Cost savings on court interpreting services are anything but

Professional interpreters are boycotting courts because of new pay arrangements.

Whenever I am woken up on Saturday morning by a phone call, I know yet another blow has been dealt to British taxpayers. For it's almost certainly a magistrates' court requesting an interpreter to replace a no-show. If you missed the (surprisingly few) headlines dedicated to the recent confusion in courts, here is the story so far.

Until this year, courts used to book registered public service interpreters directly. On 1 February 2012, a new agreement was put in place, supposedly to make the system more efficient. The contract privatising court interpreting services in England and Wales was won by Applied Language Solutions (ALS), owned by the outsourcing firm Capita, which has promised to cut the annual £60m interpreting bill by 20 per cent. This figure, £12m per year, however attractive in the current climate, has two flaws: no one can see how it was derived, nor how it can be achieved.

Geoffrey Buckingham, the chairman of the Association of Police and Court Interpreters (APCI), said of ALS' target: “We first heard about it in September 2010, in a meeting with the MoJ. It was given as a ballpark figure, based on nothing solid and arrived at without any consultation.” APCI presented a number of documents to the MoJ, indicating that the spending is likely to increase as a result of outsourcing. This prediction turned out to be correct. Keeping people in custody while hearings are delayed costs money, as do appeals caused by poor interpreting. Buckingham also spoke of “the weekly humiliation of the criminal justice system”, referring to a number of cases adjourned because of interpreters' unprofessionalism. That's before you start counting the human costs of what appears to be a classical example of privatisation gone wrong.

It's not only the opponents of the Framework Agreement that point out its downsides – the MoJ now admits the savings may not be as great. Justice Minister Lord McNally said ALS had made “a very poor start to this contract” and that “some of the original estimates of a £12m saving in this first year will probably not be achieved.” Baroness Coussins, an independent cross-bench peer, was sceptical about the data supplied by ALS: “These figures come without any independent verification or audit and they tell a very different story from the complaints we are hearing daily from judges.” Indeed, it's hard to see how the MoJ can effectively monitor the quality of these services. Working for courts, I often wondered if anyone could give me any post-assignment feedback and once asked a clerk to fill in an improvised form; he was unable to write more than “was of assistance to judge.” Proper assessment would be too costly, whereas a certificate issued by an independent body is at least some guarantee that the person sitting in the dock is not going to call the defendant, accused of perverting the course of justice, a pervert.

The chaos in courtrooms was initially put down to “teething troubles”. An MoJ spokesperson admitted: “There have been an unacceptable number of problems in the first weeks of the contract” – thanks to incompetent interpreters who have failed to turn up on some occasions and made irreparable mistakes on others. When a Romanian interpreter mispronounced a defendant's statement, saying “bitten” instead of “beaten”, a retrial had to be ordered at Snaresbrook Crown Court, after the error was admitted. This four-day case is estimated to cost taxpayers £25,000; another one, in Leicester, which collapsed after three weeks for a similar reason, will be even more expensive. That ALS uses unqualified “linguists” is no secret; to prove this, a frustrated professional successfully registered her dead pet with the company.

Previously interpreters received a flat fee of £85, a lower quarter-hourly rate after three hours and were paid for travel time and expenses. This has been replaced by an hourly rate of £16, often with no travel reimbursement. No wonder the majority of professional interpreters are boycotting the ASL contract. Their protest outside the Houses of Parliament in April was strong but fruitless; still, Interpreters for Justice campaign continues. To keep the MoJ under pressure, activists go on writing to their MPs, signing petitions and reporting substandard cases online. Yelena McCafferty, an experienced court interpreter, said on behalf of her colleagues: “We feel the new principles are both unfair and completely unworkable from the practical point of view. Many interpreters have left the profession to try their skills elsewhere.” Asked about the MoJ's response, she added: “Not only are they failing to monitor the performance delivered – or undelivered – by ALS, they are also turning a blind eye to everything we have exposed in the media and on our campaign website.”

APCI submitted their own proposal aimed at improving court interpreting services nearly two years ago, but got no answer from the MoJ. The ministry seems to be less interested in cost reduction than Cambridgeshire Constabulary, which shashed their interpreting expenses via better management rather than payment cuts. “The Framework Agreement is dying a painful death,” said Buckingham. “I think it should be put to sleep.”

Let's hope someone is going to listen to the voice of reason. This would mean less disruption in courts, and in my home at weekends.

 

The Scales of Justice on top of the Old Bailey. Photograph: Getty Images
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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?