What policies should we propose to maintain a competitive economy that provides full employment?
The impact of austerity budgets on individuals and households has been a great strain on the British people, particularly while the cost of living has risen and wages have been suppressed.
This Act would implement measures that would halt the draining of money from the taxpayer by private companies that are addicted to the taxayer teat.
The Austerity Act will allow any state entity to void without penalty any private sector contract where the service provide is neither better nor cheaper than can be provided in-house. Where a service is better or cheapery (but not both), the state agency may unilaterally change contract terms to ensure the supplier meets both tests. Contracts of private providers who are both better and cheaper will be protected. The test of value for money will include all the aims of the state rather than just those of the contract in question, therefore, if a private provider pays low wages in order to be cheaper, but those employees are necessarily on benefits as a result, then this would be counted against the supplier in the value for money test.
There will be a cap on profits derived from taxpayer-funded contracts. Suppliers will be required to report and return excess profits or face sanction
There will be a cap on profits derived from taxpayer-funded contracts. Suppliers will be required to report and return excess profits or face sanction
I'm not sure I understand. Are you talking per-contract profits? Or the overall profits made by any company that does work for the public sector? If it's the first, then how do you measure that on anything more complex than a simple time+materials contract? (e.g. a small business selling a customised version of a software system they developed?)
I'm not clear on what problem this part is trying to address, but there's got to be a better way than this. Cost-plus contracts can conceivably work in a few narrow areas, but even then they tend to create perverse incentives on both sides. To apply this approach everywhere seems not only unworkable but undesirable.
The key measures should be around value, not cost, and certainly not second-degree cost.
It's already standard for pharmaceutical companies whose profits on what they provide to the NHS are capped.
I'd say it should be declared and scrutinised and not to be allowed to go above a certain level. But that level should be quite relaxed as long as the service is both better and cheaper than the state could deliver itself.
This is about providing an additional sanction for those companies who are not better or cheaper but that have simply used the contract to siphon off cash from the taxpayer
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On 13 Oct 2014, at 00:13, Tony Bowden [email protected] wrote:
There will be a cap on profits derived from taxpayer-funded contracts. Suppliers will be required to report and return excess profits or face sanction
I'm not sure I understand. Are you talking per-contract profits? Or the overall profits made by any company that does work for the public sector? If it's the first, then how do you measure that on anything more complex than a simple time+materials contract? (e.g. a small business selling a customised version of a software system they developed?)
I'm not clear on what problem this part is trying to address, but there's got to be a better way than this. Cost-plus contracts can conceivably work in a few narrow areas, but even then they tend to create perverse incentives on both sides. To apply this approach everywhere seems not only unworkable but undesirable.
The key measures should be around value, not cost, and certainly not second-degree cost.
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It's already standard for pharmaceutical companies whose profits on what they provide to the NHS are capped.
You're talking about this: http://www.burrillreport.com/article-ukcapsgovernmentdrugspend.html ?
If so (or indeed if not!), do you have a better link about the detail? This seems to be talking about something quite far removed from profit caps.
I'd say it should be declared and scrutinised
You still haven't explained what "it" means there. Profit on a single contract is a very different thing from a company's annual profit (for example), and both are very different things from an a cap on expenditure on a single item category that was negotiated industry-wide.
Sorry. Simply the profit on state contracts. Not on other business
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On 13 Oct 2014, at 08:32, Tony Bowden [email protected] wrote:
It's already standard for pharmaceutical companies whose profits on what they provide to the NHS are capped.
You're talking about this: http://www.burrillreport.com/article-ukcapsgovernmentdrugspend.html ?
If so (or indeed if not!), do you have a better link about the detail? This seems to be talking about something quite far removed from profit caps.
I'd say it should be declared and scrutinised
You still haven't explained what "it" means there. Profit on a single contract is a very different thing from a company's annual profit (for example), and both are very different things from an a cap on expenditure on a single item category that was negotiated industry-wide.
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Simply the profit on state contracts. Not on other business
That still has same ambiguities. Do you mean the profit on each contract will need to be reported one by one? Or that the company will report once a year (say) on how much profit it earned in total from government contracts?
The total from all state contracts
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On 13 Oct 2014, at 09:18, Tony Bowden [email protected] wrote:
Simply the profit on state contracts. Not on other business
That still has same ambiguities. Do you mean the profit on each contract will need to be reported one by one? Or that the company will report once a year (say) on how much profit it earned in total from government contracts?
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Are you proposing any qualifications on this — e.g. only in cases where income from government sources is over a certain threshold? As it stands this seems like it would add even more barriers to SMEs going after government contracts.
@philipjohn - over 9 years ago
👍
I see your concern @tmtmtmtm about SMEs and I think given the policy applies across the board it'll equally apply to big business as well. In fact, it may even result in fewer larger businesses going for Gov't contracts in some cases because a profit restriction that means less to an SME.
@philipjohn bigger businesses generally have more ability to swallow the costs involved in this sort of extra reporting, etc., — though I'm still having a very hard time seeing the point of this more generally. If it is indeed simply directed at "companies that are addicted to the taxayer teat" [sic, though even with the typo corrected this seems like very unhelpful language], then as proposed it seems likely to create huge collateral damage too. What are some examples of what this is trying to counter, and why does this need to be directed at the seller, rather than the buyer?
If this were expressed in more precise terms (i.e. some indication of even roughly what these caps might be, and probably expressed more clearly than "profits", which are largely subjective on anything but the simplest contracts), and were only triggered in certain circumstances (e.g. companies who deliver more than £x amount of government contracts; or with more than x% of their revenue coming from government clients); or were made part of the rules around tendering for government contracts, rather than being all-encompassing like this, then I might be more persuadable, but for now this is a 👎 from me.
To be fair, the profit caps are already the norm in the pharmaceutical industry and have been for years in order to prevent them profiteering from the NHS
I'm simply proposing an extension of this
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On 29 Oct 2014, at 07:30, Tony Bowden [email protected] wrote:
@philipjohn bigger businesses generally have more ability to swallow the costs involved in this sort of extra reporting, etc., — though I'm still having a very hard time seeing the point of this more generally. If it is indeed simply directed at "companies that are addicted to the taxayer teat" [sic, though even with the typo corrected this seems like very unhelpful language], then as proposed it seems likely to create huge collateral damage too. What are some examples of what this is trying to counter, and why does this need to be directed at the seller, rather than the buyer?
If this were expressed in more precise terms (i.e. some indication of even roughly what these caps might be, and probably expressed more clearly than "profits", which are largely subjective on anything but the simplest contracts), and were only triggered in certain circumstances (e.g. companies who deliver more than £x amount of government contracts; or with more than x% of their revenue coming from government clients); or were made part of the rules around tendering for government contracts, rather than being all-encompassing like this, then I might be more persuadable, but for now this is a from me.
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the profit caps are already the norm in the pharmaceutical industry
Can you provide more information on this? The articles I found (e.g. the one I cited earlier) seem to be about a much more complex group agreement — not per company profit caps.
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On 29 Oct 2014, at 09:48, Tony Bowden [email protected] wrote:
the profit caps are already the norm in the pharmaceutical industry
Can you provide more information on this? The articles I found (e.g. the one I cited earlier) seem to be about a much more complex group agreement — not per company profit caps.
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https://www.gov.uk/government/uploads/system/uploads/attachmentdata/file/207462/dh098498.pdf seems to be a good summary of this. However, as previously noted, this is a much more complex scheme than simply declaring a profit cap across the board. Also, it is a voluntary scheme that was entered into after long negotiations in an already very tightly regulated industry. Going from this to a compulsory scheme for all companies in any industry seems like a major leap. So again: 1. What problems, specifically, is this proposal trying to address? 2. Why is a profit cap on all government contracts the solution to those?
@philipjohn - over 9 years ago
@hiltona This will pass once you click the beautfiul big blue button at https://www.clahub.com/agreements/openpolitics/manifesto
it shouldn't though — as I've a 👎 on it that the vote bot isn't picking up on for some reason...
@philipjohn - over 9 years ago
Hmm that's weird. You should have voting rights because of #226 but Votebot doesn't seem to be picking that up. I'll flag that as an issue...
The OpenPolitics Manifesto
@hiltona - over 9 years ago
There are many companies that have made a lot of money out of the taxpayer in recent years. I have tried to apply the same approach to companies that has been applied to benefit recipients. Alex