The public sector has a lot to learn

Getting the hell on with it.

Last week the chancellor, George Osborne, trumpeted agreements with seven government departments on their budgets for the next comprehensive spending review (CSR), which is due to be announced next month.

The CSR will lay out spending for the five years after 2015. In keeping with his commitment to “Plan A”, Osborne is looking for a further £11bn of cuts in government budgets. With health, education and overseas development protected, there will be tough decisions to be made elsewhere. Reaching an agreement with seven departments is a promising start, but these were all relatively low-spending departments with smaller budgets. The agreed savings were reported at £2.5bn. So the really tough decisions still lie ahead.

How these discussion are progressing was signalled by an interview given by defence secretary Philip Hammond on the Today programme. He explained that frank discussions (which can be read to mean arguments) between the Treasury and the MoD have had to be mediated by the Cabinet Office, which has launched an independent review of the department’s spending plans.

The MoD is an interesting case in point. It was severely affected by the last round of cuts with all three armed forces still reeling from the strategic defence review that was as much about cutting costs as it was about better military decision-making. What makes the MoD especially interesting is that it is one of the better organised ministries. Hammond has deployed former experience in business to set the department up in a businesslike fashion.

It is one of the few departments with a board that functions in the way a FTSE 100 board might. Indeed, a scan of the departmental pages of the website reveals that of the 24 cabinet departments, only a handful have this kind of properly functioning board. Perhaps strangely, the department for Business Innovation and Skills isn’t one.

A good look at the structure of government in this country, especially compared to other countries, suggests we have too many departments and way too many ministers. The 24 ministries compares to an international average of 15 or 16. The UK’s 120 ministers compares very badly with 78 in India, 66 in Canada and 68 in South Africa.

Even more unusual is the fact that devolution of power to Scotland, Wales and Northern Ireland hasn’t seen a decrease in UK ministers, but rather an increase, so that the actual UK total (including ministers in the devolved regions is closer to 200).

With all these jobs to protect, it’s no surprise that getting all these departments to agree they can afford substantial cuts is a tough job for the Treasury.  

One way to bring all this under control and make the process much simpler is highlighted in a new report published this week by ICAEW. In A CFO at the Cabinet Table? Strengthening UK government finances for the future, Sumita Shah highlights the potential advantages of having someone in the position to take on a “group finance” role across government. While each individual financial team is making a case for their department, the political tug of war between the Treasury and all the other members of cabinet will continue.

As to the tougher question of what long-term impact the focus on public sector cuts is having on the private, new research (also produced by ICAEW) found that 31 per cent of businesses reported their turnover has been negatively affected by UK public sector cuts, this is up from 21 per cent two years ago when the same question was last asked.

Not surprisingly the vast majority of those affected by these cuts have looked elsewhere for business, with 72 per cent of those negatively affected by the public sector cuts looking for new customers outside the public sector. However almost half (49 per cent) have had to cut permanent staff and 41 per cent have reduced their contract or temporary staff.

So the message seems to be clear. The private sector, while fearing the worst, is doing its best to get on with life in the age of austerity. It would help enormously if it was obvious that the public sector (and in particular central government) was doing the same thing by simplifying and rationalising government systems and structures.

Some of the money freed up might be wisely invested by putting in place a strong central government finance function, starting with the appointment of a cabinet CFO.

Treasury. Photograph: Getty Images

Richard Cree is the Editor of Economia.

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7 problems with the Snooper’s Charter, according to the experts

In short: it was written by people who "do not know how the internet works".

A group of representatives from the UK Internet Service Provider’s Association (ISPA) headed to the Home Office on Tuesday to point out a long list of problems they had with the proposed Investigatory Powers Bill (that’s Snooper’s Charter to you and me). Below are simplified summaries of their main points, taken from the written evidence submitted by Adrian Kennard, of Andrews and Arnold, a small ISP, to the department after the meeting. 

The crucial thing to note is that these people know what they're talking about - the run the providers which would need to completely change their practices to comply with the bill if it passed into law. And their objections aren't based on cost or fiddliness - they're about how unworkable many of the bill's stipulations actually are. 

1. The types of records the government wants collected aren’t that useful

The IP Bill places a lot of emphasis on “Internet Connection Records”; i.e. a list of domains you’ve visited, but not the specific pages visited or messages sent.

But in an age of apps and social media, where we view vast amounts of information through single domains like Twitter or Facebook, this information might not even help investigators much, as connections can last for days, or even months. Kennard gives the example of a missing girl, used as a hypothetical case by the security services to argue for greater powers:

 "If the mobile provider was even able to tell that she had used twitter at all (which is not as easy as it sounds), it would show that the phone had been connected to twitter 24 hours a day, and probably Facebook as well… this emotive example is seriously flawed”

And these connection records are only going to get less relevant over time - an increasing number of websites including Facebook and Google encrypt their website under "https", which would make finding the name of the website visited far more difficult.

2. …but they’re still a massive invasion of privacy

Even though these records may be useless when someone needs to be found or monitored, the retention of Internet Connection Records (IRCs) is still very invasive – and can actually yield more information than call records, which Theresa May has repeatedly claimed are the non-digital equivalent of ICRs. 

Kennard notes: “[These records] can be used to profile them and identify preferences, political views, sexual orientation, spending habits and much more. It is useful to criminals as it would easily confirm the bank used, and the time people leave the house, and so on”. 

This information might not help find a missing girl, but could build a profile of her which could be used by criminals, or for over-invasive state surveillance. 

3. "Internet Connection Records" aren’t actually a thing

The concept of a list of domain names visited by a user referred to in the bill is actually a new term, derived from “Call Data Record”. Compiling them is possible, but won't be an easy or automatic process.

Again, this strongly implies that those writing the bill are using their knowledge of telecommunications surveillance, not internet era-appropriate information. Kennard calls for the term to be removed, or at least its “vague and nondescript nature” made clear in the bill.

4. The surveillance won’t be consistent and could be easy to dodge

In its meeting with the ISPA, the Home Office implied that smaller Internet service providers won't be forced to collect these ICR records, as it would use up a lot of their resources. But this means those seeking to avoid surveillance could simply move over to a smaller provider.

5. Conservative spin is dictating the way we view the bill 

May and the Home Office are keen for us to see the surveillance in the bill as passive: internet service providers must simply log the domains we visit, which will be looked at in the event that we are the subject of an investigation. But as Kennard notes, “I am quite sure the same argument would not work if, for example, the law required a camera in every room in your house”. This is a vast new power the government is asking for – we shouldn’t allow it to play it down.

6. The bill would allow our devices to be bugged

Or, in the jargon, used in the draft bill, subjected to “equipment interference”. This could include surveillance of everything on a phone or laptop, or even turning on its camera or webcam to watch someone. The bill actually calls for “bulk equipment interference” – when surely, as Kennard notes, “this power…should only be targeted at the most serious of criminal suspects" at most.

7. The ability to bug devices would make them less secure

Devices can only be subject to “equipment interference” if they have existing vulnerabilities, which could also be exploited by criminals and hackers. If security services know about these vulnerabilities, they should tell the manufacturer about them. As Kennard writes, allowing equipment interference "encourages the intelligence services to keep vulnerabilities secret” so they don't lose surveillance methods. Meanwhile, though, they're laying the population open to hacks from cyber criminals. 


So there you have it  – a compelling soup of misused and made up terms, and ethically concerning new powers. Great stuff. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.