions being noted. The in-year deficit has gone down by only £6bn to £179bn. “the overall net liability (the difference between what it owes and what it owns) increased by £283bn to £1,630bn. This was largely down to a £169bn increase in public sector pension liabilities and a £31bn increase to government borrowing in the form of issuing gilts to finance government spending.”

 It is truly astonishing  that ‘proper accounts’ are still only four years old and the C&AG should in the 21^st century have to “call on the government to help fully realize the potential benefits of WGA in the running of government and use them to inform policy making and assist in medium term financial management.” The same applies to the CIPFA hope that “the treasury will start to  lead the way in this by using WGA in the presentation of fiscal events such as the budget and the autumn statement, including by reporting outturn against budget for the whole public sector, and publishing forward balance sheet forecasts.” I identified the Treasury as “the weakest link” some time ago. The OBR (Office of Budget Responsibility) is heavily dependent on data quality. By all of that, elements of the senior ‘manderinate’ are shown  to have become atrophied, a situation arising long ago but not dealt with by Parliament.  Those of us who have the experience to understand will be sobered by the certainty of inefficient spending of taxpayers’ money and debt creation attributable purely to that situation.  

 And as the final example of bonkers government: It is rumoured that to ‘massage’ the GDP/ debt ratio as a management tool the former is to be adjusted upwards to include illegal drug turnover and that from the sex industry.

Peter Webb 27th June 2014