New BSF delays imminent as Gove wreaks more havoc on schools

The national school-building programme has been thrown into confusion once again after the government delayed work on schools that have been approved for development.

When Education Secretary Michael Gove scrapped Labour’s Building Schools for the Future (BSF) scheme earlier this summer, he allowed a small number of ‘sample school’ projects to go ahead where contracts had yet to be signed.

But according to business publication Infrastructure Journal [subscription required], Partnerships for Schools (PfS) – the national agency that oversees the BSF programme – has written to the councils and private firms developing these sample school projects, warning them to halt work pending yet another review.

The move throws many school projects back into limbo. Gove had delayed a decision on the sample schools before finally approving a number of them earlier this month. The latest review will delay these schemes yet again.

Under the review, Gove will consider the legal structures under which the schools are built on a case-by-case basis. The letter states: ‘There is no certainty as to what structure may or may not be permitted and it is possible [Gove] may conclude that no form of exclusivity is acceptable.’

This exclusivity point is crucial – it amounts to a strong suggestion that the government is trying to extricate the BSF schemes in question from the exclusivity arrangements that are automatically granted to the selected private sector bidder. This exclusivity gives the selected bidder the sole right to develop any school project over a certain value (typically £100,000) in the given area over a 10-year period.

The problem for the government is this:

• where BSF schemes had selected a private sector bidder but not yet signed binding contracts, Gove kept some of their sample school projects but ditched the remaining projects
• for the sample schools to go ahead, the schemes now need to sign binding contracts
• signing binding contracts will give legal effect to the exclusivity arrangements, meaning no other company can carry out a major school project in the area for 10 years
• this means that other than the sample school projects, no other school redevelopment would be able to proceed, no matter how necessary, without the involvement or blessing of the selected private sector bidder

Schemes that had already signed binding contracts before Gove axed BSF are not affected. Gove approved these schemes in their entirety, meaning all local school redevelopment is going ahead in these areas.

But the potential problems in areas where only sample schools were approved explain why Gove is now searching for a get-out clause from the exclusivity arrangements.

And while he looks for a way out via this latest review, important school redevelopment work must wait even longer. PfS has instructed the affected local authorities not to incur any more expenditure on their schemes pending the review.

Kiel Porter, the reporter who broke the story for Infrastructure Journal, told A Thousand Cuts: “Technically they can do it as nothing has been signed, but it would create all sorts of problems.

“First it would make a mockery of the bidding process and allow not just the preferred bidder but also losing bidders to claim the process was flawed. The test case (SITA v Greater Manchester Waste Disposal Authority) is still going on three years later with fees totalling millions.

“Second it would require a completely new project agreement that could take months to draft – and no one has the time to do it. Schools are already falling behind.”

Quite apart from yet another bungle from the increasingly hapless Gove – does anyone still describe him as a ‘rising star’? – it is also an example of how the government’s deficit machismo is blowing up in its face.

By rushing ahead with major cuts in an attempt to strike intimidating postures of intent, the government has not thought things through and is seeing unexpected problems crop up all over the place.

With BSF, we’ve already had the shambles over the publication of inaccurate lists of cancelled schools because Gove didn’t want to check the data first. Now we have Gove firing off panicking letters via PfS because he evidently didn’t consider the exclusivity issue when he axed BSF in the first place.

But it’s not just BSF. The in-year funding cuts to local authorities have forced councils to desperately hack away at local services such as Connexions. Had the cuts been delayed by a year, councils would at least have been able to prepare in advance and avoid making legally binding spending commitments.

Instead they must rush cuts through with large amounts of spending already committed. Council spending cuts have been determined not by the relative importance of specific services, but by which services have signed bits of paper and which do not.

Meanwhile Andrew Lansley’s hasty ‘denationalisation’ of NHS commissioning is heading for the courts over the legality of its unconvincing consultation process.

When millions of people’s personal details went missing under Labour in late 2007, the then-Shadow Chancellor George Osborne delivered this scathing attack on a government that had become obsessed with finding a grand vision:

“Never mind the lack of vision – just get a grip and deliver a basic level of competence.”

As the coalition revels in its epochal ‘transformation’ of the public sector, Osborne and co would do well to heed their own advice.

Step aside Sir Philip – government appoints ANOTHER tax avoider to advise on cuts

Since his appointment as the coalition government’s new ‘cuts tsar’, Sir Philip Green has rightly made unwanted headlines over his tax affairs.

Retail billionaire Sir Philip’s (entirely legal) tax schemes meant that he avoided paying an estimated £285m in tax in 2005 after he transferred control of most of his business empire to his Monaco-based wife for tax purposes.

Senior Lib Dems – in particular Vince Cable – are known to be privately angry at his appointment to advise the coalition on public sector efficiency measures.

But it turns out that Sir Philip is not the only tax avoider appointed by the government to advise on how to cut billions from public services.

Step forward Adrian Beecroft, one of four City high fliers recruited by George Osborne earlier this month to act as key figures on the government’s ‘independent challenge group’.

As the FT reported at the time, ‘The group’s brief is to “think innovatively about the options for reducing public expenditure”. It will perform a similar function to the “red teams” used by intelligence agencies to question key conclusions of analysts.’

The issue here is not Beecroft’s personal tax affairs – of which I know nothing – but the tax policies of the businesses he worked in and ran.

Beecroft was one of the founders of private equity firm Apax Partners. In 25 years at the group he served as chief investment officer and then senior managing partner before retiring in September 2008 – after Apax had acquired media group Emap in partnership with Guardian Media Group.

This Apax-GMG acquisition of Emap in 2008 adopted a curious structure. As the Guardian explained in an article in 2008, the deal involved a holding company that was to be set up in the tax haven of Luxembourg, which itself would own a number of companies located in another tax haven, the Cayman Islands.

The vehicle for the Apax-GMG bid for Emap was a company called Eden Bidco, incorporated in the Caymans in December 2007.

As the Guardian article explained:

‘The Apax Caymans structure at the time of the deal involved a complex network: Apax Nominees WW Ltd owned Eden Acquisition1 Ltd which owned Eden Acquisition 2 Ltd which in turn wholly owned Eden Bidco. The rate of corporation tax in the Caymans Island is zero.’

A GMG spokesman told the Guardian that the offshore structure had been created at Apax’s request.

While Emap’s operating profits remain taxable in the UK – unlike the bid vehicle, Emap itself is registered in this country, not the Caymans – the offshore structure carries ‘unspecified’ benefits for Apax, particularly if it sells its shares in the future, a typical mid-term strategy for a private equity firm.

As the Guardian continued: ‘The level of taxation payable on any capital gains made from selling shares could have a significant impact on the financial performance of the investment in Emap.

‘Should the Emap asset be sold in the future, a potential purchaser may also avoid stamp duty on any acquisition thanks to the offshore structure, which could have the effect of enabling Apax and GMG to achieve a higher price on any disposal.’

Apax did not comment on its Emap acquisition tax structure for the Guardian article. But it may not be just the Emap deal. A search of the Cayman Islands’ company register brings up the following firms, all registered in the Caymans, all with the name ‘Apax’:

APAX CAYMAN EIGHT LIMITED
APAX CAYMAN ELEVEN LIMITED
APAX CAYMAN FIVE LIMITED
APAX CAYMAN FOUR LIMITED
APAX CAYMAN NINE LIMITED
APAX CAYMAN ONE LIMITED
APAX CAYMAN SEVEN LIMITED
APAX CAYMAN SIX LIMITED
APAX CAYMAN TEN LIMITED
APAX CAYMAN THREE LIMITED
APAX CAYMAN TWELVE LIMITED
APAX CAYMAN TWO LIMITED
APAX CSG HOLDINGS LIMITED
APAX EUROPE VI NXP FOUNDER GP LTD
APAX EUROPE VI NXP FOUNDER L.P.
APAX EUROPE VI NXP FOUNDER MLP CO LTD
APAX FINANCIAL CORP 221135 -SO
APAX GLOBIS PARTNERS & CO., LTD.
APAX NXP US VII, L.P.
APAX PARTNERS & CO (GERMANY) II LTD.
APAX PARTNERS & CO (GERMANY) LIMITED
APAX QUARTZ (CAYMAN) GP LTD.
APAX QUARTZ (CAYMAN) L.P.
APAX US VII GP, L.P.
APAX US VII GP, LTD.
APAX US VII INTERNATIONAL PARTNERS, L.P.
APAX US VII, L.P.

Given the secrecy around Caymans-based companies, it’s impossible to say how many are owned by the Apax of government adviser Beecroft or how many were created before he retired, but it’s reasonable to assume that at least some of them are and were, given Apax’s use of a Caymans-based network for the Emap deal.

There is no evidence or suggestion that either Apax or Beecroft ever did anything remotely illegal. But nevertheless, we have Adrian Beecroft, a multimillionaire Sunday Times Rich List alumnus who ran a company that used offshore tax avoidance structures on his watch, now advising the government on how to cut public spending in a way that will almost certainly impact on frontline services and welfare for the poorest in society.

Incidentally, the other three City hotshots hired to the government’s ‘independent challenge group’ are:

• Douglas Flint, finance director of HSBC
• Richard Sharp, former head of the Goldman Sachs European private equity arm
• John Nash, a founder of the Sovereign Capital buy-out group and chairman of private nursing home firm Care UK

Putting to one side the clear benefits Nash’s firm Care UK will draw from Andrew Lansley’s ‘denationalising’ of NHS service provision, I have no evidence that any of these individuals have personally or professionally engaged in any form of tax avoidance. None at all.

But if anyone else has, do shout.

Building industry lambasts government’s first 100 days as ‘death by 100 cuts’

The National Federation of Builders has attacked the coalition’s first 100 days in office as ‘death by 100 cuts’ for the construction industry.

The NFB, which represents many of Britain’s small to medium-sized building outfits, said that the government’s policies are forcing the industry into a double dip recession, with the current growth in the sector due to ‘companies scrambling to finalise deals before the government axe could fall’.

The body highlighted the decisions to scrap regional development agencies and regional spatial strategies with nothing in their place and no policies to handle the transition.

Describing the government’s execution of its agenda as ‘sadly wanting’, it delivered a stinging verdict on the coalition’s policies so far: ‘In much the same way as Gordon Brown redefined the word “prudence”, this government has redefined the phrase from the emergency budget “no more capital spending cuts” to mean “we are now cutting the £55 billion Building Schools for the Future programme”.’

STOP WHAT YOU’RE DOING! Government starts public vote on Spending Challenge

STOP.

GO TO A COMPUTER.

VOTE.

Yes, the government has opened its much-mocked Spending Challenge to the public vote. All 44,000-plus ideas that were submitted to the website and didn’t breach moderation rules have been put out for the public to peruse.

As the Spending Challenge website says: ‘As you read through the ideas on the website, we’re asking you to let us know what you think by rating the idea from 1 star (poor) to 5 stars (excellent).

‘At the end of August, we’ll review the ideas with the most potential and investigate them in further detail to see if and how they could be taken forward for the Spending Review on 20th October and beyond.’

So, all you have to do now is give proper, considered thought to 44,000 suggestions by the end of August.

Excluding today – you need a bit of time to prepare, after all – that gives you 13 days until the end of August 31^st. That’s 312 hours. Or 18,720 minutes.

In other words, you have a little over 2 minutes and 20 seconds, starting from midnight tonight, to read, consider and vote on each of the 44,000 suggestions. No eating, no drinking, no sleeping, no going to work. Just voting,

No doubt that is a terrifyingly daunting prospect, so just to filter out some gems for you, perhaps you might consider voting to sell the Royal Swans for meat. As the proposer suggests:

‘There are being many Wall by the River in Central London that are desolate except for Slime. Here I am proposing we put Pen for Swan and Employee of Government at minimum Wage for the upkeep and sale of Swan.’

That’s the spirit!

PS: interesting to note that there’s a large number of suggestions to scrap the proposed High Speed 2 rail link…

You already have a veto, Simon Hughes. It’s up to you to use it

Simon Hughes. The 'aye' to the Left.

Liberal Democrat deputy leader and general centre Left head honcho Simon Hughes has been making headlines again, saying that Liberal Democrats should have a veto over government policy.

“If you want a coalition to deliver the vote then you have to make sure everybody has bought into that,” he told this morning’s Today programme. “It’s a matter of practical politics, the answer is therefore: yes, the parliamentary party, on behalf of the wider party, on big issues has to say, ‘No, we can’t go down this road.’”

Now, to paraphrase the words of his party leader, if Simon Hughes actually did something to bring about progressive policies every time he talked about the need for them, we’d be living in a social justice nirvana.

But he doesn’t. Today’s comments are a case in point.

Liberal Democrat MPs do, of course, already have a veto on government policy. It’s called the parliamentary vote. If they don’t like legislation proposed by the government, they are free to vote against it. If all Lib Dem MPs voted against a bill, there’s a good chance it would be voted down. It’s called parliamentary democracy – a novel concept, evidently.

There are a few honourable MPs on the Lib Dem benches who are not agog at the chance to take one of the plethora of ministerial jobs reserved for them, and have had the guts to vote against the government.

Mike Hancock (Portsmouth South) and Bob Russell (Colchester) were at least willing to vote against the VAT rise in the emergency Budget.

Later Hancock joined John Pugh (Southport), Annette Brooke (Mid Dorset and Poole N), Andrew George (St Ives), John Leech (Manchester Withington) and David Ward (Bradford E) in voting against the coalition over academy schools.

Note the absence of Simon Hughes from either list. Despite being widely reported as a VAT rebel, he actually spoke in support of the Budget and merely warned of possible amendments moved by Lib Dem backbenchers to make it fairer. Amendments that (correct me if I’m wrong) somehow failed to materialise.

The fact is that the parliamentary Lib Dems largely consist of Orange Book types who enthusiastically support the Conservatives’ cuts agenda (Clegg, Cable, Law etc), sort-of social democrats who generally don’t have the guts to vote against the leadership – and a third of their MPs who’ve been bought off with ministerial jobs.

Lib Dem grassroots members will have a chance to deliver a few vetoes of their own at their party conference this autumn. With any luck, they’ll teach Mr Hughes a thing or two.

Salami slicing in Maulden & Houghton Conquest

With local government shutting down over August, I’ll take this opportunity to run down some of the cuts taking place in councils around the country.

First up, Central Bedfordshire. This fairly rural area, comprised of such wards as Maulden & Houghton Conquest, announced its in-year cuts in mid-July.

As ever, children and young people’s funding took the biggest hit, after the government cut education area based grants (ABG) by 24 percent.

But while some councils have cut sought to protect certain priority areas – Connexions, for example – Central Bedfordshire opted for a salami slice approach, cutting equally from all budget lines with no thought to priorities.

As a result, everything has had a 23.964557 percent budget cut. Give or take the odd one-thousandth of a percent.

Among the cuts are £450k from the Connexions service, £60k from work to support the prevention of exclusions from school, just under £70k from start-up costs for extended schools projects (breakfast clubs etc), and £6k from work to tackle substance misuse among young people.

Former government debt advisor “not confident” of avoiding double dip

The former head of the government’s advisory body on national debt has said he is “not confident” about Britain’s prospects for avoiding a ‘double dip’ recession.

Sir Alan Budd, who ran the Office for Budget Responsibility until last week, told BBC Radio 4’s Today programme that a return to recession was a possibility, although he felt continued growth was the more likely outcome.

Asked about whether Britain would avoid going back into recession, Budd said: “I’m not confident of it. Our fan charts show that it is a possibility, just as much stronger growth is a possibility.

“It’s not the most likely outcome. The most likely outcome is that the economy will continue to grow. But you cannot rule it out.”

More here (subscription required).

Managers receive £1m in bonuses at crisis-hit university

Managers at Britain’s most crisis-hit university have carried off bonuses worth a million pounds.

The performance related pay bonuses at London Metropolitan University amount to a total of around £1m a year for 200 senior academics, managers and members of the university’s executive group.

An internal email sent by Tracey Gormley, a senior adviser at London Met’s human resources department, and seen by A Thousand Cuts states: “PRP [performance related pay] for around 200 Research Institute Directors, Academic Leaders, Professional Managers (PMGs), Senior Managers (SMGs and EG) & Professors totals around £1M per annum.”

It is not clear how much has been awarded to specific managers or the basis on which the awards are calculated, but the bonuses awarded to members of the executive group (referred to as EG in the leaked email) are likely to be especially controversial.

Executive group members were criticised in the official report into the scandal that nearly bankrupted London Met in 2008-9.

London Met was plunged into crisis when Hefce, the agency that manages higher education spending in England, discovered that the university had for years deliberately underreported the number of students dropping out its courses, thus drawing millions of pounds of funding that it was not entitled to.

Hefce clawed back £36.5m from the university, leading to the resignation of vice-chancellor Brian Roper – who was held largely responsible for the scam – and the university’s governing board.

London Met was left in a financial crisis, leading to job cuts and the closure of the university’s nursery.

However, the executive group remained in place, even though the report into the scandal, published last November, said that they “share collective and in some cases line management responsibility for the failings in relation to data quality”.

“Executive Group members and the University Secretary share responsibility for not ensuring that the funding completion issue was discussed, either through in some cases their line management responsibilities or for all in Executive Group meetings,” the report concluded.

A more recent report by law firm Eversheds ruled out disciplinary action against two members of the executive board regarding the scandal.

While £1m has been awarded in bonuses to 200 senior managers, just £100k is paid as ‘merit awards’ to support staff for good performance each year. Academic staff receive a separate bonus worth around £600k last year.

Roper’s successor as vice-chancellor, Malcolm Gillies, recently wrote to all staff asking for suggestions on how to make savings.

Gillies said in a separate email that “the effectiveness of staff reward structures needs to be reviewed”, with a formal review into staff and management bonuses brought forward due to “a perceived heightened sense of urgency”.

However, current management bonuses will not be suspended pending the outcome of the review.

Max Watson is chair of the London Met branch of Unison, the trade union that represents support staff. He told A Thousand Cuts: “London Met managers continue to live in cloud cuckoo land and award themselves bonuses worth £1m per year despite their well documented track record.

“They caused a financial crisis of £38 million, leading to 350 job cuts. They closed our last nursery at London Met, and they tried to sell off the family silver in a desperate bid to make savings. And now they want us to accept a 0.4 percent pay rise, which is in effect a cut.

“This is jaw-dropping hypocrisy and a slap in the face to us hard working, poorly paid support staff, without whom there would be no university.

“Their arrogance is breathtaking, both in staying put and then awarding themselves such obscene bonuses. Any further cuts will be strongly resisted, and until they get real and stop lining their own pockets, there can be no goodwill toward any of them.

“There is a myth being peddled at every level that ‘we’re all in this together’. At London Met, and elsewhere, we’re under no illusions: it’s bonuses for the senior staff, and cuts for the rest of us.”

London Met’s most recent accounts – for 2008/09 – showed a surplus of £9.5m, up from a £12.5m loss the previous year. However, the surplus was only achieved by selling £22m of property.

The university will repay the over-claimed money to Hefce through annual instalments of £10m starting this September.

In 2008/09, 30 members of staff were paid £80k or more, up from 19 the previous year.

PFI – the £65bn NHS mortgage

So after yesterday’s hullaballoo about £500 trips to Blackpool, today we have news of some genuinely expensive public sector spending.

And no prizes for guessing – it’s PFI.

The BBC reports that New Labour’s favourite cash-guzzler has left the NHS with a £65bn bill under PFI contracts – the so-called ‘NHS mortgage’.

None of which will surprise readers of Private Eye, of course.

Under the 103 PFI deals, NHS trusts pay private companies contractually agreed sums over a period of decades to cover the cost of construction, operation and maintenance of facilities. The payments cover the loans that private companies take out to fund the up-front work.

The fixed nature of the operation and maintenance costs means that in squeezed financial times – such as now – trusts can’t make savings on non-frontline functions, such as catering, that have been sub-contracted out under the PFI deals. Such costs are fixed under the contracts – meaning hospitals have little choice but to make cuts to frontline services, the costs of which are met in-house and are not fixed.

The King’s Fund health think tank is now urging trusts to try and renegotiate the PFI deals.

But given that the contractually agreed costs cover borrowing from commercial bank lending, often from banks that are trying to rebuild their finances following the credit crunch, good luck with that.

More here. And good on the BBC for crunching the numbers.

PFI – the £65bn NHS mortgage

The Ultimate Right-Wing Nutjobs’ Guide to Outrageous Government Waste

Eric Pickles. Eats public sector fat cats for breakfast, lunch, dinner...

Today Communities Secretary Eric Pickles trumpeted his department’s publication of all supply contracts above £500 as proof of the government’s new transparency. Rightly so.

He called for an army of “armchair auditors” to scrutinise what the department was spending money on. Fair enough – although a glance at the list shows how unrevealing it is, given that it doesn’t give any detail on what each payment was for.

And given the absence of any clarity, the press have settled for reporting the blatantly flagged expenditure of £1,600 on massages for staff and £539 on an away day at Blackpool pleasure beach.

Local government minister Bob Neill – yes, that Bob Neill – weighed in gleefully: “It seems, quite literally, the government offices for the regions were taking the taxpayer for a ride.

“They were living it up at the taxpayers’ expense whilst thousands of households were struggling to make ends meet.

“Splashing out six-figure sums on pollsters appears to be another one of Labour’s vanity projects. It’s unforgivable that a culture of excess was allowed to flourish for so long.”

But given the £314m that the department spent in total on supplies and procurement in 2009/10, a couple of thousand quid on dubious perks – even the “six-figure sums” on pollsters – is a drop in the ocean.

Any serious analysis of the data is difficult as very little detail is provided on what each contract was actually for. The government has indicated that future data releases will be more detailed, but not many conclusions can actually be drawn from today’s figures.

But that won’t stop people trying, of course.

The swivel-eyed right-wing brigadiers have been out in force on the messageboards this afternoon in all their spEak You’re bRanes pomp.

“Labour through and through. Councillors spend thousands on ‘jolly boys’ outings, alternative medicine and focus and diversity groups, while MP’s line themselves up for huge salary increases, gold-plated pension pots and fraudulent expenses claims. They treated the British public with complete and utter contempt,” said ‘The Doctor, The Tardis, somewhere in the Medusa Cascade, BRIGHTON’ in one of the highest rated comments on the Daily Mail’s ever reliable messageboard.

Inevitably there will be some dubious purchases among the thousands of supply contracts signed by the department. Highly paid executives no doubt enjoyed perks for themselves, hired expensive consultants and ran pricey advertising campaigns as New Labour tried to get the public sector to ape the private sector. But as a proportion of the total?

The lack of detail makes it hard to calculate how much of the department’s purchasing can be put down to ‘waste’. So let’s make this easy for the swivel-eyed Right. Let’s just assume whole swathes of spending were all wasteful, regardless of the detail. Let’s tar all purchases with the same brush and see how much it comes to.

And so, here we have A Thousand Cuts’ Ultimate Right-Wing Nutjobs’ Guide to Outrageous Government Waste:

• Strategic consultancy – “No idea wot that is but it sounds like crap” – £27,709,553.15
• PR and marketing – “I don’t even know what that department does. Why is it spending money on advertising?” – £13,554,732.80
• IT consultancy – “When my computer breaks down I get my son to fix it. I’m sure little Johnny would be happy to do it for the government in return for the odd Mars Bar” – £4,669,922.44
• Property services/estates consultancy – “I hate estate agents their like Nazis” – £2,844,325.12
• Events and hospitality – “What kind of events? The Nuremberg Rally? looolll more Nazis” – £1,343,832.10
• Events organisation – “Cum to think of it I quite like Nazis. Rule Britannia” – £1,268,834.07
• Finance consultancy – “Paying people to check on money wots the point in that?” – £868,292.28
• Rail – “Here we go first class trains. Why can’t they just use a car like the rest of us?” – £558,388.85
• Vehicle hire – “Wot I’m having to pay for them to use a car? ANGRY” – £383,006.67
• Marketing and comms consultancy – “Jeez more advertising” – £354,053.78
• Staff childcare – “This is what happens when you hire women they should stay at home and look after their kids the lazy bints” – £332,957.78
• Staff subscriptions – “Subscribe to what? They can get Nuts online no need to buy it!” – £281,876.98
• Taxi – “I had one of these civil servants in the back of my cab the other day bloody disgrace them spending all our money on taxis” – £250,526.78
• Staff medical care – “Bloody parasites spending my money. I’d rather they just died” – £193,108.77
• HR consultancy – “I mean what is HR anyway?” – £109,851.10
• Interpretation and translation services – “IMMIGRANTS BLEEEAAAARGGHHH!!!” – £49,369.73
• Staff health and safety – “IT’S NOT HEALTH, IT’S ELF muppets cant even spell loolll” – £13,850.82
• Clothing – Ok, so I don’t get that one either – £771.51

All outrageous, diabolical, ZaNuLaBliar waste. Every last penny. And what does it all come to?

£54,408,973.99. Out of £314m. That’s under 17.5 percent.

So, even if every single transport cost, every single hired consultant, each and every magazine subscription, taxi hire and advertising campaign was a waste of money, even if we accept the anti-health and safety propaganda of the Right, even if we dismiss medical care and childcare – even allowing all that, we’ve still got under 17.5 percent of the total. If even half this money is valid expenditure, that leaves us on less than 10 percent.

And unless the Right wants to start picking apart contracts for electricity and office equipment, the rest of the £314m is money you’d largely expect to be spent.

That 17.5 percent is a problem. Partly, of course, because it’s wildly excessive – dubious contracts will only make up a fraction of that total. And given that the percentage of departmental staffing costs for things like consultancy and transport will be minute – the whole point of buying in services is because you don’t have that capacity with your own staff – the percentage of total departmental expenditure that can be attributed to dubious supply deals will likely be in the low single figures.

And with the government planning to reduce departmental spending by about 25 percent, it’ll be far more than the odd trip to Blackpool Tower that gets cut. The level of government waste, even when massively and consciously over-estimated, comes in well below the level of cuts Eric Pickles is preparing to implement.

In fact, the largest single area of expenditure within the Communities Department is ‘Managed/outsourced services’, which cost £55m last year. If that counts as ‘waste’ – and we have no way of knowing whether it does or doesn’t – the Conservatives might want to think twice about their plans to outsource a vast array of public services at national and local level.

And that £54m – in fact, the entire £314m – is utterly dwarfed by some real public spending stinkers. Common Agricultural Policy – £3bn. Privatised rail subsidies – £820m. Service costs on Ministry of Defence PFI deals – £2bn. Mention these and the government goes strangely quiet.

Pickles can crow about £539 on a trip to the seaside – rather less than his own dubious expenses claims – but only through grand distortion and deception can today’s figures and sensational headlines justify the savage departmental cuts to come.

In fact, if we can draw one solid conclusion from today’s news, it’s that a huge number and range of private sector companies gain some level of profit from public sector contracts.

The government has done the right thing in publishing this data. Just don’t expect it to draw the right conclusions.

The full data is available here, but the Guardian’s datablog has it sliced and diced

PS: It’s worth clarifying that the head massages and Blackpool trip were purchased by one of the department’s quangos, rather than the department itself, so those costs don’t feature in the £314m central department spending I’ve referred to above. But the point remains the same.

PPS: I will actually be joining the army of armchair auditors with a truckload of FOI requests regarding some of the contracts that have been agreed, so we can hopefully get a better idea of what’s been spent and why. More when the responses come through.