More on PADA …
April 11th, 2008So I trotted down to the Personal Accounts Delivery Authority in Holborn last week. To refresh your memory, PADA is the body charged with setting up Personal Accounts - essentially, occupational pensions for 5.5 million people and a million employers who do not normally take out or supply pensions. People will be automatically enrolled, and you have to actively choose not to have one.
One of the reasons PAs got through was because the set up cost was promised to be £500 million. This meant that you could argue that it was cheaper to do it this way than use private providers (as the Government has done with the Child Trust Fund for example).
I think the cost will be £2 billion, which is why the affable CEO of PADA, Tim Jones, summoned me to a meeting. He told me that I was completely wrong, but refused to reveal his own estimate of the set up costs, because he does not want to weaken his negotiating position with contractors. On running costs, he said they had spent about £14 million since August, but he won’t pblish full accounts until the summer of 2009. They are still consulting on the charging structure for PAs, so no way of knowing if they will meet the 0.3 per cent the Government promised. And finally, as I predicted in my last post, he refused to reveal the costs of consultants on the grounds of commercial confidentiality,
I find it amusing to look at the contrast between the press getting worked up into a lather about the cost of MPs expenses, around £10 million a year, yet no one seems to care that an organisation that could cost the taxpayer billions is able to keep its financial arrangements completely confidential. Mark my words, PADA will cost you more than the Government told you. Guaranteed.
