“They rubbish job projections made by internationally renowned institutions” was one of many statements made by Aberdeen City Councillor John Corall in an article headlined “Development opponents ‘tired, blinkered people’” which appeared in the P&J on 20th Feb 2012. Richard Pelling takes a good hard look at PriceWaterhouse Coopers and begs to differ.
Which “internationally renowned institutions” made the job projections that Councillor Corall was referring to? PwC? They did the TIF business case which contains the only job projections I’ve seen (see Think of A Number in AV for more details). PwC are indeed internationally renowned and hit the headlines frequently, even without taking their role in the Global financial crisis into account.
On 6th April 2011 the BBC reported that “Satyam and PwC are fined in US for accounting fraud” noting that Satyam (an Indian outsourcing company) which PwC audited had falsely reported “more than $1bn in profits over five years” – this cost PwC India a $7.5 million fine from the US Securities and Exchange Commission.
Closer to home, in January 2012, the Yorkshire Post reports that PwC were fined £1.4 million for “wrongly telling regulators for seven years that JPMorgan Securities was keeping its clients’ money safe”
Anyway, the fact is that PwC prepared the City Centre Regeneration Scheme (CCRS) business case for Aberdeen City Council, but Stewart Carruth – Aberdeen City Council’s director of corporate governance – is a PwC old boy, so everything will be in order and we have nothing to worry about there.
Outside of ACC, the projections in the business case are, however, being presented by some as hard facts. For example, in their City Garden Project FAQ Diller Scofidio + Renfro state that the CCRS “will attract 6,500 new jobs and contribute £122m into the economy”. These are projections, not hard facts.
Projections and predictions often go wrong …
Who could have predicted that the once mighty Glasgow Rangers would be insolvent? Couldn’t happen to them could it?
Now, way back in June 2002, Unison published a paper ironically titled “A Web of Private Interest” which looked at how “internationally renowned institutions” had built the case for and benefitted from privatisation in its many forms, citing some work done by PwC :
“PwC has now stepped in with what it calls new “hard evidence”. PwC, which describes itself as No.1 in the privatisation league table, has stepped up its promotion of PFI with a report that claims to have evidence that “PPPs work”
– ( Public Private Partnerships: A Clearer View, October 2001).
This will be balm to the ears of a government that says what works is all that matters.
However, PwC’s evidence turns out to consist of 90 anecdotes about the benefits of PFI from senior managers directly responsible for introducing it. There is no financial or service data despite major criticisms that PFI increases costs and reduces staffing, service volume, and terms and conditions of employment. Asking those with the job of introducing PFI to their services whether the policy is good or bad is by any standards a pretty lame research method. But after 9 years of PFI the government is still relying on evidence of this sort from one of the policy’s main financial beneficiaries.”
Now we all know what happened with PFI don’t we? Turns out that it wasn’t such great value for us at all, we (the public) take all the risk and the private companies take all the profit – still the accountants, lawyers and consultants make their money either way, so it’s easy to see why they would promote a business case for PFI or TIF.
Yes, TIF is not PFI, but the institutions building the business cases are the same and the accountants, consultants and lawyers will no doubt trouser a tidy sum, so take their projections with a pinch of salt and always bear in mind that the public usually bear all the risk.
Vote Retain Union Terrace Gardens.
An Aberdeen Voice writer contacted PwC and asked if the firm was comfortable with the way its projections were being used. The Press & Journal printed the large claims in a box called ‘Facts and Figures’.
PwC were asked to confirm:
“…that those are indeed your projections and you stand by them”, and “…these figures appeared in a newspaper recently (Press & Journal,19 January) under a column, ‘facts and figures’. Can you please confirm whether or not PwC thinks its projections should be labelled ‘facts and figures’?”
Did PwC happily confirm the figures were robust and reliable? Not exactly:
“Our work was undertaken on behalf of our client. It would not be appropriate to discuss this with anyone other than our client” was their spokeswoman’s reply.