Giving bureaucrats profit motive works for Brit agnecy

Scotsman:

AT FIRST glance, it appears the classic case of the family silver being sold off too cheaply. Four years ago, part of the government organisation that funds development in the Third World was sold off to its employees for the modest sum of £373,000.

Now the company, Actis, is said to be worth up to £600 million, with the former civil servants who led the buy-out in line for a sizeable chunk of the proceeds if the government decides to privatise it. Already they have been earning six-figure salaries and sharing in multi-million-pound profits.

The story has for many months been occupying the attentions of the satirists at Private Eye. This evening, Radio 4 will broadcast a documentary on its File on Four programme. And today The Scotsman can reveal that the National Audit Office is currently investigating the sell-off of Actis.

Actis was hived off from its parent company, the Commonwealth Development Corporation (CDC), by the government in 2004. It had operated as an in-house funds manager for CDC, and invested in projects across the world. Its aim was to encourage developing countries to help themselves by setting up new firms or supporting fledgling businesses, creating thousands of jobs in the process.

This would help to grow their own economies and break with the "hand-out culture" on which many poverty-stricken nations rely at the most severe times of drought, famine and flood.

The CDC was born out of Britain's post-war socially-aware Labour government that also heralded the National Heath Service. In the intervening years it has fallen under the auspices of the Department for International Development (DfID), now headed by former Scottish Secretary and Paisley MP Douglas Alexander.

Its task is to invest in projects that the private sector considers too risky. At a basic level, it can be seen as a success – CDC's net assets increased from £2 billion in 2006 to £2.7 billion in 2007. This has been done without a penny of public subsidy – the last cash injection in CDC was in 1996, by John Major's Tory government.

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There is much more. It appears some in the government have seller's remorse after see how profitable the enterprise became in private hands. Since the government still has an indirect 40 percent interest in the company it is not a complete loss. They appear to be fit for purpose as teh Brits say and accomplishing their mission. Its just that socialist get so spooked by PROFITS.