LETTER TO MICHAEL BOSKIN FROM HENRY S. ROWEN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00153R000100050007-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: January 11, 2008
• Sequence Number: 7
• Publication Date: March 28, 1983
• Content Type: LETTER

Approved For Release 2008/01/11: CIA-RDP85T00153R000100050007-9
THE DIRECTOR OF
CENTRAL INTELLIGENCE
28 March 1983
Here's a piece on public investment
in the UK that might interest you.
Sincerely,
Henry S. Rowen
Chairman
Approved For Release 2008/01/11: CIA-RDP85T00153R000100050007-9
 Approved For Release 2008/01/11: CIA-RDP85TOO153R000100050007-9
?
BRITAIN'S AGEING FABRIC
The case of the mis
By Robin Pauley
I s Britain slowly falling to
bits? There is plenty of
evidence on the surface to
suggest that it may be-patched
and pot-holed urban roads,
peeling paint and boarded
windows on dilapidated council
estates, motorways with cracked
bridges and miles of lanes
closed for repairs.
There is more evidence
beneath the surface in the
hundreds of thousands of miles
of water pipes and sewers,
,'some more than 100 years old,
hwhich are crumbling at a grow-
Sing pace. This goes largely
unnoticed until the damage is
so great that the road collapses
into caverns sometimes large
enough to accommodate one or
more double decker buses.
s All these problems get
a steadily worse the longer they
e are left. But this is not imme-
diately apparent, which makes
V cuts easy to justify in times of
financial hardship for both cen-
tral and local government. Lack
of maintenance of council
homes has no effect in the first
year, for example, but by about
the fifth year the level of dis-
repair is so great that restona-
lion costs several times what
regular maintenance would
have cost in each of the preced-
ing four years.
Britain, like most of the
world, has been going through
a severe recession and since its
election in 1979 the Government
has been trying to control pub-
lic expenditure very tightly.
However, in the last two years
these controls have proved
tighter than even the Govern-
ment wanted and the Public
Sector Borrowing Requirement
(PSBR) has fallen short of its
already tight targets. Central
and local expenditure on wages
Restoration costs
could be greater
than maintenance
`Many projects like motorways would have -bee
if'the money available had been spen
? Replaced an extra 10 per cent which has discouraged local today will have to last around
of the worst sewers (f300m). authorities ; (c) uncertainty 800 years at the present rate of
? Replaced the worst 10 per from year. to year about what . slum clearance, property repair
cent of water mains and pipes local authorities will be allowed and replacement according to
and improved technological de- to do, greatly worsened by the Mr John Mills, chairman of the
tection of leakages (f350m). sudden six-month moratorium. on Association of Metropolitan
? Built the Al-Ml motorway capital housing projects in 1981; Authorities housing committee.
link to provide industry in the and (d) severe penalties for The.number of houses built in
West Midlands with Its first councils which overspend on 1982 was about 25 per cent
hi
f
h
.' a 15n Ann in 1981
th
or
g
a
er
the
....- ----- capital projects Is serviced
rt.` war ). `~
ports (#80m). through these. accounts so most
motorway t 1 including miles of the much planned of them have' revenue implies-
delayed tions which lead to higher
delaayed yed M20 and incomplete penalties.
M25 round London (#500m). In addition because. many
? Built at least 50 of the 120
n
l
t
h
g
o
s
ave
capital projec
planned but uns4arted by. lead-in and completion times
and salaries has soared, but the Pass, each costing less ess than the year-to-year :l uncertainty
casualty has been capital ex- #3m (f120m). ed cnot to start
penditure on the infrastructure ? Modernised 100,000 pre-1945 encetou ourag cpuncils all.
-the fabric of the nation. council homes (#300m). l Victorian times,
In the Past-particularly in ? Accelerated Improvements in Since
Briinc has invested. ions, n the 1930s-recessions have some school buildings to enable Britain that many countries we
proved an ideal -time for im- more very old schools to be its public infrastructure. Only
proving roads, schools, hospi- closed down more quickly the ublic infras, for example,
tals, reservoirs and upgrading (#100m but with a net saving in rivals' Britain's record of
-or building-houses for the running costs). getting clean water to-and
future. But cash limits for ? Built 10,000 new homes by dirty water away from-99 per
d
h
are
spending on these items have private builders for s
been consistently undershot ownership by housing associa-
I Year after year. Only last tions or some councils (#250m).
000 jabs
100
,
autumn did Mrs Thatcher ? Created around
roads in the towns and the s e d but also not to re invest
realise the ex,lgnt, the oppo;- directly plus another 40,000 or cities may, be pot-holed;,buJt r efts from the `sale of council
iunittes?fct 'capital itvestment so indirectly-from -new ---jobs- look (-and `'feel) ..'much better houses and 1 nr . w eapital.
which wefe' being lost because resulting from increased.. output' thaat those in New York or "Bdtdvi spew flbh. c and
at the end of each financial year -according to a detailed study Paris. London's underground pooes a j
nost money unspent is gone for by Cambridge Econometrics network is the world's most #2bn of capital receipts is now
:ood. She immediately em- prepared last year for the con- extensive. estimated to be squirrelled away
'arked on a campaign exhorting struction industry. This all means both that in reserves and not to have
he public sector to spend, None of this would have dis- maintaining and improving the been spent. There are signs
Pend, spend. turbed the Government's. capital infrastructure is very that councils, exasperated at
The undershoots, year after economic strategy ; it would expensive, but also .that it has being criticised both for over-
ear except for a #400m capital have reduced unemploylnepit to deteriorate a long way spending and underspending,
)ending overshoot of councils and social security costs and the before it becomes poor enough are now going to overspend on
..t 1980-81 (for which they were effect of spending up to the to be compared with that in capital in 1983 .84.
roundly criticised) have limit on the labour-intensive many other countries. So the Since April 1980 about #lbn
covered all sectors, but most projects involved would not fact that capital investment In half the figure quoted above
particularly housing and roads. have added directly to imports real terms in the' key sectors - has been underspent on hous-
The #2bn earmarked for ' The reason that underspend- of water. housing and roads is ing plans. If that figure were
capital projects but not spent ing has been so persistent in- all well below half that. of the to be made up, it would provide
since 1979-80 could have: elude (a) the climate created last Conservative government firstly 1,300 new homes from
? Enhanced spending to stop by the Government against all in the early 1970s is only private builders for shared pur-
Introduced by the some
the sewer
(fl00m)acement public spending; arates for) borrowhih ing ? Housing. Hoses being built achase lready schemes
falli e
i lam w th .the finest detai
Approved For Release 2008/01/11 : CIA-RDP85T00153R000100050007-9
cent of toe population. 1 iiC peatedly cut the provision for
municipal housing sector is one housing investment
Councils
.
of the world's largest. The have tended not only to under-
300,000 a year ' estimated as
necessary in the 1977 Housing
Policy` Review Green Paper
produced by the then Labour
Government. .
The rate of ? clearing Britain's
remaining slums (some of
which are only 20 years old
because of bad design and
faulty materials in the 1960s)
is slowing down. A third of
Britain's housing stock is pre-
1919 and in the last four years
councils have skimped on
upkeep and maintenance which
is becoming particularly
obvious In apartment blocks.
 Approved For Release 2008/01/11: CIA-RDP85TOO153R000100050007-9
Financial Times Thursday .March IOs'1983
Capital.spendingin_real terms
is about' half. the, 1973-74 . level,
Potentially, there. < water ,.:.;.cojlected..
e
d
stor
d an
. purifiedj. is lost:
by ;..leakage, is before ,- t. 'bets .' .
Wales thereat'e, 2,000 kin of
w
te
i
s
dl
a
r ma
n
an
8m service
pipes with a total ,lengtly?t f: an-_ .
considerable Bristol' 1`A-
Works, Company;' fo examp e,
reckons that"an;annual;expendi
ture of:#600.000 on?,leakage con=
trol:' may .; be : saving z;,them
#200000 In '_ energy, , annd:.treat-
ment':costs;, and : #750,000 ':~?of;:
cumulative .capital. charges;
',;..; .
;
Roads. Actual :capital ; spend
ing on;roads in.1982-83 of #330m
represents a fall'ofA }-1 per-cent
on 1981.82, -and'.. 40' "per. -cent
below target. : i Localil authorities
underspent by,;#139mr;1Thes, are
Roger Teyloi
t
completed...
uncils and. housing associa-
ins and, secondly,. 100,000
uncil house modernisations -
wiring, central, healing,
odern kitchens and `bathrooms
? among the! 10tH pre=1945
imes, plus 165,000 extra'hous
ig improvement'. grants among
to im properties ' which"I'need
least #7,000 - spendinjp'i,on
tern to get them into'a- reason
)Ie stateof repair..: -
Cambridge Econometrics:esti-
ousing - two-thirds on : new
omes and one-third-nn rpha}ii_
Water and sewers '" There zngiana alone since 1979 one11.'~
.
',is:;#365m: ~+
o no votes in sais a roadsWhile the Chancellor
alitical .....adage e as _ old' a? B
d
motorways, ,ta t d, sown and
pother 16,000 indirectly, Some
0 per cent of'the cost of heus- on local. road fs r.,9 P'6r, cent
get speech on Tuesday is
Iritain's intricate' and partly u
tnmapped' sewer system, ,much likely to maker general com-
if it completed more than 100 .meats about b Ip? for t' l' n
struchon- dndusy, ',hno:
ears ago by cheap Victorian ere es' ,
tption for capital investment reintroduce unspent money
pr.-since because the; benefits from previous years. If that
o
l
been_ going= to ha tpen it
w;annot be appreciated by the
w
u
d
- 71?' s result r thete e% now sear in February dry
1,500 and jor oil s - qj I'rlrig rath ear n February
excavations I 'ye and t inn r_ _t__
m
b
k
ajor
loc
ages from partial
. i collapse.- *;'This costs '#100m to
repair, but the indirect.-costs
are often -much 'greater-a
major . collapse,;.,in Richmond
cost #2.2m. to, repafir-., but the
indirect costs of the. dlsiuption
were.=:estimated., in.,a;'recent
House of Lords, report::on the
water- industry: at #6.5m. ,
To, replace; Britain's sewers
would cost -around, #3ibnt>,and
just;tolmaintain the 210,000 km
of {sewers. in :their present:npar-
lous ; state, .the , . water industry
should_,,be spending 1310m.-.a
year' compared with an actual
level of;f205m.;:.,
no ground- to;beheve- that:?the...
60 ? per. 'cent rise.,-forecast' for
spending?Lbn . loi al roadstb an
result in anything more % than
another undershoot. Thus the
still, ou st>snding-o -the 120'by-?
passes due to, start InA982 .1983
or 1984, ninety "have:`f been
susp }ded or relegated;. - to
rese q, lists, and hardi any of
the ray #jive been , ~~ ed
Since i 9~,spepilin n?
n
i. new
roads col3struction an improve-
menu has den,, In .. real : te ms-
utey gev 1gC0- gear .-wnen,,tne
economy: is4anywW into an' up-
swing and- needs ; they stimulus
less.,, t ia;;,:risur,..
#2bn;,underspending, sincets 979 -,
huge. backlog:,- of ;undone :.capital
work .and, renovationAnd- =;are;.not:.
going . to go away::: when"
they. - are finally tackled:'they
will be _ much'. more;: expensive .
to : solve than they might.; have
been, ., g' + 9 t
Approved For Release 2008/01/11: CIA-RDP85TOO153R000100050007-9