What cuts look like

[Young Master Smeet]

https://drscottthinks.wordpress.com/2015/12/05/forth-road-bridge-truss-end-links-was-work-planned-cancelled-and-deferred/

Ignore any partisan breast beating, this is a classic example of what happens as budgets fall:

Quote:

August 2013: Work on the truss is planned on the truss ends:
As reported in June 2013, the Chief Engineer and Bridgemaster will bring three projects to tender during 2013/14. The projects that have been selected on the basis of criticality and affordability are; Main Cable Acoustic Monitoring, Truss End Linkages and Suspended Span Gantry Improvements. It is currently estimated that these three projects will cost £2.270m based on the current Capital Plan. This will represent the majority of the funds available for non-committed schemes and therefore it is recommended that a full risk assessment of all projects on site is carried out before the tenders are approved.

February 2014: Planned work “deferred”  due to Scottish Government budget cuts: During this second round of deferrals, the four projects detailed below were identified as having the highest estimated cost.  Therefore, these projects had to be considered in part or full for deferral in order to produce a significant reduction in the predicted deficit.  These projects were:

Maintenance and repair are often the first budgets to go, quick savings with little immediate adverse impact, and, with any luck, the person who authorises the cuts will have moved on before they start to bite.  Hence why roads get pitted with potholes, and hospitals get paint peeling from the walls.  There's always a higher priority budget, and yet, maintenance is actually the most important budget, because, when things break, often the costs of repair or replacement are astronomical.

I'll just throw in, that this illustrates a problem for public finances: governments borrow to build, and often repay over 60 years, which is longer than the lifespans of the buildings, so alongside the costs of paying for the bulding in the first place, they have to pay for it a second time in maintenance.

[alanjjohnstone]

Now blogged at our Socialist Courier web-pagehttp://socialist-courier.blogspot.com/2015/12/what-cuts-look-like-forth-road-bridge.html

[jondwhite]

I don't get it. Governments paying for the building, then paying for maintenance is two payments even if they borrow the money for one.

[Young Master Smeet]

jondwhite wrote:

I don't get it. Governments paying for the building, then paying for maintenance is two payments even if they borrow the money for one.

So, while they are still paying the debts, they are making a second payment for amortisation (maintenance), this doubles the strain on current finances.  If, say, the government had saved up the cash in advance (which they can't), they'd only have the amortisation to pay.So, taking, say, council housing, if the government borrows to expand housing, it will end up with the cost of repayment and maintenance.  If the repayment period is longer than the time it takes to fully turnover the full cost of purchase (i.e. 60 years on a building that will last 30) then a government can be left with stray debts without assets to back them up, and without the capacity to pay for replacement buildings or keeping up with maintenance, never mind expansion of provision.Yes, growth wikll diminish the relative size of those repayments in relation to tax receipts (and inflation), but only so long as the econonomy is growing.Another way of saying this, is that debt.  cannot replace taxation, and state provision is limited by the capacity of the market to generate wealth: also that repayment of debt will take precedence over curent expenditure on services.

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