£482 million a year, almost a fifth of the £2.6 billion NHS budget for maternity services and an estimated £700 for every birth, is being spent on medical negligence cover. The most common reasons for compensation claims are management mistakes, problems after a caesarean section and errors resulting in cerebral palsy.
There is no point in the NHS paying medical insurance premiums to anybody, as they can self-insure. There's is some marginal point in paying for insurance against unusual but catastrophic losses, but there is no point insuring against frequent, small-scale losses.
The NHS knows that out of 700,000 births a year, they are going to mess up a few hundred and will have to pay out few hundred thousand each time, but the total amount is probably fairly stable and only a tiny percentage of the NHS' overall budget, so they might as well just pay the compensation directly. The premiums the NHS pays to the insurance companies will of necessity include the insurance companies' guaranteed profit element, and that is money which could easily be saved.
The government will further support Right to Buy by introducing Right to Buy Agents to help buyers complete their home purchase, and provide £100 million to establish a fund to increase Right to Buy sales, by improving applicants’ access to mortgage finance.
There is absolutely no need for "access to mortgage finance" when somebody does Right To Buy.
Let us assume that at present, Council Tenant A is paying £5,000 a year rent.
The council now decides that he can buy his house at a massive discount for (say) £60,000. If that proud new Homey took out a mortgage for £100,000, the repayments would cost him (say) £3,000 (at current interest rates).
The council can act as the bank and "lend" him the £100,000 out of thin air. They just have to right it down at the top of a sheet of paper, then every year they add on the interest charge and deduct the amount he has paid until he has paid off the loan.
Bonus points to the first idiot who says: "The local council needs to get that money in so that it can build another council house." Firstly that is not true, the amount of council housing to be built (or indeed sold off) is purely a political decision, there are no financial constraints on the amount that can be built and it needs very little in the way of finance.
And even if they did need the cash up-front, the council can easily sell its loan book.
(Why it is considered better for the local council to have fixed income of £3,000 for a limited period rather than £5,000 a year, rising with inflation, in perpetuity is a mystery to me, bearing in mind it is the taxpayer generally who will have to make up the shortfall, but that's a separate topic.)
Sunday, 8 December 2013