Debunking Tory Stories, or Is this the best Jon Crudas could do?

There’s been some interest today in the launch of a new website called Tory Stories. It seems a nice premise – well written and researched criticisms of Tory activities. Conservative Home’s “Left Watch” welcomed it, and Sam Coates in the Times apparently thinks it’s “well researched”.

The only problem is that the site doesn’t really deliver. One telling sign is the decision to disable comments, and having read through some of their material I think I can see why.

The current lead on that site is ‘”Failure of leadership, culture and governance” at Surrey County Council’, penned by Jeremy Cliffe, a student at Oxford and head of the University branch of Compass. It’s dripping in hyperlinks, and certainly looks like every detail is supported.

The article purports to be a scathing indictment of Surrey County Council, focusing on the removal of a popular subsidised school bus service. The merits of that decision aside, the article contains some highly questionable claims. Take this eye catching statement:

Having considered four possible options for its future, the Conservative council opted for “maximum savings at the earliest possible date”: ending the service in July 2010 and selling the twenty-two buses at a loss of £1.7 million.

Cliffe links his claim of a loss of £1.7 million to this document, an options paper put before the Council’s cabinet. At paragraph 17 it says:

The initial purchase cost of the 22 Pegasus buses, owned outright by the County Council, was in the order of £2.8m. Using current industry estimates for the resale value of similar vehicles it is expected that their residual market value in December 2010 would be around £1.1m They could reasonably be expected to have a further 12 year life and are in good condition.

In other words, Cliffe took the original cost of the buses and deducted the residual market value. The difference, he says, is a loss.

Except it isn’t. As the position paper makes clear in paragraph 1:

The Ride Pegasus School Bus Service was developed as a five-year pilot
finishing in December 2010. The intention was to seek government funding for a
wider school bus scheme, and act as a national pilot for the ‘school bus’ concept.

There’s this little thing called “depreciation”, which Cliffe seems never to have heard of. Simplistically, if you buy a large capital asset – like a bus – good accounting practice is to reduce the value of that asset each year it is used, and at any given point it will have a residual value. The Council isn’t losing £1.7 million, since it has owned the asset for several years.

Having failed one maths part of his task, Cliffe moves on to compare and contrast the cost of running the bus service with other bits of expenditure. The service had a net cost of £900k per annum, so if Cliffe can find £900k of waste he should be able to make a decent case for saying the Council could have cut other things.

He doesn’t even come close.

The best he can manage is £162,000, made up of £147,000 allocated for preparations for the 2012 Olympics, and £15,000 for a High Court appeal against an Ofsted inspection result. In fairness to Cliffe, both seem on the surface pretty questionable.

Or are they? The Olympics one is a little bizarre, requiring as it does the parroting by Cliffe of a line originally taken by the Daily Telegraph – namely that Surrey should not be spending this money because it isn’t hosting any part of the Olympics. In a shocking twist, the Daily Telegraph missed the point. Surrey’s own option paper makes clear that the Council is spending the money on pump priming a variety of projects (and, yes, managing this allocation) to achieve a number of objectives:

5. Business Outcomes:
The South East of England is expected to gain over £1 billion from the 2012 Games, both through Games related contracts and from increased tourism. Our aim is to help Surrey companies to compete for their share of this business…

6. Community Outcomes:
We will bring communities closer together by increasing participation in sporting, cultural and skills-development activities associated with the 2012 Games. The County Council will particularly want to ensure that Schools take full advantage of the opportunities that this programme offers. We will encourage and support volunteering activities, and will improve educational attainment in Surrey by providing every young person with the opportunity to participate in 2012 projects.

7. Health Outcomes:
We will use the Olympics and Paralympics to inspire the people who live and work in Surrey to take up more active and healthy lifestyles. We will improve Surrey’s sporting achievement by helping to transform today’s sporting talent into world-class athletes of the future, in part through collaboration with the national charity SportsAid.

8. Training Camps:
Surrey has 19 excellent sporting venues qualified to offer training camps to nations competing in the 2012 Games. In addition to these registered venues, we hope to make the most of other top quality Surrey facilities, such as those in our independent schools. Surrey has already hosted visits from nations evaluating training facilities and communities, visits that have attracted positive media coverage as well as engaging the public’s imagination. Each nation will have a London 2012 grant of up to £25,000 to spend on facilities and associated training costs, with the added potential of wide-ranging benefits to the host community as well as the visiting nation. We aim to gain the commitment of at least one competing nation to a Surrey training camp.

Local Council in promoting local business and community involvement shocker!

All of this sounds strangely familiar. I wonder where I’ve heard a politician putting a broad set of objectives forwards in connection with the Olympics?

The Olympics is that once in a lifetime opportunity for hundreds of thousands of people to discover new, thrilling and unexpected ways of fulfilling their creative potential in all its forms.

That was Tessa Jowell during a speech in Liverpool in 2007 on the Olympics. Here she is again, in April of this year:

But these opportunities are not limited to London. Building the Games is a truly nationwide endeavour:

• London 2012 will directly award £6bn worth of contracts, creating around 75,000 business opportunities along the supply chain
• Already more than 900 businesses have won contracts together worth around £3.5bn. Almost half of these have gone to UK firms outside London, two-thirds of which are small or medium sized enterprises

Apparently Jeremy Cliffe didn’t get the memo regarding the way the Olympics isn’t just for London.

He’s spot on regarding the £15,000 apparently wasted by Surrey County Council on appealing the Ofsted decision, but that’s looking a little paltry now – given Surrey County Council’s projected savings from cancelling the service: £2.19 million over three years. It’s also looking a little hollow – since there was an election earlier this year, and the Council leader and much of the cabinet were replaced. And the new leader accepted many of the criticisms about the Council’s culture made by the outgoing Chief Executive, Michael Frater.

I must have missed that last in Jeremy Cliffe’s piece – despite the fact that I’m linking to the same piece as he is. Funny, he quoted at length from Frater’s report, but forgot to mention the leadership had changed, or thatthe new leader’s response.

Obviously just an unintentional oversight.

Tory Stories? On current evidence, Compass Fairy Tales is more like it.