Private companies profiting from taxpayers' money

Yesterday morning on the radio I heard discussion of the large amounts of money paid by Her Majesty's Government to private contractors to assess people's ability to work, regarding eligibility for disability benefits. I think it was Stephen Crabb, a previous Secretary of State for Work and Pensions, suggesting that the sums paid are probably reasonable if the private companies are not making much profit on them. A quick search online finds him quoted as saying, If the payments being made reflect the actual economic cost, then I think that is a fair contract.

Argh, no!, I thought in response. ( Americans have a similar system. )

Paying companies according to their actual cost in doing the work gives them very little incentive to work at all efficiently. ( The government pays their costs either way. )

I found it a little surreal at Aetion for the government to pay for our time in interacting with the government auditor who would come in, analyze our timesheets and books, and find that we had slightly underbilled the government so we could then ask for more money. ( We were unusual in actually working efficiently. )

Given that the mortgage on the property in which one's government-project contractors work is a fair overhead to bill, it is hard for me not to see some government contractors as an opaque device to have the taxpayer buy the owners a handsome piece of real estate over the course of some years.

I would far rather see private contractors given tight verifiable-outcome requirements for each milestone payment and, while open to competitive bidding to limit typical profits, able to go ahead and do the work cheaply if they find a way to without losing revenue for achieving that. The occasional larger profit margin is well worth scrapping the overhead of carefully measuring and auditing how much it costs companies to achieve goals inefficiently in the knowledge that the government will still pay.

( Large projects can be subdivided to manage risk. )

I should clarify that none of the above relates to my current employment: ( I do not know the details of our funding. )

Simnel cake hiatus

I am most partial to the Simnel cake manufactured by The Cake Academy; it is their product I had in hand when mentioning it last Easter. Alack, though they do still make and supply it, it has failed to turn up on local grocery store shelves. Ah well, perhaps next year or, if not, I could always switch tradition and make some charoset.