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Saturday, 28 December 2013

Saturday, December 28, 2013 Posted by Jake 2 comments Labels: , , , ,
There are a number of differences between those who indulge in tax fraud and those who indulge in benefits fraud. The most basic is money: to dodge tax you probably have money, to steal benefits you probably don't. 



Is it this basic financial distinction that accounts for the differences we describe below? Do well paid legislators and prosecutors feel more empathy with tax dodgers then benefits cheats? 

The following graphs suggest perhaps so:

7.4 times more money is lost through Tax Fraud than through Benefits Fraud:

10 times more in percentage terms is pinched by tax dodgers than by benefits cheats according to the NFA report:
  • Benefits: 0.7% of all benefits are taken fraudulently
  • Taxes: 6.7% of all taxes are not paid fraudulently (i.e. doesn't include 'avoidance' which uses legal loopholes).

Even though Tax Fraud is a far bigger problem, there were 16 times more criminal prosecutions for benefits fraud than for tax fraud in 2012!


Ian Swales, Liberal-Democrat MP, asked HMRC representatives in a December 2013 session of the Public Accounts Committee:

"I think what bothers members of the public is the vigour with which the authorities pursue people who defraud a few thousand in benefit compared with the vigour with which we pursue people who evade thousands and thousands in tax"

In response the HMRC representatives burbled incoherently (burbling incoherently is a tried, tested, and invariably successful evasive manouevre in parliamentary committee meetings).

The Tory led government announced in December 2013 the abolition of the National Fraud Authority. So presumably we won't have the benefit of embarrassing statistics like this next year. How disappointing.
Saturday, December 28, 2013 Posted by Jake 1 comment Labels: , , , , , ,
The Joseph Rowntree Foundation's report "Coping with the cuts? Local government and poorer communities" shows that spending cuts in more deprived local authority areas are systematically greater than in affluent local authority areas. The difference between most affluent and most deprived being about £100 per head.




"Figure 3 illustrates this, but also highlights a key finding relevant to this study: that the scale of the cutback has been greater in more deprived local authorities than in more affluent ones. Figure 3 expresses this in terms of per capita spending power, where there is a difference of over £100 per head between the most and least deprived. Deprived authorities were previously more grant-dependent and have suffered disproportionately. However, even in percentage terms, deprived areas have seen a greater reduction in spending power (-21.4 per cent) than affluent areas (-15.8 per cent)."


Here is a brief definition of "Specific" and "Formula" grants in the graph above. They are the two main sources of money from central government and represent around 70% of all local authority funding.

Specific grants pay for individual services, such as key government priorities. This money is ring-fenced and must be used in the way specified by those priorities.

Formula grants are calculated using mathematical formulae based on, among other things, the local council tax base and how many people rely on local services.

For a fuller definition of how local authorities are funded, see http://www.bbc.co.uk/news/uk-11567693and http://www.local.communities.gov.uk/finance/1213/basicguid.pdf

Friday, 27 December 2013

Friday, December 27, 2013 Posted by Jake No comments Labels: , , , , ,
Friday, December 27, 2013 Posted by Jake No comments Labels: , , , , ,

Tuesday, 24 December 2013

Tuesday, December 24, 2013 Posted by Jake No comments Labels: , ,
Tuesday, December 24, 2013 Posted by Jake No comments Labels: , ,

Monday, 23 December 2013

Monday, December 23, 2013 Posted by Jake No comments Labels: , , , , , , ,
Public policy is a classic instance of the tail wagging the dog. For a tail to wag a dog it is not necessary for the dog to be in cahoots with its tail. It is enough that the dog doesn't resist its nether extremity. 

Most people pay little attention to things that don't affect them directly and immediately. Even when those things inevitably will in the future, or inescapably did in the past, they are likely to swallow any lazy assertion. The unemployed are portrayed as living high on the hog with their overly generous benefits. A lack of interest in whether this is true or not allows public policy to be driven by the prejudices and interests of whichever cabal is wagging the government.

The Marmot Report of 2010 showed statistics from the Office of National Statistics (ONS) comparing the death rates per 100,000 of two cohorts in the period between 1981 and 1992. The first cohort was made up of people who had a job in 1981. The second cohort was made up of people who were unemployed in 1981.


The impact on mortality of being unemployed is clear, and provides no evidence of the unemployed having it easy. The "lower orders" have a higher death rate within both cohorts. However it is also evident that being unemployed has the greatest impact on the highest Class I, where the unemployed in that group had a 65% higher death rate than their employed peers. A matter that should be of interest to the highest as well as the lowest in the land. 


Social Class, defined by your occupation, has a strong impact on your mortality rate. But so does where in Britain you live. The impact particularly on 'routine' workers of living in the North East rather than the South West is apparently pretty deadly:



The definitions of the social classes above are as follows:

I            Professional etc occupations

II            Managerial and Technical occupations

III        Skilled occupations

(N) non-manual

(M) manual

IV        Partly-skilled occupations

V            Unskilled occupations

Standardised Mortatlity: "A standardized death rate is a crude death rate that has been adjusted for differences in age composition between the region under study and a standardpopulation. Standardization allows for comparisons when the population structures differ and is key in assessing the potential influence of environmental or cultural factors on death rates in a region."

Saturday, 21 December 2013

Saturday, December 21, 2013 Posted by Jake 2 comments Labels: , , ,
A graph on page 63 of the Bank of England's end of year report might raise an eyebrow, if not your blood pressure.

Loan to Value (LTV) tells what percentage of the value of your home you owe on your mortgage. For instance, if you have a £150,000 mortgage and your home is worth £200,000 your Loan To Value ratio is 75%.

LTV in 2013 is actually higher than just before the Credit Crash, blamed by many on people borrowing too much on mortgages. In 2007, just before the crash, around 10% of borrowers owed more than 75% of the value of their homes. In 2013 this had risen by a half to 15% of mortgage borrowers. The percentage of borrowers in negative equity in 2013 (they owe more than the value of their homes) quadrupled to 4% of mortgage borrowers. 

Bank of England Quarterly Bulletin, 2013 Q4




Saturday, December 21, 2013 Posted by Jake 2 comments Labels: , , , , , , , ,
These graphs are from the Joseph Rowntree Trust:



In 2012 5.1 million people were paid less than a living wage, defined nationally at £7.45 per hour. This is about one in five of the UK workforce (made up of approximately 29 million people in 2012 according to the Office of National Statistics). 

Over 70% of jobs done by the 18-21 year age group were 'low paid'. 

Most low paid jobs in the Public Sector were held by those over 40 years of age.


Thursday, 19 December 2013

Thursday, December 19, 2013 Posted by Jake No comments Labels:
Government lost £13bn to fraud and error
MPs are demanding action after £13.2bn was written off the government balance sheet in 2011-12 due to fraud, financial error and legal claims. The numbers are found in a new annual report called “Whole of Government Accounts”, first published in 2011. But the figures do not include local government or public corporations, and the National Fraud Authority estimates the true cost of fraud to the public sector was £20.6bn. Other omissions include HMRC’s "tax gap" - the difference between what the authorities were owed and what they were collecting – which now totalled £35bn. Overall, the accounts showed net public liabilities - the difference between the government's assets and liabilities - rose from £1.19 trillion to £1.34 trillion over the period. BBC NEWS

Osborne: £12bn more in welfare savings needed
"You are going to have to find billions of pounds more in welfare savings if you want to reduce the deficit, eliminate the deficit and get our debt falling," he said. The comments indicate that if the Conservative Party wins the next election, welfare may be cut to protect spending on public services. Conservative MP Brooks Newmark cited figures produced by the Institute for Fiscal Studies think tank, which said that welfare cuts of £12bn would be required after the next election to keep departmental budget cuts at their current rates. BBC NEWS

NAO contradicts Osborne on Lloyds share sale: Taxpayer lost £230m on rushed sale of bank
The National Audit Office findings shatter Chancellor George Osborne’s claim that the sell-off delivered “a profit for taxpayers.” A rushed sale of Lloyds shares left the taxpayer another £230million out of pocket, a report reveals today. The Government raised £3.2billion by selling off a 6% stake in the bank to major institutional investors in September. But that’s before taking account of borrowing costs to bail out Lloyds at the height of the financial crisis. The taxpayer pumped a colossal £20bn into saving the bank following its disastrous takeover of Halifax Bank of Scotland. A report from the National Audit Office found that once you’ve included the cost of financing the mega-deal, the taxpayer ended up £230m worse off from this summer’s share sale. MIRROR

Probe into gold price scam extended to Deutsche Bank
Germany’s financial regulator has demanded documents from Deutsche Bank as part of an investigation into potential manipulation of gold and silver prices. The probe from the German watchdog comes as regulators around the world step up their scrutiny of benchmarks after the recent Libor interbank lending scandal led to hefty fines for banks. The UK’s Financial Conduct Authority has also been looking at precious metals as part of a broader review of financial benchmarks. With an estimated 175m ounces of gold, worth $215bn at today’s prices, changing hands daily on the over-the-counter market, London is the global centre of gold trading. However, the FCA has not launched a formal investigation. FINANCIAL TIMES


Serco to lose out-of-hours GP services and hospital management contracts
Serco has agreed to the early termination of its contract for out-of-hours GP services in Cornwall after the company left the county short of doctors. The embattled outsourcing company also said it would stop running Braintree hospital in Essex as it pulls out of managing GP services and large hospitals. The day before the announcement the company, along with G4S, was forced to hand over its electronic tagging contracts to rival Capita following fraud allegations over the way they charged the government. An investigation revealed in May that Serco had falsified its performance data for the Cornwall contract when reporting to the local NHS trust so that it appeared to meet targets that it failed to achieve. It had won the contract with a bid that undercut the local GP co-operative by £1.5m. Whistleblowers later raised the alarm over safety, highlighting an occasion when only one GP had been on duty for the whole county for the night. GUARDIAN

G4S and Serco stripped of prisoner tagging contracts over fraud claims
They have been told to hand over all their responsibilities to rivals Capita on an interim basis by the end of March, the justice secretary, Chris Grayling, has said. The Serious Fraud Office has started a full-scale criminal investigation into both companies over their Ministry of Justice (MoJ) contracts. The two companies had been billing the taxpayer tens of millions of pounds for tagging prisoners who turned out to be dead, back in prison or overseas. Across government there is now in effect a moratorium on Serco or G4S getting any new work. GUARDIAN

People born in 1960s and 1970s 'poorer' than previous generation
People born in the 1960s and 1970s will only be wealthier than the previous generation in retirement if they inherit money, the Institute for Fiscal Studies (IFS) has said. The think tank found people in their 40s and 50s are less likely to own a home than those 10 years older. Their incomes are also no higher and their private pensions are smaller. It suggests an end to the steadily rising incomes and living standards since World War Two. BBC NEWS

Lord Hanningfield: I can name 50 peers who 'clock in' to claim expenses
Up to 50 peers are regularly "clocking in" to the House of Lords in order to claim a £300 daily attendance allowance, a former Conservative peer has claimed. Lord Hanningfield – who served nine weeks of a nine-month sentence in 2011 for falsely claiming £28,000 in parliamentary expenses – suggested it was normal practice. He made his comments after the Daily Mirror alleged that it had followed Hanningfield in July and found that on 11 of 19 days he spent less than 40 minutes in the Lords before returning to his home in Essex. While MPs are paid a salary, members of the House of Lords can claim a daily allowance of £300 if they attend a sitting. GUARDIAN
Thursday, December 19, 2013 Posted by Jake No comments Labels: , , , ,
Updated on 22/3/2015: We first posted this in December 2013, reporting that between 2011-12 and 2012-13 the number of people resorting to foodbanks close to tripled. Since then the Trussell Trust issued new figures showing this leap happened again between 2012-13 and 2013-14, with yet another close to tripling of users (up 2.6 times). We have updated the graph to show this.

According to a report by the Trussell Trust, a charity running foodbanks the number of people resorting to foodbanks nearly tripled in 2012-13:


"Trussell Trust foodbanks have seen the biggest rise in numbers given emergency food since the charity began in 2000. Almost 350,000 people have received at least three days emergency food from Trussell Trust foodbanks during the last 12 months, nearly 100,000 more than anticipated and close to triple the number helped in 2011-12."



A report to Parliament stated:

"Food bank use has been increasing steadily since 2005. In the period April-September 2013 alone, over 350,000 people received food from Trussell Trust food banks – triple the number helped in the same period in 2012. These figures have led the Trussell Trust to call for an inquiry into the causes of food poverty and the surge in food bank usage. A range of experts have also warned in the British Medical Journal (December 2013) that UK food poverty “has all the signs of a public health emergency that could go unrecognised until it is too late to take preventive action.”"

The report went on to say:

"Food prices rose 22%, in the UK between January 2007 and May 2013 while rising only 12% in Germany and 13% in France. Averaged across the EU food prices rose 17% over the same time period."

Kellogs, who among many things produce cornflakes, stated in a report:

"We estimate that the poorest 10% of households in the UK spent nearly a quarter (23.8%) of their gross income on food and non-alcoholic beverages in 2012. This is in stark comparison with just 4.2% for the richest 10% of households."


Thursday, December 19, 2013 Posted by Jake No comments Labels: , , , ,
According to a report by the Trussell Trust, a charity running foodbanks the number of people resorting to foodbanks tripled in 2012-13:


"Trussell Trust foodbanks have seen the biggest rise in numbers given emergency food since the charity began in 2000. Almost 350,000 people have received at least three days emergency food from Trussell Trust foodbanks during the last 12 months, nearly 100,000 more than anticipated and close to triple the number helped in 2011-12."



A report to Parliament stated:

"Food bank use has been increasing steadily since 2005. In the period April-September 2013 alone, over 350,000 people received food from Trussell Trust food banks – triple the number helped in the same period in 2012. These figures have led the Trussell Trust to call for an inquiry into the causes of food poverty and the surge in food bank usage. A range of experts have also warned in the British Medical Journal (December 2013) that UK food poverty “has all the signs of a public health emergency that could go unrecognised until it is too late to take preventive action.”"

The report went on to say:

"Food prices rose 22%, in the UK between January 2007 and May 2013 while rising only 12% in Germany and 13% in France. Averaged across the EU food prices rose 17% over the same time period."

Kellogs, who among many things produce cornflakes, stated in a report:

"We estimate that the poorest 10% of households in the UK spent nearly a quarter (23.8%) of their gross income on food and non-alcoholic beverages in 2012. This is in stark comparison with just 4.2% for the richest 10% of households."


Tuesday, 17 December 2013

Tuesday, December 17, 2013 Posted by Jake No comments Labels: , , , , , ,
Tuesday, December 17, 2013 Posted by Jake No comments Labels: , , , , , ,

Sunday, 15 December 2013

Sunday, December 15, 2013 Posted by Jake 3 comments Labels: , , , , , , , ,
One almost has sympathy for our MPs. They are being tantalised mercilessly by IPSA waving wads of cash at them. IPSA's proposed pay-hike is as cruel as leaving a diabetic Billy Bunter locked in a dorm with a plate of lemon meringue pies and lashings of ginger beer. Shame on you IPSA! Is this revenge for when all but one of your predecessors were de-facto sacked in January 2013 for refusing to be MPs' doormats? Though we do appreciate the black comedy of MPs protesting through clenched teeth "I couldn't possibly".

MPs have convinced themselves they are underpaid. Even though the supply of politicians has in all our recorded history wildly exceeded the demand. Even though:

MPs bleat that although they are led by the nose in Parliament, they work very hard back in their constituencies. The IPSA public consultation has various bits of interesting data on this assertion suggesting that the public on the whole don't really give a damn who their MP is:
  • Most of us don't even know the name of our MP.
  • Fewer than 1 in 5 of us have ever bothered to find out anything about them.
  • Fewer than 1 in 10 of us has ever seen our MP speak at a local event.
IPSA Survey

The mischievous trap set by IPSA is their claim to have public backing for this payrise. IPSA's CEO issued this statement:




"The package we will announce on Thursday will, taken as a whole, not cost the taxpayer a penny more. That message has not been heard in the hubbub of the last few days. Once it is, I am hopeful that our reforms will receive the same thoughtful response that we found in our polling.  And that some commentators will pause before making sweeping assumptions about what the public think without asking them."

"The same thoughtful response we found in our polling" is the bait. Our fat owls in Parliament may understandably pounce on the conclusion that the electorate are on their side. Clearly the thoughtful public agreed with IPSA's pay hike. Or did they? The graphs below from IPSA's own data the public thoughtfully thought that the pay hike is wrong, and expenses should be cut:

IPSA Survey
IPSA Survey
MPs are already happy to waive their principals in their party's interests. They are already paid more than 95% of Britons. Paying them even more will just make them even more dependent on sucking up to their political masters, rather then representing their constituents.

The warier MPs should see IPSA's generous proposal in the light of Mark Antony's funeral oration for Julius Caesar. Is IPSA payrise to praise them or to bury them?

Saturday, 14 December 2013

Saturday, December 14, 2013 Posted by Jake 1 comment Labels: , , , ,
A National Audit Office (NAO) report published in December 2013 reported that 'free schools' were costing twice as much (on average £6.6 million per school) as expected to build. On the day of publication the media herd wallowed in this cost-doubling story. 

What was less talked about is the report's observation that even though the schools' costs were double the original estimate, they still cost 45% less than building a traditional school. The NAO report stated:

Costs have been lower partly because the Department has taken an innovative approach to providing premises for Free Schools. It has used significant numbers of existing buildings to reduce costs, including properties not traditionally used for schools (Figure 13).

 

the Department also used less extensive building specifications than on its previous building programmes, such as Building Schools for the Future. It also adopted new space standards, which were approximately 15 per cent smaller for secondary and 5 per cent smaller for primary Schools than existing standards.

Free Schools are 45% cheaper on average to build than traditional schools, helped by having less space per student (15% less in secondary schools!) and by moving into unused former hospital, police, office and retail buildings.

With all the evangelical talk of a 'free school revolution' could grubby cost-cutting be the real motivation? Or was the cheapness just collateral to improving educational standards? The same NAO report sheds some light on this. 



Figure 16 from the report shows the results of OFSTED inspections in the 2012/13 academic year. The Free Schools apparently handily beating Academies and common-or-garden Local Authority schools:

Red = % 'Good' or 'Outstanding', Yellow = % 'Needs improvement' or 'Unsatisfactory'

However, anyone who read the text just after this graph in the NAO report would have noticed:
  • Academy and Local Authority schools inspected in 2012/13 would have not included schools judged as 'Outstanding' in the previous year. This is because a school judged 'Outstanding' does not get re-inspected for 5 years. This is equivalent to saying if a footballer scores a goal in a match then he can't play in the next five, which inevitably weakens the team.
  • Of the free schools there were 17 primary free schools, 14 of which were judged to be in line with or better than other neighbouring schools. However, of the 5 secondary free schools none were better than neighbouring schools - 2 were judged to be in line, and three below the standard of their neighbours.
Figure 17 shows that primary free school children travelled more than twice the distance to get to school compared to local authority and academy primary school students. Secondary free school students travelled significantly further that secondary local authority schools, though the difference is very much less than for primary schools.




Is there a correlation between the longer distance travelled and the better performance of free school primaries compared to free school secondaries? Are free school primaries casting a wider net, disdaining some of the local smallfry? The report states that the Department of Education had exempted many of the free schools from the normal Schools Admissions Code followed by Academies and Local Authority schools, giving 'founders' preferential access. Once the gobbet of founders' children, a self-selecting highly motivated group, has passed through the system, what will happen then? Other potential correlations are mentioned in the report:
  • Free school students tend to come from wealthier families: only 16% of free school students get their school meals for free, compared to 25% in neighbouring schools.
  • Only 18% of free school students have English as an additional language (EAL, where English is not their first language), compared to 36% in neighbouring schools.
And yet these advantages seem to be subsumed in the disadvantages that come with a Free School (whatever they may be) such that at Secondary level no improvement in performance is discernible according to the 2012-13 OFSTED inspections reported by the NAO. Even when the comparison is rigged by excluding Local Authority schools that achieved 'Outstanding' status the previous year. But at least the government will have saved money that would otherwise have to be spent on non-privately educated children.

The PISA report in December 2013 comparing international educational attainment caused all sorts of anxiety over the UK's stagnation in pupil attainment. This report provides more insights than just the crude country rankings. Among many other things the Pisa report lists important factors that impact student performance:



Students whose parents have high expectations for them– who expect them to earn a university degree and work in a professional or managerial capacity later on – tend to have more perseverance, greater intrinsic motivation to learn mathematics, and more confidence in their own ability to solve mathematics problems than students of similar socio-economic status and academic performance, but whose parents hold less ambitious expectations for them.



Lack of punctuality and truancy are negatively associated with student performance: on average across OECD  countries, arriving late for school is associated with a 27-point lower score in mathematics, while skipping classes or days of school is associated with a 37-point lower score in mathematics – the equivalent of almost one full year of formal schooling.



Across most countries and economies, socio-economically disadvantaged students not only score lower in mathematics, they also reported lower levels of engagement, drive, motivation and self-beliefs. Resilient students, disadvantaged students who achieve at high levels, break this link; in fact, they share many of the characteristics of advantaged high-achievers.


All these important factors come from outside school. And yet Sir Michael Wilshaw's OFSTED focusses on beating up schools while largely ignoring what happens outside the school gate. In his December 2013 speech "The Unlucky Child" Wilshaw defines the difference between a 'lucky child' and an 'unlucky child' in terms of the nature of their school. 

Recognising that poor behaviour is a central issue Wilshaw announced inspectors will make "no-notice visits to schools where we have identified behaviour as a particular concern." 
However he regards issues from outside school as teachers' excuses. No no-notice visits will be made to homes, television studios, cinemas, games and video makers to berate them for the bad luck they bring children.

Good schools are critical to good education, and merit rigorous inspection. But students spend most of their lives and are most receptive to influences outside the classroom. OFSTED and successive governments' determination to ignore this shows that some people really do never learn.

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