The doyen of Liberator magazine, Simon Titley, just sent me through a cutting from the Leicester Mercury which gives us just a glimpse at the reasons why public services became so expensive under New Labour.
The report tells us of the unused regional fire control centre for the East Midlands, standing empty in Castle Donington, but still costing £5,000 a day to run, with burgeoning interest accruing in the PFI contract. It wasn’t just the dream of regional government, or the manifest problems of PFI, that caused the problem here. It was another example of a huge misconceived and failed IT project, like so many others.
One estimate suggested that the last government spent over £70 billion on IT projects and IT and management consultants over the past decade. The basis for that spending included a whole raft of wholly unproven assertions, from economies of scale through to ‘lean’ management systems and the fatal division between front office and back offices.
Most of these, along with other aspects of the McKinsey world view, still seem to have the Cabinet Office in its grip.
But the real problem is that the coalition are only half way through a revolution in service thinking. They have got rid of targets, half chucked out the Audit Commission… yet still our commissioning units get bigger and bigger, the disastrous shared back office systems continue to grow, and McKinsey consultants are still at large in the corridors of Whitehall. The result? Sclerosis.
In fact it’s worse than sclerosis. The response of the NHS establishment to the appalling revelations about the care of older people seems to be more systems and more training -– as if either can make up for diminishing humanity.
There is no real mystery about why such modern institutions, targeted and standardised to within an inch of their lives, have become so inhumane.
The trouble is, because they have only half-grasped the public service reform nettle, our own Coalition has not been able to articulate this critique of the previous Labour government’s disastrous record on public services -– leaving them increasingly inhumane, ruinously expensive and decreasingly effective (a miserable combination).
Thirteen years of centralised targets, standards and auditing has sucked the human element out of these and other institutions. They have been treated like assembly lines — and that is what they have become.
The reason, according to my new book The Human Element: Ten new rules to kickstart our failing organisations, published Nov 3), is that human beings have been increasingly taken out of public service systems because they are regarded as fallible.
That is true, of course, but humans are also the only real source of success and the only source of genuine change. Removing them is increasingly expensive and wasteful because our institutions are that much less effective.
Services and organisations are failing because conventional ‘efficiency’ destroys human contact and human relationships. The new agenda -– real public service efficiency through public service effectiveness -– means putting them back in again.
* David Boyle is a member of FPC and the author of The Human Element: Ten new rules to kickstart our failing organisations (Earthscan).
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12 Comments
But it’s not just Westminster corridors where the McKinsey consultants are rife – the SNP government in Edinburgh seem keen to waste millions too…
http://livingonwords.blogspot.com/2011/01/stupidity-of-snps-police-merger-plan.html
Fire Control was an even worse fiasco than David suggests, with a veritable herd of these white elephants left around the country, as this National Audit Office report from July makes clear:
http://www.nao.org.uk/publications/1012/failure_of_firecontrol.aspx
Most of my friends and family work in pubic services and can tell you immediately why almost all that has been introduced in recent decades in the name of “efficiency” has had the reverse effect. Yet still we see clueless people at the top – in business, in media, in politics – spewing out the mantras on these things, the tired old lines that have been tried and have failed. This is one of the big costs of inequality in our society – too many people at the top who have reached that position despite being rather thick because they have the right accent and contacts and hot-housing eduction that pushed them forward, so many people at the bottom or middle ranks who know what’s going wrong but can’t get a voice to say so.
We have seen a destruction of morale and of pride in service and a rise in its place of a tickbox culture where the best way to survive is to keep your head down and do what the bosses tell you, however crazy it is. The current government seems hellbent on carrying on with this. If your line is one of putting service out to lowest bidder contractor, then using regulatory mechanisms to keep up standards this is what you will get. If you impose a culture on society where everyone is supposed to be a thrusting “entrepreneur” whose only real aim in life is to make as much money as they can so they can show off about it, this is what you will get. If you constantly insult public service workers, telling them they are lazy and over-privileged, telling they can easily be replaced by cheaper workers from no-questions-asked agencies, this is what you will get.
New Labour did seem to be so much in the thrall of snake-oil salesmen, whether for IT systems or management restructuring. You only needed some callow youth with an MBA who could spout the jargon, and they thought such a person must be so much more to be trusted in what he said than people who actually did the job. I remember this from my time as a councillor in a thoroughly New Labour council under the New Labour government. So often they seemed to regard me as a dinosaur because I didn’t trust a lot of the “IT” solutions, yet actually a major reason why I was sceptical was that I teach computer programming and software engineering at university. I remember ploughing my way through the complex paperwork of PFI, trying to work out what it really was underneath, but when I asked the questions the answers could really be paraphrased as “there’s this magic fairy dust called ‘private sector know-how’ which it sprinkles on things and make them so much better”. So, you got some bloke who’d been running things in the council, going off and rebadging himself as a “consultant”, now he had this “private sector know-how”, and was supposed so much better – then you had him teaming up with fancy bankers and lawyers who had much smarter suits and manners than we councilors and those who remained public service employees, so they must be much better, mustn’t they? My biggest regret from those days was not to have been more forthright in my opposition to all these things, but I was learning too, having found myself unexpectedly leading the opposition, with no-one to guide me and only my own intuition and knowledge to rely on. So even I was shut up more than I should have been by the smooth-talking salesman who treated you as an ignorant fool if you questioned their solutions.
We have now a whole management structure in public service which comes from those days. Those who have risen are those who were good at picking up the jargon and looking smart and not asking awkward questions. Those who have a true human understanding, who are able to be more sceptical and didn’t buy into the rot imposed by their political masters have not prospered. They have remained at the bottom or lost their jobs or retired through stress.
Classic typo – “public services”! The alternative presents a whole new image ..
Huge amount of sense here from David and Matthew. If we are going to rebuild the policies of this party, here is one place to start.
Tony Greaves
Excellent stuff from David and Matthew. So the job of the Liberal Democrats is to stop the Conservatives from keeping Britain from being as Tory as it was under ‘New’ (sic) Labour? Who’dathortit?
Well said David and Matthew.
The dangerous corollary of the epic management failure in the public sector is that we all experience it on a regular basis – it’s become a “given” of modern Britain. And so, when those who want to diss the public sector for ideological reasons or for their own private gain come along, their job is already mostly done. They have succeeded in equating “government” and “bad” in the public’s mind to a remarkable extent. From that starting point degregulation of anything and everything is only a short hop.
Some months ago I was talking to some Conservative friends and said that I believed the ALL the savings the government needs to find could come from better management of the public sector. They were appalled, “But you can’t do that” they chorused almost as one. Not in their case because they are evil bastards (they’re not) but because they just accept that that is how the public sector is and they have been given no reason to think otherwise.
We need a liberal vision about how government could be better run so that we can make the proper distinction in voters’ minds – that government is necessary, that it can be either good or bad, and that we want it to be on the people’s side, a necessary counterbalance to the inevitable power of elites.
In practice the left/liberal end of politics has hardly helped matters; they have largley gone along with the Conservative notion that words like “efficiency” are just code for job cuts and/or privatization so they’ve steered away from the subject, preferring instead to think about how to rearrange the deckchairs more fairly even though the SS UK is in a whole heap of trouble. Also I suspect that the Lib Dem high command has always been concerned not to upset the establishment. Thus Vince Cable did a surveryseveral years ago that revealed that most members were strongly opposed tyo PFI yet now we are in government it suddenly seems acceptable.
I think you are absolutely right, Matthew. The tragedy is that the public sector has had its imaginative and effective people leached out – not completely, but far too much for comfort – and especially in the New Labour years. That is one reason why our services are very much less effective and therefore very much more expensive than they should be.
It seems to me that what we should do as a party is now to follow the implications of this to re-imagine what kind of services might work, and what kind of shape they need to be. I would be uncomfortable if we remained on the conservative side, sceptical of any kind of reform – but ‘reform’ so far has meant a particular kind of re-structuring that has been largely disastrous.
Good post, and positive comments. Almost gives you hope! We need to build from here.
I agree with your analysis and Matthew’s response. I think there are two aspects and they are intertwined but can be considered conceptually separate.
First is the consultancy problem. I’ve been an independent consultant contracting in the pharma sector for many years. My modus operandi has always been to deliver what the client wants; to warn them quickly and frankly if I see mistakes being made; to question and challenge where appropriate; and of course to make the sponsoring director look good by helping their team to succeed and achieve. I don’t need to throw in any “scope creep” because if you work in the client’s interest, you get re-hired.
But in my experience, when you get a “big name” consultancy onto a project, the senior stakeholders within the commissioning company have to keep a very tight rein on them. The consultancy will throw in “scope creep” at every opportunity: of course they will. And they will displace as many client staff with their own as they can: all in the interests of making the client’s life as easy as possible, of course. Ker-ching!
The worst thing you can do is pay top dollar to a top name when you don’t really know what you want: senior management cannot delegate fundamentals like objective-setting and scope.
Second is the IT systems. It is crucial to understand what the users need at the outset, so getting the IT experts to write the user requirements specification is like getting a pig to write the recipe for sausages.
Unfortunately it seems that too many public sector IT projects have started off with a blank sheet of paper and no vision. That they’re so concerned with the system for its own sake that they end up building an edifice of bureaucracy around the system, instead of tailoring the system to supporting the best and most effective processes.
I’ve lost count of the number of times I’ve seen one of these cock-ups make the news and thought, I could walk into GSK House (to name but one) tomorrow and handpick a team that could DO THIS PROPERLY.
The element that makes private sector projects work (generalising!) is in my view that the enterprise spending the money is protecting its profits and shareholder value. Consultancy firms do not generally get rewarded for failure: they must deliver results within budget.
PFI projects, in contrast, adopt this model for the protection and enrichment of the private partners, but the cost of failure, poor analysis and lack of vision/control is laid on the ultimate “client” i.e. the bottomless pit that is the taxpayer.
That’s why throwing more money at failing projects doesn’t work.
Don’t even start me on the legal contracts side of things… or procurement…
My studies suggest that the NHS is institutionally peopleist http://vanguardinhealth.blogspot.com/2011/10/institutionally-peopleist.html. And it is like this because it spends too much time doing the wrong thing righter. That’s why we do not get the care we deserve http://vanguardinhealth.blogspot.com/2011/10/why-dont-we-get-care-we-deserve.html. So we have system where people want to care but it is systemically designed to prevent that. My experiments are suggesting that if we are prepared to see people as people, rather than numbers on a spreadsheet, and take the time to understand them in the context of how they live their lives the opportunities to support people in having a good life or dying a good death are significant. It takes a brave leader to do this though as it means being prepared to completely change the way we think about what works.
Two thoughts:
Firstly, the prime reason that private industry is thought more efficient than nationalised or public sector is that private lives under the shadow of failure putting the whole firm out of a job overnight. I remember when the private gas company in my home town ceased trading and the first some customers knew was when they couldn’t have a hot breakfast. However, that is not a suitable model for many public services. In fact, as we have seen with mega-banks, socially or economically important private enterprises can have the same sort of protection as the public sector. It doesn’t really seem to matter if their problems were due to foolish and conceited management –
RBS recently or BMC/BLMC half a century ago. So the incentive of failure can be absent from the private sector.
Secondly, computer projects only have a chance of working through close understanding between the customer and the geeks. The customer has the knowledge, often quite buried, of what is needed. The geeks know a lot about possibilities and enhancements. If they don’t work together, cost and time overruns can be confidently expected and complete failure is on the cards. Mega-projects are a great risk, because this understanding is harder to achieve and changeover is very hard to manage. A better approach to establish communication and security standards, so that the project can proceed in smaller chunks and stages, with bits up and running throughout the project.
A major project that has been largely successful is the income tax system of HMRC, but if your affairs are a bit off the mainstream, you would have discovered over the last decade or that it entered service pretty incomplete, and, somewhere in the background, an army of officers and geeks has been beavering away fixing errors and filling in gaps.