Why is government so incompetent?

Every day brings a fresh example of a government policy that is not working as it intended or a public service that has gone badly off the rails. It is usually accompanied by a government press release (rarely a ministerial interview) denying that there is any kind of problem, or minimising it. No wonder the public is losing faith in the political class. When human knowledge has never been greater, our education systems have never put out more well-educated people, and our technology has never been more capable, this problem should provoke more comment than it does. What is happening?

Let’s make this abstract observation more concrete with a few examples. The Grenfell Tower tragedy showed that safety regulation for the cladding of buildings had become meaningless, and consultation with residents completely empty. The only surprising thing about the recent reports of abuse of innocent immigrants in detention centres is that the scandal took so long to emerge. The implementation of the government’s new nursery care entitlement went off the rails many months ago, and will probably lead to less nursery provision, not more – and yet the government still denies it. New regulations on data protection in the pipeline look unworkable and retrograde to everybody I have met who has taken the trouble to examine them( and that is blamed on the need to comply with EU regulations, but I wonder if other member states are having such problems?).  I could go on. And on. Everybody who has direct involvement with public services or government initiatives (in education, health, unemployment support, etc.) will have an example of rampant policy madness. Sometimes these stories are ill-founded grouching by people resisting change. Mostly they are not.

But why? There some usual suspects. Politicians like to blame the other side. So Labour (and Lib Dem) ones will label this as Tory incompetence, and claim they would do better if only they were in charge. They would say that. But one of the most egregious bits of government incompetence in recent years was on the Labour watch, and they still deny it: the macroeconomic and regulatory failures that made the impact of the global financial crisis of a decade ago much more severe than in any other major developed country. Those in power tend to blame the supposedly deteriorating quality of civil servants trying to implement their clear vision – in the way that bad workmen blame their tools, or bad generals blame their subordinates. Another common complaint is that modern politicians have less real-world experience than they used to, of running businesses or commanding troops, say. And yet there has always been something amateurish about British politicians. And there is still quite a bit of real world experience on the political front benches.

For my part I can’t help recalling Tony Blair’s valedictory article in the Economist in 2007. Consider this quote:

The state today needs to be enabling and based on a partnership with the citizen, one of mutual rights and responsibilities. The implications are profound. Public services need to go through the same revolution—professionally, culturally and in organisation—that the private sector has been through.

The first bit is classic Blair. It sounds very good and liberal, but it isn’t clear what it actually means. It is used to dress up the second bit: that public services should learn from the private sector, and reflect the revolution that the private sector has been through. Well I was, in small way, a standard-bearer of that private sector revolution. I led the transformation of the various operational units I was responsible for, with massive advances in efficiency and improved customer service (certainly in the reduction of mistakes). But here’s the thing: since Tony Blair’s time that private sector revolution has shown its dark side (already evident when I was working, up to 2005). We are now being assaulted by examples of private sector incompetence that match those I have been complaining about in the public sector. The biggest by far was unfolding as Mr Blair was writing his article: the great financial crisis of 2007-2008 that climaxed with the collapse of Lehman Brothers. The levels of misjudgement in so many financial firms is completely breathtaking. Governments and regulators contributed (especially in Britain), but often because of pressure placed on them by businesses.

It’s worth mentioning just a few modern examples of commercial incompetence. In Europe we are reeling from the problems at Ryanair, where changes to pilots’ holiday rosters have caused thousands of flight cancellations. This has parallels with Southern Rail’s travails earlier this year, after they played with staff rosters – with the trouble wrongly blamed by the company and government on the trade unions,who are admittedly making things worse. Americans are alarmed about massive data breaches at credit firm Equifax. It is not hard to find other examples.

Perhaps the problem is for public services and government in Britain is not that they have learned too little from the private sector, but that they have learned too much. Or they have learned the wrong things (I can vouch that they could learn many good things…). The dark side of private sector transformation might be called “simplify and exclude”. A simple business model is much easier to manage than a more complex one, and in its own terms it is more efficient. It also makes increases in scale easier to manage. And it can benefit the world as a whole by cutting out wasted duplication. I did a lot of this at work – especially when my firm took on outsourcing contracts for operations in financial services. But even then the dark side was evident. If it didn’t fit the model, you excluded it. This leads to two distinct problems.

The first problem is tunnel vision. People running large businesses with simple operating models simply lose the capacity to engage with the complexities of the real world. The public is becoming increasingly aware of this as it tries to deal with problems and engage with larger businesses – it is harder and harder to have a meaningful conversation with anybody. This increasingly marks our engagement with public services too. This isn’t helped by what Douglas Adams called the SEP field in his hugely perceptive A Hitchhikers Guide to the Galaxy – a powerful cloak of invisibility. SEP stands for Somebody Else’s Problem. One prominent victim of the SEP field was Labour Chancellor and Prime Minister Gordon Brown, as the great financial crisis developed. He (or some of his apologists) complained that part of the problem was responsibility for handling finance was split between the Treasury, the Bank of England and the Financial Services Authority – though it should surely have been clear that it was his Treasury that was responsible for the system as a whole.

The second problem with Simplify and Exclude is the revenge of the excluded. This is much more of an issue with government and public service than it is with big business. The inconvenient people who do not fit your simplified service model do not disappear. Very often their needs are left unmet and they come back to deliver bigger problems later. Children excluded by schools are more likely to become drug addicts and indulge in crime and antisocial behaviour, for example. The Department of Work and Pensions (DWP), perhaps the biggest champion of Simplify and Exclude in government,  may celebrate that is has driven many people of their claimant rolls, but it is has no understanding of why. It has not attempted to to solve the underlying problems of worklessness – it has just made access to benefits more restricted. That just means more trouble for everybody else. Knife crime and acid attacks are rising here in London – it is hard not to think that this has something to do with the simplification of services in the DWP, as well as youth provision, employment and policing. This is closely linked to funding cuts (“austerity”) of course, but I am convinced the problem is much deeper than the lack of public funds. It is the narrow way in which public servants are approaching the problem.

At the heart of this is a trade-off between scope and scale. In order to improve the scale of services it is usually necessary to simplify the scope. But by reducing the scope you make them less effective. The answer, in public services, is to bring together services for different things around the needs of individual citizens. You can only do that by devolving political responsibility to a much more localised level. More people are realising this – but few are ready for the change in political culture required to drive it through.

 

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