June 2024

How the Government could save billions – but won’t

Our rulers keep telling us that the British economy is a great success and is growing faster than most other European countries and is creating more jobs than other countries etc etc.

What our rulers are less enthusiastic about mentioning is the astonishing level of our national debt – up from £750bn when Cameron’s Coalition was elected to about £1.8 trillion today and still increasing by an horrific £5,170 per second.

To be fair to our useless rulers, they have made a few paltry cuts in how much they spend – mainly by cutting things like care to the elderly, road repairs, libraries and garbage collections. But these pathetic efforts are having little effect on our ever-spiralling debt.

However, there are some areas where our rulers could easily slash spending, but won’t:

The foreign aid farce

Perhaps the greatest squandering of taxpayers’ money in history is the way out Government borrows over £12bn a year (which we don’t have) and hands it over to brutal African kleptocrats and their cronies who immediately funnel our borrowed money into their offshore bank accounts while their people breed by the millions into poverty and destitution before heading for a life funded by benefits and crime in Europe.

But I’ve dealt with this in my book THE GREAT CHARITY  SCANDAL and in two videos I made for YouTube

The False Claims Act

There’s a wonderful law in the USA called “The False Claims Act”. It was brought into law in 1863 by Lincoln to stop companies ripping the US Government off during the American Civil War and was substantially updated in 1968.

The False Claims Act allows private parties to file qui tam actions alleging that defendants defrauded the federal government. If the suit succeeds, the private party may receive up to 30% of the government’s award. In these suits, the government is the real party in interest, and thus is considered the plaintiff. The private party who initiates the suit is called a relator.

Th False Claims Act works in two ways:

Firstly, anyone who believes a company is screwing the Government can launch a legal action on behalf of the Government and, if successful, can make an awful lot of money.

But perhaps more important is the deterrent effect. The existence of the law means that companies know that, if they overcharge on Government contracts, any honest and/or disgruntled employee can take them to the cleaners and become very wealthy in the process. This certainly discourages many companies from having a go at screwing the American taxpayer.

Not needed in Britain?

“But we’re so honest in Britain that we don’t need a False Claims Act here” I hear you say. Really? Well let me tell you a story.

In 2009 over 100 British construction companies were fined by the Competition Commission for colluding in overcharging on contracts for the public sector. The companies used what’s called ‘cover pricing’. With this, the companies agree among themselves which company is going to win each Government contract and then the other companies put in excessively high bids to help the chosen company win.

I came across this when I was an elected governor of my local NHS trust. I was given information that a £5.4m hospital car park should only have cost at most £3.9m. In fact, our hospital car park was 50% more expensive per parking space than similar car parks build for private-sector shopping centres and was almost as expensive per square metre as a fully-furnished office block. Moreover the company which built our hospital car park was the one which received the largest fine for corruption.

Naturally, when I presented the facts and figures to our hospital management, I was told to mind my own business and no action was taken as hospital management (IMHO) circled the wagons to protect their own careers rather than taxpayers’ money. In fact, I don’t think any of the billions the 103 construction companies defrauded from us was ever reclaimed by the embarrassed Government departments who had allowed us to be looted.

The Government spends over £200bn a year buying stuff. If a British False Claims Act could save us just a measly 5% of that money, that would be an extra £10bn a year we wouldn’t have to borrow.

So, why don’t we have a False Claims Act in Britain?

Could it possibly be because many MPs have lucrative consultancy contracts with companies that supply goods and services to the Government?

Could it be that such a measure would never get proposed by any MP as most of them have their snouts deep in the trough of our money?

3 comments to How the Government could save billions – but won’t

  • David Brown

    Part of Government debt,in reality debt to be repaid with interest by the taxpayer, is overseas aid. This on a par with someone being suckered by a telethon such as Children in Need making a contribution that they can not afford and than having to get a payday loan at high interest.
    We know that a large amount of overseas aid is going to corrupt regimes what we do not know is are some of these corrupt regimes officials in collusion with some of the UK administrators of the aid. The Government has all sorts of snoopers powers to check on peoples bank accounts maybe they should run spot checks on some of the people deciding who gets the aid money.

  • MGJ

    A brief examination of the incentives reveals the problem. Private companies are constrained by the requirement to make a profit in order to remain solvent. Public sector management on the other hand has all sorts of incentives but value for money is very low down on the list, as it’s not their money they are spending.

    Such a toxic environment incentivises fraud and both sides are to blame.

  • Roy Hartwell

    We have large national organisations like the NHS and police forces who, if they purchased on an agreed national basis could screw suppliers down until their nuts hurt but it seems each individual police force (for instance) is responsible for it’s own purchasing. This means their cars etc. are purchased in much smaller contracts than could be done on a national basis.
    It all sounds so easy so why isn’t it done ? Perhaps too many have too much to lose !!

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