Piece up today at Techcentralstation. On the costs of regulations.
TCS Piece Up.
5 responses
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Another TCS piece, another trip into fantasy-land. Your article is the social policy equivalent of a fairy-tale made up to scare the children.
As you would know if you had bothered to read up on the subject in even the most basic way, your ‘figure’ (derivation unclear) of £1.2 billion per life saved is, er, twenty-four times the estimate of the Small Landlords Association, who at least based their conclusion on some analysis of risk factors, seriously flawed though it is (http://www.landlords.org.uk/pdf/FireandHMOsmainandappendix-july.pdf).
What explains the difference? Basically, you make a lot of wacky assumptions with no basis in reality. Such as:
-You assume zero fire safety measures at present in HMOs. This is obviously nonsense.
-You seem to assume that the rate of fires (and fire casualties) is the same for HMOs as it is for single-occupancy homes. It isn’t – it’s higher (the Small Landlords research linked to disagrees, but they seem to be leaving out several categories of HMO).
-You seem to thinks that all HMOs are composed of apartments like yours (or whoever owned the one that cost £11,000 to bring up to standard). They’re not – for one thing, a very high proportion are tiny bedsits. I find it hilarous that you offer no evidence whatsoever to support this ‘average cost’ which you’ve basically pulled out of your ass.
-You seem to think “some one-third of the population live in HMOs”. They don’t, in fact you’re so far removed from reality here that it’s quite funny.
-Finally, you are unaware that local authorities can provide grants to bring HMOs up to standard. They can and do.
I can only imagine the kind of treatment you would give such a shoddy article if it was written by, say, Polly Toynbee.
Tim adds: derivation of 1.2 billion is fairly simple. 15,000 apartments at 10,000 each, there’s half a life a year to be saved if all fire deaths are stopped, I assumed that half the population lived in HMOs (they don’t but this serves to underestimate the cost) and we’ll save only half those lives at risk because there’ll always be some idiots. It is actually spelled out there you know. I also show a range, from 30 million to 1.2 billion, and explain how each is calculated. The one third of the population came from the Council. With 3,000 HMOs in an area of 170,000 people that doesn’t sound too far from the truth. Maybe a quarter would be closer. Don’t know, I’m not going to go and count them.
Please note, this is Bath we’re talking about, all those Georgian terraces. Also note I do not try to generalise across the country.
I do not assume zero measures currently. I quite clearly make a difference between the additional measures required now and those that have accumulated over the years.
I do not assume that HMOs are as risky as other homes. I quite clearly state that they are probably more risky. It would have been even worse if I’d used the actual death rate for HMOs in Bath last year….none, making the costs of saving a life infinite.
The apartment/bedsit thing is that again, we’re talking about Bath. Those buildings by Wood etc are most definately not all bedsits. My source was again the council.
Again, the third number. 15,000 apartments in a place with 170,000 residents? Perhaps you’re right that a third is off line…average of three occupants would be 26% not 33. But it is not, in the case of this one city, so far off as to be absurd or funny.
That local councils can and do provide grants is the really absurd comment. Whether the money comes from private pockets directly or indirectly via the tax system does not make any difference at all to whether there is an overspend on safety now does it?
Further update. BTW, thanks for the link to that report. Taking the numbers from the ENTEC report (the ones that that paper is stating are overblown) of a one in 50,000 chance in a house of bedsits (which as above is not the case in Bath) and assuming that there are 50,000 living in the 15,000 apartments, just to make the maths easy, we’ve got one life per year saved for the minimum 15 million costs. Take the even higher figure, of one in 18,600 and we have roughly 6 million per life saved. So, even on the worst case, basing ourselves on warrens of bedsits, not the Bath normality of a flat per floor, we have a safety measure that costs some 5 times what is spent to save a life on the railways (actually around 1.2 million according to the Guardian).
The conclusion still stands…..even putting the very best case forward about the costs of lives saved, this is still an extremely expensive way to do it, and as such wastes lives because we ought to do the low cost things first. -
PS that link probably wont’ work as it’s got a bracket and full stop at the end. Here it is again: http://www.landlords.org.uk/pdf/FireandHMOsmainandappendix-july.pdf
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A quick point: all your calculations seem to assume that these various expensive upgrade investments must be repeated *every year* since you are comparing costs with *yearly* fatality rates. This is obviously not the case. We must therefore divide the one-off costs of compliance (which according to you are anything between £1,000 and £10,000, but since you neither link to the actual regulations or provide any other evidence we just have your own word to go on) by the effective life-span of the equipment.
To use your last calculations based on the ENTEC report, a five year life-span (which seems a reasonable assumption) would bring the cost per year per life saved to the low single figure millions, which is around the DTI figure mentioned in the SMA publication.
Tim adds. I hear what you say about yearly costs. Certainly, it is possible to talk about costs per year per life saved per year. Other alternatives are cost per life years saved (something the old Harvard Study used) and so on. It is not unusual to use what I did. Capital cost (ie money spent once) on lives saved per year. That is, for example, how the Guardian gave us that number of 1.2 million per life saved per year on the railways. Or how local councils purportedly measure road schemes, at 100,000. I am comparing like with like and still find that the fire regulations are too expensive.
The 1k and 10k numbers come from the bills I’ve just paid. Not sure that it is actually necessary for me to publish them is it? -
“The 1k and 10k numbers come from the bills I’ve just paid.”
And what makes you think these are representative of costs in HMOs? I could just as easily write an article about how I’ve just paid £100 to bring an apartment (any apartment) up to standard and base all my calculations on that. Just as valid as your method, i.e. not valid at all.
Tim adds: In the article I did say “from personal experience”. I also did a little research….talked to a few managment agents, my own and others, about what they were seeing as the general level of costs, the guy at the local council who enforces all of this…. -
Hate to drag up an old post again, but I think there’s another problem with your calculations.
Your costs per life saved is based on a particular risk factor, ie the risk of death from fire in HMOs. But while the costs figure you use assumes no current fire safety measures in HMOs (i.e. you count both the money that was partly paid already in the past and that which has to be paid in full now) the risk factor of fires in HMOs is based on the reality, which is that HMOs have an unknown level of fire safety measures which is more than 0% but less than 100%.
Now, the more fire safety measures HMOs actually have right now, the lower the risk factor that ENTEC would have found. If HMOs really had no fire safety measures at all, the risk factors would surely be vastly higher. This would make the expenditure on meeting the new regulations (by paying the full per-aparment figure now rather than spreading it over the past as well, if you follow) much better value.
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