Thursday 16 January 2014

History Being Made

South Sea Bubble

The South Sea Company (officially The Governor and Company of the merchants of Great Britain, trading to the South Seas and other parts of America, and for the encouragement of fishing) was a British joint-stock company founded in 1711, created as a public–private partnership to consolidate and reduce the cost of national debt. The company was also granted a monopoly to trade with South America, hence its name. At the time it was created, Britain was involved in the War of the Spanish Succession and Spain controlled South America. There was no realistic prospect that trade would take place and the company never realised any significant profit from its monopoly. Company stock rose greatly in value as it expanded its operations dealing in government debt, peaking in 1720 before collapsing to little above its original flotation price; this became known as the South Sea Bubble.

Railway Mania

Railway Mania was an instance of speculative frenzy in Britain in the 1840s. It followed a common pattern: as the price of railway shares increased, more and more money was poured in by speculators, until the inevitable collapse. It reached its zenith in 1846, when no fewer than 272 Acts of Parliament were passed, setting up new railway companies, and the proposed routes totalled 9,500 miles (15,300 km) of new railway. Around a third of the railways authorised were never built – the company either collapsed due to poor financial planning, was bought out by a larger competitor before it could build its line, or turned out to be a fraudulent enterprise to channel investors' money into another business.

Groundnut Scheme

The Tanganyika Groundnut Scheme was a plan to cultivate tracts of what is now Tanzania with peanuts. It was a project of the British government. It was abandoned in 1951 at considerable cost to the taxpayers when it did not become profitable. Ground nuts require at least 500 mm (20 inches) of rainfall per year; the area chosen was subject to drought.

Ponzi Scheme

Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors, rather than from profit earned by the individual or organization running the operation. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.

TR Omnishambles

The TR Omnishambles was a government scheme in 2013/14  to privatise most of the probation service in England and Wales by dividing it in the ratio 70/30 between commercial Community Rehabilitation Companies and a National Probation Service. The concept was borne principally of a political desire by the Conservative/Liberal Democrat coalition government to save money and reduce the size of the State. However, it proved totally unworkable and many Community Rehabilitation Companies went bust with investors incurring heavy losses. The resulting chaos and public outcry from several notorious murders led to expensive renationalisation by the subsequent Labour/Liberal Democrat/United Kingdom Independence Party coalition government in 2015.     

16 comments:

  1. http://www.taxpayersalliance.com/home/2013/06/bumper-book-government-waste-exposes-120-billion-wasteful-spending-4500-household-uk.html

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    1. I wouldn't put any faith in the taxpayers alliance. Randian free market pressure group.

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    2. I saw the other day that the BBC Trust reprimanded BBC News for failing to describe the TPA as a pressure group, which has strong links to the Tory party. Not before time. The list in their article simply shows their moral judgements - presumably the £700,000 paid by the Prison Service to actors relates to Geese Theatre, in which case this particular taxpayer would consider it money well spent.

      Wonder what they will make of the hundreds of millions of pounds spent on TR, which is unlikely to realise any savings once the costs of extra crime, demands on other services etc. is factored in. Probably not very much; the TPA do love a small state, even if it's a mindlessly ineffective one.

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    3. They'll be silent. They represent the far right in economic terms and i consider them my enemy.

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    4. Well its all delayed now until June 1st. Breaking news!!!

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  2. In advance of the Comprehensive Spending Review, we can reveal how the Government could cut vast swathes of wasteful and unnecessary spending. A new online edition of the Bumper Book of Government Waste, published today, identifies potential savings to the tune of nearly £120 billion, a figure almost exactly equal to the current budget deficit. This equates to a massive £4,500 for each and every household in the UK - enough to give every family in the land a luxury holiday or pay their household energy bills nearly three times over.

    Excellent work has been undertaken by the Cabinet Office’s Efficiency and Reform Group in terms of finding savings, but taxpayers’ cash has still been wasted in a number of ways, with significant sums ripe for being saved in many areas, including:

    £53 billion - Additional cost of funding pay and pensions for public sector workers over and above the private sector average, based on analysis of figures from the Office for National Statistics and the Pension Policy Institute
    £25 billion - Amount wasted through inefficient public sector procurementand poor use of outsourcing, based on an authoritative report from the Institute of Directors
    £20.3 billion - Cost to the economy of public sector fraud, according to the National Fraud Authority
    £5 billion - Amount paid in benefits to those with an income in excess of £100,000
    £4 billion - Losses to the taxpayer from RBS and the sale of Northern Rock
    £2.9 billion - Amount spent needlessly by the Department for Business, Innovation & Skills and Department for Culture, Media & Sport, which should both be scrapped
    £1.2 billion - Annual subsidy to foreign farmers through the EU’s Common Agricultural Policy
    Our figure is almost certainly an underestimate. A rigorous assessment of the public sector efficiency commissioned by the European Central Bank found that if the UK’s bloated public sector were as efficient as that in the economies of countries like the US, Australia, and Japan, no less than £137 billion could have been saved in the last year.

    In addition to the big ticket items, we have identified hundreds of examples of smaller sums being wasted. It is, however, all still taxpayers’ money and there is no excuse for waste, regardless of the amount involved. Among the culprits identified are:

    Arts Council: Gave a £95,000 grant to artists in Brighton for “Skip”, a rubbish dumpster outlined with yellow lights
    Crawley Council: Spent £5,070 on 12,200 hot drinks from vending machines for council employees, when the equivalent number of tea bags would have cost just £200
    Department for International Development: Spent £21.2 million on a road maintenance project in Bangladesh, later pulled due to “fiduciary irregularities” after it emerged that less than 10% had actually been spent on roads
    Durham Council: Funded a £12,000 clothing allowance to allow councillors to wear “Geordie Armani”
    Hull Council: Spent £40,000 on a concert in honour of the councillor who is Lord Mayor this year
    Ministry of Defence: Paid £22 for light bulbs that are normally 65p
    Prison Service: Paid £720,000 to professional actors for role playing that is aimed at helping inmates become employed
    Scottish Government: Signed a £1.4 million 4-year contract for taxis for civil servants in Edinburgh – despite staff being told to use buses
    Stoke-on-Trent Council: Spent £330,000 to pay for redundancy packages and subsequently rehiring 25 members of staff.

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    1. You learn some amazing things on this blog for sure! But the above article has made me think a bit more about co-location. Will there be NPS and CRC T-bags? Who will pay for light bulbs that need replacing? Maybe toilet rolls will be colour coded, white for CRC and pink for NPS? And as for the problems regarding the photo copying machine and paper used?

      I wonder if there is actually someone at the MoJ charged with with solving these problems?

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    2. MOJ and solving problems!!!!

      Somewhat a oxymoron IMO :)

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    3. lol lol. Pink bog roll for NPS. I thought the NPS colour was purple, lol lol. Someone at MOJ probably is paid to deal with these problems, though probably just merely pushes papers around.

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  3. Yesterday the EU passed laws that made outsourcing for the UK government much easier. Wondering just how far it can go I did some research. I found this video on you tube. Could we all be working in offices like this in 18 months time?

    http://youtu.be/LrloJQhQ2yQ

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  4. A Tip to help you create a computer password , that smiling Sonia is unlikely to pass on!

    Please do not follow the link if you are often offended by the language others use - you have been warned!

    https://pbs.twimg.com/media/BeAymcGCUAAoFrD.jpg

    Andrew Hatton

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  5. Jim - the entry for TR should have a reference to it being Chris Grayling's vanity project (I for one will not rest in trying to ensure he's held personally responsible for the SFOs that follow) but otherwise it's spot on as usual!

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  6. http://www.theguardian.com/society/2014/jan/17/fortified-school-education-young-offenders-glen-parva

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    1. Will they teach Conservative doctrine, and start every day with the Thatcher Anthem?

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    2. Detailed plans to build the first "secure college" to rehabilitate young offenders through better education and training have been jointly announced by Nick Clegg and the justice secretary, Chris Grayling.

      The fortified school, as it is described by the justice ministry, is to be built at a cost of £85m next door to the existing Glen Parva young offender institution in Leicestershire.

      Work on building the East Midlands secure college will start next year with a 2017 opening date.

      The facility is designed to pilot a network of secure colleges across England and Wales. It will house 320 young offenders in addition to the current provision of 1,778 beds in young offender institutions, privately-run secure training centres and local authority secure children's homes.

      Clegg and Grayling said educational provision for the 800 under-18s currently held in young offender institutions will be more than doubled from the current 12 hours a week, under new contracts to come into effect from later this year.

      Clegg said the number of young people in custody had been reduced – from 2,600 in March 2009 to 1,229 last November – but reoffending rates remained "sky high". The deputy prime minister said the answer lay in education.

      He said: "We need to make sure that time spent in custody is time well spent. We need to turn these young people into better citizens not better criminals. If we want to stop prisons being colleges of crime, we have to teach these kids how to do something else." He said some young offenders spent less than one school day a week in the classroom.

      Grayling said young offenders needed to be given the skills and self-discipline they need to gain employment or training on release.

      The justice ministry says the pioneering fortified school will provide strong discipline while focusing on rehabilitation and education. It will have a headteacher or principal at the core of a leadership team made up of educational professionals and offender managers.

      The secure college will cost £85m to build. There are no precise estimates of running costs but officials say it will be less than the current £100,000 a year per head cost of current youth custody provision.

      Bids to run the college are to be invited from a range of providers including from the private and voluntary sectors.

      The plan carries echoes of the original conception for the privately run secure training centres that were launched by Ken Clarke when he was home secretary in 1992. Whitehall sources say the eventual aim is to replace the network of troubled secure training centres with secure colleges.

      Penelope Gibbs, chair of the Standing Committee for Youth Justice, said the single focus on education was misguided as there were many underlying causes of youth offending. "A more holistic therapeutic model is needed rather than a gimmicky repackaging of our current costly and broken approach to child custody," she said.

      "Numbers of children in custody have been falling, and the government's focus should be on ensuring further reductions so that only those children who are a genuine danger are placed in custody. The few children who need to be imprisoned should be in secure children's homes local to them, not in a 320 capacity prison in the middle of the country."

      The shadow justice secretary, Sadiq Khan, said building one new secure college would do little to reduce the reoffending rate across the rest of the country.

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  7. It would be nice if someone thought about getting them into college before they went to the YOIs. Or send them to Eton!

    On another note, have you got any inside knowledge about the newly-announced two month delay in the abolition of Trusts, Jim?

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