Remember around this time last year Peter Mandelson persuaded Gordon Brown he needed a powerbase 'super' ministry to match his political ambitions? Of course Gordon said yes and the Department for Business, Enterprise and Regulatory Reform and the Department for Innovation, Universities and Skills were merged into the Department for Business, Innovation and Skills (BIS). At the time some predicted the move would prove unmanageable and now BIS's most senior civil servant, permanent secretary Simon Fraser, has admitted that trying to create a 'coherent departmental structure' proved a 'major challenge'.
The confusion over the merger even led to major breaches of financial control. On two occasions, Mr Fraser said, the Treasury wrote to the department to warn that BIS officials had 'entered into financial commitment' without authorisation.
BIS has a budget of £33 billion and it is one of the Government's biggest departments. It has now been discovered that Peter Mandelson left a legacy of bad debts which cost taxpayers tens of millions of pounds last year. More than £30 million was written off as lost at the Department during 2009/210, while another £71 million is likely to go in this and future years. It is also throwing away almost £12 million a year renting part-empty office blocks which it vacated without finding new tenants. A further £137 million has been set aside to cover those rent losses in future years.
The details are buried in the latest accounts for BIS, which is now run by Libdem Vince Cable and which civil servants regard as a "problem child". The accounts also show BIS wrote off £30.9 million in bad debts last year after deciding the money was unlikely to be recovered and the department has also set aside £71 million for cash it expects to lose in unpaid student loans.
No wish to spoil your Sunday with this example of complete incompetence and mismanagement, but I thought you'd be interested to know, among other things, that the government offer our higher education students loans, then sets money aside to write them off. £71 million is more than 10% of loans granted.
Enjoy your Sunday.