Regarding your recent article (Paediatricians say hospital childcare must be reformed, 12 April), it is possible to reorganise to ensure that consultant staff are available to see sick children out of hours. The Royal Free London Foundation NHS Trust has been providing a resident consultant paediatrician service 24 hours a day, seven days a week since 2007. We decided then to implement the model of care being suggested by the Royal College of Paediatrics and Child Health.
Contrary to the prevailing belief at the time, we had no problem recruiting very able colleagues to provide this consultant-delivered service. Through annualisation of hours, consultants are able to provide safe care to ill children and babies, and have time for management duties as well as for their own families. Trainees benefit from close consultant supervision, and senior decision-making at the front line has led to fewer admissions and fewer unnecessary investigations. Wider adoption of staffing models such as ours – along with some reconfiguration of paediatric units so as to have fewer, larger units – would contribute to safer out-of-hours care for UK children.
Dr Mike Greenberg
Clinical director, paediatrics, Royal Free London Foundation NHS Trust
•?I was not surprised to read that paediatric patients sometimes wait to be seen, and “12% did not see a consultant paediatrician within the first 24 hours”. Admitted with a medical problem, I was put into an orthopaedic ward and not seen by any consultant for the four days before signing my own discharge on a Sunday morning because the message from the consultant was “tell him I will see him tomorrow” – and I am a retired consultant myself.
David J Hurry
Hurstpierpoint, West Sussex
Dr Michael Dixon is quite right to say that we need to invest more in preventive medicine, better care of people with long-term conditions and access to support services outside hospital (Hospitals must shrink or shut, doctors warn, 8 April). And that we need an honest public dialogue about hospital reconfiguration. However, it would be misleading to blame the existence of acute hospital beds for all the problems in the system. We have lost around one-third of our beds in the past two decades. In fact we have losts beds at a faster rate than most OECD countries and have fewer beds per head of the population than most. But emergency admissions have continued to rise exponentially, despite this downsizing.
Acute hospitals are under a great deal of pressure daily. A recent survey of medical registrars has shown that the on-call shifts are extremely pressurised. The reasons are complex but they include the quality and accessibility of primary care delivered (not commissioned) by GPs. We spend less than 0.5% of the whole NHS budget on out-of-hours care. We have a primary care model based around short consultations and contract incentives based on select single diseases. Nursing and residential homes receive very patchy healthcare inputs and older people receive systematically worse care than younger people for a variety of conditions.
Meanwhile social care funding cuts are really starting to bite and we have nowhere near enough capacity in step-up or step-down rehabilitation places or “virtual wards” or good end-of-life care outside hospital. Older people and their carers (and indeed the GPs who refer them into hospital) know that if they pick up a phone and call 999 something will at least happen quickly, and so they vote with their feet. They then often stay too long in hospital or are readmitted due to the same lack of alternative services. Until the public have credible rapidly responsive community services in times of crisis, and unless we change the way primary care is delivered to make it fit for ageing patients with complex needs and multiple problems, people will continue to default into hospital in large numbers. To caricature frontline hospital doctors who are daily doing their best to divert people back home from the “front door” as driven by considerations about tariff income and preserving the hospital’s “business model” would be a gross distortion of reality. The entire health and social care system needs to work differently. Acute admissions are a symptom of a wider malaise. And by the way, there are many times when a hospital admission is precisely the right thing to do for a patient who has suffered acute illness or injury – old or young. And age-based discrimination is now illegal.
Dr David Oliver
• You describe Dr Michael Dixon as a “GPs’ leader”. I am a GP and he is not my leader. He is the chair of the NHS Alliance, a body which welcomes the changed commissioning arrangements that may lead to NHS services being provided by new providers instead of local hospitals. This may or may not have advantages, and may or may not lead to profits for those who provide them, who may or may not be GPs like Dr Dixon.
Dr Laurence Buckman is the chair of the BMA’s GPs committee, so might more accurately be described as a GPs’ leader, and has generally been critical of the changes. I’ve never met him, but he appears to wear a straight tie.
Dr Dixon is right: hospitals may have to shrink or shut. The market has been fixed, with traditional providers such as local hospitals at a disadvantage. There may be advantages in services being provided by new providers, perhaps based in GP surgeries where they would pay rent to GPs. But probably there will only be disadvantages for most people, except for those providing the new services that replace them, who may do very well.
Local hospitals are ideally sited for most communities. Shutting or shrinking them means travelling further to hospitals that survive and provide a full range of services, or going to piecemeal providers that may be fantastic, or may not, will disappear without warning if they do not make a profit, and though they may be “in the community” might actually be harder to get to, as it might not be your community. Some GPs and other providers, like perhaps those represented by the NHS Alliance, may do well out of the new system. Doctors as a whole, as represented by the BMA, do not support the destruction or shrinkage of local hospitals
Dr John Green
• Michael Dixon’s forecast of the replacement of hospitals with “community care” may be premature. Much investment in community care has improved the quality of patients’ lives but has not led to reductions in hospital capacity. Thus such investment may be an expensive complement to hospital care rather than a cheaper substitute. Investments in community care have been very poorly evaluated, and until the evidence base is improved Dixon’s advocacy should be considered as faith-based optimism about the pursuit of this particular nirvana.
Professor Alan Maynard
University of York
• Mike Farrar, chief executive of the NHS Confederation, betrays a wondrous naivety in suggesting that the “shift of care into the community” which took place in the 1980s under Margaret Thatcher, causing thousands of people with learning disabilities and mental illness to be discharged from the hospitals to die of hunger, hypothermia, or brutal attacks from gangs even to this day, “is now … recognised as being the right thing”. Those of us who have an interest in the fate of these unfortunate people have no such delusions. Moreover, while he has been slumbering during the last three years, the sons of Thatcher have been busy destroying the community care facilities that belatedly replaced the hospitals, upon which he plans to build the new model of community care.
Here in West Sussex, the local authority had removed daycare from all but those with critical needs by 2011 – and once again the frail and vulnerable are being abandoned to die. However, this time it does not just affect people with mental illnesses or learning disabilities, who have no contact with their families. It includes frail elderly people, as well as once fit and able citizens (who all paid their taxes and contributed to the economy of the country), now suffering a range of neurological and degenerative conditions. Left to manage without help, they are prey to accidents and injuries, causing our hospitals to be overwhelmed with patients who can no longer be discharged, because the daycare provision which facilitated this has been withdrawn. Those with severe but not critical dementia will die from neglect as their condition deteriorates unnoticed.
There is no doubt that the provision of healthcare must evolve with the needs of the population – and many aspects of hospital care can be more effectively delivered in the community now. However, we will not see any progress in containing the costs of healthcare until the disastrous Thatcherite dismantling of public health policy is reversed – especially with regard to food regulation.
In the current scenario, Mike Farrar’s vision is little less than a model of “genocide by default”.
Cuckfield, West Sussex
Cottages in West Sussex and Northumberland feature in this week’s gallery
Lord Justice Leveson has rightly ignored the special pleading cacophony of some newspaper editors and owners and listened to wiser expert ears (Report, 30 November). Freedom of expression is the most precious of our democratic freedoms but it is not intended to underpin the power of large media corporations to character assassinate innocent individuals in order to sell more papers. Leveson is right to recommend a fair code of practice backed by monetary sanctions and appropriate cheap, fast and easy redress which can be the guarantor of real freedom of expression and heightened trust in our written press. For this to work and inspire real confidence, it has to be overseen by a truly independent body, with all relevant organisations signed up, and underpinned by statute with no interference from media editors or owners.
The NUJ should be congratulated in winning Leveson’s support for a code of practice that must enshrine a conscience clause for journalists. Any independent body must also include their representatives. Newspapers could embrace such a code and system of regulation, calling themselves the “good guys”. They might be surprised with an increase in sales that goes with good corporate citizenship. This means them eschewing the huge power they enjoyed in the past to act with impunity.
Then the government has to act. A consultation, then green and white papers could be timed to culminate in 2015 with no time to act before the next general election. A majority of politicians, with a brave and principled Ed Miliband in the lead, should not be cowed and waste the opportunity to enhance the quality and reputation of the British written press.
Former MEP spokesperson on media
• You give Leveson the balance of the doubt (Editorial, 30 November), but you are in the minority within Britain’s newspaper industry with most already attempting either to trash the findings or supporting the PM’s “crusade for press freedom”. Let us be clear: this is not about freedom of speech – in fact, the newspapers are clearly not interested in the views of the public. No, this is about the freedom of press proprietors to print what they like, subvert political life and discourse and do anything which supports their power over elected politicians and the ordinary public – in other words, the equivalent of the banks in newsprint form. Now what do they both have in common I wonder?
With their many friends in the Tory party they will get their way again. Cameron said he would implement Leveson unless it was bonkers. He also said we have to do right by the victims. He has been caught out on both. One hopes the victims and the rest of the British public will remember this day and realise whose side Cameron and his party are really on.
Horsham, West Sussex
• This country has fought in two world wars to preserve the concepts of democracy and freedom, which includes freedom of speech and freedom of the press. If press regulation is enforced, then all the suffering and death will have been for no purpose. The only people who wish to reduce press freedom and free speech are those who have something to hide. All the recent misdemeanours of the press are covered by law and, if the police had acted, all this current upheaval would not have been necessary.
• The PM’s main “misgiving” about Leveson’s recommendation of a new law to underpin an independent press regulator reflects his fear that such a law could be amended or replaced by some future illiberal government in such a way as to infringe the principle of freedom of the press. But that danger must be much greater if there is no law already on the statute book that guarantees press freedom and the independence of the regulators than if there is. Leveson makes an irrefutable case for statutory backing for the new independent regulatory body he recommends, and which he stresses does not equate to statutory regulation. Parliament should clearly accept and act on it.
• It’s not the press in the last-chance saloon, it’s the rest of us. Does anyone imagine that the cynical editors at Leveson, who take “hard-bitten” as a compliment and especially delight in persecuting women in the public eye, are going to change? The financial imperative is still challenging, and the competition for readers cut-throat. A while down the line they’ll be at it again. Again and again, witnesses begged for a regulator with teeth. Legislation can provide that, without interfering with press freedom, a matter of much interest to some who haven’t allowed freedom to innocent individuals trying to get on with their lives.
• The press, like other institutions, needs to be free from powerful commercial and political interests. How about more democracy in the press? Perhaps the Guardian could start by extending the letters section to two pages. The broadcast media is regulated, it does not stop them from making excellent documentaries exposing corruption. If any government starts to overtly censor the press then it’s up to the journalists to organise against that. It was a great pity the media allowed the BBC to be taken to task for essentially telling the truth over Iraq. Where were all the defenders of “press freedom” then?
Seine Maritime, France
• Leveson claimed he was determined not to produce a document which would simply sit on the second shelf of a professor of journalism’s study. He should be so lucky. He has drafted a thoughtful report which is meticulously documented and which should have won a consensus for its proposals on press regulation. I’d be happy to have a copy on my shelves.
Professor of journalism studies, Cardiff University
Local authority awards firm £154m contract for telecommunications and pensions administration services
West Sussex county council has awarded Capita a 10-year deal for the outsourcing of various support services, including telecommunications and pension fund administration, worth £154m.
According to a notice in the Official Journal of the European Union, Capita, which was named as the council’s preferred bidder last month, will deliver HR and payroll, finance, office services, online service delivery, procurement and pensions administration. The service is expected to go live in September 2012.
The council already has a seven-year contract worth £56m with the firm for IT services, which it signed in October 2010. A spokesman for the authority confirmed that the new deal was separate to the IT deal it already has with the firm.
There are many things to fault in Nick Clegg’s attempt to excuse the abysmal outcome for the coalition in last week’s council elections (The centre will hold, 7 May). Here is just one: Clegg’s repetition of the tired old coalition mantra that they are sorting out “Labour’s mess”. In recent months, the coalition had cut down its use of this mantra realising, perhaps, that the public were sick of hearing it. But since 3 May, coalition ministers have recited it at every opportunity and, in doing so, are being economical with the truth on three counts.
First, the 2008 recession was global, not of Labour’s making (any more than the current Europe-wide crisis is of the coalition’s making). Second, it’s true that Labour didn’t regulate the banks sufficiently, but at that same time, the Tories were calling for still greater deregulation, and would have made the “mess” even worse. And third, the current mess is entirely of the coalition’s making. Through economic naivety and incompetence, a desire to dismantle the state, and a predilection for pandering to the rich, Osborne and Alexander have managed to turn Darling’s incipient recovery in 2010 into a double-dip recession in 2012. This is a coalition mess of the first order.
•?Tim Montgomerie may believe that “much rightwingery [is] popular” (Right turn for Cameron, 7 May) but he fails to notice that, nothwithstanding Boris’ victory over Ken, the electorate throughout the rest of the country, and in particular for the London assembly, clearly indicated a desire for a more centre-oriented politics. He should remember that the Conservatives have no electoral mandate to introduce many of the radical, rightward changes they desire, like the ones they forced on to the NHS, yet they plough on regardless. If they continue in this vein, ignoring the voting public, they will almost certainly lose the next general election.
•?The Conservative right is now calling for “faster, longer incarceration of serious offenders”. After a promising start, following the formation of this coalition government, most of the debate on criminal justice has already relapsed into the dreary language of punishment and competition. The government should resist any temptation to regress still further towards the failed policies of the past. The Labour party still has no visible policies of its own. Criminal justice is in a precarious situation and a clear, principled sense of direction based on prevention, rehabilitation, problem-solving and restoration is now urgently needed. It would be consistent with the older traditions of the Conservative party, and all three main parties should try to articulate it and ideally seek some agreement around it.
•?So rightwing Tories think the reason for the drubbing in local elections is because of Lords reform and gay marriage (Tory right calls for end to barmy policies and a return to core values, 5 May)? Yes, that’ll be the reason; nothing to do with back-door privatisation of the NHS, cuts in welfare for the most vulnerable, tax cuts for the wealthiest, reductions in police numbers, record unemployment, attacks on teachers etc …
Richmond, North Yorkshire
•?”Loss of funds sinks former pit village’s ‘big society’ plans” all for the want of a measly £350,000 annual grant; less than the tax cut some of the overpaid were given by the Tories in the last budget (Report, 7 May). In the same paper I then read that the Ashmolean museum has received a grant of £5.9m from the Heritage Lottery Fund (Museum granted £5.9m for Manet work, 7 May). How is it that we can find endless amounts of money to fund the purchase of antiquities and works of art (and wars in far away countries), but the only way to save our economy from ruin is to cut a £350k grant from a successful community programme? It strikes me that one is an investment in the future and one is pandering to the interests of a very small minority.
Haywards Heath, West Sussex
•?A few months ago a group of socialists drew attention to the need for a voice for the north by launching the Hannah Mitchell Foundation. That call is emphasised by the local election outcomes. Labour did well in Wales, the south and east, and made an impression in the south-west, but the extent of support for the coalition is plummeting in the north.
Some major northern cities started these elections without any Tory councillors – Sheffield and Newcastle-upon-Tyne among them. Liverpool and Manchester, also Tory-free, halved the representation of Liberal Democrats locally. Yet these cities continue to be the prime target for the onslaught of austerity. No investment to fill the holes in Bradford; public sector jobs hit hardest in areas where unemployment is already high and the insult to northern nurses and teachers of a suggestion they should take a pay cut and earn less than colleagues in the south.
As the coalition tears itself apart over House of Lords reform, is it not time for Labour to spell out the links between our remote and centralised government, and the impact of this economic dictatorship? Reforming the House of Lords in a way that gives a stronger regional voice to the north (and to Wales, Scotland and the south-west) ought to be one of the options on the table.
Holmfirth, West Yorkshire
Health experts fear new national framework governing allocation of drugs could hit some more than others
People with rare diseases are failing to receive vital medical treatment because their illnesses are not recognised in guidelines that govern the distribution of NHS-approved drugs.
Health experts who fear that a new framework governing drug allocation that comes into force next year could see some people lose out.
Anglea Tyermans, 38, who has arteriovenous malformations (AVMs), an extremely rare cardiovascular defect that affects less than 1% of the population, fears she will die if she does not receive a course of injections approved by Nice, the clinical body that oversees drug allocation on behalf of the NHS.
Her primary care trust in West Sussex will not pay the £15,000 for her to have the one-off treatment, which her lawyers say will arrest her illness. Experts appointed by West Sussex PCT said “further research” was required.
Rare Disease UK, an alliance of organisations that support people with uncommon illnesess, estimates there are more than 6,000 rare diseases that will affect 1 in 17 people in the UK.
A new commissioning board next year will oversee the allocation of medicines to end the “postcode lottery” that sees some patients deprived of a drug because of where they live.
But Alastair Kent, chair of Rare Disease UK, warned economising could have an impact on how the board determines future allocations of drugs.
Kent said: “The rhetoric is about everybody achieving better healthcare but for the rhetoric to meet the reality is a huge ask.”
The Guardian has consistently exposed the flaws in Andrew Lansley’s NHS reforms, never better than today. Polly Toynbee (Sorry, Shirley, but I have to nail your health bill myths, 13 March) delivers a telling riposte to Shirley Williams – a great lady who shamed Nick Clegg’s careless endorsement of the “emperor’s new clothes” and the subsequent cosmetic makeover. It was sad to see her at the weekend re-enacting the scene of Alec Guinness trying to save the Bridge on the River Kwai.
George Monbiot (The shadow government: it’s how politicians get their way, 13 March) puts his finger on the corrosive effect of ministerial preferment for those singing the “right” tune (from hymn sheets increasingly written by secondees from, or aspirants to, the big consultancies and corporations). Organisations like the King’s Fund, the NHS Confederation and the Royal Colleges left it far to late to voice their serious concerns. Rigid control down the NHS chain of command ensured compliance there and, despite his coded dismay, David Nicholson’s rush to assemble the GP commissioning groups and hollow out the primary care trusts now leaves the coalition with the fallback that it is now too late to stop.
Your front-page story (NHS costs soar as GPs focus on health reforms, 13 March) describes one facet of what will prove to be the soaring cost of GP commissioning. With GPs better paid than most of the professional managers they will displace, will their “responsibility enhancements” give value for money?
Lansley clearly can’t be entrusted with salvaging the mess and will go down as one of the worst health secretaries yet – not that far below Alan Milburn, whose legacy is now a millstone round Andy Burnham’s neck. Nick Clegg certainly finds himself on the wrong side of destiny, along with his grandfather, who as editor of the British Medical Journal in the late 1940s helped voice the BMA’s fierce opposition to the original creation of the NHS, later acknowledging his error. Perhaps Nick will too, though he will have more to regret.
•?How can general practitioners possibly commission the existing 54 medical specialities? It is the medical specialists in secondary care who have the knowledge, skills and dedication necessary to plan the future of their services. However, their contribution is wasted because of the market dogma which determines that there should be an arm’s-length relationship between the buyers and sellers of health services. Without this dogma, GPs, hospital consultants and others would collaboratively determine the future of particular services. But then there would be no need for the commissioning frenzy which constitutes the health and social care bill currently before parliament, nor would the large City firms and private healthcare companies carve out their huge profits from the NHS budget.
•?George Monbiot and Polly Toynbee provide damning evidence of the dark heart of this Con-Dem government. The wholesale privatisation of our fast-diminishing public provision is the ideological driver of all aspects of current government policy. As capital failed to find sufficient profit from domestic manufacturing in the 70s/80s due to the rise of competition in the far east, with its cheap labour base, it turned to the manipulation of the financial markets. Manufacturing financial products became more profitable than manufacturing anything that may have had some social usefulness. This was enormously successful for almost two decades, until its own excesses brought about the current crisis.
Where now for capital? The obvious place is all those functions that have been, rightly, the province of government, since they require some degree of democratic control and accountability. We now have a government committed to handing over to private corporations the final areas of social provision so that capital can replenish its diminished returns. Hence, as Monbiot shows, the corporate sector taking over the committees overseeing the privatisation process. Ironically, Shirley Williams’ memorial is likely to be that of destroyer-in-chief of the most successful and socially useful area of public provision Britain has achieved, the National Health Service – no longer national and no longer a service.
Chidham, West Sussex
•?Let’s get real here. The only thing that’s going to make a difference to the NHS bill is votes – votes of Lib Dem peers and MPs. Nothing that happens after the bill is passed is other than wishful thinking. The corporations who have lobbied for the bill for over 20 years will have got their prize.
I am starting to collect quotes from government spokesmen which promise us free healthcare in the future. I’ve saved a thick file of articles over the past year, so should be able to unearth quite a number. Then if I am told in future that a treatment I need is no longer available on the NHS, I will quote a relevant promise. It won’t be much, but it’s all I have.
•?Polly Toynbee, responding to Shirley Williams’ criticism of her remarks about the health bill, concludes with the statement: “If anyone doubts the scale of change, a second NHS hospital this week put itself up for takeover or private sale, after Hinchingbrooke was called a ‘one-off’.”
I would remind Polly that the process for selecting Circle to operate Hinchingbrooke hospital started under the last Labour government, and the decision to transfer the management was made using powers set up by Labour in 2001. It is telling that Polly Toynbee should conclude her response to Shirley Williams’ criticisms with a statement that is not exactly a lie, but so economical with the facts that it bears an even scantier relation to the truth.
Cambridgeshire Liberal Democrats
•?Another Liberal Democrat conference, another crowd of passionate and articulate demonstrators defending their ideal of the NHS. Being Liberals, many of us of course listened to them and argued with them.
I learned that those I listened to are opposed not only to the current bill but also to almost all of the other changes brought in by the Labour government between 1997 and 2010. I also learned that they resist the idea that there need to be any restraints on NHS spending. They want the complete Polly Toynbee: a steady increase in health spending each year above and beyond whatever may be the rate of growth, paid for by continuing increases in taxation.
I don’t remember the NHS of 15-20 years ago as beyond criticism. Changes in medical technology, in drugs, in methods of treatment and in life expectancy have in any event made it impossible to go back to that, let alone to the NHS of 1948, designed for a very different society coming out of a world war. If we want to maintain the NHS – as we all do – it is necessary to adjust.
Liberal Democrat, House of Lords
•?I would suggest that if Tim Farron and the Liberal Democrats are feeling guilty We must stop apologising, 9 March), it’s because they know what they are doing is wrong. I voted for the Liberal Democrats because I thought they could be trusted to have the courage of their convictions. It now appears that my judgement was misplaced. Having achieved some power, they may “retain a conscience” but they do not have the moral fibre to stand up and be counted, they appear no more trustworthy than any other party.
•?There’s so much to chuckle at in Tim Farron’s entertainingly daft piece. However, I have to take serious issue with his claim that had the Lib Dems not joined the coalition, the current health and social care bill would have passed into law unamended last year. In fact, that’s very unlikely, as the Conservatives didn’t have a parliamentary majority. Isn’t that exactly why we’ve got the coalition?
•?By splitting the Labour party, Shirley Williams kept the party out off government for almost 20 years. As a result of her support for the destruction of the NHS she is almost certainly ensuring the Liberal Democrats will not get back into government for another 50 years. Wouldn’t it be wonderful if she could be persuaded to join the Tories!
The soaring cost of gritting roads is forcing local authorities to gamble on weather derivatives
As Britain prepares this weekend for a Siberian blast, councils across the country will be anxiously checking their betting slips.
The increasing cost of keeping roads open during harsh winter weather has forced councils to make spread bets to offset the risk of big financial losses. Weather derivatives – financial contracts that pay out in cases of extreme weather – are being actively tested by councils across the country.
The recent succession of historically cold winters, followed this year by what may prove to be the warmest winter on record, has fuelled concern among council strategists. Guardian research has revealed that in the last two years, councils nationwide have overspent on their winter budgets by up to 100%.
Dave Simpson, head of finance for strategy and communities at Lincolnshire county council, said: “We are looking at derivatives on a trial basis. Last year, we would have saved £1.5m. Derivatives could help generate considerable savings; this is very important to us during these difficult economic times.
“However, usage [of derivatives] could also potentially be an additional cost. With the mild winter this year we would so far have been out of pocket.”
Derivatives are widely used in the private sector, especially the leisure, agricultural, energy and construction industries, to safeguard businesses. The worldwide weather derivatives market is worth more than £7bn.
A council would be offered a certificate for a fee that would pay out a fixed sum for each day that the thermometer dips below a specified mark. For example, in Lincolnshire the contract could pay out £40,000 for each night of freezing temperatures after the first 42 of the winter.
West Sussex county council, which overspent £300,000 on a winter budget of £1.5m last year, has hedged with an advanced fixed five-year lump-sum deal. Richard Speller, the council’s winter service manager, said: “We have agreed a deal with Balfour Beatty on a fixed five-year agreement. This is the first winter of the contract and it has passed the risk to them.
“This time last winter we had been out to operate [gritting lorries] 53 times. This year it has been 13,” Speller said. When a typical nightly gritting run can use more than 2,000 litres of diesel and costs £15,000, the risk to precarious council finances is obvious.
Despite opting for a fixed-sum model, West Sussex council believes derivatives are here to stay. “All councils have to look at derivatives,” Speller said. “It makes sense to balance the risk. For us, this year, it was a step too far.”
The hedging scheme is being offered to councils by Gritit, a winter risk-management specialist, in partnership with a Swiss weather derivatives company, Celsius Pro.
Jason Petsch, commercial director of Gritit, said: “Derivatives are used by the private sector for a simple reason: because they make financial sense. They mitigate risk.
“The country has faced many years of volatile winter weather and this comes at a public cost. We are in discussions with councils across the country about the employment of derivatives. It is only a tiny part of our overall business. However, in austere times there is a moral public duty to address this.”
Contracts differ around the country but a typical derivative certificate for the winter would cost £185,000, providing a maximum of £1m of cover. In the Lincolnshire trial, a number of certificates are being issued to establish the different payouts under the scheme if it went ahead with a purchase.
Winter maintenance budgets have long proved to be a struggle for councils. Freedom of Information Act requests have revealed some striking figures:
• South Lanarkshire council had a 2008-09 winter budget of £2.9m but ended up spending £4.9m. In 2009-10 its winter budget was £2.9m; it spent £5.7m.
• Perth & Kinross council had a winter budget for 2009-10 of £2.9m. The actual spend was £4.9m. In 2010-11 its budget remained at £2.9m but the spend reached £5.2m.
• Suffolk county council had a winter budget of £2.3m in 2009-10. The actual spend was £3.3m. The council’s budget in 2010-11 was £2.37m – again, it spent more than £3m.
However, despite the huge degree of overspending, many industry figures are urging a cautious reaction.
Petsch, of Gritit, said: “Winter cost management is different to other council areas. Weather is volatile and absolutely unpredictable. After two horrific years, who would have anticipated this winter?
“Yet it is for that very reason that councils risk looking foolish by not hedging their bets. Derivatives are a gamble – but avoiding their usage may be the biggest risk of all.”
In his interview with your paper on Saturday, Ed Balls effectively holds up a white flag and admits that Labour has given up any attempt to set out an alternative economic agenda (Beyond the hair shirt: Labour party can give Britain the tough love it needs, insists Balls, 14 January).
His capitulation before the Tory-led coalition’s definition of economic credibility as meaning ever more fiscal austerity, and his jaw-dropping statement that “we are going to have to keep all these cuts” calls into question the very purpose of the Labour party.
Moreover, the choice he poses between higher public sector pay or growing unemployment conveniently ignores the fact that many public sector workers are on very low incomes, and falsely suggests that we can’t afford to fund both. It is investment in decently paid jobs that generates income, and thus the tax revenues to pay for credit or borrowed money, not the other way round. Instead of trying to outcompete the government in some kind of masochistic virility test to see who can threaten the greatest austerity, an opposition party worthy of the name would be making a far stronger case that austerity isn’t working, and offering a genuine alternative.
A combination of more progressive taxation, a crack down on tax evasion and avoidance and, crucially, Green quantitative easing to deliver investment directly in the new jobs and infrastructure the UK urgently needs to make the transition to a more sustainable economy, would do far more to challenge the government than the Tory-lite policies set out by the shadow chancellor.
Caroline Lucas MP
Leader, Green party
•?No wonder Labour is failing to convince not only the country but its own members that it has an alternative vision when the shadow chancellor’s strategy is to endorse Osborne’s attacks on pay and conditions of public sector workers. I am a Labour party member and work for Doncaster council where the workforce face a 4% pay cut this year.
This is Ed Miliband’s constituency, yet the message we get from his shadow chancellor is to expect more of the same. Gordon Brown conceded that it was a mistake to tie himself to Tory spending plans when Labour came to power in 1997. The instigator of that error, Ed Balls, appears to have refined that mistake to include supporting the most savage attack on the public sector ever experienced. It is certainly not a message to convince the nation that Labour has an alternative vision of the future.
Horbury, West Yorkshire
•?I would like to agree with Peter Woodcock (Letters, 10 January). The use of the oxymoron, “responsible capitalism”, shows how far Labour has drifted from its roots. In fact, what we have proposed now is a return to the 80s SDP policy, criticised by Neil Kinnock at the time, as wanting “a kindly capitalism, a gentle market, an air-conditioned jungle”.
After the greatest financial disaster in history and the consequent hardships for the poorest, surely we need to go in an entirely different direction? Let’s do something for the “squashed bottom”, as well as the “squeezed middle”. Perhaps Labour will then recover its soul and depart from the orthodoxies which have done so much harm.
•?It is regrettable that Ed Miliband (Face up to new reality on the deficit, 10 January) and even the admirable Polly Toynbee (Miliband has been proven right, 10 January) both accept the hegemonic, neoliberal ideology that there is no money and we must accept austerity. Compared to the Attlee years the country today is infinitely richer in material terms than in those days of real austerity. The cyclical part of the deficit is the correct Keynesian response to an economic downturn and the structural part is due to New Labour increasing public expenditure but refusing to increase taxes to pay for it.
Miliband should be arguing for decent pensions for all, a public infrastructure we can celebrate, adequately resourced health and education provision, and a solidaristic social security system, paid for by a steeply progressive taxation system and an end to wasteful expenditure on Trident and other imperial hangovers. Oh, and on the financial markets, we could always adopt Aditya Chakrabortty’s suggestion of a debt jubilee (Let’s make 2012 a default jubilee for have-nots, G2, 10 January).
•?I trust Ed Miliband is taking to heart the advice he is receiving from the Blairite creepy-crawlies whom his lack of leadership, political ideas or strategic intelligence have brought scurrying to the surface. The aim is not to bury but to complete the New Labour project. The realignment of Labour with centre-right neoliberalism is the future. Anyway, it is impossible to distinguish “productive” from “predatory” capitalism. Since shadow ministers do not understand its underlying principles, Labour must embrace, not only the hollowing-out but the winding-up of the welfare state.
And since speedy action is required, he should instruct his MPs and party activists to take to the streets to explain to every social constituency which has suffered from the cuts that they can expect nothing from a Labour government. To support their cause would be “dishonest populism” since the only winners will be “the squeezed middle”. He should also try to persuade professors of politics who teach that democracy is some sort of brake on the total rule of society by capital to revise their lecture notes. The death wish is unstoppable.
•?Ed Balls says Labour accepts every spending cut imposed by the coalition, does this mean we live in a one-party state? Apologies to the Greens!
Worthing, West Sussex
•?Ed Balls’s comment that “Labour has lost the argument” on responsibility for the financial crisis in respect of the party’s leadership is not wholly accurate. It has been neither lost nor won but simply and unfortunately uncontested.
The reticence of the party leadership on the issue has been in stark contrast to the Tories’ rehearsed and relentless repetition of the big lie that the crisis is all down to Labour. The implied denial of the bankers’ responsibility is manifestly absurd.
The same could be said of David Hindsight-Cameron’s condemnation of Labour’s spending record given that he was promising to match it as late as November 2008 when the crisis was well upon us. And why is no one in the Labour leadership reminding the nation that the heart of the problem lies in the unregulated international financial markets introduced by the Thatcher and Reagan governments in the big bang of 1986.
Ed Miliband’s thoughtful approach to the longer term policy issues is very commendable but it does not obviate the need for constant condemnation of the big lie. Fortunately for the leadership thousands of Labour party activists believe the argument is not lost and so continue to go out campaigning like never before.
Nigel de Gruchy
•?Ever since the introduction of universal suffrage the ultra-rich and their corporations have spent billions on propaganda seeking to impose their interests on public policy. The endgame of this strategy has always been to undermine democracy by ensuring all mainstream political parties surrender to corporate interests. Ed Balls’s capitulation over public sector pay and his advocacy of Tory spending cuts – despite these being central causes of the economic crisis and moreover, increasing pay and spending power being the solution – seems to finalise the corporate takeover of our political process. Now that voting has been rendered pointless, it seems to me our focus must be on changing the economic and political system that is destroying everything we hold dear.
Kingston upon Thames, Surrey
•?In one speech by Ed Balls, the Labour party ditched its historical support for the poor, the disabled and the dispossesed. With one mighty leap they crossed the floor of the Commons to become the third party in the coalition.Now having pledged support for most of the cuts, Her Majesty’s oppostion has thrown in the towel for the life of this parliament and left those facing massive cuts with no representation in the House of Commons. It would seem that the old adage, “No matter who you vote for, the Tories win” is true. RIP the Labour party.