In the foothills-of-apocalypse position we now occupy, this may seem a prosaic concern: but where do they hide the budgets? Well, this was always conceived of as basically a business blog, so we can't take responsibility for solving Ukraine, Gaza, Taiwan, small boats, climate change etc.
Here are a couple of examples. Firstly, the mighty Afghan refugee cockup. What do they reckon - £7 billion and counting? How come no canny forensic budget-bore spotted that one on the HMG books? Clever old Sir Humphrey, eh?
Second, and you'll permit me my local interests here - I give you Drax plc. Outwardly just a regular UK listed company going about its chosen mission of incinerating the forests of the world using UK subsidies on the pretence this is helping to solve the aforesaid climate change. But behind the scenes it has to fight legal action after legal action: that's what happens when you are aggressively living a lie which you've determined to brazen out at all costs. The other day I happened on some evidence that they are spending tens of millions annually in legal fees for litigation, amounts dwarfing what they spend on their annual statutory audit plus associated consultancy. The latter, you will find laid out in detail in the Annual Report and Accounts: the former you will not. The ordinary shareholder would never know.
Finally, and this one won't be even remotely surprising, I've had some correspondence that invites me to believe there is a fairly substantial renaissance getting underway of our nuclear deterrent. Yes, there are indeed project line-items in the MoD budget for some of this. But I'm being told it's a fraction of the true total. Still, this probably goes back at least as far as the two Harolds, Macmillan and Wilson ... (Maybe those two aircraft carriers didn't cost quite as much as we'd thought?)
Somebody signs off on all this stuff, supposedly with great solemnity and a straight face, with liabilities theoretically involved. Where's an honest accountant to be found? On the job market, I suppose.
ND
6 comments:
I can’t find who this quote came from, but it was the CFO or similar of a big company, or else a consultant and, when asked about the accuracy of accounting and, specifically, the nonsense of trying to come up with one single definitive figure for “cost” of something quipped:
“See that chair? Want to know how much it cost? Well, I can make it cost anything you like”.
The one on Brown's flat tops is food for thought!!!!
Semi-OT, but is AI the dot-com boom all over again? Potentially great rewards but insane valuations? Anyone remember Freeserve?
"Freeserve floated on the stock market in July 1999 (as Freeserve.com plc), at which point it had approximately 1.3 million subscribers and was valued at between £1.31 billion and £1.51 billion."
At that time I said - "that's a valuation of £1k per customer! No way will they ever get that much profit from them!". But they found a greater fool in France Telecom (now Orange), who bought them for £1.6bn within 18 months.
Similarly, councils will frequently put projects under ringfenced services no matter how tenuous the link, as it's the only way they can budget for them.
@Anon 3:20 - the bell isn't tolling yet, but the AI companies are objectively unaffordable. In order to go into profit - instead of 8-10 figure losses - pricing is going to have to increase by orders of magnitude.
We've seen with ChatGPT-5 initial attempts at cost-cutting, with pushback from customers as to the impact. There keeps being promises of improved efficiency and reduced costs, and those promises keep being kicked in to the long grass.
I think we're a couple of years off yet, but whilst cheap, "good enough" results are fine at lower price points, customers are going to want something rock solid if they're going to be burning a hole in their wallets.
And AI isn't that, because it's not actually intelligent.
Does this mean that in two years time there will be lots of jobs available to replace the employees laid off in the false expectation that AI would do their jobs?
But presumably the new jobs will not go to the laid-off but to younger and cheaper people.
Who may then be found not to be up to it, being il-educated and snowflakey. And so ...
ND, can you be any more specific about the nuclear deterrent? Tick all options that apply:
(a) Trident replacement going ahead
(b) Increase in total number of missiles and/or warheads
(c) More submarines to launch them
(d) Development of alternative methods of deployment, i.e., launch from aircraft or from land
(e) Tactical nukes under UK ownership/control for the planned F-35A fleet in addition to the existing NATO weapons
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