I knew roughly what Resource Accounting and Budgeting was all about, but I never imagined they could invent a system that would require NHS trusts to pay back any overspend twice. Especially as, at the same time, the introduction of payment-by-results means that their income scales directly with their output. So, they can’t reduce the number of operations performed, because their income would go down still more. That also means they can’t really cut any variable or semivariable costs – pay is set by long-term negotiations with the unions that aren’t readily adjustable, and inputs such as drugs are dependent on the scale of production.
Worse, a lot of them are committed to paying unalterable PFI charges, so even the overheads cannot be trimmed. It’s less well known, but MOD has been struggling with RAB ever since its inception. By definition, MOD has a lot of stuff that is only used if there is a war on – vehicles, sets of combat body armour, bandages. RAB requires government departments to pay a notional cost of capital charge on the value of their assets back to the Treasury, which is or used to be 6 per cent. This was a significant drag for the MOD, which responded by flogging stuff it then had to buy back when the wars started. There are vehicles in Afghanistan that were acquired for Kosovo, sold, bought back for Iraq, sold, and bought back again. It’s hard not to see the whole thing as an exercise in treating the public servant as a servant.
Latest is that the RAF is leasing-back two Canberra PR9 reconnaissance planes it disposed of literally months ago. The Canberra was the RAF’s first jet bomber, going into service in 1949 or thereabouts, and it is planned that it will finally be replaced by the (delayed) ASTOR reconnaissance plane, a business jet stuffed with gadgetry. That isn’t in service yet, so it’s yet another of those “capability gaps” Blair’s defence secretaries are so fond of. PR-9 had some extremely advanced cameras, the like of which are unavailable on anything else – it was one of the few UK or NATO assets the Americans specifically asked for in Afghanistan in 2001.
I’d very much like to know what the two (officially civilian) PR9s are doing.