The First Available Exit

So George will start cutting on Day One:

�The message could not be clearer � if you find yourself on the wrong road, you take the first available exit instead of carrying on. With the date of the general election increasingly likely to be after the beginning of the next financial year, that means we will need to make early in-year reductions in existing plans.�

Good. Much better to let the spending departments know now, before they start spending the money, that they'd better not plan next year on the basis of Labour's announced budgets. And the first available exit is a great image.

Unfortunately, George still hasn't clarified either where the major cuts will fall or how big they'll actually be.

All he told us yesterday was that "excessive spending on things like advertising and consultants" will go, and "spending on tax credits for people earning over �50,000, and spending on Child Trust Funds for better off families will all have to be cut during the financial year."

Fine. But he told us all that last October (see this blog), and it still only totals �7bn. What's more, big chunks of of that �7bn - including the public sector pay freeze - cannot begin until the year after next (ie 2011-12).

And just to repeat, �7bn comes nowhere near the scale of cuts we need. As we blogged yesterday, our so-called structural deficit is around 10% of GDP, which is �150bn. And that has to be the sighting shot for spending cuts (see here for the Economist's take on how poorly our politicos are performing on this).

Now, to be fair to George, Labour have already announced some measures to address that �150bn gap. So maybe he figures he's already got them in the bank.

Unfortunately, as we blogged here, Labour's various fiscal measures don't get going until next year, and they add up to just over 3% of GDP by 2014-15. Even setting aside the fact that one-third of that comprises Labour's further disastrous tax on jobs (ie the National Insurance increases), and the fact that most of the planned spending cuts have not been specified, it's not nearly enough. George needs to find another 6%+ of GDP, or more than that if he wishes to rescind the NI increases. So far, his announced �7bn amounts to just 0.5% of GDP.

Of course, he may be thinking that if he can talk the right kind of talk, the markets may let him off the hook. Maybe they'll be prepared to go on lending on something close to current terms (4-4.5% interest rates on gilts) and give him more of a breathing space.

But if he is thinking that, as we noted yesterday, he's dicing with death. The markets have so far been patient because they have been persuaded George will deliver real painful cuts pretty well immediately. Tyler's researches in various watering holes beyond the village of Westminster suggest there would be considerable displeasure should he fail.

Meanwhile, defence is being lined up for big cuts whoever is in power (see this blog). And this morning we hear that Cam will attempt to ease the pain of that by raiding his already ringfenced aid budget.

The idea seems to be that some of the work currently done under the MoD budget in places like Afghanistan could be funded from the aid budget instead. In fact it sounds like some of the aid budget could even be used to fund security activities here in the UK. Cam says:

"We have a defence department, a foreign affairs department and a Home Office and they all work separately. We want to be thinking, how do defence and development work together?

When we think about what we do overseas, we have to think about how it can affect people at home....

A National Security Council will mean we think of those things. The different departments will all sit around and say �What is in our National Security interests?�"

Aid driven by national security rather than altruism. That puts a very different complexion on Cam's aid ring-fence pledge.

As regular BOM readers will know, we have always been very sceptical about our �8bn pa aid budget, believing it to be misdirected and riddled with waste (see all previous posts gathered here). So we welcome any plan for root and branch reform - including the recognition that no spending programme is sacrosanct. But it's still impossible to see this latest move as anything other than a violent swerve to escape a most ill-advised spending pledge. A sort of first available exit.

And if he can do this to the aid budget pledge, he can surely also do it to his much more ill-advised NHS pledge. He could easily use some of that to fund part of the social care or welfare budgets.

Let's keep our fingers crossed - somewhere out there amid all the obfuscation, wishful thinking, and downright porkies, it's just possible that reality is starting to bite.

The Real Lessons Of Nimrod

More victims of government failure

"We are working hard to ensure we capture lessons from incidents and inquiries to improve our safety. As an organisation the MOD is changing its culture and approach to put safety first."

So says the lamentable Bob Ainsworth.

How many times have we heard that? How many times have we heard some government minister telling us that lessons have been learned and changes made? And how many times have we been let down?

And before we go any further, just take a moment to imagine it was your partner, your son, your brother, or your father who went down with the plane.

I haven't read the whole of the 587 page Haddon-Cave Review of the 2006 Nimrod crash, but what I have read tells a familiar story of bungling, complacency, and denial:

"If the Nimrod Safety Case had been drawn up with proper skill, care and attention, the catastrophic fire risks to the Nimrod fleet... would have been identified and dealt with, and the loss of XV230 in September 2006 would have been avoided...

Unfortunately, the Nimrod Safety Case was a lamentable job from start to finish. It was riddled with errors. It missed the key dangers. Its production is a story of incompetence, complacency, and cynicism."

It is a shameful tale, and nobody emerges with credit. Unusually for such an enquiry, the Review names names, in the MOD, the RAF, and the private contractors involved - BAE and Qinetiq. They should all hang their heads - as well as getting sacked.

But the real lessons go much deeper. The real lessons relate to those fundamental flaws in government we blog so often.

To start with, the only reason fourteen of our servicemen were flying in that ancient clapped out plane at all, was because our politicians decided to overrule the advice of their frontline professionals.

As BOM readers will recall, back in 1996 the RAF and MOD procurement team wanted to replace the ancient Nimrod MR2 fleet with the Lockheed Orion, the world's most successful maritime reconnaisance aircraft. But the politicians effectively overruled them, opting instead for an updated version of the Nimrod.

Why? Well, we'll never know exactly, but we may presume it was to shore up BAE which depends critically on MOD orders. In other words, it was a decision made on industrial policy grounds rather than military needs (the Defence Secretary at the time was BBC TV pundit Michael Portillo, who subsequently became - yes, you guessed it - a non-executive director of BAE).

Second, the reason the Nimrod MR2 is still flying, rather than its replacement MR4, is that BAE has still not finished the new version. The MR4 was originally supposed to go into service in 2003, but the latest official estimate is 2011 - eight years late. Eight years in which our servicemen have been expected to go on flying in dangerous planes that are older than they are themselves (indeed, when you consider the Nimrod is basically a converted Comet airliner, these planes are actually even older than Tyler).

And of course, the delay is on top of a truly wild cost escalation. The project was originally supposed to cost �2bn for 21 planes- �95m each. But we're now paying �3.6bn for 12 aircraft- �300m each. That's a price increase of 216%.

Should we blame BAE for the overruns? Well, yes, of course. But it fits into a much broader pattern of government being incapable of managing its contractors effectively. We've blogged this issue many times, and it includes the inability to spec the job properly, the inability to draw up workable contracts, the inability to price jobs realistically, and a chronic inability to stick to the original spec. The all too predicatable result is delay and cost overruns, just as we see with Nimrod.

Third, the reason the MR2's known safety issues were not tackled - or better still, the plane grounded - was that the 2001-2005 safety review (the "Safety Case") was little more than a gigantic box-ticking exercise. Haddon-Cave says:

"... the task of drawing up the Safety Case became essentially a paperwork and �tickbox� exercise...

... The Nimrod IPT [the MOD's own project team] inappropriately delegated project management... to a relatively junior person without adequate oversight or supervision; failed to ensure adequate operator involvement in BAE's work; failed to project manage properly, or to act as an �intelligent customer� at any stage; failed to read the BAE System Reports carefully or otherwise check BAE Systems� work; failed to follow its own Safety Management Plan; failed properly to appoint an Independent Safety Advisor to audit the Nimrod Safety Case; and signed-off BAE Systems� work in circumstances where it was manifestly inappropriate to do so. Subsequently, the Nimrod IPT sentenced the outstanding risks on a manifestly inadequate, flawed and unrealistic basis, and in doing so mis-categorised the catastrophic fire risk... as �Tolerable� when it plainly was not. The Nimrod IPT was sloppy and complacent and outsourced its thinking."

We encounter this kind of sloppiness in government all the time. Senior managers who delegate critical functions to juniors without proper supervision. Non-existent project management. Failure to act as "an intelligent customer". Failure to check contractors' work. Failure to follow their own procedures. Failure to audit results.

Government is very good at compiling massive codes of practice and rules both for itself and other people. But when it comes to practical execution in the real world, it is terminally hopeless. It simply isn't up to the job.

Fourth, the Nimrod disaster reflects the unintended consequences of this government's much-hyped "efficiency" programmes. Haddon-Cave describes how the cuts demanded by the 1998 Defence Review sent the MOD into "organisational trauma":

"Financial pressures and cuts drove a cascade of multifarious organisational changes, which led to a dilution of the airworthiness regime and culture within the MOD, and distraction from safety and airworthiness issues as the top priority. There was a shift in culture and priorities in the MOD towards �business� and financial targets, at the expense of functional values such as safety and airworthiness."

As we've blogged many times, these so-called efficiency programmes may sound good on paper, but they almost always degenerate into farce (Gershon) or tragedy, as here. Government just doesn't do efficiency. To get better value we have to dismantle it.

But defence is a rather special case. Government has to do defence. And that being so, our first and overriding priority must be to support our servicemen and women, especially in the line of fire. It is completely unacceptable to put their lives at risk in an attempt to shave 20% off the logistics budget, as apparently happened here.

Yes, we should switch to buying off-the-shelf kit (like the Orion). But beyond that we should recognise that we will always end up paying over the odds - that's just the way government is (eg see this blog).

So to summarise, the real lessons of the Nimrod killings are:

1. Politicians should not override the operational judgements of frontline staff
2. Government is hopeless at managing outside suppliers - and the end-customers become the victims
3. Government is hopeless at project management - and indeed, at management more generally
4. Government is hopeless at efficiency programmes - cuts are never the same as efficiency savings

But of course, we knew all that long ago. It really should not have taken 14 more service deaths to remind us.

PS BAE comes out of this even worse than the MOD. The Review says: "BAE Systems bears substantial responsibility for the failure of the Nimrod Safety Case. Phases 1and 2 were poorly planned, poorly managed and poorly executed, work was rushed and corners were cut. The end product was seriously defective... The work was riddled with errors of fact, analysis and risk categorisation... These matters raised question marks about the prevailing ethical culture at BAE Systems." BAE may claim that the cause of the crash �will never finally be determined�, but if I were a relative I'd be suing.

Tough On Big Ticket Items. Not.

Since Mad King Gordo reeled off his latest shopping list of new public spending commitments, we've been treated to a succession of Labour politicos thrashing around trying to explain how it will all be paid for.

The much-hyped Millipede (Ed) was particularly ludicrous on Newsnight, coming across as an earnest 16 year old Young Socialist who doesn't have the faintest idea how the real world works. Most ludicrously of all, he's the one in charge of Labour's election manifesto.

All we've been given is the tedious mantra that Labour will not shy away from "tough decisions".

But what decisions?

The only specific we got yesterday was that ID cards will not be compulsory. But we already knew that, and anyway it will save virtually nothing (we estimated �55m in 2010-11 - see this blog).

Tinkering around with ID cards and the like simply won't do it. If you're going to make real tough decisions, they have to involve Big Ticket Items.

And as it happens, we've recently had useful reports on three of the very items we have in mind - public sector pensions, the Trident replacement, and our planned new aircraft carriers.

On public sector pensions, Corin Taylor of the Institute of Directors has written a note (see here) responding to the TUC's entirely spurious claim that the pensions ticket isn't really all that big at all. And while the TUC claims they only cost taxpayers �4bn pa, in reality:

"... the cost of public sector pensions to taxpayers in 2009-10 is the sum of the employer contributions to the unfunded schemes (�12.961 billion), the Treasury top-up to the unfunded schemes (�4.118 billion), and the employer contributions to the funded Local Government Pension Scheme (�4.506 billion), which gives a total of �21.585 billion."

Now, �22bn pa is big ticket by any standard - getting on for �1000 pa for every single household. And it is an obvious area for tough decisions because, as we've blogged many times, the final salary pensions provided in the public sector are now way more generous than those available to the bulk of private sector employees.

True, we couldn't save the whole �22bn pa anytime soon, because most of it is going to pay pensions accrued long ago. But there's nothing to stop a tough decision-maker cutting the employers' contributions by several bill and increasing the employees' contributions by the same amount right away.

Except that's a tough decision we know Labour will never take: their reliance on public sector union funding rules it out entirely.

Turning to Trident, we've been reading the paper published earlier this month by Greenpeace. Yes, we know - Greenpeace. But setting aside the propaganda, the paper is actually a rather good overview of just how big Trident's ticket is likely to be:

"The government gives two figures for replacing Trident. The first is the cost of designing and building new submarines, warheads and �infrastructure�. This was said in 2006 to be �15�20bn and to take up 3% of the defence budget every year between 2012�27.

On top of that are the running costs, which will take up around 5�6% of the defence budget (approximately �1.9�2.3bn) every year.

This gives a total of �72.9�89.5bn for building and operating a replacement for Trident."

So that's a range up to �90bn. But we all know about MOD budgets, so that will certainly be an underestimate.

Greenpeace reckons the true costs are closer to �100bn, once you take account of hidden items like the cost of upgrading the Atomic Weapons Establishment, and securing the nukes from terrorists and other wellwishers. And the MOD's dire record on cost overruns might suggest an even higher figure.

And then there are the carriers:

"The lifetime costs of the two supercarriers and their aircraft were estimated by government in 2005 to be �31bn, broken down as a �12bn procurement cost and �19bn running costs. Separate estimates of �10bn and �18bn have been given for buying and running the F35 planes."

So as per, confusion over what's actually included in the �31bn. But in any event, Greenpeace says the official numbers are serious underestimates, given that the cost of both ships and planes are known have spiralled since these numbers were published earlier in the decade.

So two more Very Big Ticket Items here.

And these at least are items you'd think Labour might be much happier to cut.

Except of course, these big naval construction jobs pay the wages for thousands of Labour voters up north.

In truth, Labour is pretty certain to announce defence cuts. But they won't be anything like the kind of clean cuts suggested by the term "tough decisions".

Instead, they will be a grubby compromise that keeps the maximum number of constituency jobs, but only at the cost of downsizing and despeccing both Trident and the carriers to the point of uselessness and probable danger (see comments here for the way that the new Type-45 destroyers are being fitted with decades old salvaged kit to save cash). Which will be the worst of both worlds.

So there we have it - three major spending areas where "tough decisions" won't even get a look in.

Hopeless and helpless.

Surely, Mr Cam must do better than that.



PS If you haven't read today's Sun editorial explaining why they've dumped Labour, you should. It's an excellent pocket catalogue of Labour failure: failed on law and order, failed on schools, failed on health, failed on immigration, failed our children, and failed our troops. No wonder poor Lord Kinnockio got so emotional on the wireless this morning.

Same Old Same Old

The roller-coaster of government debt - here we go again

Time to catch up after our staycation in the grey sunless Westcountry (hope Mr Dale has better luck this week). Except there's nothing much to catch up on: it's just more of the same old grey sunless same:

1. NHS sick leave

As we've blogged many times (eg here), sick leave in the NHS is higher than in any other organisation known to man. Updated stats were released last week:

"The average NHS worker takes 10.7 days off sick a year, compared with 9.7 days for the public sector as a whole and 6.4 days in the private sector. The service loses 10.3 million working days annually... costing �1.7 billion per year."

Why are they so sick?

"The first national audit of staff habits has found high rates of obesity, smoking, absenteeism and poor mental health."

This will come as no surprise to anyone who has ever dined in an NHS hospital canteen, as we did here. Amidst the vast steaming piles of chips and Ginsters, you're hard pressed to find anything even vaguely healthy on the menu. And by far the fattest diners are members of staff.

Worse, it now transpires that NHS staff can continue to claim overtime and anti-social hours allowances while they are actually off work.

Now what kind of dope would negotiate a pay deal like that?

Apart from our swaggering clothead rulers, that is.

The simple fact is that the monstrously obese NHS is unmanageable. Nobody - not Sir Terry, not Sir Stuart, and certainly not Shaky - has a prayer of mastering it. It needs to be broken up into much smaller and competing social insurance providers.

2. MoD incompetence

The latest cover-up over MoD procurement incompetence is still making headlines:

"The British military operation in Afghanistan is being compromised by an �incompetent� Ministry of Defence equipment programme that is �35 billion over budget and five years behind schedule, a leaked confidential report has revealed.

The highly critical internal MoD report, written by a former defence special adviser, says that the department is running a �substantially overheated equipment programme, with too many types of equipment being ordered for too large a range of tasks at too high a specification�.

We already blogged this leaked report here. But equally astonishing is last week's news that MoD underestimated the likely cost of the Iraq War by factor of three:

"British officials failed to predict both the length of the UK engagement in Iraq and the financial drain. Treasury documents from September 2002 show it greatly underestimated the costs, believing British troops would need to remain �fully engaged� in Iraq for just six months.

In a document drawn up for Ed Balls, special adviser to Gordon Brown, the then chancellor, officials said the �central estimate� for the cost of �preparation, deployment and return� of UK troops from Iraq was �2.5bn."

The latest cost estimate is �8.4bn - itself almost certainly too low.

As we've said before, you wouldn't trust the MoD to buy your weekly shopping, let alone put them in charge of our �48bn pa defence budget.

But we can't privatise defence. Which is a real problem.

(While in the Westcountry, Tyler met a man in a pub. This particular man's firm supplies the MoD with top-secret "if I told you I really would have to kill you" IT kit. He reckons they've now supplied three generations of said kit, but as far as he knows, none of it has ever been used. Insurmountable "source code" conflicts with other kit MoD has bought separately from the US means that the vital components can't talk to each other. So it's all "lying in a cupboard somewhere". Not that he's complaining - the exercise has earned him a rather nice second home.)

3. Deeper in Debt

The monthly public sector borrowing figures were the usual horrorshow. Borrowing in July was �13bn higher than last year, and net debt has already reached �800bn. At this rate we will rack up the trillion sometime next summer.

As it happens, Tyler spent last week poolside huddled over a radiator, reading The Cash Nexus by Niall Ferguson, a lengthy examination of the historic relationship between money, power, and politics. And government debt is a large part of the story.

To be honest, Tyler was a little disappointed. While the book is stuffed full of government financial fiascos, bungling politicos, and greedy bankers, somehow it never quite takes flight: it's less than the sum of the parts.

Still, Ferguson does remind us just how often heavily indebted governments inflate their way back to solvency. The Nineteeth Century British example of a government actually redeeming its huge debts (see Ferguson's handy chart above) is very much the exception. Throughout history, most governments have simply defaulted via inflation.

It is a salutary warning to all savers, especially pensioners. It says that in terms of the political calculus, they don't count. They are outvoted by debtors, and those who can more easily protect themselves against rising inflation, including of course, bolshie unionised labour (as happened in Weimar Germany).

Which naturally brings us to...

4. Inflation

Last month's inflation numbers underlined the stark reality that the deflation scare is a con: it simply ain't gonna happen.

The CPI came in at 1.8% (year-on-year), unchanged from last month. And that despite the fact that most mainstream forecasters had told us there'd be a dip.

All the more reason then, to worry about the Bank of England's roaring printing presses (eg see this post).

And even more reason to wonder WTF the Bank Governor actually wanted to crank them up even further. Has he lost the plot? Or is this by some chance the very same Mervyn King who signed that notorious 364 economists letter opposing fiscal discipline in 1981?

He's going to have to steady himself: with Bernanke calling the end of the US recession, those presses will need shutting down any time now.

Can't say we're optimistic. Maybe we need a holiday.

Shame And Anger

More demands - less resources*

Not for the first time, Tyler is feeling ashamed and angry.

How can these politicos - the ones we're responsible for because we elected them - have committed our troops to a war with such half-baked and unachievable objectives? Surely they can't really believe we can establish democracy and the rule of law in Afghanistan?

And why have they sent the troops in with such hopelessly inadequate force and equipment? Who do they think they are to put lives on the line in such a contemptible manner?

Of course, the Defence Secretary says the head of the Army is plain wrong. Apparently, there are plenty of men and helicopters. And it is perfectly true that Generals always want more resources.

But who are we going to believe - General Sir Richard Dannatt, a career soldier with nearly 40 years distinguished service to the nation; or Bob Ainsworth, an ex-trade union official from the Red Robbo 70s car industry and a former candidate member of the International Marxist Group?

Quite apart from the fact that Ainsworth looks and sounds like a jobsworth district council official in charge of dockets, his entire experience of defence comprises just 24 months behind a Whitehall desk (apart, that is, from his time with IMG, when they were supporting the IRA in its "armed struggle" against the very army he's now responsible for).

And let's just remind ourselves of the background here.

Even though it has made our troops fight two simultaneous wars, this government's commitment to defence has been dismal. In the last five years there have been no fewer than five defence secretaries, an average of one a year. And not one of them has been what you'd describe as a star.

On the money front, their performance has been even more shameful. Despite an endless series of dangerous foreign ventures since 1997, and despite the fact that they increased every other major department's budget as a share of GDP, they actually reduced MoD's share.

In 1997, defence spending was 3.1% of GDP . Last year, it was 2.7%, which represents the lowest level of defence spending since Ramsay MacDonald's disastrous pacifist policy during the thirties (average spending of 2.7% from 1929 to 1934).

But in MacDonald's case, at least low spending was consistent with his pacifist policies. This lot have held down resources while at the same time being quite happy to strut about on the world stage committing our boys here there and everywhere.

Cameron has to do better than this. It is wholly unacceptable to have our troops thrown into major wars without sufficient numbers and kit.


*Footnote - The chart above is lifted from the excellent ukpublicspending.co.uk. Far superior to HM Treasury's own site, it lets you look at all the main categories of public spending both in money terms and as a percentage of GDP. Plus, it has data going back to the Nineteenth Century. Here's defence:

So we can see the two peaks for WW1 and WW2, the latter being far more costly in GDP terms (even if much less costly in terms of British service lives). We can also see the smaller peaks for the Boer War and Korea. But perhaps the most striking thing is the low burden prior to 1900 - after all, weren't we running half the world at that point? Answer - yes, we were. But the Pax Britannica must have been so powerful, we didn't actually need to spend all that much to keep it in place. Although we might just note that for the Second Afghan War (1878-80), we did need to send 40,000 troops, as opposed to the mere 8,000 we have there now. We reportedly won the war, but lost 1630 men, and got out as quickly as possible.

The Battle of Kandahar 1880

Running Sores

Slightly held-up in the Smart Procurement Gateway

Last week brought updates on two of BOM's longest running sores: the interminable scandal of defence procurement, and the moneypit that is the 2012 Olympics.

Defence procurement scandal

The Public Accounts Committee published its annual update on the MOD's 20 largest procurement projects. And the story is all too familiar (see previous posts gathered here). Despite the introduction of a deckchair rearrangement known as Smart Procurement (don't ask), the projects have fallen even further behind schedule and gone even further over budget:

"In the last year, the 20 biggest projects suffered a further �205 million of cost increases, and 96 months additional slippage. This is the worst in-year slippage since 2003. The total forecast costs for these projects have now risen to nearly �28 billion, some 12% over budget. Total slippage stands at over 40 years, a 36% increase on approved timescales. The number of Key User Requirements reported as being �at risk� of not being met has also increased from 12 to 16 in the last year."

A very serious implication of this incompetence is that British servicemen are being forced to fight with equipment that is obsolete and/or past its planned scrappage date. I know we've said it before, but if the Spitfire had been built to this timetable, the RAF would have had to fight the Battle of Britain with Sopwith Camels. Either that, or ask the Luftwaffe to postpone until 1980.

We should note too that the additional cost overrun has only been kept to �205m because the MOD has slashed the number of orders:

"For example, it has trimmed the number of Future Lynx helicopters being bought from 70 to 62, and delayed a number of projects, such as Future Aircraft Carrier, Future Rapid Effect System and elements of the Military Afloat Reach and Sustainability fleet auxiliary programme. We remain deeply concerned that further cost overruns in projects will result in additional reductions in current defence capability and added delays to projects..."

Of course, the scandal of defence procurement isn't just a question of delay and cost overrun: it's much worse than that. There's the whole question of fighting the last war.

As General Sir Richard Dannatt*, the head of the Army, said just last week, the government is "squandering our increasingly scarce resources on those things that are not relevant for today's requirements... At present I can only conclude that much of our planned investment in defence is at the very least of questionable relevance to the challenges we face now and will in the future."

As we've blogged many times, the �20bn we're blowing on the Cold War Eurofighter Typhoon is money that would be much better spent on kit for our boys on the North West Frontier. Along with the �1bn apiece we're spending on the new Type 45 destroyers (which according to ex-Navy man Lewis Page, will simply spend the next 20 years cruising the world hosting cocktail parties - and see BOM vid here).

2012 Olympics moneypit

The government has finally admitted that the �1bn cost of the Olympic Village will all have to come from public sources. Since we never believed their pie-in-the-sky claims that it could be privately funded, this is hardly surprising.

But what it does mean is that the "cast iron" �9.3bn budget has now been breached. Not only has the budgeted contingency fund been raided, but �268m of extra cash is being smuggled in under the guise of social housing support.

Despite this fiddle, and with 3 years still to go, the unused contingency fund is down to a mere �585m. There isn't a prayer it will be enough.

Still, there is now an obvious use for this village post-2012. A few hundred of the 2,900 apartments should be used as London accommodation for our spendthrift MPs. Stratford and Westminster are directly connected by the Jubilee Line, the village will come with built-in security, there'll be an onsite canteen, and the members could keep fit in the abandoned white elephant swimming pool. David Sparkes, British Swimming's chief executive, describes the idea as "excellent".

Could have been built for the job

PS Talking of MPs, would you stand for election as one? "Honest John clean hands" Tyler has been approached by "dissident elements" from a local Tory constituency party, suggesting he seek selection in place of the current member "who will not be standing again". But, protested an immensely flattered Tyler, surely a humble citizen such as his good self could not possibly hope to be selected - he's not even on the Z List, let alone the A List... besides, he's male, heterosexual, white, middleclass, and nearly 60. That doesn't matter at all, said the dissidents. In fact, in the current circs, not being on the Central Office list would be a positive advantage. Trust us, we could get you selected. Yeah, right. But just suppose they were right. Could Tyler possibly contemplate running as an MP? Why would he do it? Why would anyone volunteer for all the brickbats and social work entailed? Because it's a chance to do something about the terrible mess we're in, he was told. But isn't that how they all start?

*Footnote - General Sir Richard Dannatt GCB CBE MC was educated at St Lawrence College, a public school in Ramsgate. And do you know how many of the Army's top 10 officers were privately educated? Hmm? According to the PAC, it's 9. Like we blogged here, looks like the Army will always comprise Ruperts and orphans... or at least, Joannas and orphans. Thank God for the public schools, eh? Otherwise it might be all orphans.