JagPatel3

JagPatel3

38p

54 comments posted · 43 followers · following 0

16 weeks ago @ http://www.conservativ... - Greg Hands: Now that B... · 2 replies · +1 points

Competition is the essence of enterprise and free market capitalism. In Adam Smith’s use, the “free market” is not a market free from government, but one that is free from rents – these rents include distortions borne of market power, privileged access and position.

It is therefore heartening to learn that senior members of this government, including the Prime Minister, are self-confessed free marketeers and are willing to go out of their way to praise the virtues of the market over the State at every opportunity.

The central tenet of capitalism is that those participating in it do so in the expectation that they will profit from their own labour and initiative. Yet, the last several years has seen the widespread belief that individuals at the top of big business and corporate houses are benefiting at the expense of their customers, employees, supply chain partners and the local community.

The post-second world war experience has repeatedly vindicated the view that the single most powerful driver of prosperity is profit-seeking businesses trading within a law-governed and competitive market economy.

However, in the new millennium, the recently exposed frailties of capitalism are all too evident in markets in which the government is the main or only customer, which happen to be some the most closed in the world, with significant barriers to entry. In the UK, the government spends £292 billion of taxpayers’ money each year to purchase goods, services and labour from the private sector, making it quite easily the single largest buyer.

The problem with markets in which the government is the only customer is the endless subsidies handed out to incumbent businesses, which insulates them from being usurped by agile and innovative start-ups, thereby preventing wealth being spread about.

This is further complicated by the fact that, such markets are highly susceptible to cronyism – the nexus between the governing elite and the business elite that contrives to put the interests of business first, ahead of the wants, needs and expectations of ordinary citizens. Not least, because the twin evils of lobbying and corruption rear their ugly heads every time taxpayers’ money crosses the boundary between the public sector and the private sector.

It is, as the economist Randall Holcombe puts in his book “Political Capitalism” a “system in which the economic and political elite cooperate for their mutual benefit.” The political elite tilt the economic playing field in favour of the economic elite, privileging them through subsidies, regulatory protections and targeted tax breaks. In exchange, the economic elite then help to ensure that the political elite remain in power. The rest of us pay the bill for this quid pro quo through higher taxes, higher prices, and a less efficient, less dynamic economy.

As the UK looks outwards, there is a fear among free marketeers that uncompetitive businesses will intensify their lobbying efforts during the transition period, to shield themselves from being exposed to foreign competition.
@JagPatel3

21 weeks ago @ http://www.conservativ... - Ben Brittain: Get Brex... · 6 replies · +1 points

Competition is the essence of enterprise and free market capitalism. For an economic model that relies on casual interactions between buyers and sellers and seeks to deliver goods and services to everyone at a price they are willing to pay, genuine competition among vendors on the basis of a level playing field is absolutely essential.

Time and again, this conservative government has made it absolutely clear that it would like see the competitiveness of the defence industry improved significantly, both in the domestic market and globally, so that the UK can pay its way in the world, post-Brexit.

To this end, it has abandoned the tried-and-failed policy of talking and cajoling to try to convince the big defence contractors to become more competitive. Instead, the government has adopted a radically different approach. It is now seeking to accommodate additional participants in the UK defence equipment market, both at prime contractor level and right down the extended supply chain – by attracting foreign defence contractors to take up the slack at the top and indigenous engineering businesses from adjacent sectors who have not previously engaged with MoD, elsewhere in this highly lucrative market.

Indeed, in its latest policy statement on defence procurement expressed in the Defence Industrial Policy published in December 2017, the government says (on page 24):

“Competition and innovation are mutually reinforcing. SMEs and non-traditional suppliers, alongside universities, are the bedrock of British innovation. We are committed to make it easier for them to do business with defence ……..”

But the real reason why the government wants to widen the diversity of defence equipment suppliers is because it wants to be released from the suffocating embrace of the cabal of usual suspects, the Select Few, who have monopolised the military equipment market for as long as anyone can remember. Indeed, this is confirmed by statistical data cited by a recent House of Commons Library Briefing Paper which reveals that a few big contractors dominate the UK defence industry landscape today. In fact, over 42% of MoD expenditure on defence procurement for 2017-2018, amounting to over £15 billion was spent on just ten suppliers, with this market share remaining pretty much the same over the last decade. It is hard not to conclude that this stranglehold by the Select Few has been the cause of poor performance hitherto – characterised by persistent delays, cost overruns and chronically weak export performance.

The government also knows that by opening-up the defence equipment market to all and sundry, there is every chance that standout performers from the civilian arena – businesses that do real, proper engineering as their core activity (using professionally-qualified people from a wide variety of backgrounds and disciplines) – will be attracted to this highly lucrative market, bringing with them strict standards of ethical behaviour, a culture that nurtures the get-it-right-first-time philosophy and an export-orientated outlook. These newcomers view taking part in competitions as a natural order of things and treat it as a challenge, to take market share from incumbents. They are also used to raising private capital from the financial markets for the purpose of investing in innovation, product research and development, creating intellectual property and upskilling employees.

But the greatest benefit to be derived from displacing the Select Few is that the standards of workmanship on defence contracts will be elevated to the level exhibited by the UK’s high-performing, best-in-class manufacturing businesses which are more likely to deliver value for money, and with it, lessen the burden on the Exchequer.
@JagPatel3

23 weeks ago @ http://www.conservativ... - Julian Brazier: So Dow... · 1 reply · +1 points

One of the reasons given by people who want the government to carry-on with the practice of handing out uncontested, single-source development contracts to UK-based defence contractors is that an indigenous engineering design, development, systems integration, prototyping and testing capability will be cultivated and maintained in-country, in perpetuity.

But the fact of the matter is that the defence sector in the UK has already lost such a capability. It went many years ago.

This is because the last several decades has seen the transfer of thousands of people in the pay of the State to the private sector via the ‘revolving door’, in particular, defence equipment manufacturers’ organisations, largely due to the resounding success of the policy instituted by Defence Secretaries of all political persuasions – to encourage for-profit organisations in receipt of government defence contracts to take-on people who were previously in the pay of the State.

This mass migration would explain why the workforce, at every level of the hierarchy within defence contractors’ organisations (right across the full spectrum of defence engineering businesses, government outsourcing contractors and foreign-owned entities, large and small) is now made-up entirely of people who were previously in the pay of the State.

Whereas this targeted action has done much to alleviate the problem of high joblessness among those who had completed their terms as public servants, it has only served to deprive defence contractors of the ability to design & develop new military equipment to a user-specified technical specification requirement.

This is due to the fact those who have come across from the public sector, in their middle-age (armed with a full government pension), have no experience whatsoever of advancing the developmental status of the starting-point for a technical solution from its existing condition, to a point where it will satisfy the qualitative and quantitative requirements expressed in the technical specification requirement – not least, because they were never required to do so, during the first half of their career.

In fact, such expertise is the sole preserve of people who were inducted into the private sector at an early age, where they honed their design & development skills within the crucible of a competitive market environment and a setting driven by the profit motive and winning mindset. It also required, as a minimum, an adequate understanding of what it takes (in terms of skill types, funding, tools, processes, materials, scheduled work plan, inter-business contractual agreements etc.) to advance an immature technical solution from its existing condition. As a consequence, these types of people are to be found exclusively in the non-defence, engineering sector of the UK economy today.

The most important feature of any business that calls itself an engineering company is the existence of an in-house design, development, systems integration, prototyping and testing as a core capability. By employing only people who were previously in the pay of the State, UK-based defence contractors have inadvertently forsaken this capability – which has ironically, left them at risk of being usurped and displaced by real engineering companies from adjacent sectors or outside the UK, who have made it their foremost priority to invest in such a foundational capability.

The complete absence of any new patent applications, IP rights or innovative products put forward by UK-based defence contractors is yet another indication of the paucity of such a capability. It would also explain, in part, the persistent instances of delays and cost overruns on equipment development programmes – brought about by contractors not possessing suitably experienced and talented engineers, problem-solvers, innovators and doers on their payroll, right at the start of an equipment procurement contract.
@JagPatel3

27 weeks ago @ http://www.conservativ... - Richard Patient: At la... · 10 replies · +1 points

The determined pursuit of Brexit leads one to believe that the Conservative party is no longer the party of business, but a party wedded to a pro-market, pro-competition philosophy.

The post-second world war experience has repeatedly vindicated the view that the single most powerful driver of prosperity is profit-seeking businesses trading within a law-governed and competitive market environment.

However, in the new millennium, the recently exposed frailties of capitalism are all too evident in markets in which the government is the main or only customer, which happen to be some the most closed in the world with significant barriers to entry. In the UK, the government spends £292 billion of taxpayers’ money each year to purchase goods, services and labour from the Private Sector, making it quite easily the largest single buyer.

The problem with markets in which the government is the only customer is the endless subsidies handed out to incumbent businesses, which insulates them from being usurped by agile and innovative start-ups, thereby preventing wealth being spread about.

This is further complicated by the fact that, such markets are highly susceptible to cronyism – the nexus between the governing elite and the business elite that contrives to put the interests of business first, at the expense of the wants, needs and expectations of ordinary citizens. Not least, because the twin evils of lobbying and corruption rear their ugly heads every time taxpayers’ money crosses the boundary between the Public Sector and the Private Sector.

It is, as the economist Randall Holcombe puts in his book "Political Capitalism" a “system in which the economic and political elite cooperate for their mutual benefit.” The political elite tilt the economic playing field in favour of the economic elite, privileging them through subsidies, regulatory protections and targeted tax breaks. In exchange, the economic elite then help to ensure that the political elite remain in power. The rest of us pay the bill for this quid pro quo through higher taxes, higher prices, and a less efficient, less dynamic economy.
@JagPatel3

46 weeks ago @ http://www.conservativ... - Mark Harper: If the Co... · 1 reply · +1 points

This country is in a sorry place when the two leadership contenders for the office at 10 Downing Street which carries the title of Prime Minster and First Lord of the Treasury sound like old-fashioned, tax-and-spend socialists trying to outdo the leader of the opposition and his kind.

They should be reminded of the words of the current Chancellor of the Exchequer who said these words in March 2017:

“We need to maintain our commitment to fiscal discipline and to strengthen our economic position and ensure we get back to living within our means. That requires us to stick to the plan I set out in November to maintain the trajectory of reducing borrowing so that we don’t pass on our debts to future generations”.

The principles of sound fiscal management require that governments put their economic security first, and balance their books at the earliest possible time.

The fact of the matter is that the urgent task of paying down the UK’s national debt – which currently stands at £1,780 billion, and rising – can only begin after the budget deficit of £25 billion (the gap between government income and expenditure) has been cut down to zero, not before.

It’s never too late to begin to do that.

In 2010, the incoming coalition government led by David Cameron did the right thing and put the national interest first, by making it a priority to balance its books.

Today, it has given this Chancellor of the Exchequer the maximum amount of freedom to deal with, not only the national debt, but also the immediate fallout from Brexit.
@JagPatel3

52 weeks ago @ http://www.conservativ... - Penny Mordaunt: It's t... · 2 replies · +1 points

Talking of failed leadership, it is instructive to look at the recent history of defence procurement in the UK – so that people can understand and appreciate the reasons why the new Defence Secretary’s department is in such a financial mess right now.

Such was the intense focus of attention and diversion of resources onto examining alternative management models for MoD’s arms-length defence procurement organisation at Abbey Wood during the 2010-2015 Parliament that, the urgent need for the existing, flawed procurement process to be replaced by a new acquisition policy which deals with the usual delays and cost overruns, was completely ignored by the then coalition Government.

The main reason why the Government went down the GOCO route (the so-called Government-Owned, Contractor-Operated governance model) is because it was deemed not to have the necessary skills in-house, to undertake its procurement duties with confidence, and was accordingly persuaded to outsource this role to the Private Sector instead. However, the inability of the Government to find and install a Private Sector operator to run MoD Abbey Wood on a for-profit basis has left it in the worst possible situation – the status quo – which guarantees ongoing failure on defence equipment procurement programmes.

Indeed, the quality of management skills in the Public Sector is so poor that there is not a single person in the pay of the State who is equipped with the necessary blend of leadership/communication skills, specialist knowledge, cross-discipline expertise or prior experience to, not only correctly identify the deep-seated problems associated with the existing procurement process but also come up with simple, workable, easy-to-apply solutions which will tackle these shortcomings – yet, it is the responsibility of Government to shape, and then implement acquisition policy which will deliver equipment to the Armed Forces that is fit for purpose, adequately sustained in-service and constitutes value for money through-life.

This lack of leadership talent and management capability in Whitehall would explain why there is a massive void in defence procurement policy.

In response to this deficiency, the governing elite has concluded that there is an urgent need to inject Private Sector skills and practices into the business of Government. However, the policy of replacing just the top man at MoD Abbey Wood with someone from a Private Sector background, in the expectation that the commercial acumen he brings will ‘rub off’ onto people around him has not worked at all, nor has it delivered dramatic improvements in efficiency hoped for, and demanded by the political elite.

What is urgently needed is injection of tried-and-tested Private Sector skills not only at the top, but right down every level of the hierarchy at MoD Abbey Wood – but especially at the coal-face level, where it matters most, in numbers large enough to make a tangible difference to performance outcomes.

In addition, this top man should be given the power to choose lower-tier post holders ‘in his own image’ (as well as releasing the existing lot) so that he/she can assemble a delivery-orientated management team which is focused solely on results.
@JagPatel3

67 weeks ago @ http://www.conservativ... - The most pro-intervent... · 1 reply · +1 points

The principles of sound fiscal management require that governments put their economic security first, and balance their books at the earliest possible time.

When it comes to procuring defence equipment, the government has no option but to rely on the Private Sector, because it no longer has the ability to produce military equipment – as it used to do.

This is because the means of defence production, distribution and exchange is now exclusively in the hands of private interests, that is to say, the State is entirely dependent on for-profit organisations for the design, development, manufacture and delivery of new military equipment to the Armed Forces.

Consequently, the government has become reliant on the Private Sector for all its military equipment needs, including its subsequent upkeep, when in-service with the user. The harsh reality is that, no department of state in Whitehall is as dependent on the Private Sector, as is MoD. Likewise, these private interests are completely hooked on a steady flow of taxpayer funds for their very existence.

Consequently, as the only customer of defence equipment, the government is in a powerful position to dictate the terms of trade. But it has failed to leverage this enormous purchasing power to its advantage.

The main reason for this failure is that people in Whitehall have little or no understanding of the forces at work and commercial pressures that exist within for-profit organisations which are ready to be harnessed for the benefit of taxpayers – not least, because they have not spent a single day of their lives in the Private Sector – and yet, they have been put in charge of spending taxpayers’ money to the tune of £15 billion per year to buy defence equipment, outsourced services and labour from the Private Sector.

What’s more, the judgements made by these people, as it relates to the expenditure of public funds, are distorted by the fact that they will end up in the Private Sector to pursue a second career, later on. So, it comes as no surprise that MoD employees are, without exception, favourably disposed towards the defence industry because they are completely dependent on it for their subsequent career choices (via the revolving door), when their time in public service comes to an end, or their employment contract is terminated abruptly by political edict because they have been found wanting. Indeed, it is very hard to find anyone at MoD who will aggressively defend taxpayers’ interests, once they have enjoyed a cosy relationship with defence contractors.

This mass migration would explain why staff on defence contractors’ payroll is made-up entirely of people who were previously in the pay of the State.

Defence contractors may very well call themselves public companies and have their shares quoted on the stock market, but they really are Private Sector organisations in name only, not least, because they are ‘created in the image’ of public sector institutions like MoD Abbey Wood (warts ’n all) displaying all the tell-tale features of: a workforce made-up entirely of people who were previously in the pay of the State (where they developed an unhealthy penchant for rules, regulations and processes), who have succeeded in transplanting a work culture characterised by failed practices of management by committee & PowerPoint presentations, and groupthink that disallows external challenge.

What’s more, instead doing the right thing and educating people in the pay of the State about the ways of the Private Sector, these new arrivals (in association with those who have gone before) then set about exploiting the ignorance of their former colleagues in government, for one purpose only – relieving them of taxpayers’ money – which has, in itself, left the public finances in pretty bad shape.
@JagPatel3

72 weeks ago @ http://www.conservativ... - Howard Flight: Finding... · 0 replies · +1 points

Nowhere is there a greater need for taxpayer value as in the acquisition of military equipment. When it comes to procuring defence equipment, the government has no option but to rely on the Private Sector, because it no longer has the ability to produce military equipment – as it used to do.

This is because the means of defence production, distribution and exchange is now exclusively in the hands of private interests, that is to say, the State is entirely dependent on for-profit organisations for the design, development, manufacture and delivery of new military equipment to the Armed Forces. Consequently, the government has become reliant on the Private Sector for all its military equipment needs, including its subsequent upkeep, when in-service with the user. The harsh reality is that, no department of state in Whitehall is as dependent on the Private Sector, as is MoD. Likewise, these private interests are completely hooked on a steady flow of taxpayer funds for their very existence.

Consequently, as the only customer of defence equipment, the government is in a powerful position to dictate the terms of trade. But it has failed to leverage this enormous purchasing power to its advantage.

The main reason for this failure is that people in Whitehall have little or no understanding of the forces at work and commercial pressures that exist within for-profit organisations which are ready to be harnessed for the benefit of taxpayers – not least, because they have not spent a single day of their lives in the Private Sector – and yet, they have been put in charge of spending taxpayers’ money to the tune of £18 billion per annum to buy defence equipment, outsourced services and labour from the Private Sector.

What’s more, the judgements made by these people, as it relates to the expenditure of public funds, are distorted by the fact that they will end up in the Private Sector to pursue a second career, later on. So, it comes as no surprise that MoD employees are, without exception, favourably disposed towards the defence industry because they are completely dependent on it for their subsequent career choices, when their time in public service comes to an end, or their employment contract is terminated abruptly by political edict because they have been found wanting. Indeed, it is very hard to find anyone at MoD who will aggressively defend taxpayers’ interests, once they have enjoyed a cosy relationship with defence contractors.

This mass migration would explain why staff on defence contractors’ payroll is made-up entirely of people who were previously in the pay of the State.

Defence contractors may very well call themselves public companies and have their shares quoted on the stock market, but they really are Private Sector organisations in name only, not least, because they are ‘created in the image’ of public sector institutions like MoD Abbey Wood displaying all the tell-tale features of: a workforce made-up entirely of people who were previously in the pay of the State, who have succeeded in transplanting a work culture characterised by failed practices of management by committee and groupthink that disallows external challenge.

What’s more, instead doing the right thing and educating people in the pay of the State about the ways of the Private Sector, these new arrivals then set about exploiting the ignorance of their former colleagues in government, for one purpose only – relieving them of taxpayers’ money – which has, in itself, left the public finances in pretty bad shape.

There is something very disturbing about people who have previously, as public servants sworn undying allegiance to Her Majesty Queen Elizabeth II, only to then engage in defrauding Her Majesty’s Government of taxpayers’ money on behalf of vested interests.

82 weeks ago @ http://www.conservativ... - George Freeman: There ... · 1 reply · +1 points

Your observation “Too often, Whitehall’s funding orthodoxy rewards failure” is just so true.

At a time when this Government is wrestling with how to deal with the fallout from Brexit, eliminate the budget deficit and pay down the national debt, it cannot afford to subsidise failure in the defence industry any longer.

Whereas the foremost priority is to tackle the £20bn funding “black hole” in MoD’s budget, there remains an alternative to withdrawing front-line capabilities, delaying projects or cancelling them altogether – eliciting Private Sector investment capital into each equipment procurement programme. Not only will this new source of funding relieve the burden on MoD’s equipment budget, but it will also preserve the integrity of the rolling 10-year Equipment & Support Plan.

Accordingly, each Bidder should be invited to declare that part of the bottom-line Selling Price for the overall programme which is to be paid for, from his own (or third party) funds to advance the developmental status of his starting-point for the Technical Solution – as a separate line item on DEFFORM 47 to enable Abbey Wood Team Leader to make a like-for-like comparison.

The more money Bidders put in, the less MoD will have to contribute and the lower the risk that the Team Leader will be censured for exceeding the sanctioned budget. See illustration pic.twitter.com/UIZFTSayqq on how this works.

Whereas MoD’s focus on upskilling its existing workforce to a level comparable with counterparts in the defence industry will yield results only in the long term, the policy of eliciting Private Sector funds into defence equipment procurement programmes will have an immediate impact upon HM Treasury’s objective of balancing MoD’s budget this fiscal year, and for the rest of the Parliament.

Normal commercial pressures and market forces prevalent within the context of a multiple-phase winner-takes-all competition will, in themselves, persuade defence contractors to take a business decision to voluntarily make a contribution from their own funds, towards the cost of advancing the developmental status of their starting-point for the Technical Solution, to meet the Requirement. It will not even require expenditure of procurement officials’ time, in trying to persuade Bidders to put their own money into defence equipment programmes – saving MoD an enormous amount in overhead costs.

Such a feat has not been achieved on any previous equipment acquisition programme for the UK’s Armed Forces, not least, because no one (including the Secretary of State for Defence) has provided convincing evidence of any Private Sector capital invested – instead, this issue has been dominated by lies, disinformation and spin.

An added benefit to be derived from compelling Bidders to borrow funds from third parties such as Finance Houses or Private Equity partners to pay for the cost of developing their Technical Solutions is that, the monitoring and scrutinising function will be automatically transferred from MoD to the lending institutions, who are likely to be much more rigorous and demanding regarding day-to-day performance than disengaged, here-today-gone-tomorrow procurement officials – yet another good reason why the headcount at MoD Abbey Wood should be reduced even further!
@JagPatel3

85 weeks ago @ http://www.conservativ... - Nicky Morgan: Let Hamm... · 1 reply · +1 points

Yes, employers should be encouraged to invest in building a capable and resilient workforce, but it need not be limited to the private sector only. People in the pay of the State should also be brought into the fold, if the government is going to satisfy the wants, needs and expectations of citizens.

The government’s much heralded Industrial Strategy white paper finds that the skills and capabilities of those employed in the Private Sector need upgrading, if the UK is to realise its vision of a Global Britain and pay its way in the world, post-Brexit. But there is no recognition that people in the pay of the State – the other party to this Industrial Strategy, on whom its success is wholly dependent – are equally ill-equipped for their public sector roles. This lack of acknowledgment is not a surprise. The Industrial Strategy was, after all, written by people in the pay of the State!

It would also explain why there is very little confidence in the ability of big government to fix market failures, use the instrument of regulation to curb anti-competitive behaviour, manage outsourced public service contracts or secure value for money for investments made in infrastructure.

Indeed, the reputation of people in the pay of the State is further diminished by the fact that their ability to innovate, solve problems, learn from past mistakes and adapt to change, which is a distinctive characteristic of people in the Private Sector, has been erased in the Public Sector due to incessant conditioning of the mind from an early age. And, of course, people in the pay of the State are very good at talking a “big game” but they can’t “do it”.

But, what is especially worrying about people in the pay of the State is that they haven’t got a clue about what it is that drives the behaviour of for-profit organisations in the free market – not least, because they have not spent a single day of their lives in the Private Sector – and yet they have been put in charge of spending taxpayers’ money to the tune of £277 billion to buy goods, services and labour from non-public sector organisations.

Worse still, in specialised markets such as that in military equipment for the Armed Forces, the role of the regulatory authority and sponsoring agency has been combined in one department of state – the Ministry of Defence – which means that the independent scrutiny function, free from political interference, is non-existent.

So, successful capture of a department of state by the Defence Industry amounts to taking control over both roles!

Additionally, the culture in Whitehall has always put greater emphasis upon people who master rules, regulations and processes instead of valuing smart working, execution and delivery. What’s more, civil servants have migrated over the years, in overwhelming numbers, to the Private Sector via the revolving door in pursuit of a second career and infected it with these traits. Which would probably explain why the Defence Industry has failed so miserably to deliver equipment to the Armed Forces that is fit for purpose, adequately sustained in-service and constitutes value for money through-life – bearing in mind that 99% of people who work in the Defence Industry right now were previously in the pay of the State.

Instead of doing the decent thing and educating people in the pay of the State about the ways of the Private Sector, defence contractors are busy exploiting their ignorance, for one purpose only – relieving them of taxpayers’ money – which has, in itself, left the public finances in pretty bad shape.
@JagPatel3