The Venerable Gove

[Tubby Isaacs]

The Venerable Gove

That's worth a link:

http://www.regen.net/news/ByDiscipline/Community-Renewal/1021745/Gove-freezes-community-playground-grants/

I hadn't seen that news. Maybe Gove's axe isn't newsworthy any more.

Playgrounds, I presume, are not "frontline".

[Tubby Isaacs]

The Venerable Gove

He's back.

http://www.guardian.co.uk/politics/2010/nov/02/free-meals-school-improvement-scheme

what could possibly go wrong here?

The cash will come from an endowment fund started with £110m of public money, saved by a coalition decision to scrap an extension of free school meals to all primary schoolchildren living below the poverty line. The government plans to outsource the project to a City fund manager, who will assess the bids in consultation with education experts. The education secretary, Michael Gove, said he expected the fund to pay out up to £10m a year.

The City Fund manager, I presume, is gambling with the money to yield a return. He won't be assessing bids about education, a subject he knows nothing about, will he?

The Education Endowment Fund will run for a decade, dispensing money from its income as well as a portion of the capital each year. The government hopes it will also encourage donations from philanthropists. Establishing it for a decade will put it outside the "twists and turns" of Treasury negotiation, Gove said.

So money that isn't handed over to the City can all be taken away, can it? You can't ringfence it then? Why not give him the entire education budget in that case? Or at least the £500k you gave to the Free Schools Network.

[E10 Rifle]

The Venerable Gove

If I see Mossbourne fucking Academy invoked one more time on an education discussion I'm gonna scream. It doesn't seem to have occurred to many people that most of the country isn't very like Hackney. (And Mossbourne's head, Sir Michael Wilshaw, was the head of lower site at my secondary school in the 80s, where he was universally known as "spam" due to his high forehead. I hope Mossbourne's pupils call him that too)

[Tubby Isaacs]

The Venerable Gove

I think it was him on the John Humphries programme about education who said it wasn't about buildings. Right, swap your Richard Rogers place with a school whose building grant has been cut by Gove.

And Gove, you can do your next presentation at this school.

[E10 Rifle]

The Venerable Gove

Well Mossbourne looks ugly as fuck - that great luminous blue block that looms over Hackney Downs station on the way to Clapton. Still, I'm sure the PFI firm that built it have done OK.

[Anton Gramscescu]

The Venerable Gove

It's interesting - the mechanics of that Fund are *exactly* the same as those of the Foundation I used to work for - a 10-year sinking fund of government money, business person as chair (not bankers, in our case). It's like they photocopied it.

In our case, the dude who was chair of the Board did virtually nothing (other than lend his prestige to the project) - there was a small professional secretariat (not public servants, but certainly publicly-minded...I never wuld have joined if it had actually been government) that ran all the programs, liaised with the relevant group, did the impact analysis, etc. Best job I ever had and arguably one of the best (quasi-)public entities in Canadian history.

Re: gambling with money - if they've gone the same route as we did, there will be quite strict limits on the kinds of things in which they can invest. Our agreement with the feds specified that we couldn't hold equities, and something like 70% of the portfolio has to be AAA-rated bonds. We ended up making a ton of money anyway on capital gains in the first year or two because interest rates were falling, which ended up funding a lot more scholarships.

No idea if they'l copy the good parts of it, though. Probably not.

[Anton Gramscescu]

The Venerable Gove

Of course, our money came from the country's first fiscal surplus in thirty years rather than from the earmarked proceeds of eliminating school lunches.

For a former journalist, Gove has a seriously tin ear for the politics of this stuff.

[Tubby Isaacs]

The Venerable Gove

E10 Rifle wrote:

Well Mossbourne looks ugly as fuck - that great luminous blue block that looms over Hackney Downs station on the way to Clapton. Still, I'm sure the PFI firm that built it have done OK.

Is there anyway we can find out how well?

What would have happened if it went wrong, Gramsci?

Interesting thoughts.

[Anton Gramscescu]

The Venerable Gove

If what went wrong?

[Tubby Isaacs]

The Venerable Gove

That they lost all the money. If it were completely safe why not invest the whole education budget like that?

[Anton Gramscescu]

The Venerable Gove

Well, you can write the investment rules to favour capital perservation (which is what ours did) over capital gains. The reason you don't do the entire budget that way is that you're pre-paying ten years worth of spending and there isn't money to do it like that across the entire budget.

The main reason you do something like this would be a) to get money off government books and b) you want an alternative delivery mechanism for public services. If you think your public service doesn't have the wherewithal to give out money efficiently, or creatively, or whatever, then you can do something like this to experiment a bit.

In our case, basically the finance department didn't trust the Dept. of Human Resource Development not to piss it all away, so they set up a new non-governmental structure. I think they got their money's worth - the structure we developed was frankly better than the one the student loans division had. We managed a program about a third the size with a tenth of the staff they did, we had far better relationships with the provinces and institutions than they did, and the Auditor General said we had better mechansisms for measuring impact and value-for-money than they did.

(Mind you, she still hated the arrangement as a whole, but she was at least fair-minded enough to say that even though she thought our legislation was an atrocity - which in some respects it was - we had done a really good job.)

I don't know about the culture of the public sector over there, but over here, in large sections of the federal service, anyway, it is dull, plodding and desperately unimaginative. Having skunkworks organizations that permit new ways and possibilities for more creative allocations of public funds isn't a bad idea.

[Tubby Isaacs]

The Venerable Gove

I've a lot of sympathy with the last point that the established central government bodies can get stuck in a rut. It might be a good idea sometimes to set up separate public bodies for "competition". With local councils there are dozens of ways of doing stuff from which best practice can be worked out, but it's different when there's just the one body.

What I'm getting at really is what is the financial advantage of this scheme, given that we're paying out money up front? What are the risks? How can we influence where the investment goes? I don't want it to go to arms companies, for example.

[Anton Gramscescu]

The Venerable Gove

If you actually had good government and some kind of cross-party understanding on education, there'd be no benefit at all. from the point of view of institutions receiving the moey, there is no difference at all between receiving (say) $30M/year as a flow from the conolidated revenue fund, or $30M per year from a 10 year-sinking fund with a $250 million endowment (nor, in accounting terms, is there much benefit to the treasury because the NPV over 10 years of the initial investment should be awfully close to $300 M.

The benefits of this kind of funding arrangement are essentially that having alienated the money from the exchequer, it's bloody hard for the next government to undo what you've done. And, if you're going into a period of cuts, it's a way of ring-fencing the money. And, it gives the body doing the awarding some real independence, because they aren't reliant on a supply vote in the House every year.

As for protecting the investment and keeping it out of arms companies, as I said, you'd write it into the financial agreement with the receiving body: no purchase of equities or real property permitted, mostly AAA (i.e. government) bonds, that kind of thing. It's not difficult to do.

[Tubby Isaacs]

The Venerable Gove

I'm not an expert on public finance but is setting this up, under a city speculator, the only way to keep it out of the hands of future chancellors? There's obviously more to it than that.

I'd be more sympathetic to Gove's people if many of them, whenever the EU is discussed come up with rhubarb about parliament not bounding its successors. They then set up things like this, or propose 30 year leases for train companies, or indeed 50 year defence agreements with France.

[Tubby Isaacs]

The Venerable Gove

Gove censured by all-party Commons Procedures Committee

http://politicalscrapbook.net/2010/11/gove-withholds-information-from-parliament/?utm_campaign=twitter&utm_medium=twitter&utm_sourc e=twitter

Anyone know much about Lisa Nandy MP? Some good work done here.

[E10 Rifle]

The Venerable Gove

She's one of the young newbies, a regular on Labourlist and such websites. Soft-left, I think. Good on her for this.

[E10 Rifle]

The Venerable Gove

Talking of which, more on how Gove's education plans are mainly about the evisceration of local government.

Ah, that lovely decentralised politics again. No more top-down government.

[Anton Gramscescu]

The Venerable Gove

This bit from the Labour List piece struck me as a little odd.

The FT reports that the Institute for Fiscal Studies predicts the proposed system would mean that 60% of secondary schools and 40% of primary schools will lose money even without a cut to education funding, which there will be.

An alternative reading of this would be that presumably that 40% of secondary schools and 60% of primary schools would receive an increase in funding, wouldn't it? Funding held constant, of course.

[E10 Rifle]

The Venerable Gove

But the piece is saying funding isn't likely to be held constant, but cut

[Anton Gramscescu]

The Venerable Gove

But here they seem to be agruing not against the cut, but the new formula, which the author seems to say would be bad even if there were no cut in the total amount spent, basically because there are some losers. But if the number of losers and winners is roughly equal, who cares? Indeed, if the losers are rich schools and the winners poor ones (I'm not saying it is - there's no evidence one way or the other on this point), it might even be a good thing.

[E10 Rifle]

The Venerable Gove

You're making the "if" in your last sentence do some Stakhanovite levels of work there.

[Anton Gramscescu]

The Venerable Gove

I am as demanding of my prepositions as I am of myself.

But my point here is that declaring a policy a bad one because it creates some losers isn't all that smart - you'd want some evidence about the identity of the losers (among other things) before rushing to judement.

[Anton Gramscescu]

The Venerable Gove

Actually, "if" is a conjucntion, isn't it?

[E10 Rifle]

The Venerable Gove

A more centralised funding formula is less likely to take into account local conditions on the ground and my hunch, like, is that it won't be fairer. Even though the word "fair" has been almost completely stripped of meaning in recent British political discourse.

But my other point was that the Tories came to power promising an end to centralised government and "handing power back to communities". They lied.

[Tubby Isaacs]

The Venerable Gove

E10 Rifle wrote:

Talking of which, more on how Gove's education plans are mainly about the evisceration of local government.

Ah, that lovely decentralised politics again. No more top-down government.

Is Eric Pickles still talking about referendums on "big" council tax rises too?