Universal Credit and the December putsch

Without him, 21 million people will have no identity.

Without him, Universal Credit will fail.

Will ex-Guardian man Mike Bracken deliver on time?

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December 2011, the Department for Work and Pensions (DWP) needs an identity assurance service to make its Universal Credit plan work. DWP officials write an invitation to tender (ITT) estimating a figure in the region of £240 million to be offered to suppliers interested in five-year contracts. A notice is published, as required by law, in OJEU, the Official Journal of the European Union.

This is the old way, the path of false consciousness.

The uncomradely hate crime committed by the reactionary cadre DWP is deprecated by Francis Maude, Cabinet Office minister, and following a late-night encounter in his facility deep in the bowels of the Lubyanka DWP's OJEU notice is voluntarily and swiftly withdrawn. Loyal agents of Minitrue erase all traces of it from the record. All except for this one, expressing DWP's meek contrition:

The Department for Work and Pensions (DWP) has cancelled its tender for identity assurance services, claiming it had not followed the relevant procedures for the procurement. A spokeswoman for the DWP told GGC: "The Ojeu for identity assurance services (IAS) was (prematurely) issued by the department before all of the necessary governance, approvals and checks were complete and therefore needed to be withdrawn. We expect an Ojeu for IAS to be re-issued in the new year."

1 March 2012, ex-Guardian man Mike Bracken, executive director of the Government Digital Service (GDS) and Senior Responsible Officer Owner for the Identity Assurance programme, publishes Identity: One small step for all of Government on the Identity Assurance blog operated by GDS:

GDS has been working closely with DWP to revise the OJEU and agree it with other Departments ... The revised DWP OJEU notice is effectively an HMG-wide framework being delivered initially using DWP as the vehicle. We will then introduce wider HMG needs into this first draft and cut/paste the whole approach into GPS. This approach ensures that, ultimately, HMG-wide Identity Assurance is supplied across central departments via a common procurement portal (to HMG agreed standards) and governed by the Cabinet Office.

Following revision of the ITT, in the gloom of the Cabinet Office darkness at noon, and with the tortured body of DWP now quivering in the basement, the consideration for identity assurance is reduced to £30 million, the ex-Guardian man says, and the lease on the contracts will be only 18 months. The new notice in OJEU makes surprising reading:

HMG is intending to establish a marketplace of suppliers to deliver identity assurance services consistent with the Cabinet Office guidelines and utilising agreed open standards. This will support the roll-out of strategic customer services and HM Government programmes - DWP’s universal credit and personal independence payments in the first instance. The initial DWP services will be required to provide identity assurance for approximately 21 000 000 claimants. As the HMG customer base is diverse, a wide range of suppliers will be required to ensure demographic coverage to ensure that no claimant sector is unfairly disadvantaged by limiting supplier choice. To support the rollout of universal credit and personal independence payments, identity assurance suppliers will be selected in summer 2012 and systems will need to be fully operational from spring 2013 ...

The revised notice was published on 1 March 2012 and the service has to be operational from the Spring of 2013? Barely a year later? Only six months after the contracts are awarded? 21 million claimants? Millions of whom have never used the web? Operational? Countrywide?

It's a tall order. Nevertheless, 25 May 2012, GDS apparatchik Steve Wreyford publishes Identity Assurance gets closer to market in Pravda assuring 21 million grateful claimants that a framework agreement has been established, that "a selection of potential suppliers has passed the Pre-Qualification Questionnaire stage of the procurement" and that the successful bidders (Google) should be announced by the end of September – only eight days to go, tovarich.

The announcement cannot come too soon. 17 September 2012, and the normally resilient tractor-drivers are becoming despondent:

Universal Credit is due to replace scores of individual benefits from next year, simplifying claims and allowing claimants to keep more of their benefits when they take paid work. The regime will be internet-based, with ministers intending that most claimants apply and report a change in circumstances online. Appearing before a Commons inquiry into the reform, Lord Freud, the welfare reform minister, was asked what was the biggest risk to the programme. “I’ll say what the challenges are, what we need to get right: to get the security system working properly,” he said. Private security companies will be commissioned to develop a system of “identity assurance” to check that only real claimants can get benefits. “That’s one of the biggest challenges,” said Lord Freud.

Without him, 21 million people will have no identity. Without him, Universal Credit will fail. Will ex-Guardian man Mike Bracken deliver on time? Who will the winning suppliers be? (Google.) Who will be the UK's "identity providers", as they are known in GDS Newspeak? (Google, the mind-writers™.)

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A historian writes:

If you ask me, it all went wrong last December when the spineless bourgeois DWP lost control of its own programme to the kulak Maude and his entryist henchmen, Martha Lane Fox and ex-Guardian man Mike Bracken. I mean that's just my opinion. L. Trotsky

Universal Credit and the December putsch

Without him, 21 million people will have no identity.

Without him, Universal Credit will fail.

Will ex-Guardian man Mike Bracken deliver on time?

----------  o  O  o  ----------

December 2011, the Department for Work and Pensions (DWP) needs an identity assurance service to make its Universal Credit plan work. DWP officials write an invitation to tender (ITT) estimating a figure in the region of £240 million to be offered to suppliers interested in five-year contracts. A notice is published, as required by law, in OJEU, the Official Journal of the European Union.

This is the old way, the path of false consciousness.

The uncomradely hate crime committed by the reactionary cadre DWP is deprecated by Francis Maude, Cabinet Office minister, and following a late-night encounter in his facility deep in the bowels of the Lubyanka DWP's OJEU notice is voluntarily and swiftly withdrawn. Loyal agents of Minitrue erase all traces of it from the record. All except for this one, expressing DWP's meek contrition:

The Department for Work and Pensions (DWP) has cancelled its tender for identity assurance services, claiming it had not followed the relevant procedures for the procurement. A spokeswoman for the DWP told GGC: "The Ojeu for identity assurance services (IAS) was (prematurely) issued by the department before all of the necessary governance, approvals and checks were complete and therefore needed to be withdrawn. We expect an Ojeu for IAS to be re-issued in the new year."

Public spending 1

... if you cut today's public spending by the IPPR's other figure of 3.8%
this year and every year for the next 25 years,
it would fall to £263.8 billion,
which is still higher in real terms than it was in 1970-71.
It's a long time ago, certainly,
but we weren't exactly running around in nothing but woad 40 years ago,
there's plenty of room for 3.8% cuts. ...

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There is currently a certain amount of debate in the UK about public spending. Iain Duncan Smith wants to "make work pay". Frank Field argues that means-testing rots people's souls. Support for the benefits system, a report says, is at its lowest level for three decades. And according to Alegra Stratton, the political editor of BBC TV's Newsnight, the government is eyeing an end to the link between benefits and inflation.

Ms Stratton laid out the options for public spending over the next few years, please see Wednesday's edition of Newsnight between 15'38" and 21'28". If the budget is to be balanced, the Institute for Public Policy Research say that public spending will have to be cut by 3.8%. If the NHS, education and international aid budgets are to be ring-fenced then the other departments face a cut of 8% in their budgets. There will have to be cuts, says Ms Stratton, and cuts upon cuts, and what does "8% cuts elsewhere, beyond the fence" mean? It means 8%, that's what it means, but Ms Stratton assists her viewers' understanding by explaining that that's equivalent to:

BBC TV Newsnight 19 September 2012

Either that, or huge cuts in welfare, which brings us back to Iain Duncan Smith.

The debate isn't exclusive to the UK. Mitt Romney makes his own pertinent contributions to it in the US.

And it's not a new debate, as Polly Toynbee reminds us in the Guardian. "David Cameron's mission was to break the postwar consensus on the welfare state that survived Margaret Thatcher", she says, and quotes the Institute for Fiscal Studies (IFS) claim that the overall spending cuts planned by the coalition government are "almost without historical and international precedent".

(Notice that "almost". What the IFS mean is that there are historical and geographical precedents. Almost the opposite of what it sounds as though they're saying.)

The debate is over-heated at the moment, permanently in danger of taking off into outer space – Ms Stratton's Newsnight package, for example, uses Mozart's Requiem as background music. The debate needs to be tethered to planet Earth. It needs some facts, to ground it, and HM Treasury have kindly published those facts in their report Public Spending Statistics July 2012, which includes the figures below in Table 4.1 on p.42:

Total Managed Expenditure Nominal £billion Real terms £billion Per cent of GDP 1971-72 25.2 255.4 42.6 1972-73 28.3 263.9 41.9 1973-74 33.4 291.9 44.4 1974-75 43.7 319.9 48.7 1975-76 55.7 325.0 49.7 1976-77 63.6 326.4 48.6 1977-78 69.5 313.6 45.6 1978-79 78.6 319.8 45.1 1979-80 93.6 326.4 44.6 1980-81 112.5 331.8 47.0 1981-82 125.6 338.1 47.7 1982-83 138.3 348.7 48.1 1983-84 149.7 361.5 47.8 1984-85 160.0 367.8 47.5 1985-86 166.6 363.7 45.0 1986-87 172.8 366.5 43.6 1987-88 183.3 369.1 41.5 1988-89 190.7 360.5 38.7 1989-90 210.2 372.3 38.9 1990-91 227.5 376.1 39.2 1991-92 254.2 394.5 41.5 1992-93 274.2 416.5 43.3 1993-94 286.3 425.7 42.6 1994-95 299.2 438.5 42.1 1995-96 311.4 444.2 41.4 1996-97 315.8 437.2 39.5 1997-98 322.0 437.0 38.0 1998-99 330.9 439.9 37.0 1999-00 342.9 447.9 36.3 2000-01 341.5 443.7 34.6 2001-02 389.2 496.1 37.8 2002-03 421.2 523.8 38.8 2003-04 455.5 554.2 39.5 2004-05 492.4 582.0 40.5 2005-06 524.0 605.5 40.8 2006-07 550.0 619.0 40.7 2007-08 582.9 640.0 40.7 2008-09 629.7 673.0 44.3 2009-10 670.2 705.6 47.3 2010-11 689.6 706.1 46.6 2011-12 694.9 694.9 45.5

There follows a series of questions. DMossEsq doesn't know the answers.

41 years ago, 1971-72, annual public spending in the UK was £25.2 billion. Taking account of inflation in the intervening period, that is equivalent to £255.4 billion today in real terms.

Public spending today isn't £255.4 billion, it hasn't been maintained at its 1971-72 level. Instead, it's gone up to £694.9 billion. Why?

If public spending today was £255.4 billion, it wouldn't have been cut at all. For 40 years, it would have been maintained, guarded, ring fenced, ...

If you cut today's public spending by the IPPR's figure of 8%, it would fall from £694.9 billion to £639.3 billion, roughly the level of 2007-08. We were not in a state then – Ms Stratton please note – equivalent to having 70,000 fewer defence personnel and 20,000 fewer policemen and we wouldn't be now.

If you cut today's public spending by the IPPR's other figure of 3.8% this year and every year for the next 25 years, it would fall to £263.8 billion, which is still higher in real terms than it was in 1970-71. It's a long time ago, certainly, but we weren't exactly running around in nothing but woad 40 years ago, there's plenty of room for 3.8% cuts.

But was public spending in 1970-71 at the right level? What is the "the right level"? Perhaps we should choose a different base line. Which? And why?

Public spending today has gone up in real terms since the treasury's 1970-71 base line by a factor of 2.7208, it's increased by 172.08%. That means the state has taken on new burdens, burdens which it didn't used to shoulder. Is that a good thing? Or a bad thing? Is the state taking on unwonted responsibilities? Is it being intrusive? Is there any limit to the state's responsibilities?

The coalition government has not yet managed to cut public spending. Public spending has levelled off for two years but it hasn't been cut. Not appreciably.

It's hard to cut. It takes time.

Equally, it's hard to make material increases in public spending. Every time the NHS budget is materially increased, under whichever government, the question arises whether its systems can absorb all the extra money. Of course they can, but the question is whether the money can be used efficiently, without waste. No, it can't. Increases have to be planned, just as much as reductions.

The IFS describe 3.8% spending cuts as "unprecedented". For a conservative organisation like them, that is a criticism, they assume that you shouldn't do things that are unprecedented. If an action is unprecedented, does that mean it shouldn't be taken? Or is now the time to be radical?

The 172.08% increase from £255.4 billion to £694.9 billion over 40 years works out at a steady rate of increase of 2.5% p.a. But the change hasn't been steady.

Spot the cuts?

Cuts are not unprecedented. There are six years when public spending was cut:

• 1977-78 (-3.9%),
• 1985-86 (-1.1%),
• 1988-89 (-2.3%),
• 1996-97 (-1.6%),
• 2000-01 (-0.9%)
• and 2011-12 (-1.6%)

and 34 years when it went up.

There were two hefty increases in public spending, in:

• 1973-74 (+10.6%)
• and 1974-75 (+9.6%)

and the biggest ever was in:

• 2001-02 (+11.8%)

followed by an unprecedented run of further increases – +5.6% in 2002-03, +5.8%, +5.0%, +4.0%, +2.2%, +3.4%, +5.2% and +4.8% in 2009-10.

To put it another way, public spending in 2009-10 (£705.6 billion) was 59% up on the 2000-01 figure (£443.7 billion) 10 years before:

Unprecedented?

Yes.

For 30 years, public spending had increased at an annual average rate of 1.9% from £255.4 billion to £443.7 billion in 2000-01. Then the rate of increase nearly trebled to 5.3% p.a., taking public spending in 10 years from £443.7 billion to £705.6 billion in 2009-10.

The end points of the solid lines in the graph above show what did happen, with the trajectory in between smoothed out. The dotted lines show what could have happened instead. On the established trend, the long run 30-year rate, public spending in 2009-10 could have been "only" £526.7 billion. Instead, it was £178.9 billion higher at £705.6 billion.

By the IFS's reckoning, those increases should not have been made.

Somebody nevertheless, ignoring the IFS, put their foot on the accelerator. During Labour's 1997-2001 administration, Gordon Brown as Chancellor of the Exchequer was wedded to Prudence. Thereafter, Prudence left and Mr Brown was joined by Sir-Gus-now-Lord O'Donnell, first as Permanent Secretary at the Treasury and then as Cabinet Secretary. Whose foot was on the accelerator? The cautious/prudent/indecisive and some say cowardly Brown's? Or O'Donnell's, the man to whom every government economist reported, the man who would be King?

Is the state better at allocating resources than individuals and private sector organisations? Or worse? Is state spending always benign? Clearly O'Donnell thinks the answer is "yes", but is it?

Today's public spending represents 45.5% of GDP according to the Treasury. With public spending standing at £694.9 billion, it follows that GDP must be £1,527.3 billion.

Does that mean that we can afford a public spending level of £694.9 billion, or that we can't? Is 45.5% of GDP the "right level" for public spending?

What's public spending got to do with GDP anyway? Does public spending act as a drag on growth? Or does it actually promote growth?

Can anyone answer these questions? Politicians? Mandarins? Economists? Journalists? You?