Inland Revenue

[Big Momma]

Tracker - 2011-03-09 8:58 PM

 

One of the biggest issues in pension provision and the simple fact is that public service employees do not pay enough into their pension to cover it's cost.

 

Therefore public service pensions are heavily subsidised by every other taxpayer whereas those who have to pay for their own pensions through employment or self employment have no such luxury.

 

Is that fair do you think - maybe it is a fair trade off for all the lower paid workers who, lets face it, don't get a huge pension anyway but it certainly is not fair for higher paid civil servants to have such a subsidy.

 

Nobody wants to see public service get a smaller pension but all the rest of us ask is that they be educated into paying a fair share for it.

 

It won't happen of course because turkeys don't vote for Christmas and the unions would rather destroy the very service they claim to protect than accept the inevitable and work with government to redress the imbalance.!

 

Rich, this is already happening. The Government have already announced that Public Sector workers will pay more towards their pensions but receive less than they do now. I don't think that it has got anything to do with Education. When you apply for a job the first thing that you look at is the salary, the next thing is T&C's and Pension arrangements. If the contract stated that you pay 'X' in contributions then it is up to the individual if they accept the job with T&C's. But to change T&C's without any consultation is unfair and certainly not legal, otherwise a 'contract' is not worth the paper it is written on. If those coming in to the Public Sector signed up to the new T&C's then that is a different issue.

 

How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?

[CliveH]

 

Big Momma - 2011-03-09 9:39 PM

 

 

How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?

 

Hmmmmmmmmmm

 

"How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?"

 

Good question that thankfully many in the Private sector can answer because of their experience.

 

Probably about the same as I did when my Private Sector employer closed its Final Salary scheme and forced all its employees into a Defined Contribution scheme rather than the Defined Benefit scheme we had before. This was because of the rules laid down by the Public Sector HMR&C on how pension schemes should be run and the fact that we all live longer, plus the fact that Private Sector pension schemes now suffer tax (Public Sector pensions do not as they are actually PAID from taxation)

 

Then again I suspect that my wife who has just been told that her OAP will now not be paid to her for a further two years feels a bit like that. Whilst this applies to many across the board - it rankles with her that currently the Public Sector pensions have a NRA of age 60, whereas most in the Private Sector are resigned to working well beyond age 65 due to their pensions being decimated.

 

Then when it comes to Terms and conditions changing - I suspect all those who have been forced chose less hours or redundancies could feel pretty miffed. But when the likes of JCB gives its workers the facts - the employees chose to earn less so that no redundancies fell. Amazing but here we had workers voluntarily changing their T&C's to share the pain.

 

So in answer to your question ""How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?" - at least you are asking the right people if you are asking the Private Sector - because on the whole the Public Sector have very little experience of this happening to them.

 

In marked contrast the Private Sector has that experience in spades.

 

:-S

[Guest pelmetman]

Just watched Lord Hutton on the BBC and it sounds like existing Public sector workers have nothing to worry about, as any alteration to T&C and pensions will only affect new staff :D

 

Doubt the unions will see it like that *-) ............but they can rarely see past the end of their nose (lol)

[BGD]

CliveH - 2011-03-10 8:08 AM

 

 

Big Momma - 2011-03-09 9:39 PM

 

 

How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?

 

Hmmmmmmmmmm

 

"How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?"

 

Good question that thankfully many in the Private sector can answer because of their experience.

 

Probably about the same as I did when my Private Sector employer closed its Final Salary scheme and forced all its employees into a Defined Contribution scheme rather than the Defined Benefit scheme we had before. This was because of the rules laid down by the Public Sector HMR&C on how pension schemes should be run and the fact that we all live longer, plus the fact that Private Sector pension schemes now suffer tax (Public Sector pensions do not as they are actually PAID from taxation)

 

Then again I suspect that my wife who has just been told that her OAP will now not be paid to her for a further two years feels a bit like that. Whilst this applies to many across the board - it rankles with her that currently the Public Sector pensions have a NRA of age 60, whereas most in the Private Sector are resigned to working well beyond age 65 due to their pensions being decimated.

 

Then when it comes to Terms and conditions changing - I suspect all those who have been forced chose less hours or redundancies could feel pretty miffed. But when the likes of JCB gives its workers the facts - the employees chose to earn less so that no redundancies fell. Amazing but here we had workers voluntarily changing their T&C's to share the pain.

 

So in answer to your question ""How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?" - at least you are asking the right people if you are asking the Private Sector - because on the whole the Public Sector have very little experience of this happening to them.

 

In marked contrast the Private Sector has that experience in spades.

 

:-S

 

 

 

 

 

BINGO.

 

 

[CliveH]

This is expected but not especially good news for Public Sector jobs. If the PS pension scheme payouts do not go down, and only new recruits have a watered down pension scheme, then think about it?

 

In order to reduce the CURRENT liability - the only way to do that is to shed jobs.

 

To lose a good Public Sector job now, when the private sector is working on reduced hours and is not recruiting, will be especially hard. I would suggest that the Public Sector need to take a look at what happened at JCB and other firms. Not so much on reducing hours to spread the pain, but certainly look at bringing the pension costs more in line with reality and so lower the cost of the Public Sector so that more jobs can be saved.

 

Seems to me that the Public Sector Pension Scheme could be the iceberg that the sinks the P.S. Titanic whilst all the "reviews" (including this latest one) simply move the deckchairs a little bit further back from the approaching waters.

 

 

 

[catinou]

CliveH - 2011-03-10 8:08 AM

 

 

Big Momma - 2011-03-09 9:39 PM

 

 

How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?

 

Hmmmmmmmmmm

 

"How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?"

 

Good question that thankfully many in the Private sector can answer because of their experience.

 

Probably about the same as I did when my Private Sector employer closed its Final Salary scheme and forced all its employees into a Defined Contribution scheme rather than the Defined Benefit scheme we had before. This was because of the rules laid down by the Public Sector HMR&C on how pension schemes should be run and the fact that we all live longer, plus the fact that Private Sector pension schemes now suffer tax (Public Sector pensions do not as they are actually PAID from taxation)

 

Then again I suspect that my wife who has just been told that her OAP will now not be paid to her for a further two years feels a bit like that. Whilst this applies to many across the board - it rankles with her that currently the Public Sector pensions have a NRA of age 60, whereas most in the Private Sector are resigned to working well beyond age 65 due to their pensions being decimated.

 

Then when it comes to Terms and conditions changing - I suspect all those who have been forced chose less hours or redundancies could feel pretty miffed. But when the likes of JCB gives its workers the facts - the employees chose to earn less so that no redundancies fell. Amazing but here we had workers voluntarily changing their T&C's to share the pain.

 

So in answer to your question ""How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?" - at least you are asking the right people if you are asking the Private Sector - because on the whole the Public Sector have very little experience of this happening to them.

 

In marked contrast the Private Sector has that experience in spades.

 

:-S

It is difficult for me to answer this calmly:

We have been "stuffed" on endowment mortgages, part of my husband's pension is still stuck in Equitable Life (result of transfer out as advised by "financial adviser" in the 1980s) >:-( He will be 60 this year but will have to wait until he is 66 to claim a state pension, intended working until he was 65 anyway and is currently paying several hundred pounds extra per month to make up for the Eq/Life shortfall.....

 

Now there is talk of changing the goalposts on the pension he has paid into for so long (payment from which, incidentally, is funded by current contributors as far as I am aware). If this happens in 2014 as suspected he will retire before the age of 65 to protect his position (along with thousands of other workers - GPs doctors, nurses etc). When he was training his take home pay was less than half of that in the "private sector" - I know because we compared his pay to mine!

 

Is it really fair to say now, after nearly 40 years of public service and continued training throughout his career, to decimate his pension, just because "it happened to us, so it should happen to everyone"?

 

Surely, a better way forward would be to enhance private sector pension schemes rather than to lower the goalposts for everybody? :-S

[Guest pelmetman]

CliveH - 2011-03-10 9:00 AM

 

To lose a good Public Sector job now, when the private sector is working on reduced hours and is not recruiting, will be especially hard. I would suggest that the Public Sector need to take a look at what happened at JCB and other firms. Not so much on reducing hours to spread the pain, but certainly look at bringing the pension costs more in line with reality and so lower the cost of the Public Sector so that more jobs can be saved.

 

 

I agree that the Private sector is unlikely to be able to take up the slack as DC & NC claim, most of the people I work for have no intention of expanding as the risk far outways any potential benefits :-S

 

I also believe the banks when they say the majority of small businesses are paying back debt rather than asking for loans *-)

 

This is my 3rd or 4th recession (been so many I lose count (lol) )I have worked through, and I get the feeling this one is likely to last a good decade or more :D

 

So my advise to the Public sector would be to consider following the example of JCB ;-) , as I doubt things are ever going to be a bed of roses in the Private sector again :D

 

Oh yeah if some muppet in the future comes along and say's he's cured boom & bust >:-( .....................Head for the hills (lol) (lol)

[CliveH]

catinou - 2011-03-10 9:43 AM

 

CliveH - 2011-03-10 8:08 AM

 

 

Big Momma - 2011-03-09 9:39 PM

 

 

How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?

 

Hmmmmmmmmmm

 

"How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?"

 

Good question that thankfully many in the Private sector can answer because of their experience.

 

Probably about the same as I did when my Private Sector employer closed its Final Salary scheme and forced all its employees into a Defined Contribution scheme rather than the Defined Benefit scheme we had before. This was because of the rules laid down by the Public Sector HMR&C on how pension schemes should be run and the fact that we all live longer, plus the fact that Private Sector pension schemes now suffer tax (Public Sector pensions do not as they are actually PAID from taxation)

 

Then again I suspect that my wife who has just been told that her OAP will now not be paid to her for a further two years feels a bit like that. Whilst this applies to many across the board - it rankles with her that currently the Public Sector pensions have a NRA of age 60, whereas most in the Private Sector are resigned to working well beyond age 65 due to their pensions being decimated.

 

Then when it comes to Terms and conditions changing - I suspect all those who have been forced chose less hours or redundancies could feel pretty miffed. But when the likes of JCB gives its workers the facts - the employees chose to earn less so that no redundancies fell. Amazing but here we had workers voluntarily changing their T&C's to share the pain.

 

So in answer to your question ""How would you feel if when you signed your contract to agreed T&C's then 40 years later when you are about to retire they tell you that they have changed their minds and you are not getting what your contract stated ?" - at least you are asking the right people if you are asking the Private Sector - because on the whole the Public Sector have very little experience of this happening to them.

 

In marked contrast the Private Sector has that experience in spades.

 

:-S

It is difficult for me to answer this calmly:

We have been "stuffed" on endowment mortgages, part of my husband's pension is still stuck in Equitable Life (result of transfer out as advised by "financial adviser" in the 1980s) >:-( He will be 60 this year but will have to wait until he is 66 to claim a state pension, intended working until he was 65 anyway and is currently paying several hundred pounds extra per month to make up for the Eq/Life shortfall.....

 

Now there is talk of changing the goalposts on the pension he has paid into for so long (payment from which, incidentally, is funded by current contributors as far as I am aware). If this happens in 2014 as suspected he will retire before the age of 65 to protect his position (along with thousands of other workers - GPs doctors, nurses etc). When he was training his take home pay was less than half of that in the "private sector" - I know because we compared his pay to mine!

 

Is it really fair to say now, after nearly 40 years of public service and continued training throughout his career, to decimate his pension, just because "it happened to us, so it should happen to everyone"?

 

Surely, a better way forward would be to enhance private sector pension schemes rather than to lower the goalposts for everybody? :-S

 

OK so if we could all be calm! – I get frustrated when those in the public sector bleat about how awful it is that their pensions are going to be curtailed and say things like just because it happened to you why don’t you agree to it being awful to us?

 

It is awful I agree – but where was the Public Sector support for the Private Sector when the rules as set down by the Public Sector caused our Final Salary pensions to be scrapped?

 

Where was the public sector support when the civil servants convinced Gordon Brown that robbing the private sector pension pot to the tune of £5 to 8 BILLION a year by way of a tax on the income within a private pension?

 

Where was the good sense and due diligence when it was known that the public sector FSA was asleep at the wheel when Equitable Life went under? - Read the Parliamentary Ombudsman’s report onto the shameful ineptitude of the FSA “Equitable Life – a Decade or Regulatory Failure (incidentally – did others notice that it was the same Howard Davies that was then in charge of the FSA that has just had to resign from the LSE because of his cosying up to Gaddaffi!)

 

As for Equitable Life(ELAS) Cat – I assume you husband was in the Civil Service In House AVC scheme. Equitable Life had its AVC scheme in about 80% of all Public Sector organisations. Talk about eggs in baskets! – who sanctioned that???? - And was it a surprise that the FSA sat on the issue when its own In House AVC scheme was with – YES – YOU GUESSED IT ! – EQUTABLE LIFE! – Now there is a surprise.

 

However – all Pub Sec employees with an ELAS AVC received enhanced terms to transfer out to a rescue package scheme(s) that were set up with Scottish Widows and the Pru. Your husband should have done this as he would have been advised to do so. Again I have to point out that the Pub Sec negotiated a 5% transfer fee as opposed to the MVR on with Profits fund of 10% and a further Transfer penalty of 14% that applied to ALL OTHER ELAS POLICYHOLDERS.

 

So please give a thought to those who relied on ELAS for their main pension provision rather than using ELAS as a top up. Also – I am somewhat concerned as if as you say your husband has worked for 40 years then he will have a full main scheme pension and any funding into AVC’s could “Over Fund” him. This could mean that the benefits from the AVC he has (if this is what he has) – will be restricted. Think you need to check this out.

 

So sorry Cat – but I do not see the Pub Sec suffering much re ELAS either! – In fact poor regulation and oversight by the FSA actually caused much of the problem because there was an incestuous relationship with ELAS and the Public Sector. Sadly – with the oversight of the banks – we have exactly the same problem repeating itself.

 

But if you feel your husband was badly advised then ping me the details in a PM and I as an IFA will look at it – no charge.

 

As for funding – I will repeat what has been said earlier – the Pub Sec pension scheme are, on the whole funded by 6% employees contribution – which as your salaries are all paid from taxation means that this 6% is simply recycled taxation. The cost of the benefits provided is circa 20% pa of salary. So about 14% is provided from that department’s budget – which again is provided directly from taxation – hence the hit on all taxpayers by the overly generous, by today’s standards, Pub Sec Pension scheme.

 

Plus we have the odd situation that Private Sector pension funds are taxed via Gordon Browns first stealth tax. The Public Sector scheme, because in the main (some Local Auth schemes do have a funded element) is a money in – money out scheme – i.e. no pension “pot” to tax, does not suffer this extra burden of taxation – indeed it could be said that the Pub Sec Pension scheme and its members actually BENEFIT from this specific tax on funded scheme.

 

Spooky then that those that made up this tax, specific to the Private Sector, where employed in the Public Sector. >:-(

[catinou]

ELAS was the result of transferring out to the Pru from NHS pension then the amount being transferred to E/L but as we sent the paperwork back to get out as advised - it was "apparently" received the day after the cut off date. He is now paying in to the main scheme to make it back up to 40 years.......

 

I cannot believe how complicated the whole thing is! After hearing the basics from the Hutton review just now on the news I think we can breathe easy - for now.

 

I appreciate your comments Clive and understand where you are coming from but as my own private pension plus the endowments were such a dreadful failure we have already taken a big hit as a couple. *-) I will now give my energies to looking at our Easter break I think - not much we can do whichever "camp" we are in - out of our hands..... :-S

[CliveH]

It is complicated Cat and in some ways I benefit from that as i am one of the sad souls that actually enjoy sorting it all out.

 

My friends think I am mad but i really enjoy budget day and sit down with a pot of tea, rich tea biscuits and a notepad to watch the performance and to see how the idiot politicians are going to mess up this time.

 

One little nugget for everyone that has recently been announced:-

 

Pension Drawdown - The rules up to April 5th this year allow for you to set your income at 120% of GAD rates (Government actuarial department) - so roughly speaking if your annuity rate is 5% then 120% would be 6% so if you had £100K pension pot then the annuity would pay you £5000 and the Drawdown £6000.

 

But after 6th April 2011, the GAD rates will be redefined and the maximum Drawdown will be 100% - but this is 100% of a different calculation - so what and how will the new GAD rates be calculated?

 

You would think that those in charge (sorry but they are Pub Sec again) would have that worked out by now wouldn't you?

 

Well they haven't, so we don't know either - so we cannot tell our clients what the parameters are for Drawdown so that they can make an informed choice!

 

Most take the view that 120% of the old figure is likely to be better than 100% of some limit yet to be published and so are setting up chunks of their pension into drawdown now to secure the higher rate.

 

You can see why I get frustrated with those that make the rules but are not affected in anyway by them - and the above is just one example! 8-)

 

[catinou]

8-) 8-) No wonder we have muddled through this minefield and come off "not so well" Clive! :$ *-)

[Dave225]

Firstly, I think I need to apologise somehow. I originated this thread to basically 'complain' how efficient i felt the Inland revenue was in sending me multiple Tax Codes, all from the same Office. Somehow along the way the thread migrated to a very frank discussion on Public Sector pensions, which i do admit is very topical. Mind you someone looking at the title of the thread could be forgiven if they read the latter messages, in wondering what on earth it is all about.

 

Is it possible to edit Thread Titles??

 

However........

 

There is no doubt that there will be 'winners and losers' in any changes to the current system. However, it is also agreed that there has to be changes, or it all collapses and then nobody will receive anything. The Unions as usual will use the issue to scare people into protesting against things that may not even happen. But their agenda is political, not worker benefit. Curiously the same Union bosses have protected pensions themselves, so will not suffer whatever happens to the workers.

 

However, to try and put a little data into the melting pot. It appears that an average PS wage is around £8-10000 per annum, which is not generous by any means. However, if a worker does their 40 years and retires on 2/3 ds that then they will get a pension of £5300 - £6600 per annum, again not overly generous. However, to achieve that in the majority of private sector pensions will require the creation of a pension pot of £110000 - £135000. The maths on that one suggest that even if the employer matches the contributions then the employee will still be paying between 15-18% of gross pay every month. Yes, I have not gone into growth rates but life is too short. Any pension boffin is welcome to submit more accurate numbers. If the employer pays less, say 10% then the employee needs even more to make the 'pot'. This I feel goes some way towards explaining why current pensions are being funded by contributions from current workers. There was just not enough money being put into the 'pot' to pay what was promised. I also read today, and assume it is based ona fact, that over 3000 public sector workers have pension pots in excess of £1 million, giving them a pension of over £60000 per annum. I cannot believe that anyone was earning that sort of money even a decade ago, so one has to ask how this 'pot' accumulated. It also means even less for the lower paid workers.

 

So, if there has been a 'crime' then it was in public sector employers making promises they knew could not be kept if the books were to be balanced, but hoped that pushing the problem 'down the line' would be an answer. Also in allowing the rapid inflation of many salary levels where they all 'chased' each other up the scale, was if not criminal, certainly immoral. No one is deliberately asking anyone to lose what they feel they are entitled to, but if the money is just not there then an answer has to be found. The Union idea of just jacking up Council Tax to pay the funding gap, is not really realistic.

 

As others have stated, we are all getting 'punished' in various ways for things we did not have any control over. My wife is like others, having her pension age delayed although she has paid all the necessary years. My daughter has just had her Final Salary Scheme closed by her employer, whether she wished it or not. The new calculation show she will get about 15% less pension for the same contributions, if she is lucky, so she is having to make up the difference herself.

 

As they used to say in a famous advert' It is an Equitable world Henry' but as we all now know, it isn't.

[Gwendolyn]

CliveH - 2011-03-09 4:10 PM

 

Gwendolyn - 2011-03-09 1:33 PM

 

So you would have the workers in the Public Sector work on a voluntary, unpaid basis? Or do away with it completely?

 

whereas you overreact Gwendolyn and make the silly comment that those of us concerned at obvious excesses of the public sector "would have the workers in the Public Sector work on a voluntary, unpaid basis?

 

I was attempting to use IRONY!!! Not being ‘au fait’ with the "symbols" I did not try to use them, preferring instead to rely on words alone. It seems that I failed. Alas!

[CliveH]

A couple of relevant articles in this weeks “Pinks”

 

“A survey by NAPF (National Association of Pension Funds) show that in 2009, a further 17% of Final Salary Schemes have shut their doors to new members.

 

Only 21% of Private Sector Final Salary schemes are open to new joiners, compared to 88% 10 years ago the survey reveals”

 

Ref: Final Salary closures shift up a gear: NAPF – Financial Adviser 10/03/11 – page 5

 

Better coverage at

 

http://fundamentalsmagazine.com/news/4294/uk-final-salary-pensions-close-doors-members

 

Then we have the knock on effect of this outlined in the same “Pink” on page 27

 

“Older workers have doubled in a decade”

 

This article covers another survey – this time from the Office for National Statistics that the number of people over age 65 and still working has doubled from 412,000 in 2001 to 870,000 as measured in the last quarter of 2010.

 

“Over the last decade these older workers are making up an increasing percentage of the total workforce in the UK, doubling from 1.5% in 2001 to 3% last year.”

 

So two surveys each indicating clearly the knock on effects of the decimation of good Private Sector Final Salary schemes.

 

I don’t want this to seem like another knock at the Public Sector – but the data is pretty stark as to what has happened to everyone else!

 

[Guest pelmetman]

I reckon this is part of the reason that so many youngsters are unable to find work ,because older people do not have an adequate pensions so have to continue working *-)

 

 

[CliveH]

 

Absolutely Dave - it is supply and demand. Thankfully older workers seem to be in demand because of their reliability and experience.

 

But we were all young and inexperienced once.

 

If we are unable to stop work due to poor pensions then that stops kids getting jobs.

 

We have to give back pensions the "Value" they once had. And the first step would be to stop taxing the pot via Gordon Browns first stealth tax!

 

 

[Brian Kirby]

Having read all the above, two thoughts come to mind.

First, why have pensions at all?  Yes, I know it is to pay for one's years of retirement, but what I mean is, why all the complexity that actually surrounds pensions?  My suspicion is that it is all due to the contributions being tax exempt, and the arguments and ruses this has generated on the one hand, and the attempts to head them, off or close them down, on the other.  If everyone (irrespective of public or private sectors) contributed into ISAs (or similar savings schemes), in the open market, in lieu of into pensions schemes, it seems the whole procedure of saving for retirement could be simpler and far more transparent.  We could decide what to buy, could move it to another "provider" if we didn't like how it was working, could see how much it was worth, and could monitor the performance of the "providers" whenever we wished.  Surely this would be better than the present adherence to pensions schemes, with all their opacity and complexity?  There may be a need to impose some form of compulsion over the need to make contributions, and to limit the size of the "pot", and possibly some need to restrict withdrawals during a working lifetime, just to be sure the feckless had a pot of some sort at the end, but need that be so complex to achieve?

Second, regarding public versus private sectors, why the distinction?  Why do we have certain functions provided by public employees, but others by private employees?  Is there any reason, intrinsically, why all present public sector functions could not be privately provided?  Would this allay the fears of those who think the public sector costs too much, or do they just resent paying for services for which they cannot see any personal benefit? 

For example, take a school.  It can, and generally will be, designed, and built, by the private sector.  It can be maintained, and cleaned, by the private sector.  It could be staffed by the private sector.  The only public sector involvement needed would be paying for those services.  Local authorities could entrust their revenue gathering activities to the private sector, credit management companies exist.  The actual payments for the school could be entrusted to, say, accountancy firms. 

The functions of the council, and so presumably, the government, could be reduced to merely setting the rates of general and local taxation, and the business of tendering for, and awarding, the various essential contracts.  Even those functions could be carried out by the private sector, in that, once a desirable public service is identified by the elected members, tenders could be drawn up, invited, and vetted, by contracting firms with no interest in the areas of work concerned, so with no sticky fingers to put in the pot. 

It is not a route we have, hitherto, followed, and I am unaware of any other country that has gone quite that far, but why could it not work?  If it could, would it be better, in terms of overall cost and freedom from corruption, than what we now have? 

The underlying reason for so many public services being provided by public employees seems to have been the perception that, by eliminating the private contractor's profit, better value could be gained.  In theory that may be true, but it seems often to fail to deliver the expected benefit. 

On the other hand, work gained in open competition is usually awarded on a lowest price basis, and that often means it goes to the tenderer who has deliberately, or through oversight, under priced the job.  So, to generate their expected profit, or maximise it, they cut corners in service provision. 

So, in the end, which is better?  The risk of a complacent and lethargic response from a superannuated direct labour force, or the risk of poor performance by a profit driven, corner cutting, private labour force. 

Or, do we need a third way, where the contractors are differently constituted, so that quality of service takes precedence over profit as the prime function of their business?  Public/private partnerships, joint ventures, mutuals?  Could this be better still?

[Big Momma]

As always Brian you raise some good, logical and thought provoking points which I am sure could generate many more responses. The truth I suspect is that there a lot of people who benefit from the confusion and beaurocracy and I do not anticipate very much real change in my lifetime :-S

[Guest pelmetman]

Brian Kirby - 2011-03-11 12:57 PM

Or, do we need a third way, where the contractors are differently constituted, so that quality of service takes precedence over profit as the prime function of their business?  Public/private partnerships, joint ventures, mutuals?  Could this be better still?

 

Gets my vote providing they have an annual review by the customers who can decide if their up to the job, which would ensure the contractors dont take their eye of the ball :D

[Colin Leake]

Big Momma - 2011-03-11 1:45 PM

 

As always Brian you raise some good, logical and thought provoking points which I am sure could generate many more responses. The truth I suspect is that there a lot of people who benefit from the confusion and bureaucracy and I do not anticipate very much real change in my lifetime :-S

 

You may be right. Just don't' expect me to confirm this in case my nice Scottish tax inspector is reading this. And if you are sir this is not me. Someone has stolen my identity. Honest.

[malc d]

Or a much easier solution.

 

Privatise the control of Public Sector budgets ?

 

 

;-)

[Guest pelmetman]

malc d - 2011-03-11 5:04 PM

 

Or a much easier solution.

 

Privatise the control of Public Sector budgets ?

 

 

;-)

 

Or better still become tax neutral :D

[malc d]

pelmetman - 2011-03-11 5:13 PM

 

malc d - 2011-03-11 5:04 PM

 

Or a much easier solution.

 

Privatise the control of Public Sector budgets ?

 

 

;-)

 

Or better still become tax neutral :D

 

 

 

How would we do that ?

 

;-)

[Guest pelmetman]

malc d - 2011-03-11 5:16 PM

 

Or better still become tax neutral :D

 

 

 

How would we do that ?

 

;-)

 

Totally legal you start a new business, finance it yourself so your yearly drawings (household income) is below £14500, and then you get tax credits which cancel out your tax bill :D

 

I get a nice warm feeling everytime the benefits agency puts £111 a month into my account :-D

 

 

 

Shame they can not match the £1200 a month I reduced my drawings by :-S

[Brian Kirby]

malc d - 2011-03-11 5:04 PM Or a much easier solution. Privatise the control of Public Sector budgets ? ;-)

Depending on what you mean by control, is that not what we now have? 

MPs, or Councillors, are those who effectively control the budgets, by deciding what the money will be spent on, and how much will be allocated to each head.  We could hardly privatise them!  Or could we?  :-)

Having established the budget and apportioned it, its progress is then monitored by public employees.  However, they have no real control over how much is to be spent, or where it is to be spent, only how fast the set pot is exhausted and, within the rules established by the politicians, who shall get it.  That element of control could just as easily be carried out by a contractor, but does not, IMO, truly amount to control of the budget. 

It is those who decide the budgetary sums and their allocation who cause the problem, not the monitors who control delivery.  Unless you have the MoD in mind, of course, who for years have got away with fantasy budgets for ill defined projects, and then gone on to fail in monitoring the expenditure as an encore.  :-)