Thursday, 10 July 2014

Why don't we ever commission entrepreneurs?

It has been a brilliant summer so far, hasn’t it? It reminds me of the 1990s, when I remember – day after day – getting up, putting on my shorts and sandals and heading off to Cowley Street to edit Liberal Democrat News (no, sandals weren’t compulsory).

But I do have one local difficulty. The lane at the end of my road, which gives me access to my local area and my childrens’ school, has become flooded and boggy.

In the rain, the water pours down and into the street. Now, in the summer, it is at least passable, but I can still see the trickle washing through into the bog.

The water is still running despite weeks of sunny days. A development next door has disturbed one of the many springs in the area, and it doesn’t stop (these are, after all, the hills that gave us the Beulah Spa in the 1840s).

I have seen water board investigators there. I’ve seen local authority investigators there. I’ve had the same conversations with them many times. I was finally assured in early December by Croydon Council that I would get an answer within three weeks. I’m still waiting.

But here’s the point. I'm told the reason why I’m still waiting is that the company the council wants to tackle the problem has been asked to tender for the work, and is dragging their feet. Still no tender. And so we wait.

Now this is very peculiar, and yet somehow familiar. The whole justification for giving up on direct labour organisations and commissioning private companies to do the work instead is that it was supposed to be more flexible.

If one company couldn’t or wouldn’t do the work, and at a reasonable pace, quality and price, there would be others that could be employed instead.

That's the theory. The practice is quite different. We wait, six months now, for a company that clearly doesn't want the work to tender for it.

For me, it is yet another example, not of the perils of private contractors (that's another question) - but of the failure of government at every level to reap the benefits they should from the flexibility of an open market.

Instead of privatisation, what we actually have is a muddle of interlocking and contradictory regulations – from preferred supplier lists to minimum size limits – which actually get it her way of open markets, and do so in the name of open markets.

I have written before about how open market regulations at the European level get in the way of so much activity happening at a local level. The same thing happens at local level too.

This is bizarre, and is so far from what passes for a debate between state and private – which takes place on a different plane, about a different planet. We consequently get the worst of both worlds – no security, little quality control, ridiculous delays and extra costs, and all in the name of enterprise and open markets. And no competition.

At a European level, we know that at least some of the regulation around the single market is there thanks to lobbyists from the biggest companies, and is designed partly to squeeze out competition from the smallest.

We are also assured that the new EU/US trade negotiations (TTIP) will result in growth of 0.5 per cent in each EU country, with 545 euros per household pouring through the economy.

Is there really any evidence for this? Is it really going to do more than shift existing spending into the pockets of the biggest and least effective companies and do more to crowd out the genuine entrepreneurs?

It is true that the whole purpose of TTIP is to extend the ability to export services to smaller companies. But there is the problem. At local and international level, open markets appears to mean more definitions, processes, limits and restrictions. It is the precise opposite of what it is supposed to be - in fact single market regulations, inspired by the UK, are the source of the most spectacular EU mythological regulation stories.

What can be done about it? I don't know. But I'd start with a bonfire of regulations and procurement processes at local level.

Heavens, you might say! How are small companies and social enterprises ever going to get commissioning contracts? But they are not getting contracts under the current system.

Something must change - but for that to happen, we need a dose of ideology that can see open markets clearly. That means rediscovering the idea of free trade from a Liberal perspective.

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