James Max - James Max is a broadcaster, columnist and business expert

Financial waste is all around

Until we understand what government spends, how can a sensible judgment over cuts ever be made? Understandably the public and the media got themselves into a frenzy over MP’s and their expenses. A principle of trust had been broken. Elliot Morley was one of the MP’s found guilty and jailed. After serving just a quarter of his sentence, he was released. Of course what he did was wrong. £32,000 of taxpayers’ money claimed for a mortgage that never existed. Some say he should still be in prison. Costing the taxpayer even more? The result of this fiasco is a system for managing MP’s expenses that costs more than before with a net saving of nothing. If anything over a point of principle, we are spending more to ensure the MP’s get less.

We are in the middle of an economic and financial crisis. A committee of MP’s has found that a project set up by the last government to regionalise the fire brigade’s call centre operations from 46 centres to 9 was a “complete failure”. £469 million has been spent. And wasted. Yet that isn’t the only example of waste by government. The board running an £11 billion IT project for the NHS is to be scrapped. Commissioned in 2002, the project was ill conceived, poorly monitored whilst consistently missing deadlines, over promising and under delivering. And that’s not all. The nation’s gold. Half of it was sold at the request of Gordon Brown, the then Chancellor. He raised £2.2 billion in the sale. At an average of $276 an ounce. So how much has the country lost as a result of this devastating decision? About £12 billion is your answer. Though it could be more. £55 billion was allocated for the “Building Schools for the Future” programme. Some of those buildings were realised on time and on budget. Many were not. What about those Chinook helicopters? Ordered in 1995 for £259 million. Delivered in 2001. But never used. Endlessly tinkered with. Did we waste £800 million? Or perhaps another billion? Who knows. And still the helicopters sit. Unused in a shed somewhere.

Those are the public details of money spent by the government and wasted. I am sure there are many more. From poor procurement to wasted training schemes. Benefits paid out and revenue not collected. Orders made for goods that were not put into service. Government buildings procured and not fit for purpose. Inquiries that lead nowhere and cost millions. From the Olympics to evictions at Dale Farm, health tourism in the NHS and campaigns that go unheeded (remember the “5 a day” lunacy?). The evidence is everywhere. I am sure there are further examples of unnecessary expenditure, waste and poor provision throughout the public sector. There are people far better qualified than me to give you the details.

The point here is simple. As a nation we are borrowing billions. August saw a record net borrowing requirement of £15.9 billion. Until we get our borrowing under control, the economy won’t return to health. This isn’t just about making cuts to public spending. We need to change our attitude. We are very happy to punish small-scale fraud and embezzlement. What about the large scale financial disasters? Will anyone be held to account for wasting public money on an epic scale? Has the government “learnt the lessons” of its predecessor’s mistakes? I hope so. However, have we the public got the message that a cut doesn’t mean we have less services if we are cutting waste and inefficiency?


It’s about time we did. It’s time to end the profligate spending on mega schemes that go unchecked. Time to end the endless stream of benefits for those in work and out of it at the taxpayers’ expense. Time to review the amount of money tipped into the vortex that is the EU. The rules have changed. So the players must adapt. And fast. Forget the old mantra that if you count the pennies, the pounds will look after themselves. That’s what has been happening. And guess what? It doesn’t work.

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