Review of 2012 – 1. Sport

And so, as another year draws to its end, here’s my round up of some of the highlights for me looking back.

London Olympics and Paralympics 2012

2012 has been a big year for sport with the Olympic and Paralympic Games in London and the European Football Championships. I think most people were surprised at how well the Olympics went and how enthusiastically they were received. Perhaps it is a peculiarly British thing but many commentators seemed resigned from the start to an expectation of shoddiness and disappointment from the competitors’ performances. However, a sign of how this was misguided came in the way the Olympic Torch Relay went and the large crowds around the country that watched its long procession through the land. This was a precursor to the incredible tally of medals achieved in both sets of Games which led to such an embarrassment of riches that someone like Mo Farah with two Gold medals could only manage to come fourth in the voting for Sports Personality of the Year – a contest which not so many years ago was won by Damon Hill for coming second in the Formula 1 championship.

Euro 2012

The England football team’s performance in Poland and Ukraine was more true to form but ironically this was no bad thing. Normally the press become far too excited about the prospects of England in international tournaments with an expectation that anything short of victory is a major disappointment. That is peculiar when combined with the fatalism that infected many earlier in the year about the Olympics. So, going into Euro 2012 with low expectations after the unlamented departure of Fabio Capello and the controversy over John Terry and the charges he faced of hurling racist insults at Anton Ferdinand meant that the tournament was ultimately rather enjoyable and that losing to Italy in the Quarter Finals was not seen as the end of the world.

Brentford

From a more personal angle, it has been an interesting year as a Brentford fan. The late and unexpected push to the League 1 play-offs in the 11-12 season ultimately didn’t quite materialise but at least it showed that the club was not too far short of what it needed to do to achieve promotion. After a slowish start to the current season the club has gone on a very good run to be sitting in second place in the table as I write ahead of the pre-Christmas home game against Stevenage which I hope will not be as disappointing as the last game against that team. I was lucky enough to have chosen to go to the 5-1 victory against Crewe and it seems that the free-flowing passing and attacking game that was displayed then has become a more consistent feature of the club’s performances since then. Hopefully that change in footballing philosophy which manager Uwe Rosler has worked so hard to instil over the past season and a half will be a permanent one leading to a first promotion to the Championship during my time supporting the club and its second season (and many more to come!) at that level since 1954.

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Olympic Torch Relay

I’m prone to cynicism. I understand why lots of people are moaning about the London Olympics which are due to start this week. Brits love a good moan. Of course it is colossally expensive and of course this is galling at a time of austerity. Of course the restrictions placed by the organising committee (LOCOG) on use of related words and logos are heavy-handed and illiberal. Of course G4S has made itself look immensely foolish by its inability to secure sufficient numbers of security personnel. For sure the sponsors have too much prominence and are all global mega-corporations. And yes, Wenlock and Mandeville are supremely sinister-looking mascots.

But, despite all this, I think it is going to be a great spectacle and something that people will remember fondly for years to come, long after they have forgotten about the negatives. The first thing that got roundly criticised was the Torch Relay bringing the Olympic flame on an 8000 mile journey round the UK. Some denounced it for its supposed Nazi origins as it was first conducted ahead of the 1936 Berlin Games, although that didn’t seem to have worried many people at the 1948 London Games even though the horrors perpetrated by Nazi Germany were fresh and had been experienced by all at the time.

I was unconvinced by the value of the Torch Relay until a few weeks ago when we went as a family to watch it pass through Headingley on a fortunately sunny Sunday afternoon. The crowd was massive and cheerful. There was a real sense of excitement about seeing the torch – even though, as it turned out, with so many people watching it was all but impossible to see as it rapidly swept past. Normally the area is one which has the typical Guardian-liberal antagonism towards jingoism – few of the adults round our way were at all interested in the Jubilee – so seeing the streets filled with Union flags and innocent excitement at the spectacle was refreshing after a diet of often jaded anti-establishmentism.

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I was lucky enough to get to see the Torch Relay again a couple of weeks later as it made its way through Slough and passed right in front of my office (see, I may be a cynic but not a pessimist if I can put a positive spin on spending 3 days a week in Slough).

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As you can see, I got an excellent view this time round. Also, that the torch bearer (one of the non-celebrity local ones, a guy called Bob Dennis) was wearing contraband trainers rather than those from the official footwear partners of the Olympics. It looked like he was enjoying it as one of the best days of his life and one that he’ll not forget.

The visit last night of the torch to East Enders’ Albert Square had been long anticipated and caught the mood of the relay well. The partial live broadcast got the feel of the event. It was one of those relatively rare occasions when a soap opera reflects something real about the society it is set in. The episode also gave the impression of the mad events of an anxiety dream in following the normally hapless Billy Mitchell’s travails in getting back in time to do his stint as a torch bearer while also worrying about his errant grand-daughter Lola and the impending birth of her daughter (which took place in the inauspicious environment of McClunky’s Chicken Restaurant while he enjoyed the only limelight of his life). Which is probably how things felt to LOCOG when the G4S security problems came out! 

Ironically, I’m going to miss most of the Games themselves, but I’m not going to make the arrogant mistake of assuming that nobody cares about them and nobody is going to enjoy them. They’re going to be great and those who will carp are ultimately going to be the insignificant ones. Let them be grouches or take the 100/1 odds on Boris Johnson setting fire to his hair with the torch at the opening ceremony.

Conspiracy or cock up – why couldn’t Thameslink buy British?

The £1.4bn contract to provide new Thameslink trains has been awarded to Siemens in Germany. Over a thousand jobs will be lost at Bombardier’s Derby plant. Something must have gone horribly wrong, someone must be to blame for all those jobs being lost when some of them might have been saved if only Britain bought British trains. Or so the argument goes.

British trains now just for museums?The boring fact is that all large contracts for the supply of goods, works or services which are bought for the public sector in the EU are subject to the EU Public Procurement Rules. These grew up to prevent EU countries from distorting their local economies by favouring domestic businesses over those from other parts of the EU – regulating the terms on which the private sector does business with itself turned out not to be enough to do this because the state everywhere is one of the largest customers around.

The rules set out in great detail how purchasing by the state has to be carried out to make all contracts contestable by all suitable businesses around the EU and to ensure that all bids are judged on the same criteria in the same way without giving an unfair advantage that could not be justified on economic grounds.

So, the Thameslink contract went out to tender and after applying all these criteria, the only decision that could be taken on the basis of the bidders’ responses was to award the contract to Siemens. Making the decision on any other, undisclosed criteria which would have disqualified Siemens would simply have led to an easy legal challenge by Siemens which would have resulted in the award to Bombardier being overturned or substantial damages being awarded to Siemens. Perhaps as the Transport Secretary said it would have been possible to have designed the particular process so as to give more weight to other criteria which might have given Bombardier a better chance, but the scope for doing that in a fair way would still have been limited.

All that has happened is that the rules of the EU have been implemented. Maybe the French and the Germans are “better” at designing their procurement processes to favour local businesses, but there’s no strong evidence of this. Eurostar, majority controlled by the state-owned SNCF has not bought French but gone with Siemens. SNCF also recently awarded a contract to supply the whole French railway network with that most iconic French product, the baguette, to a British manufacturer. SNCF has bought a lot of trains from Bombardier, as has the German railway, Deutsche Bahn – albeit that Bombardier manufactures trains in both France and Germany.

There are easy political points to be scored and they’re being scored all over the place – the unions say that somehow the evil Tories would rather buy from Germany than look after British union members, the Tories say that their hands are tied by the bad criteria chosen by Labour in 2008 and everyone says that Europeans don’t bother complying with inconvenient rules so why should we.

However, as with many EU issues, there’s a distinct lack of hard fact. It is implausible that the government would want to give a contract to a foreign manufacturer if it didn’t have to. The extent to which broader local economic impact can be taken into account in public procurement is fairly limited. We don’t know how much more economically advantageous the Siemens bid was than the Bombardier one. We don’t know that Bombardier would have put in the winning bid even if the criteria had been different and differently weighted – bidding is complex and technical and there is a competitive advantage to having a good bid preparation team. A parallel might be drawn with things like the Olympics and World Cups (FIFA corruption aside…) – objectively a country like ours will have much stronger underlying infrastructure and ability to deliver such projects than less developed countries but that doesn’t mean we can present a pitch that is always more appealing. At least in the trains scenario it is unlikely that there would be backhanders and bribes involved.

Finally, there’s no solid evidence that the UK is somehow too much more scrupulous in applying the procurement rules than its EU neighbours. One of the arguments put by pro-EU campaigners is that access to European markets for British business is worth the cost of opening up our markets. If in fact EU markets are closed, it begs the question why we should be part of the EU. Are there other benefits that make protecting British jobs and direct interests worth giving up? Closing up our markets in response would not be a solution because it would involve defeating the key underlying feature of the EU, the opening up of a huge, single market.

It would be nice if one day we could argue rationally about such real impacts of EU membership rather than have our politicians take the easy way out and the easy and unfounded arguments based on prejudice, whether it be about evil Tories, inept Labour, or vicious foreigners fooling us into giving away what they wouldn’t give us.

UPDATE – facts about the actual process

Part of the confusion in the media and political debate over the Thameslink train procurement has come from the use by Philip Hammond, the Transport Secretary of the term “value for money” in describing the reason for selecting Siemens. This was seen in Jeremy Paxman’s interview with him on Newsnight on 5th July where he was pressing the Secretary of State for a figure on the saving that was being obtained by going with Siemens over Bombardier. The unions and others have also criticised “value for money” as the award criterion by saying that crude comparisons of lowest cost would necessarily ignore the huge economic impact on Derby both for Bombardier employees and more generally for Bombardier’s local supply chain.

This is misconceived. I have now had the chance to do some quick research and have found the DfT’s own documents explaining the process and detail of the project. These are readily publicly available at the DfT’s Thameslink rolling stock page http://bit.ly/ndTk40 . The most interesting document is the set of presentation slides used to provide information to potential bidders ahead of the procurement process being launched back in April 2008 which can be found at http://bit.ly/pikgMI. Slide 80 makes it clear that the procurement was being conducted on the basis of selecting the most economically advantageous tender (colloquially known as “MEAT”) – that is, not the lowest price bid but the bid which offers the best combination of price and quality. Slide 77 sets out the weightings to be given to different features at the pre-selection stage, 40% going to “Business excellence and approach” and 60% on “technical capability and experience”. Having been tested at this first stage, these two elements would not generally be capable of being tested at the final evaluation stage.

The rest of the presentation gives a strong flavour for the key issues being considered by DfT as fundamental to the project. There is nothing there that would suggest that any thought had been put into preserving employment in the UK or maintaining a base of train production capacity. It would be interesting to see if a journalist could dig further into things to get hold of the documents for the next stage, the Invitation to Tender (“ITT”). The ITT will contain the actual detailed criteria on which the ultimate decision to award was to have been based upon.

A further feature of the Thameslink procurement is that it was not just a contract for a train manufacturer to build a load of trains. The DfT presentation shows that the project split into two interdependent parts – first, the building and maintenance of the trains, and second, a financing structure for leasing the trains to the train operating companies. This points to the strong possibility that even if Bombardier was able to put a good case for its ability to do the first part, it might have failed overall because Siemens found a better partner to provide the financing side of the deal.

At least on an initial inspection it looks like Philip Hammond was right that the terms of the procurement process put in place by the previous government made it difficult if not impossible to consider the broader economic impacts of letting the contract go out of the country in selecting the winning contractor. This cannot be seen to be a mere oversight. The detail of the publicly available information I’ve linked to gives a flavour of how much work went into the project from the DfT and ministers – added to this is the fact that the procurement process followed after in depth public consultation in a long-term project.

The procurement process started in the first half of 2008, before Lehman Brothers’ collapse but after Northern Rock. Unemployment was still low at what would subsequently be seen to be the end of a long period of growth and prosperity. Keynesian stimuli hadn’t been thought of as relevant to the British economy by any mainstream politician for decades. Being charitable one could say that the government at the time rightly concluded that designing the procurement of trains for Thameslink ought to be done on the basis of the best deal for the project rather than protecting Bombardier and jobs in Derby. We need to beware of the risks of hindsight.