Skip to content

Universal Credit (2)

I last wrote about Universal Credit (UC) more than two years ago, just as it was running into heavy criticism from Commons’ Committees and within government. I had intended to write one or two further articles about that criticism within a month or two.

There is little point in going into that in any detail two years later. Those wanting to pursue the matter could start with the National Audit Office report in Sep 2013 ( pdf ).

But it is worth reproducing one Figure from that report:


The main purpose of UC is to remove the disincentives to work by simplifying the system and removing the high marginal tax rates faced by current claimants on additional earned income. But an important secondary purpose was to reduce the costs of administering welfare benefits. The Figure shows that it is hoped this reduction will be £2.7 billion/year once the system is fully operational. The £4.4 billion figure is some kind of quantification of the hoped-for benefits of removing the disincentives to work.

Unsurprisingly, the key to this reduction was changing the process from personal visits to Job Centres where a claimant can have all the paperwork completed by an expert employed by the government to a process where the claimant applies online.

The snag of course, is that benefit claimants are probably the least plausible group for a massive switch to online.

There were additional problems arising from a long history of government incompetence both at delivering large IT projects in-house and at procuring them from commercial providers.

The upshot was that the government decided to hold back introduction of digital UC, so that it would not be fully implemented until near the end of the current parliament (May 2020). It decided to use rapid-prototyping techniques to develop the necessary software in-house. Meanwhile there would be a roll-out of UC for simple cases where there were no children involved using the traditional approach of claimants applying in person at Job Centres. For some reason, the jargon for this roll-out is “live service”.

A Nov 2014 NAO update report summarised the situation as follows:


The government also has a website with regular monthly reports (Oct report pdf ) on the roll-out:


One can get more elaborate detail by going straight to more detailed databases which are available online:


although for some odd reason searching on Universal Credit gives nothing (and you have to search on something in order to populate the left-hand Databases column) – you have to try rather broader terms. Clearly there has been substantial progress since the NAO update, although things seem to have flattened out recently:


In the summer the government released details of how the roll-out of simple cases would continue. A lengthy “district list” shows when each postcode will be reached.


My own SE11 is one of the laggards:


Of course, Iain Duncan Smith is far from out of the wood yet. The precise detail of “simple cases” qualifying for the “live service” roll-out is fairly complicated and set out in Schedule 5 of SI 2013/983 (“The Gateway Conditions” p53ff of the pdf). But they evidently amount to only 0.5M in total out of the 7M projected claimants. Even getting from the present 141k simple cases, to the projected 500k by next April could be challenging. To enlist another 360k in the 26 weeks before the end of April (4 already past) will require an average of 14k/week compared with the current 6k/week. If the ramp-up was constant throughout the period, that would mean ramping up to 22k/week by next April. Not impossible, but certainly challenging.

How the full-blown digital service is getting on is completely unclear. But clearly the Major Projects Authority (on which I hope to write soon) is applying a good deal of pressure. Its last published traffic-light rating of UC seems to be amber/red in Sep 2014.

Bookmark and Share

Laser pointers

In October 2014 a small group of people was having a party in the backyard in the West Midlands at 1:15am. They noticed a police helicopter nearby and one of them, Chris Vowles, pointed a 120 mW green laser at it. The police pointed their cameras at the party and directed a police car to it. Vowles threw the pointer into a flowerpot, but the helicopter police spotted that. A week or two later he was given a suspended sentence of 7 months and required to do 250 hours of community service.


But such arrests are rare. In the last 12 months there have been over a thousand reported incidents of pilots near commercial airports being temporarily blinded or distracted by lasers pointed at them from the ground. In the USA the figure is 5300, up a third on the previous year.

There are two problems. The first is that waving around a laser pointer is great fun, especially if you are slightly drunk, and it does not seem to occur to the great majority of those pointing lasers at aircraft that the pilots can see them, let alone be seriously inconvenienced by them. But as one US expert puts it:

Picture this, you’re driving on the highway at 70 miles an hour at night and someone with an extremely intense flashlight flashes it in your face or someone with an extremely high, intense set of bright lights in their vehicle oncoming vehicle flashes you at the last minute

The second is that culprits are extremely hard to catch. It is a classic example of deterrence requiring both a significant penalty and a significant likelihood of being caught. Occasionally people in the USA are sentenced to up to several years in prison (not suspended), but it is rare enough not to be a significant deterrent.


Quite powerful pointers, say 100-200mW – substantially more powerful than you need to point at a powerpoint slide – are readily available on the internet for £10-20 or even less. But you can also buy much more powerful pointers, such as that immediately above at 5W for quite modest amounts.


So far this does not seem to be much of an issue, but a report earlier this week


showed that a BA co-pilot has suffered permanent damage to his retina from an incident as he came in to land at Heathrow in April. He has had to give up flying.

So far laser blinding has been inadvertent by the ill-informed, but there is also a significant terrorist issue. Experts have been warning for at least a decade that it would be cheap and straightforward to cause actual crashes by using more powerful lasers. So far we do not seem to have a technical fix. We need to find one before the terrorists notice the opportunity.

Bookmark and Share



Henness(e)y is a confusing surname. Well, to be more precise, despite my only noticing its prevalence recently, it seems to be quite a common Irish surname, although not in old or new top 100 lists. I recently chanced on the book above. After buying it from Amazon, I am now about halfway through. The plaudits on the back seem well-justified. Patrick Hennessey (b1982) read English at Balliol, joined the Grenadier Guards and went off to Helmand. His book gives a vivid description of what it is like to fight in a foolish war.


He is now apparently the “top male Barrister Hottie” at 39 Essex St chambers where he deals with the litigation and arbitration of commercial and construction disputes. But he does not seem to be one of the “Twenty members of 39 Essex Chambers recognised in the 2015 Planning Magazine Legal Survey”, nor can I find his name on a 2015 (reported) case. Maybe he majors in arbitration. Or maybe he should stick to writing – I am currently debating whether to splash out 1p (+ £2.80 p&p) at Amazon marketplace for his second book.

I also had not realised that as a side-effect of our attempt to be at least politically correct in matters of discrimination, babe and hottie are now applied to men as well as women.


Discovering that his grandfather was also a soldier and author, I searched idly through Amazon on my iPhone one day to find Peter Hennessy, whose Distilling book I later picked up from the Barbican Library (hence the reflective cover). I should have noticed that the spelling was wrong (as well as the first name). Then I chanced on a series of videos about Cabinet Secretaries and realized that I was dealing with the peer who had teamed up with Anthony Seldon, until recently the headmaster of Wellington School and a prolific author of books on recent political history.

One of the videos was about Andrew Turnbull, and I realised that my article about him in early 2009 was seriously unbalanced. Researching his more recent career, I noticed he was on the Parliamentary Commission on Banking Standards.

So that is two or three articles which should be coming later this month or early next.

Bookmark and Share

John Manzoni

This is the second in a series of articles about changes at the top of the civil service and in key ministerial posts over the last 18 months or so.

[John Manzoni at Reform’s Annual Conference 15 Oct 2015. 184 views to 18 Nov 2015, two of them mine. Evidently not an inspiring speaker.]

Manzoni is talking about his mission of reforming the Civil Service.

So reforming the Civil Service is about structural and cultural change. It’s about strengthening cross-government links through the professional functions and reinforcing the mechanisms of delivery. But today I want to concentrate on what lies at the heart of that. And that’s our people:

– getting the right people in the right jobs
– committing to developing the right skills
– setting clear career paths for our young people
– balancing depth of expertise with breadth of experience
– connecting all of that across departmental boundaries

So he is evidently interested in running public services efficiently rather than in policy. That is perfectly sensible. Traditionally, Whitehall has been excellent at turning vague political aspirations into workable policies, but much less good at running things. That, of course, was Mrs Thatcher’s insight. She thought that many things traditionally run by public sector monopolies should be privatized.

The snag, of course, is that “natural” monopolies remain monopolies when privatised and the result can be worse than before. How for example, do you privatise electricity? Do you run multiple power lines to each house or office? Or the railways: do you run multiple services along the same track? We tried that for buses and it failed. Then it turned out that some public sector industries were woefully underinvested. No train company was interested in buying new rolling stock at vast expense, when they might lose the franchise for a particular line after 5 or 10 years.

So we got into massive complications. The electricity generators were separated from the electricity retailers. We tried to construct “markets” amongst the generators, and to promote competition amongst the retailers. Then we realised that the generators simply wanted the cheapest power, whereas we wanted to achieve green objectives and “energy security” too, so complicated subsidies ensued. For the train companies, we separated the ownership of the rolling stock from the running of services.

Then we discovered that canny business men were far better at negotiating than civil servants. Hiring special civil servants and expensive consultants to help negotiate did not seem to help. All kinds of purchase and guarantee obligations were forced onto the government, so that by and large, the public continued to bear all the risk, whilst the canny private sector operators got guaranteed profits. Sometimes the public also had to supply the funds. We could not afford to borrow the money on the desired scale, so Gordon Brown grossed out on PFI schemes (and here and here), to borrow it in a far more expensive way, but one which made it look as though the National Debt was not being increased.

Government grasped on the whole that you still had to regulate the resulting privatised industries, but many Tory backbenchers didn’t, so we still have endless useless political posturing between socialists and free-marketeers. Meanwhile we began to discover the problems of regulatory capture. Few regulators have the intellectual rigour and stamina to stand up to prolonged contact with those they are supposed to be regulating. When they do, elaborate lobbying usually gets them replaced or reined in. New Labour proved just as susceptible to such lobbying as the Tories.

But some government functions seemed too hard to privatise. What about the welfare system, for example? To their credit the Tories grasped that the system they inherited was dysfunctional and unsustainable. It had major incentives to the poor to remain un- or under-employed, and Gordon Brown’s infamous tax credit system was mushrooming in cost. It turned out that Ian Duncan Smith, after a disastrous spell as Tory leader had focussed his energies on figuring out how to reform it. He was given his chance.

Of course, he quickly ran into the difficulty that any major overhaul was bound to create losers as well as winners, unless one substantially increased the total cost of the system. Increasing the cost was impossible given the recession and the bloated budgets bequeathed by Brown, so there was always going to be serious political trouble. The unexpected additional problem was that the (substantial) software changes needed to implement Universal Credit appeared to be being botched. The solution, if it is one, appears to be to overpay various safe pairs of hands, like IBM and HP. But this surely is an area where Government ought to be doing things in-house.

I have not yet got to the bottom of why Cameron and Osborne hired Manzoni. Was it simply a reflex reaction to what they saw as Civil Service incompetence? Was it simply right-wing dogma? Or is it part of a well-thought out plan?

The omens are not good. Over the last couple of decades a good deal of experience has accumulated on hiring people into the upper reaches of the Civil Service from the private sector. There are plenty of cases where it has turned out badly and it is hard to point to cases where it has turned out better than promoting from within the Civil Service, except maybe in a few highly specialised cases like defence procurement.

The reason is fairly obvious. The Civil Service is a hugely complicated organisation with many features not shared by the private sector. At the senior levels you are typically working with colleagues across Whitehall. You need to know who is competent and who is not, or more precisely what their strengths and weaknesses are. Those who have been promoted through the ranks have absorbed all that over the decades. Outsiders have a much harder time of it.

You may object that the same is true for a top businessman who moves to a different industry as CEO. That is true, and the results of such moves are rarely good. Indeed, the performance of many CEO’s is dire. Too many of them seem to be first-rate only at padding the board with supporters and organising a ludicrous bonus scheme for themselves which is more-or-less guaranteed to pay out.

So with that background, let us look a little more closely at John Manzoni (b1960). He got a BSc in civil engineering at Imperial, and then an MSc in petroleum engineering. He then joined BP in 1983 and climbed through the ranks. BP seem to have paid for him to get an MSc in management from Stanford in 1994. In 2002 he became chief executive for refining and marketing, which put him on the main board. In 2005 the Texas City Refinery blew up killing 15 and injuring 180.


Browne [the then CEO of BP] delegates authority for all aspects of the Refining and Marketing segment including safety to John Manzoni … In this position, Manzoni is responsible for all activities in the Refining and Marketing Segment’s strategic performance units, including Refining. While Manzoni is accountable for BP’s refining operations, he does not manage them. Manzoni is a petroleum engineer by education and, like Browne, rose through BP’s Exploration and Production Segment. Manzoni has also served in a number of planning, strategic, and regional positions before his appointment as Chief Executive, Refining and Marketing in April 2002. BP appointed Manzoni to this position upon the retirement of an Amoco-heritage refining and marketing executive. Manzoni had no refining experience before this appointment.

So here we go again. The guy who was ultimately responsible for the Mid Staffs debacle gets appointed as CEO of the Health Service until eventually forced out by persistent public protests. Now we appoint the guy ultimately responsible for a major refinery disaster to improve the performance of the Civil Service.

Note that he was appointed to his board position 3 years before the Texas disaster. He knew nothing about refining, but he was trained as an engineer. So you would think that one of the first things he would have done would be to go on some field trips to look at the refineries for which he was responsible. If you read the detailed reports on the disaster, it is fairly clear that a competent engineer should have picked up that all was not well once he got on site.

But failure to get out there and look is endemic in British top management. I remember being amazed when the details of the Hatfield rail crash emerged. The wretched directors of Railtrack seem never to have left their plush offices, despite the fact that maintaining competent operations was pretty much all they had to worry about.

In case you think I am jumping to conclusions, read a little more of the Review:


We find a formidably complicated organisation chart which must have blurred responsibilities (and which was down to Manzoni after the first year or so of his tenure).

Based on its review, the Panel believes that BP has not provided effective process safety leadership and has not adequately established process safety as a core value across all its five U.S. refineries. While BP has an aspirational goal of “no accidents, no harm to people,” BP has not provided effective leadership in making certain its management and U.S. refining workforce understand what is expected of them regarding process safety performance. BP has emphasized personal safety in recent years and has achieved significant improvement in personal safety performance, but BP did not emphasize process safety. BP mistakenly interpreted improving personal injury rates as an indication of acceptable process safety performance at its U.S. refineries. BP’s reliance on this data, combined with an inadequate process safety understanding, created a false sense of confidence that BP was properly addressing process safety risks …

First, BP has not effectively defined the level of process safety knowledge or competency required of executive management, line management above the refinery level, and refinery managers. Second, BP has not adequately ensured that its U.S. refinery personnel and contractors have sufficient process safety knowledge and competence. The information that the Panel reviewed indicated that process safety education and training needs to be more rigorous, comprehensive, and integrated. Third, the Panel found that at most of BP’s U.S. refineries, the implementation of and over-reliance on BP’s computerbased training contributes to inadequate process safety training of refinery employees …

The company’s system for assuring process safety performance uses a bottom-up reporting system that originates with each business unit, such as a refinery. As information is reported up, however, data is aggregated. By the time information is formally reported at the Refining and Marketing segment level, for example, refinery-specific performance data is no longer presented separately.

The Panel’s examination indicates that BP’s executive management either did not receive refinery-specific information that suggested process safety deficiencies at some of the U.S. refineries or did not effectively respond to the information that it did receive. According to annual reports on health, safety, security, and environmental assurance that BP management provided to the Environment and Ethics Assurance Committee of BP’s Board of Directors for 1999 through 2005, management was monitoring process safety matters, including plant and operational integrity issues. The reports identify safety and integrity management risks that various levels of the organization confronted and describe management actions proposed to address and mitigate those risks. From 2001 to 2003, for example, BP developed and implemented standards for process safety and major accident risk assessments and increased monitoring and reporting of action item closure, sharing of lessons learned, overdue planned inspections, and losses of containment. The reports and other documents that the Panel examined indicate, however, that issues persisted relating to assurance of effective implementation of BP’s policies and expectations relating to safety and integrity management.

For these reasons, the Panel believes that BP’s process safety management system was not effective in evaluating whether the steps that BP took were actually improving the company’s process safety performance. The Panel found that neither BP’s executive management nor its refining line management has ensured the implementation of an integrated, comprehensive, and effective process safety management system.

In other words, as I read it, Manzoni did not even bother to make sure he got meaningful reports on the refineries.

Well, part of the British disease has been to be unforgiving of failure. We all know that it is hard to learn from others’ mistakes, whereas our own tend to be burned into our minds. So maybe Manzoni has learnt from his past mistakes and will prove to be brilliant in his role. I have some doubts – eg this report of his time at Talisman, between leaving BP and his current job.

We will find out over the next few years.

Bookmark and Share

Matthew Hancock


After more or less ignoring politics for eighteen months, I am trying to catch up with changes at the top of the civil service and in key ministerial roles. So this is the first in a series of catch-up posts.

A few months before the last election, Francis Maude (b1953) announced he would be standing down. He never made it into the Cabinet, despite being shadow Chancellor for nearly two years when William Hague was Tory leader. He appeared to be one of those senior Tories who was fairly close to David Cameron, but considered unsuitable for the Cabinet, but he seems to have lost out to another apparent backroom figure, Oliver Letwin (b1956), now promoted to the Cabinet (as Chancellor of the Duchy of Lancaster, which seems to mean in practice senior minister at the Cabinet Office). Francis Maude was made a peer immediately after the election and given the unusual position of “Minister of State (Trade and Investment)” with a position at both the FCO and the BIS (the latest in the long list of names for the Department of Industry).

Matthew Hancock (b1978) works under Oliver Letwin as Paymaster General and “Minister for the Cabinet Office” with rights to attend at least some Cabinet meetings. The current Cabinet has 22 full members and 8 others who attend on at least some occasions, which makes it too big to conduct useful business if you believe Northcote Parkinson.

Hancock seems to have had something of a baptism of fire. Searching for him on youtube leads to

Matthew Hancock ripped apart on Tax Credits, welfare etc (05Oct15)
Matthew Hancock car crash interview on Tories budget fudges (10Jun15)
Matthew Hancock challenged on Tory cuts – Victoria Derbyshire

The first two are on the liarpolitican channel, the third on the BBC channel.
Perhaps unsurprisingly, the liarpolitician titles are undiscriminating. On both occasions, Hancock is being interviewed by Andrew Neil (b1949), who can be a formidable interviewer. Hancock comes out of the interview last month fairly well and is not remotely ripped apart.

The June interview is different. Hancock is seriously wrongfooted by quoting Canada and Sweden as shining examples of a balanced budget, but knowing none of the basic facts, and indeed looking shaky on basic economics. So Neil is able to make him look stupid with a whole lot of well-delivered and essentially irrelevant debating points. All part of a serious politician’s training no doubt. He managed to put up a much better showing five months later.


I found the third video somewhat depressing. I had never heard of Victoria Derbyshire (b1968) before, but looking her up on Wikipedia, she seems well-respected. She or her producer has packed the studio with a fairly hostile audience for a pre-election “Economy Debate” on 13 Apr 2015. She is asking for details of the £10 billion of welfare cuts that the Tories are proposing.

No party in UK history has every spelt out that kind of detail before an election. It is not particularly reasonable to expect them to do so. But whether reasonable or not, it is clearly political suicide to do so. So I found Derbyshire’s antics rather tiresome.

Any conceivable cuts will involve a significant number of losers. So given any kind of detail, any competent journalist will be able to come up with a tear-jerking example of some family who will suffer terribly from the proposed cuts.

I am absolutely fed up with journalism by tear-jerking example. I know that emotion is much more persuasive than reason, and that it is harder to get an audience for rational debate. The problem is that we seem to be ditching rational debate altogether. We need some kind of balance. No doubt some sort of emotional appeal is part of persuading the electorate, but we also need rational debate.

It is easy to criticise George Osborne. He certainly has an unattractive style. The only persuasive supporter of what he is trying to do that I have heard recently is Ken Clarke (b1940), who gave an extremely convincing interview with one of the radio news programmes (I think it was the World At One) a couple of weeks ago.

But at the same time, I have no patience with most of his critics. What exactly are they proposing?

The central problem is that government expenditure falls into three categories: interest on existing debt, expenditure “rule-based” things, and expenditure on “budgeted” things. There is some jargon for the last two categories, which I have unfortunately forgotten. But some of the expenditure is simply: we will spend £X billion on salaries, grants, purchases etc on this policy objective. That is what I am calling “budgeted” expenditure. You decide in advance how much you are going to spend on it. The outcome is almost never more than you decide and quite often slightly less.

The main example of the middle “rule-based” category is welfare expenditure. You say that anyone meeting such-and-such criteria will receive these benefits. The snag about that is that whilst you can try to forecast the outcome, you cannot control it. In particular, if the economic climate gets worse, then welfare expenditure will increase. Of course, government income will decrease because tax-takes of all kinds will reduce. So in a recession, if you leave everything else unchanged, then government borrowing will increase.

The UK National Debt is currently huge. The reported figure is somewhat over £1.5 trillion. The real figure is bigger, because Gordon Brown went mad on trickery to deceive the financial markets. Instead of funding government capital projects in the traditional way – borrowing the money and spending it – he overdosed on PFI/PPP. The idea was to structure the transaction as a kind of HP deal without the final option to buy. Like many HP deals it was ruinously expensive compared with the traditional route.

To be fair to Gordon Brown, it is not the only concealed borrowing. The point about debt is that the “debt service” – the future payments of interest and repayments of principal – represent a known burden on future governments which has to be met out of taxes before they can spend any money on things which benefit the country at the time they are making the payment. Put in more pejorative language, government debt is a way for one generation to force future generations to fund their lifestyle.

But debt is not the only device which has that effect. So do unfunded pensions, or lease payments or any flow of future payments which governments are legally obliged to make.

Fortunately, or not, depending on how one looks at it, most professional participants in the financial markets are bizarrely stupid and ill-informed. So the government debt markets do not automatically adjust the official National Debt figures to the real figures which would take account of all the other fixed future obligations. The adjustment is certainly not trivial. It would probably add a trillion or more to the official figure of £1.5 trillion.

So politically, it made perfect sense of Gordon Brown to indulge in the PFI chicanery. He was able to ramp up the National Debt to dangerous levels (in the sense that the markets might start downgrading UK debt from AAA and insisting on higher interest rates), but spend even more by funding umpteen PFI/PPP projects which did not show up in the National Debt figures.

What has happened under the Tories since May 2010? Unsurprisingly, the budget deficit has increased:


After the collapse of Lehman Brothers, when professional investors finally grasped there was a serious problem and OECD-wide recession hit, the budget deficit rocketed to £170 billion for 2009/10. Osborne has subsequently brought it down somewhat, but it still a large deficit. The effect is that the National Debt is still increasing. Despite all the howling, we have not yet managed to implement any overall cut in public expenditure. Yes some “budgeted” programmes have been cut, but expenditure on the “rule-based” programmes has increased because cutting them is too politically difficult.

Of course, now that the Tories have been in for 5 years, the current situation has become firmly “their fault” not Labour’s. But the real fault is with the electorate. It simply has not grasped that as a country we have been living way beyond our means for decades and that the music is currently faltering.

What I find really strange is that the under-30s (and even more so the under-20s) do not seem to have woken up to the fact that they have been robbed.

Bookmark and Share