Local Government Association discovers lane rental

[jackal]

And those funds will be financed by increasing charges to utility customers. The utility companies won't pay for this out of their profits.

That doesn't matter if there is an overall net economic benefit, for instance, HGVs being able to travel quicker reducing prices for consumers. If you compare it to other ways of lowering congestion which are paid for by taxpayers, like road widening, it would probably work out good value for money.

It's the old problem of people not using resources efficiently when someone else is paying for them, like people getting paracetomol on prescription or filling up at motorway service stations when it's going on a company credit card.

I'm suggesting there won't be any positive effect. The roadworks will still happen as inefficiently as before, a lane rental charge will be incurred and utility prices will go up to pay it. The council will get increased revenue and council executives will be able to justify a nice pay increase.

Kit's point is essentially that there is presently a market failure as some are incentivised to impose costs (road disruption) on others. Externalities of this sort are very common, and so is the solution - to change the incentive structure so costs are allocated to those that create them. This is a fundamental part of a regulated market economy and has a long history of success. There is no basis for thinking that utilities firms are really so different to other economic actors that they disregard incentives and disincentives.

[Mark Hewitt]

Talking about the NHS they cut at the expense of patients health sometimes! I have a cousin who has Addison's disease (lack of natural cortisol). The NHS wont pay for a pump so that she can have the cortisol injected directly into her blood stream citing costs, but will pay tonnes more money for all the emergency stays in hospital due to her collapsing!
The governments way of trying to save money is the most inefficient you can ever imagine! They may as well not bother!

Government spending decisions are replete with examples of exactly that sort of thing. Trying to save money in one area resulting in massively increased costs in another. Just look at how much pressure A&E is under mostly because of the failure of GP surgeries to provide a decent level of cover.

[jackal]

Talking about the NHS they cut at the expense of patients health sometimes! I have a cousin who has Addison's disease (lack of natural cortisol). The NHS wont pay for a pump so that she can have the cortisol injected directly into her blood stream citing costs, but will pay tonnes more money for all the emergency stays in hospital due to her collapsing!
The governments way of trying to save money is the most inefficient you can ever imagine! They may as well not bother!

Government spending decisions are replete with examples of exactly that sort of thing. Trying to save money in one area resulting in massively increased costs in another. Just look at how much pressure A&E is under mostly because of the failure of GP surgeries to provide a decent level of cover.

Yet the NHS is still vastly more efficient than more market-driven approaches, with the UK for instance spending half of what the US does for a similar quality of health and healthcare outcome.

Of course we should try to reduce inefficiencies where we find them, but we shouldn't lose sight of the woods for the trees.

[RichardA35]

That doesn't matter if there is an overall net economic benefit, for instance, HGVs being able to travel quicker reducing prices for consumers. If you compare it to other ways of lowering congestion which are paid for by taxpayers, like road widening, it would probably work out good value for money.

It's the old problem of people not using resources efficiently when someone else is paying for them, like people getting paracetomol on prescription or filling up at motorway service stations when it's going on a company credit card.

I'm suggesting there won't be any positive effect. The roadworks will still happen as inefficiently as before, a lane rental charge will be incurred and utility prices will go up to pay it. The council will get increased revenue and council executives will be able to justify a nice pay increase.

Kit's point is essentially that there is presently a market failure as some are incentivised to impose costs (road disruption) on others. Externalities of this sort are very common, and so is the solution - to change the incentive structure so costs are allocated to those that create them. This is a fundamental part of a regulated market economy and has a long history of success. There is no basis for thinking that utilities firms are really so different to other economic actors that they disregard incentives and disincentives.

If costs are allocated to Utility companies and passed on down to contractors then they will price the uncertainty accordingly and unit rates will inevitably go up. (For example, water main replacement is generally reimbursed at an all-in linear metre rate) If the regulated market does not allow the cost to be passed onto the bill payer then, all other things being equal, the amount of work done on the regulation/investment/AMP cycle will reduce, with the country in general, other than council executives, being the losers.

[Fenlander]

I'm suggesting there won't be any positive effect. The roadworks will still happen as inefficiently as before, a lane rental charge will be incurred and utility prices will go up to pay it. The council will get increased revenue and council executives will be able to justify a nice pay increase.

I don't think it will. Water charges are regulated as are National Grid's. Regulators are also all over Openreach. The idea that they can pish money up against the wall and regulators will allow them to just put up bills to compensate is quite unlikely.

I work for the NHS which has a £100bn budget but I can assure you we are under constant pressure to save 20p here and £1.40 there.

Talking about the NHS they cut at the expense of patients health sometimes! I have a cousin who has Addison's disease (lack of natural cortisol). The NHS wont pay for a pump so that she can have the cortisol injected directly into her blood stream citing costs, but will pay tonnes more money for all the emergency stays in hospital due to her collapsing!
The governments way of trying to save money is the most inefficient you can ever imagine! They may as well not bother!

You talk about 'the NHS' as if it's one thing, the reality is one department won't pay for the pump and they're not worried about the hospital stay cost as that comes out of a different department's budget. My wife's a hospital nurse and she sees it so often, patient care decisions affected by budgetary factors like that.
Another thing in the hospital is identifying which patients bring money into the hospital and they (the department) can effectively make a profit from, if there's a shortage of a specialist kind of care then regional centres can earn well by taking advantage of that.

[jackal]

I'm suggesting there won't be any positive effect. The roadworks will still happen as inefficiently as before, a lane rental charge will be incurred and utility prices will go up to pay it. The council will get increased revenue and council executives will be able to justify a nice pay increase.

Kit's point is essentially that there is presently a market failure as some are incentivised to impose costs (road disruption) on others. Externalities of this sort are very common, and so is the solution - to change the incentive structure so costs are allocated to those that create them. This is a fundamental part of a regulated market economy and has a long history of success. There is no basis for thinking that utilities firms are really so different to other economic actors that they disregard incentives and disincentives.

If costs are allocated to Utility companies and passed on down to contractors then they will price the uncertainty accordingly and unit rates will inevitably go up. (For example, water main replacement is generally reimbursed at an all-in linear metre rate) If the regulated market does not allow the cost to be passed onto the bill payer then, all other things being equal, the amount of work done on the regulation/investment/AMP cycle will reduce, with the country in general, other than council executives, being the losers.

Again, this is all assuming that the 'drag utility works out as long as possible' model is the most economically efficient for the country as a whole. It almost certainly isn't. But even if it is, the only way to know that is by making the utility firms pay the actual social cost of using this model by paying lane rental. Letting businesses impose costs on society for free is an absolute economic nonsense.

[kit]

Talking about the NHS they cut at the expense of patients health sometimes! I have a cousin who has Addison's disease (lack of natural cortisol). The NHS wont pay for a pump so that she can have the cortisol injected directly into her blood stream citing costs, but will pay tonnes more money for all the emergency stays in hospital due to her collapsing!
The governments way of trying to save money is the most inefficient you can ever imagine! They may as well not bother!

You talk about 'the NHS' as if it's one thing, the reality is one department won't pay for the pump and they're not worried about the hospital stay cost as that comes out of a different department's budget. My wife's a hospital nurse and she sees it so often, patient care decisions affected by budgetary factors like that.
Another thing in the hospital is identifying which patients bring money into the hospital and they (the department) can effectively make a profit from, if there's a shortage of a specialist kind of care then regional centres can earn well by taking advantage of that.

There is work to try and have more joined up thinking, but in the end the efficiencies of "charging" departments and so making staff realise that everything costs the NHS outweighs the annoyance of departments not wanting to pay for another department's spending.

Slightly more peverse is that fact a department gets paid per patient per night so there is an incentive to keep your beds full!

[Fenlander]

Beds full mean you can't take on more patients, a few empty beds means you're always showing as available on the system both within the hospital and the wider trust/area (*). My wife's ward has to close to new admissions when it's full and that has a knock on effect on another ward that supplies them with patients.

(*) like the car park signs that indicate there's available spaces, you won't try and use one that's full but you'll queue to use one with spaces.

[WHBM]

Here's where I described how utility gang subcontractors work :

One is Schedules of Rates that include line items for supply of TTLs, even different rates for 2-way and 3-way TTLs. Often these are put together by those who understand utilities work but not traffic engineering. It can happen that the day rate for TTLs is quite profitable - so the surveyor tries to keep them in for as long as possible ........

But the key issue is, alas, a performance target culture, coupled with subcontracting out all the works. This can lead to a perverse incentive to the subbie to actually drag out the works as LONG as possible, within the performance target, which are often set quite generously compared to reality. The subbie chief wants to have as much work in hand as possible to keep the gang on revenue work. Part of this is that where a gang start a job, it's theirs until they finish.

So, Monday morning, offered a repair job. The chief knows it's about a 2 day job, but the Service Level Agreement penalties cut in at 5 days. So they start and set up TTLs etc. A few hours later they're offered another job. Can they do it ? Well of course, so leave No 1 with the TTLs running and head over to job No 2. This is about 4 days, but they are allowed an SLA maximum of 8. They work digging here until Wednesday. Job No. 3 is offered, about 2 days. Can they do it ? Well of course, leave job No 2, head over, set up more TTLs and make a few desultory digs in the road, then back to No 1 where time is running out.

They need a client-specific part, which the chief knows is often out of stock. Ideally should have been ordered at the start of the job, but actually you order it from the client stores at just on 4.30 pm on Wednesday. Told it will have to be ordered from the manufacturer, and the buying office now won't get the order out until tomorrow morning. That stops the SLA performance measurement because the onus is now on the client to get the item. Should be on site next Monday. So let's go back to Job No 2. By the way, we're getting paid day rate all through the weekend for the TTLs.

There's no more work offered this week, and maybe none the next either. And we only get paid by the job. But do you see what we've done. We've built up enough work in hand to keep our expensive gang (each 4-man gang, plus lorry, plus depot support, costs about £200,000 per year to keep going) in work, and we certainly don't want whole weeks with no work for them. As long as we finish the jobs in line with the SLAs, and have enough TTLs to hand, it's seen as the Right Way to keep the business going.

It's a very simplified example here so don't pick it on detail, but that's The Construction Game.

http://www.sabre-roads.org.uk/forum/vie ... 96#p731596

I would just add that the client's surveyor values all the jobs at month end. And you only get paid for completed jobs. If not finished by August 31 it won't be looked at until September 30. So all hands to the pump to get everything possible finished for the day before valuation day. Did I say Rushed Reinstatements ?

[A9NWIL]

I don't think it will. Water charges are regulated as are National Grid's. Regulators are also all over Openreach. The idea that they can pish money up against the wall and regulators will allow them to just put up bills to compensate is quite unlikely.

I work for the NHS which has a £100bn budget but I can assure you we are under constant pressure to save 20p here and £1.40 there.

Talking about the NHS they cut at the expense of patients health sometimes! I have a cousin who has Addison's disease (lack of natural cortisol). The NHS wont pay for a pump so that she can have the cortisol injected directly into her blood stream citing costs, but will pay tonnes more money for all the emergency stays in hospital due to her collapsing!
The governments way of trying to save money is the most inefficient you can ever imagine! They may as well not bother!

You talk about 'the NHS' as if it's one thing, the reality is one department won't pay for the pump and they're not worried about the hospital stay cost as that comes out of a different department's budget. My wife's a hospital nurse and she sees it so often, patient care decisions affected by budgetary factors like that.
Another thing in the hospital is identifying which patients bring money into the hospital and they (the department) can effectively make a profit from, if there's a shortage of a specialist kind of care then regional centres can earn well by taking advantage of that.

I see so this is what subsequent (f'ing) governments have done in separating up the NHS to make it so inefficient! It should operate as one entity thats how the public see it and that would also make it efficient!
I know that Doctors are hired as if they work for themselves, as they have always wanted their independence, but if the NHS ran the GP practices directly with the doctors being hired as if they were all mini contractors (even GPs), with all practices within a certain radius of a hospital coming under that hospital, there would be no need for out of hours centres!
Then as they would be one unit (hospitals and practices), they would be wanting to provide the medication to keep people out of hospital!
Also those who can afford to be referred for privet hospital treatment should be encouraged to do so. It might not be a huge amount going over to the privet sector, but if some more well off people did, even 5% or less it could help.

Now that might be the NHS but there is so many other examples of public services that could get a big shake up and be reorganised, the roads being one of them, as the councils obviously cant cope that well these days. In fact if the roads, NHS and other government funded services could have a direct funding source, like the TV licence, that was out of politicians hands, unlike the TV licence is, then we might be better off. politicians only think about two things votes and their own salary, so the more thats out of their hands the better.

Rant over!

[kit]

I see so this is what subsequent (f'ing) governments have done in separating up the NHS to make it so inefficient!

Now that might be the NHS but there is so many other examples of public services that could get a big shake up and be reorganised

Every incoming government says exactly the same and has it's own plan to shake up and reorganise the NHS. In reality there is very little fat to be trimmed. In fact it is consistently rated as providing world leading care for comparatively very little money.

Beds full mean you can't take on more patients, a few empty beds means you're always showing as available on the system both within the hospital and the wider trust/area (*). My wife's ward has to close to new admissions when it's full and that has a knock on effect on another ward that supplies them with patients.

Probably of interest to no-one but we have a dedicated triage ward so always (except perhaps on Christmas Eve/Day!) have a queue of patients wanting a bed. In fact sometimes we have a queue to get into the queue to get a bed. I get your point though, there are always the quiet wards that get picked on during bed management meetings to get the patients no-one else wants!

[jackal]

Lane rental is to be made available throughout England:

https://www.gov.uk/government/news/cong ... it-drivers