spending

Show me the money…

In modern day Britain, most would probably agree that the NHS and schools need more funding each year. Better internal management might reduce waste and create greater impact. But the UK government could show a lot better leadership too.

Successive UK governments don’t so much lack courage (feeling fear but taking action anyway). The bigger problems are arguably that they:

  • lack incentive (complacency and dogma seem to have set in),
  • lack clarity (can’t agree what the problem is), and
  • lack imagination.

What more could be done by central government, regardless of political party?

  • bar politicians from serving more than three terms (a maximum of 15 years in parliament). New blood would bring fresh approaches, minimise complacency and cronyism. But what if not enough people stepped in to replace outgoing politicians? True leaders will step in to lead, because they care.
  • enlist pro-bono advice from professional consulting firms, about how they would go about solving complex societal problems.
  • scrap the ‘first past the post’ voting system, in favour of proportional representation. With at least one annual referendum on a big political issue (not just Brexit either).
  • ensure stronger messaging in early-years schools (all UK schools) about why education is so vital for self reliance, so fewer students drop out later. Perhaps self-reliance has fallen out of fashion? Ironically, the first step towards caring communities begins with self reliance and two strong legs of your own.
  • change criminal penalties to put a far greater weighting on the economic costs to society from crime. Cyber crime, fraud, domestic abuse, human trafficking and narcotics trafficking would likely see stronger minimum jail sentences.
  • simplify the  UK tax rules. The costs of complexity are way too high and borne by all of us.
  • change the rules on the proceeds of crime, so the ‘Mr Bigs’ have no chance of parole, until they offer up all the deemed global proceeds of crime. The government could usefully put such proceeds directly into bigger UK police budgets, where the proceeds are not able to be returned to the victims of crime. Bigger police budgets aren’t so much about turning the UK into a police state. But instead about increasing the arrest rate for those committing crime (currently there is too much focus on crime level stats and not enough on arrest rate stats instead).
  • change the rules on taxation – seriously look at introducing negative VAT on healthy foods, sportswear and the exercise industry.
  • prevent extensive tax avoidance amongst a relatively few companies and wealthy individuals, by changing the rules. Pierce elaborate tax-haven structures, citing substance over form. And create a special set of punitive employment taxes for those making a living as tax advisors.
  • review how UK foreign aid money (the approximately £14B of public money per yr) is spent. Earmark a bigger chunk of it for disaster relief and vaccination programmes (direct distribution of goods not indirect distribution of money). And give nothing to countries who choose  to fund their own space programmes. Or fund terrorist training camps within their borders.
  • apply a common-sense UK approach to immigration and social housing. Setting and defending quotas is a distraction and any figure set is inherently subjective. Having a local government policy to house anyone who decides to live in your jurisdiction probably isn’t realistic either. It just creates unmanageable responsibilities. And cruelly raises peoples’ expectations to unrealistic levels.
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UK austerity

In the current debate about UK austerity, what’s missing from the choice (not the fake choice between austerity and no austerity, but the hard choice between Social and Economic austerity) are two important other options (Productivity improvements and Philanthropy).

To elaborate, the current debate about austerity should be about the mix of four things:

(1) Social austerity – realisable tax rises for some or all current UK tax payers). Of course, history shows us that raising taxes encourages tax avoidance and discourages incentive to work harder.

(2) Economic austerity – alleviating current austerity through borrowing to burden future citizens with greater austerity.

(3) Productivity improvements – workers choosing (through a combination of after-hours study and after-hours volunteering?) to up-skill, to raise their productivity to ultimately alleviate austerity. When we change our expectations, build on small successes to boost our confidence and reframe current problems in a different way using personal flexibility, then there is every chance to better ourselves. If the future is about portfolio careers, and in the age of smart machines, ‘keeping our skin in the game’ through clever design, then up-skilling starts today. After all, process automation and machine learning won’t wait for us, but proceeds at its own pace. A final question about labour productivity at the national level. Which is better – fewer people employed but them generating higher average labour productivity (the French model, relative to the UK model) or, more people employed but with lower average labour productivity (the UK model, relative to the French model).

(4) Philanthropy – particularly high-net-worth individuals forming consortiums, to alleviate UK social deprivation through charitable foundation activity.

The best solution will probably come from a better combination of all four things.

One great opportunity with philanthropy is developing ‘hospital charities’ to build city hospitals that are entirely charity-funded and can take some ongoing pressure off the NHS, care homes and private hospitals. Such hospitals could offer a more selective range of treatments (target elective-surgeries with long waiting lists?), than the NHS.

Food for thought?

Free markets and housing policies

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A free market of regulated consumers or a regulated market of free consumers. Entrepreneurs favour the first, politicians the second. What do we get? A pendulum that swings between both and limited consumer choice.

Consumers need the benefit of market forces on the lion share of their weekly spending and the cost of monopoly prices on the mouse share of their weekly spending.

If the UK government spends £24B a year on housing benefit, this is the result of government decisions made over the last thirty years. If the UK government cares about the future, it needs to make smart decisions on housing policy now, so the country avoids spending double that annual figure in future years.