Archive for September, 2010

Murkyside

News broke yesterday of some of the details of the contract between Liverpool City Council and the collaborative venture with British Telecom, Liverpool Direct Ltd, providing call centres, support services and much more to the city (see: http://www.liverpooldailypost.co.uk/liverpool-news/regional-news/2010/09/27/liverpool-council-report-reveals-massive-cost-of-bt-liverpool-direct-contract-92534-27348660/).  While this has been much talked about, it is finally in black and white.

Rather than repeat the details, I would remark upon the confused politics of the situation.  The former chief executive of LDL was on secondment from the City Council.  He is now back as the acting chief executive of the Council while a new one is appointed to take up post in the New Year.  He has overseen the cull of senior executives, including some closely concerned with the investigation of the financial irregularities in the LDL contract.  We might ask what role Mr McElhinny has played in the affair and in the current renegotiation of the LDL contract?

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The Government’s ‘Nudge Unit’

Officially called the Behavioural Insight Team, we now have a group reporting to a senior committee on the use of behavioural economics in policy making (http://www.guardian.co.uk/society/2010/sep/09/cameron-nudge-unit-economic-behaviour).  I have already suggested that Thaler and Sunstein’s book, Nudge, was one to be avoided.  But it strikes me that the subtle message they set out would be a great improvement on the policies we are seeing from the current coalition government.

Nudge at least argues for the representation of choices in ways that encourages us to make those that are in our best interest (as defined by Thaler and Sunstein).  Cameron and, in particular, George Osborne appear only capable of the very crudest of approaches.  Benefit cuts are targeted at those who have made welfare dependency a ‘lifestyle choice’.  Cuts in benefits for the long-term sick.  Cuts in housing benefit using extreme cases to justify widespread change.  Increasing evidence suggests that the poorest will be hardest hit by the cuts being announced each day.  This is incentivising self reliance using the very crudest thinking – withdrawal of all other assistance.

I suggested that the coalition might not last long – 18 months was my guess.  I am looking forward to the Lib Dem conference starting in Liverpool this weekend.  The cracks might be about to appear.