Council tax rises get go-ahead

[Countdown]

V8 Fettler said:

You can certainly add elements for procurement, project management and supervision, but where are these costs identified?

They wouldn’t be identified separately anywhere. They would be included within Central costs. Councils don’t generally allocate overheads out to a Departmental or Project level. Having said that, “some” PS bodies do benchmarking so they may have done some kind of internal overheaed allocation exercise, but it wouldn’t be publicly available.

[V8 Fettler]

Countdown said:

V8 Fettler said:

You can certainly add elements for procurement, project management and supervision, but where are these costs identified?

They wouldn’t be identified separately anywhere. They would be included within Central costs. Councils don’t generally allocate overheads out to a Departmental or Project level. Having said that, “some” PS bodies do benchmarking so they may have done some kind of internal overheaed allocation exercise, but it wouldn’t be publicly available.

If individual cost elements can't be identified then overall costs can't be accurately measured, therefore they can't be managed or controlled.

[Countdown]

Rovinghawk said:

Countdown said:

I'll admit I'm a cynical person at the best of times

Except towards councils, apparently.

I like to think my cynicism is universal. I don’t think I disagree that Councils can be wasteful and incompetent or the Council employees can be lazy and overpaid. However what I would say is that, on a like-for-like basis and adjusting for the different political environment and customer base, there is little if any difference in terms of quality between Public Sector and Private Sector organisations or PubSec staff and PriSec staff. People don’t magically change when moving between the two sectors and quite often nowadays it’s private sector staff who are providing Public services.

Arguably failing private sector organisations go bankrupt and the shareholders suffer. With public sector organisations if we let them go bankrupt the taxpayer suffers twice over; once for the initial funding which has been wasted and then again to scrap everything and start all over again, which clearly wouldn’t make sense.

[Countdown]

V8 Fettler said:

Countdown said:

V8 Fettler said:

You can certainly add elements for procurement, project management and supervision, but where are these costs identified?

They wouldn’t be identified separately anywhere. They would be included within Central costs. Councils don’t generally allocate overheads out to a Departmental or Project level. Having said that, “some” PS bodies do benchmarking so they may have done some kind of internal overheaed allocation exercise, but it wouldn’t be publicly available.

If individual cost elements can't be identified then overall costs can't be accurately measured, therefore they can't be managed or controlled.

That's true (although I'm led to believe that benchmarking does happen for certain services). However you also have to take into account that the Public Sector is not able usually to ration supply or only provide a product/service where it's "profitable" to do so, like the Private Sector can. It can't just walk a way from its statutory obligations and more and more money is spent "wiping peoples backsides" If more people looked after themselves or didn't behave in a selfish manner the Council wouldn't need to provide so many services. Consider how many people actively look at avoiding care costs, look at how many kids are in social care because the parents are unable or unwiliing to look after them, the list is endless.

[V8 Fettler]

Countdown said:

V8 Fettler said:

Countdown said:

V8 Fettler said:

You can certainly add elements for procurement, project management and supervision, but where are these costs identified?

They wouldn’t be identified separately anywhere. They would be included within Central costs. Councils don’t generally allocate overheads out to a Departmental or Project level. Having said that, “some” PS bodies do benchmarking so they may have done some kind of internal overheaed allocation exercise, but it wouldn’t be publicly available.

If individual cost elements can't be identified then overall costs can't be accurately measured, therefore they can't be managed or controlled.

That's true (although I'm led to believe that benchmarking does happen for certain services). However you also have to take into account that the Public Sector is not able usually to ration supply or only provide a product/service where it's "profitable" to do so, like the Private Sector can. It can't just walk a way from its statutory obligations and more and more money is spent "wiping peoples backsides" If more people looked after themselves or didn't behave in a selfish manner the Council wouldn't need to provide so many services. Consider how many people actively look at avoiding care costs, look at how many kids are in social care because the parents are unable or unwiliing to look after them, the list is endless.

To mention a few, the NHS and the police ration supply, as do the providers of social housing.

The identification of individual cost elements is the starting point to improving efficiency.

On a wider scale, it's obvious to a sane person that there are numerous expensive and avoidable social issues created by poor diet, lack of exercise, lack of suitable role models and the failure of parents to accept the responsibilities created when children arrive. Life expectancy no longer increasing, widespread obesity and diabetes, large numbers of single parent families, I could go on (no!).

[Countdown]

V8 Fettler said:

To mention a few, the NHS and the police ration supply, as do the providers of social housing.

Neither the NHS nor the Police are able to choose what services they can and cannot provide. If 100 people decide to beat each other up the Police will have to attend, to the best of their ability. If 100 people turn up at A&E with various injuries the NHS will have to treat, to the best of their ability. However Social Housing is an excellent example of where a quasi - Public Sector service can be run for a profit. This is because they "sell" a fixed service to the Taxpayer at a fixed price. That's why the vast majority of Housing Associations and ALMOs make a decent ROCE.

V8 Fettler said:

The identification of individual cost elements is the starting point to improving efficiency.

In theory yes, in practice it's "not that easy". For example when i worked in the NHS many eons ago we were doing work on Finished Consultant Episodes. However there are too many variables for it to be used as an efficiency benchmark. Patients require different levels of treatment, they will have different issues (not always medical related) the local demographic might not be the healthiest and so forth. In short, it's not like costing and overhead absorption in a normal production environment. And then combine this with the fact that you're literally giving away your "product" for free at the point of use.

V8 Fettler said:

On a wider scale, it's obvious to a sane person that there are numerous expensive and avoidable social issues created by poor diet, lack of exercise, lack of suitable role models and the failure of parents to accept the responsibilities created when children arrive. Life expectancy no longer increasing, widespread obesity and diabetes, large numbers of single parent families, I could go on (no!).

I completely agree and, more often than not, the cost of all these issues is borne by the PS.

[Rovinghawk]

Countdown said:

the Public Sector is not able usually to ration supply

My council tax entitles me to one rubbish bin, collected every 2 weeks. I'd call that rationing.

Countdown said:

or only provide a product/service where it's "profitable" to do so

I have to pay extra for a green bin- the council doesn't provide this service unless it's paid for.

Countdown said:

It can't just walk a way from its statutory obligations.

I'm willing to bet that they do so when they think they can get away with it. They've done so with me, making pathetic excuses, so I'm pretty damn certain it happens. It wasn't worth the fight so they won.

I think they all regularly walk away from their obligations regarding potholes- please prove me wrong.

[Countdown]

Rovinghawk said:

Countdown said:

the Public Sector is not able usually to ration supply

My council tax entitles me to one rubbish bin, collected every 2 weeks. I'd call that rationing.

Do you not also have a recycling bin that's collected on other weeks? Or a paper bin? Or one for Garden waste? The Council will also provide you with a tip (ie Household Waste Recycling centre). the Council also uses your CT to fund the costs of clearing up flytipping.. The point I'm trying to make is that you/I/everybody looks at the money THEY pay and the service they personally receive. Even assuming they identify ALL the services they presently receive they ignore the fact that it's a socialised cost. Some people benefit more for what they pay in, others pay less.

Countdown said:

or only provide a product/service where it's "profitable" to do so

Rovinghawk said:

I have to pay extra for a green bin- the council doesn't provide this service unless it's paid for.

You don't have to pay for it. You can take garden waste to the Tip, or burn it. The Council could incorporate this charge into your CT but then effectively everybody who didn't have garden waste would be subsidising those who do.

Rovinghawk said:

I'm willing to bet that they do so when they think they can get away with it. They've done so with me, making pathetic excuses, so I'm pretty damn certain it happens. It wasn't worth the fight so they won.

I think they all regularly walk away from their obligations regarding potholes- please prove me wrong.

"Statutory" means that they're legally obliged to provide it and if they don't you have various legal options available to you.. Im not sure if they have a statutory obligantion relating to potholes though.

[Saleen836]

My local council introduced a charge of £40 per year to have a green bin emptied, they also introduced a licence scheme to use the local community skips, if you want to dump rubbish at the tip and use a trailer or a van you need a licence and are permitted to 12 visits in a 12 month period, the licence is free and takes 5 mins to apply for online but for reasons only known to the idiots of the Parish, fly tipping is an easier option!

[V8 Fettler]

Countdown said:

V8 Fettler said:

To mention a few, the NHS and the police ration supply, as do the providers of social housing.

Neither the NHS nor the Police are able to choose what services they can and cannot provide. If 100 people decide to beat each other up the Police will have to attend, to the best of their ability. If 100 people turn up at A&E with various injuries the NHS will have to treat, to the best of their ability. However Social Housing is an excellent example of where a quasi - Public Sector service can be run for a profit. This is because they "sell" a fixed service to the Taxpayer at a fixed price. That's why the vast majority of Housing Associations and ALMOs make a decent ROCE.

V8 Fettler said:

The identification of individual cost elements is the starting point to improving efficiency.

In theory yes, in practice it's "not that easy". For example when i worked in the NHS many eons ago we were doing work on Finished Consultant Episodes. However there are too many variables for it to be used as an efficiency benchmark. Patients require different levels of treatment, they will have different issues (not always medical related) the local demographic might not be the healthiest and so forth. In short, it's not like costing and overhead absorption in a normal production environment. And then combine this with the fact that you're literally giving away your "product" for free at the point of use.

V8 Fettler said:

On a wider scale, it's obvious to a sane person that there are numerous expensive and avoidable social issues created by poor diet, lack of exercise, lack of suitable role models and the failure of parents to accept the responsibilities created when children arrive. Life expectancy no longer increasing, widespread obesity and diabetes, large numbers of single parent families, I could go on (no!).

I completely agree and, more often than not, the cost of all these issues is borne by the PS.

Post dissection, wonderful

The NHS rations treatment, sometimes on a cost basis, sometimes on a postcode basis.

The police ration attendance to crimes scenes for various stated reasons, some of which are understandable, some of which are bizarre.

The financial figures for ALMOs and housing associations are frequently skewed by the fact that their initial capital outlay does not reflect the true value of the existing properties when transferred from local authorities, also they're not supposed to make a profit.

The private sector cannot be trusted to treat the primary causes of obesity, diabetes, family breakdown, lack of role models etc. My personal view is to apply draconian legislation to resolve, might not be popular though.

[Countdown]

V8 Fettler said:

Post dissection, wonderful

The NHS rations treatment, sometimes on a cost basis, sometimes on a postcode basis.

The police ration attendance to crimes scenes for various stated reasons, some of which are understandable, some of which are bizarre.

The financial figures for ALMOs and housing associations are frequently skewed by the fact that their initial capital outlay does not reflect the true value of the existing properties when transferred from local authorities, also they're not supposed to make a profit.

The private sector cannot be trusted to treat the primary causes of obesity, diabetes, family breakdown, lack of role models etc. My personal view is to apply draconian legislation to resolve, might not be popular though.

Re: dissection - it was just intended to make my responses clear but I'll leave them all together if you prefer.

Where the Police and the NHS don't provide a service that they are obliged to provide they are shown to have failed to meet their targets. We might be talking about angels dancing on pinheads but if you were to turn up at A&E with a gunshot wound they wouldn't turn you away, regardless if there was one of you or 1000. Similarly if the Police are told that Muhammad al Jihadi is walking around Godalming Town Centre with a Suicide vest shouling anti-Western slogans then they will respond. They cannot say, not thanks we're on a break. They are not rationing, they are prioritising until the money runs out. That's why so many PS organisations have in-year budget deficits, it means they spent more than they earned.

In terms of ALMOs and HAs; Actually ALMOs DO pay towards the capital cost of the housing. It's shown within the Council's HRA. If they aren't paying then that's probably because the capital cost has already been repaid. The normal Finance plans aim for a 25 year repayment model and most council houses will be older than that. So although they don't have a mortgage to pay they will be having to pay more for the upkeep of the properties given how old they are.

[V8 Fettler]

Countdown said:

V8 Fettler said:

Post dissection, wonderful

The NHS rations treatment, sometimes on a cost basis, sometimes on a postcode basis.

The police ration attendance to crimes scenes for various stated reasons, some of which are understandable, some of which are bizarre.

The financial figures for ALMOs and housing associations are frequently skewed by the fact that their initial capital outlay does not reflect the true value of the existing properties when transferred from local authorities, also they're not supposed to make a profit.

The private sector cannot be trusted to treat the primary causes of obesity, diabetes, family breakdown, lack of role models etc. My personal view is to apply draconian legislation to resolve, might not be popular though.

Re: dissection - it was just intended to make my responses clear but I'll leave them all together if you prefer.

Where the Police and the NHS don't provide a service that they are obliged to provide they are shown to have failed to meet their targets. We might be talking about angels dancing on pinheads but if you were to turn up at A&E with a gunshot wound they wouldn't turn you away, regardless if there was one of you or 1000. Similarly if the Police are told that Muhammad al Jihadi is walking around Godalming Town Centre with a Suicide vest shouling anti-Western slogans then they will respond. They cannot say, not thanks we're on a break. They are not rationing, they are prioritising until the money runs out. That's why so many PS organisations have in-year budget deficits, it means they spent more than they earned.

In terms of ALMOs and HAs; Actually ALMOs DO pay towards the capital cost of the housing. It's shown within the Council's HRA. If they aren't paying then that's probably because the capital cost has already been repaid. The normal Finance plans aim for a 25 year repayment model and most council houses will be older than that. So although they don't have a mortgage to pay they will be having to pay more for the upkeep of the properties given how old they are.

Rationing may well be a result of the money running out, but it's still rationing.

The annual upkeep cost on a typical, solidly-built three bed semi council house in excess of 25 years old would be unlikely to match the mortgage repayment costs on a similar house, certainly not in the South East.

The ALMOs and HAs that I've had some involvement with over the years are/were inner city, all properties older than 25 years old, with a substantial number of the properties being worth seven figures on the open market.

[Countdown]

V8 Fettler said:

The annual upkeep cost on a typical, solidly-built three bed semi council house in excess of 25 years old would be unlikely to match the mortgage repayment costs on a similar house, certainly not in the South East.

Not NOW they wouldn't because house price inflation has not been matched by rental inflation. A family freind has quite a large BTL portfolio accumulated over 50 years. When he started out the rent on a 2 bed terrace was £25pw and the properties he was buying at the time were between £5k and £10k per annum. So, if you bought a house back then, it was more than likely that rental profits quickly paid off the borrowing costs. It doesn't any more and that's why HAs only build for rent where they get a grant from Homes England

V8 Fettler said:

The ALMOs and HAs that I've had some involvement with over the years are/were inner city, all properties older than 25 years old, with a substantial number of the properties being worth seven figures on the open market.

The open market value is irrelevant. The Councils cant choose to sell the houses and any that they are forced to sell (under RTB/RTA) are usually at a massive discount and they can only use the proceeds to build replacement homes.

[V8 Fettler]

Countdown said:

V8 Fettler said:

The annual upkeep cost on a typical, solidly-built three bed semi council house in excess of 25 years old would be unlikely to match the mortgage repayment costs on a similar house, certainly not in the South East.

Not NOW they wouldn't because house price inflation has not been matched by rental inflation. A family freind has quite a large BTL portfolio accumulated over 50 years. When he started out the rent on a 2 bed terrace was £25pw and the properties he was buying at the time were between £5k and £10k per annum. So, if you bought a house back then, it was more than likely that rental profits quickly paid off the borrowing costs. It doesn't any more and that's why HAs only build for rent where they get a grant from Homes England

V8 Fettler said:

The ALMOs and HAs that I've had some involvement with over the years are/were inner city, all properties older than 25 years old, with a substantial number of the properties being worth seven figures on the open market.

The open market value is irrelevant. The Councils cant choose to sell the houses and any that they are forced to sell (under RTB/RTA) are usually at a massive discount and they can only use the proceeds to build replacement homes.

Public sector cost management in a nutshell.

Right to buy was a big mistake.

[Countdown]

The open market value has no impact on cost management.

Agree that RTB/RTA was a big mistake.

[V8 Fettler]

Countdown said:

The open market value has no impact on cost management.

Agree that RTB/RTA was a big mistake.

Cost management should be based on several factors, including the true financial value of an asset; there's generally no point in investing £££ in an asset that's only worth £, there is generally merit in investing £££ in an asset that's worth £££££££££.

The true financial value of an asset is generally the open market value, how else would you value it?

[Countdown]

V8 Fettler said:

Cost management should be based on several factors, including the true financial value of an asset; there's generally no point in investing £££ in an asset that's only worth £, there is generally merit in investing £££ in an asset that's worth £££££££££.

No. It depends on the type of asset and how much profit it generates. An asset may have a market value of £10. However if it’s earning you £1000 pa annum then it would make sense to invest far more than it’s market value in it.

V8 Fettler said:

The true financial value of an asset is generally the open market value, how else would you value it?

I don’t disagree but I’m not sure how this is relevant to Social Housing. The assets generate a significant amount of cash flow. Repairs & maintenance are factored into the total budgets and they still make healthy profits. So if a Council House generating £5k a year in rent was valued at £5k on the open market or £200k on the open market it would make little or no difference to the business plans of the Housing Association. As long as it generated an operating profit the HA would continue to invest in it.

[V8 Fettler]

Countdown said:

V8 Fettler said:

Cost management should be based on several factors, including the true financial value of an asset; there's generally no point in investing £££ in an asset that's only worth £, there is generally merit in investing £££ in an asset that's worth £££££££££.

No. It depends on the type of asset and how much profit it generates. An asset may have a market value of £10. However if it’s earning you £1000 pa annum then it would make sense to invest far more than it’s market value in it.

V8 Fettler said:

The true financial value of an asset is generally the open market value, how else would you value it?

I don’t disagree but I’m not sure how this is relevant to Social Housing. The assets generate a significant amount of cash flow. Repairs & maintenance are factored into the total budgets and they still make healthy profits. So if a Council House generating £5k a year in rent was valued at £5k on the open market or £200k on the open market it would make little or no difference to the business plans of the Housing Association. As long as it generated an operating profit the HA would continue to invest in it.

An asset that generates a net income of £1000 per annum would generally have an open market value of several times that.

Where can I buy a property on the open market for £5k that generates £5k net per annum?

[Rovinghawk]

V8 Fettler said:

An asset that generates a net income of £1000 per annum would generally have an open market value of several times that.

Yes, but in the public sector it might be valued at the £10 Countdown suggests. It will then be sold at that value to the councillor's brother.

[funkyrobot]

My local council have just fooked up the installation of some new parking ticket machines. Despite people saying they shouldn't, they went ahead with installing a load of card only machines. Which then didn't work for months. It now transpires that this cost nearly £30k to implement, plus the lost revenue from the machines for months. They now need to spend a further £7k to update the machines to take both cash and card.

The council bod who oversees this appeared in the local paper saying they had to update the machines. No apology, no comment on the extra cost, just a soundbite about how the current machines don't work.

His justification for the card only machines is because it costs the council £20k a year to empty the cash out of the current machines. I'm not surprised about the costs though. The same council recently bragged how they spent £30k on a webinar facility. £30k!!

I don't know why the people in his ward keep voting him in. He's an absolute moron.