Who Can You Really Bank On These Days?

"Neither a borrower nor a lender be," old Polonious advises his son Laertes in Hamlet, "For loan oft loses both itself and friend/ And borrowing dulls the edge of husbandry."

A modern version of the drama perhaps should have Laertes played as a young banker. A Diamond geezer. Bankers were once the scrupulous, punctilious J Alfred Prufrocks of London (T S Eliot used to work for Lloyds). What are they now?   

Arthur Daley, the London spiv played by George Cole in Minder used to say "Stand on me" when he had to convince somebody that he was telling the truth. Del Boy Trotter, David Jason's wide boy in Only Fools And Horses protested his innocence in very demotic French. Alors du combat! Rod-nee!

Redtops loved Arthur and Del Boy. They were conservative working class heroes: chancers, opportunists flying by the seat of their pants, living by their wits, making the most of what little they had dubiously come by. Others, cultural interpreters perhaps, saw them as exemplars of Thatcher's Britain, the Loadsmoney yobboculture caricatured by Harry Enfield.

Little did we realise that these comic characters were prefigurations of what was to come. Those who thought the selfish Eighties was as bad as it could ever get were wrong. Boring old financial probity was defenestrated as building societies became banks and banks became casinos. In the City of London the holy skyline created by Wren and Hawksmoor was desecrated by the Nat-West Tower and other symbols of sky's-the-limit capitalism. But we didn't know the scale of the enormities of the Nineties until the summer of 2007.

Constraints were embedded in the financial market for very good reasons: to keep the bent from going crooked and offer the trusting public an assurance of honest dealing. In the exciting catch-me-if-you can ethos that Oliver Stone memorably caught on film in Wall Street, constraints were for wimps. Asset-stripping corporate raiders like Gordon Gekko now look tame compared with the real-life sub-prime species who Swiss Rolled debts and flogged them on.

This week the underhand price-fixing dealing of Barclays, RBS and their pals was exposed once again. Simultaneously, reports came out that some heath care trusts developed by Private Finance Initatives were in a state of terminal financial decline. This business with PFIs rang a bell. 

A few years ago I came across a book called Plundering the Private Sector by David Craig and Richard Brooks. I must have read it for I bashed out a paper to a friend who was trying to make a living in the regeneration game in Prague. The paper was called: BEWARE - CONSULTANTS AND PRIVATE FINANCE INITIATIVES. 

Craig and Brooks detailed the ways in which Tony Blair's Labour Government had, since 1997, conspired with private consultants to bring forth the brave new world of health care centres, hospitals, schools, roads and prisons, at an estimated cost to the public purse of £70 billion (2,800 billion Czech Crowns). Deloitte, Ernest & Young, KPMG and Pricewaterhouse Cooper did exceptionally well out of these deals. Consultants use private finance to plan, design and build on behalf of central government. Without the stewardship of a Thomas Cromwell these build now and pay later schemes accumulate colossal debt and inevitably lead to cuts in services and jobs to keep up the interest payments.

PFIs were thought up by Conservative MP David Willetts and were adopted by John Major's erstwhile Chancellor of the Exchequer Norman Lamont. Post 1997, PFIs were seen as a way of quickly bringing about huge capital-intensive building programmes. By 1995, Craig and Brooks estimated that 725 PFI schemes had been signed up, worth an estimated £46 billion.

PFI schemes, unless strictly regulated as they apparently are in the United States, invariably result in snowballing debt and revenue cuts. The authors listed five characteristics of unregulated PFI schemes: they are inordinately expensive; they are inflexible; the social costs are enormous; they offer no value for money. The fifth is possibly the most serious in its implications for a representative democracy: they are so convoluted as to be unaccountable.

I sought enlightenment from my friend Richard North, co-author of The Great Deception, a comprehensive history of the European Union in its various incarnations, and once upon a time researcher for the CP (Conservative Party). He explained what may seem obvious to you but was news to this bear of incalculably little brain:-

Public sector finance can be kept off the official accounts book; because it is classified as private finance it is not accounted for under public borrowing. Nor does it fall foul of the growth and stability pact rules of the EU. These rules state that a member state's annual budget deficit should not exceed three per cent and that total public debt should not begreater than 60 per cent of total Gross Domestic Product. For other bears of little brain GDP refers to the total amound of lucre spent on goods and services in the whole economy.

Transactions with consultants are 'off books',  fees are charged to the user and in Britain all-in-one packages complicate matters. These packages include service charges and other costs as part of an annual fee. These fees never appear in the Public Sector Borrowing Requirement figures because transactions are funded out of annual revenues. Stay with this, it gets better.

Newly built hospitals and hospitals that are part of a larger trust are paying full commercial rent for a site and commercial rates for basic services. Because the charges are so high, payments have to be found from money paid by the government to run the service. This means hospitals, deeply in debt, struggling with top-heavy management tiers set on by consultants, are obliged to lay-off nurses and close wards. The same applies to new technology IT systems devised and installed by private consultants to run vast public sector schemes. The cost runs into many hundreds of millions and often the systems do not work. Hundreds of millions of public money have been written off in failed IT schemes in Britain since 1997.

Why not simply borrow the money from the markets directly and cut out the middle man? Presumably because it wouldn't look good on the books inspected by the EU.

Most PFI schemes involve bungling. All-in-one packages are very difficult to monitor: it is impossible to tell how much each component part of the package costs. It is impossible to measure value for money. There is loss of accountability and accountability is the basis of democracy: without it democracy means nothing.

The authors of Plundering the Private Sector say in the mid-1980s the kind of unregulated nightmare current in the UK used to be the norm in the United States. The tide turned in 1996 with the Republican Clinger-Cohen Act. "The Act changed the way IT systems were bought and implemented in the US public scetor, forcing departments to take responsibility for and report to Congress on the results achieved...Since passing the Act the performance of IT systems consultancies in the US has been judged to have radically improved and government expenditure on IT has begun to fall....Under New Labour, the whole process of democratic accountability has broken down and been replaced by cronyism, profiteering, spin and outright lies."

Craig and Brooks recommended the abolition of PFI schemes and the disbanding of tiers of extra management and advuisors. Consultancy fees should be slashed by 30 per cent immediately. Excessive profiteering should be investigated by the Serious Fraud Squad.

That was then, in the days of innocence before the Credit Crunch, the Parlimentary expenses scandal, phone hacking and the latest banking scams. Nevertheless, I hope the above is of interest to those who, in spite of everything, maintain the hope in their hearts that change is going to come.

If You Build it People Will Come (perhaps)...

Bottles of bubbly were reportedly on ice. An expectant group of Bradford councillors, including the leader, Conservative councillor Margaret Eaton, and top officers, were gathered in an office in City Hall, confident of having some really good news to celebrate.

It was October 30, 2002, and the UK cities bidding to be the 2008 European Capital of Culture were about to learn their fate. A sustained marketing and PR campaign had been going on in Bradford for months. Bradford's cultural icons had been wheeled out likesupermarket trolleys for a good polish. The wonders of Bradford's industrial heritage and its modern multicultural diversity were 'the icing on the cake'.

Bradford was still coming to terms with the consequences of the 2001 Muslim riot. The authorities rightly thought that unless something drastic was done, the mud sticking to the city's reputation would put paid to any hope of future revival. It was an understandable approach, though its expression in the form of the Capital of Culture bid was, I thought, seriously misconceived.

The wider world was aware from the 1989 Satanic Verses book-burning episode, the long-running Honeyford Affair as well as the 1995 and 2001 riots, that Bradford had problems. Trying to hide them behind UNESCO's World Heritage status award to Saltaire (a Victorian model village three miles to the north of Bradford in the constituency of Shipley) was at least unwise. I was told that two of the Capital of Culture judges visiting Salts Mill were overheard to say: 'Nice place, pity about the location'. Meaning Bradford.

Though not a Bradfordian, over 37 years I have grown deeply attached to the old place. Real empathy comes out of a mixture of love and hate; feeling is empirical, not theoretical. I have lived, worked and suffered here. I have spent my money here, invested here. Any other talk is just the prattle of marketing - "brilliant", "vibrant", "visionary", "wonderful", and more "brilliant". Call me Mr Stupid, but I believe honest promotion of a place should include the flavour of lived experience, and that means the good, the bad and the ugly.

Why not promote Bradford as a place with an edge? I said. We can't hide the fact that this is the hometown of the Yorkshire Ripper and the Black Panther, not to mention the 1985 Bradford City Fire Disaster. Admit the bad and the ugly and then say in spite of that we have the good. There is beauty too. Dangerous it may be, sardonic and infuriatingly complacent it can be, but by God you won't nod off in Bradford. The damn place gets under your skin. And on a clear sunny evening, the skylines are breath-taking. I have sometimes walked home from work in tears, the sun beaming out of a cinemascopic South Dakota sky, reflecting off portals of pale yellow sandstone. The song of the place still sings to me after all these years, even after two riots, a football stadium inferno I was lucky to walk away from, and the odd threat from the odd political fanatic.

Pal: forget it. People like me, whose feelings were complex but at least authentic, were shunted out of the way for the prattlers. "Brilliant", "vibrant", "diverse". No hard feelings; but nevertheless short-sighted, I thought. The scene was set. Expectations had been worked on and pumped up. Then, on October 30, the news arrived. Bradford wasn't even short-listed.

"Are you disappointed?" Margaret Eaton (now Baroness Eaton of Cottingley) said to someone in a suit, as the news was reported on local television. The bubbly remained on ice. The disconsolate group of VIPs went across the road to the pub to inflate their spirits temporarily with a little alcoholic depressant. They needed it. This wasn't the first time Bradford's corporate expectations had come a cropper due to highly-paid people who should have known better, jumping the gun, counting their chickens.

In the 1950s, chunks of historic Yorkshire sandstone Bradford were bulldozed to make way for the brave new world of high rise office blocks faced in Portland Stone and multi-lane motorways bisecting the city centre. You can see this going on in the film Billy Liar, which was shot on location in and around Bradford. Somewhere under Prince's Way, opposite the former Odeon cinema (now wrapped in plastic sheeting, as though visited by Christo), lies the Students' Club. This was a cellar bar where the likes of George Melly and Humphrey Lyttleton used to play in the 1950s. It was visited by artists studying at Bradford College of Art, including David Hockney, Norman Stevens and others. Murals on the wall were said to be by DH himself  - 'Boris' as one of his brothers is said to have called him.

In the 1990s, planners demolished old Rawson Market in the belief that a proposed £40m leisure development in central Bradford would provide the wherewithal for a replacement. The developer walked away and for about five years, Bradford had a hole in the ground where Rawson market used to be. The lovely Java Cafe, the best cafe-bar in town opposite the Alhambra theatre, was refused a short-term lease in 1998. The building was demolished to make way for a proposed peace museum. For several years there was a hole in the ground. Eventually it was levelled and fenced off. Half the central police station was knocked down before planners realised the cells underneath the building were still in use by the adjacent magistrates court. The exposed end wall, opposite the derelict Odeon, was eventually cladded tastefully with plastic-looking glass.

Given all this (there is more), the ludicrous impasse over the Westfield site (see the blog below) comes as no surprise. Not long after a smiling Councillor Eaton formally handed over the bulldozed site in November 2005, Westfield put in a subterranean car park and foundations for the pillars that would support the super-duper shopping mall. That done, they left. Everybody waited for them to return with bricks and mortar. To date they haven't. And so Bradford has yet another hole to add to its municipal collection.

There are those who maintain that a concrete and glass retail complex is the way to revive Bradford's fortunes. I am not one of them. Nor is my friend Richard North. "More people are shopping online. Instead of a shopping mall, create an experience from which commercial opportunities arise," he says, which is the exact reverse of putting up a £200m-£300m monstrosity in the hope that it will prove to be a shopping experience. "Build on Bradford's heritage," Richard says. "Make the place a visitors' centre by creating cafes, places of entertainment and commerce." Part of the site, converted into a temporary park in 2010, is where the Occupy Westfield people have pitched one of their tents. The ten-acre site is a natural hub, between two railway stations, Bradford Cathedral and City Hall. It would be an ideal place to relocate the J B Priestley Archive, currently buried two floors down under the University of Bradford, and the Mechanic Institutes Library. And why not create an archive to commemorate the Independent Labour Party, founded in Bradford in 1894, as well as museum commemorating other luminaries and reformers who made a difference - Humbert Wolfe, Margaret McMillan, Delius, David Hockney, Jim Laker (born in Frizinghall), Richard Dunn, who tried to beat Mohammed Ali, Len Shackleton, World Snooker champion genial Joe Johnson?

Regeneration through culture has been done before in Bradford, spectacularly so by the late Jonathan Silver at Salts Mill. Between 1987 and 1997, the year of his premature death, he created the world's biggest single collection of David Hockney images alongside high-tec industries, a Diner, art galleries, offices, a bookshop and a performance space. He converted a run-down textile mill at the bottom of a hill in a village three miles outside Bradford into a place now visited by thousands annually. I watched him do this and wrote the book Salt & Silver: A Story of Hope, a double biography of Titus Salt, the industrialist who built the mill in 1853, and Silver, the former men's wear shop owner, who restored and revived the building's magnificence.

Silver, who loathed bureaucracy, never had a blueprint or masterplan. He started off with 53 David Hockney pictures which he put round the walls of a former spinning shed of 10,000 square feet. Admission to see them was, and remains, free. Like the farmer in the movie Field of Dreams, who builds a baseball pitch in the middle of one of his cornfields, Silver had a dream. His consisted of combining culture and commerce and making the result exciting and profitable. True regeneration, he showed, only takes place when an entrepreneur or a group of people seize the initiative and become empowered. In contrast, development occurs irrespective of human factors: developers put up speculative buildings whether or not they have tenants for them. Silver got the culture which in turn attracted high-tec entrepreneurs from Pace and Filtronic Components plc.

Interestingly, Jonathan Silver was never invited to City Hall to explain to planners and politicians how he did it. Not once. Those who advised them to take serious note of what was happening in Saltaire were ignored. After all, hadn't the corporation wanted to demolish Salts Mill before Silver bought it - to make way for a motorway?

In light of all this no one should be surprised that the council  subjected an historic part of Bradford - Forster Square - to the wrecker's ball in the earnest hope of attracting a big developer as a dance partner.