Others think it should be deducted because it would not have to be spent if we still had clean air in the first place. The latest stab at the exercise is the UK’s new environmental accounts. They should also be asking why Mr Thomas is still working for the group in a senior role.Cloud cuckoo land and the environmentNothing could be more ridiculous than the search among economists and others for an alternative measure of national prosperity to that of gross domestic product. That should set alarm bells ringing for the bank’s shareholders. With the name Barings ringing in their ears they should be setting in train an in-depth investigation of all aspects of internal control. None of that excuses Flemings, whose failings in this case were breathtaking.

It bears repeating that not only has one of its investment management offshoots lost its authorisation to trade but Robert Thomas, the man in charge, and Colin Armstrong, the fund manager at the centre of the scandal, have been barred from investment management.Flemings appears to have been aware of difficulties in reconciling trades since early last year or late 1994 but did not take the problem to its London regulator, Imro, until October. ( Lloyd’s carried on the tradition into the 1990s.) Hong Kong’s busy regulators at the Securities Commission are now frantically trying to clean up their markets, 10 years after the Financial Services Act made a start on London. Rat trading and other scams for making profits at the expense of clients are notoriously rife over there. Think of Standard Chartered and its problems a couple of years ago, the spate of high-profile arrests of senior figures in the Chinese business establishment in recent weeks, or the indictment last month of Chen Po-sum, former vice- chair of the Hong Kong Stock Exchange, for accepting a bribe to approve a transfer of an exchange seat.But, in fact, the gun-slinging, anything goes, culture of Hong Kong is only an uncomfortable reminder of London in the 1960s, 1970s and even 1980s, when too many professionals failed to see any distinction between their own and their clients’ money. The BBC needs to think long and hard before it goes radically down this route, for a company that exists “in essence” but not “in actuality” comes dangerously close to one that fails to justify itself at all.Jardine brings back unhappy memoriesIt would be easy to dismiss the Jardine Fleming case as just another securities scandal from Hong Kong, a market that makes London’s behaviour look prim and proper by comparison.

Indeed the main criticism of “outsourcing” is that it is a form of management abdication, a cop-out, just a method of getting someone else to do the dirty work.Furthermore, the net effect can be to add layers of previously unnecessary bureaucracy and form-filling. The arms’ length nature of the support structure destroys flexibility and the ability to adapt to changing needs It can also lead to a confusion of purpose and goals. In other words, the case for outsourcing is by no means proven; in recent years there has been a backlash against it. The company is thus freed to concentrate on what it does best, whether it be selling insurance, making motor cars, or in this case, producing TV and radio programmes.The other advantage is that it divorces the company from difficult and awkward management decisions and tasks, the downsizing and reform of working practices which is a part of every organisation these days. Time consuming, costly support and adminstrative infrastructure is put in the hands of someone else, who because this is their business, can do it better and for a lower price. Even the sleepy old life assurance industry is waking up to the potential savings and advantages of shared, arms length administrative facilities.The attractions are obvious and alluring.

If you can “outsource” the basic resources of the BBC, why not also contract out its news, current affairs and chat shows. Why, eventually you might be able to outsource the director general himself.
To be fair on Mr Birt, his dream of the virtual corporation merely reflects the current management fashion. “Outsourcing”, as EDS’s extraordinary growth in the US and Britain amply demonstrates, is now big business and there are few industries completely untouched by it. The logic of the process is that everything should go, leaving the BBC as no more than a cyberspace organisation – a collector and spender of the licence fee. Why not go the whole hog and contract out the lot? In theory, nothing is sacred.

The Shorter Oxford English Dictionary defines the word virtual as meaning “in essence or effect although not formally or actually”. To be director- general of any company “in essence or effect although not formally or actually” is to define the perfect executive job – power without responsibility, all the fun of decision-making without any of the hard graft or day to day unpleasantness of managing As director-general of the BBC it would be very heaven. The job would be reduced (or elevated depending on your point of view) to that of programme selection, scheduling, budget control, strategy and general cocktail party loafer. There is no reason why Mr Birt should stop at resource management. The transmission system will be gone shortly and 35 per cent of programming is already contracted out. What we are saying to the Kepit chairman and the board is that it should produce a single detailed proposal to shareholders that offers 100 per cent cash to them.”.