Domenomics is a new and little known in economics that I just invented, and is useful for understanding why the public sector in the UK and therefore the waste of our money to big projects almost always turn out to be costly catastrophic failures.
Domenomics after this great triumph of the public sector extravagance called the Millennium Dome. The Dome has cost us about 399 million pounds. But we ended up with a bill of almost £ 800Million €.
In the private sector, if you're a banker, if you spend about 100 million pounds, even a couple of million for a project, we hope to receive some kind of ROI. Furthermore, if shooting starts stratospherically costs regarding the original budget, usually delivered in front of his boss to explain why eating its way through so much money. Unfortunately for taxpayers, which is not how things work in the public sector.
Eachpublic sector projects, which may be different and the excuses for excessive spending and the fact that both managers varied and creative. However, despite their differences, most follow a similar flight sad and predictable.
First step: the three P - personal vanity, politics and business. First, public investment in major projects, many political decisions largely the sponsors of the personal vanity or greed of the ministers and their associatesmore than justified by any semblance of economic or social need. For example, the prime minister wants to compare a millennium to celebrate in style with his followers, entertainment and other friends, or a minister wants the hospital from opening a new minister or advisors of a gloss to trick the hungry in the rate in the case that an all-singing, all dancing new PC million pounds magically "transform" the exercise ofDepartment.
Step two: the great "small charge". For a project approved by both the Cabinet and the public career of Prime Ministers conspire with civil society massively underestimate the true cost would be. In general, the money managed by private contractors eager to get their lucrative little action ", the project has contributed to the green light. As this trend politely minimize the potential for actual costs is entitled" Optimismbias, because the minister said, are too "optimistic" about the possible costs. At a conference for public sector providers, had a lot to the audience with laughter when cracked the manager said it intends to achieve its projects in the public sector at a price he knew had to be accepted as once he had taken the agreement could increase the cost of what they wanted, and none of the officials involved do not complain.
Step three: spend, spendto spend. Once a project starts, it does not seem to matter how much you spend. The politicians never leave a project, which would mean losing face and possibly damaging political progress. In the same way, never a moment officers on duty in a minister's pet project, but much of our money is bleeding. If a senior official has dared to criticize the regime was the flagship of the Minister, or even by other persons or part demolition of a disaster, then he orIt is a risk of harm to their chances of promotion and the prospect of OBE or knight. Waste of public money are not interested in a career officer, but waste prevention can be extremely harmful. However, many big projects last year so an average of two or three years at each site, the highest ranking officials have been transported out of trouble for the real cost of a project have emerged. Why can move? On the other hand, ifhe inherited a mess of someone else, so bring food, like its predecessor the culprit of all problems.
Step four: The Pacman Bluff. With some of the worst projects, usually when it's too late, something that is politically subordinate to see toothless poodle, the National Audit Office (NAO), will attempt to discover which half was wrong and that our money is gone. Their report will be accompanied by service that has lost hundreds ofMillions or even billions, and then to the Public Accounts Committee (PAC) is presented. The members of the PAC then summoned senior officials involved panting with indignation by the pathetic amounts of money have been judged and those who should have been responsible, because things went so terribly wrong question . Knowing that only need the PAC for an hour or so ago, the duck and weave relevant officials denied responsibility for everything andInventing an extraordinary number of new excuses to absolve of guilt. If things get really difficult, and rarely do so, senior officials sometimes go as far as to admit that "important lessons have been learned." APA President then announced that any project that considered the "worst example" of incompetent management of the CAP has ever seen. The Child Support Agency IT system was one of the "worst public administration scandals in modern times" brandand have been "unbelievable," said the Department of Transport Shared Services project was done with "massive incompetence" was "one of the worst cases of project management as seen through this committee, and flow in the system by the justices of the peace was "the worst PFI deals that we have seen," building schools for the future was "perhaps the worst, the use of consultants, was the Justice Department and the last C-Nomis project career criminal, "one of the worst proportionsI have read. "This is just to name a few, there are many more, the PAC has reported, with several negative superlatives in general with" worst "of the word. Once the farce is over, and nodded to everyone, and that "this must never happen again" and precisely the same procedure as for the next project and the next and the next and then repeat.
At the beginning of a meeting of the CAP in 2009, the president finally the futility of it all seemed to understandyear in which a senior official said, "want to come with the classic line of defense is that were obviously there, everything is in hand now, you have experience in the nature of the school secretaries permanent when they learn that committee. But I had this before and do not know if it is actually a point to exercise, to be honest. "But they continue the charade. At the end of the session took on the president: "It is clear that this projectwas poor, has created little value for money, many of the causes of delays and additional costs could have been avoided. I've been a great eloquent statement of why we expect this to happen again in the public service, but I think I lost breath. "
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