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Reputability LLP are pioneers and leaders globally in the field of reputational risk and its root causes, behavioural risk and organisational risk. We help business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.

Friday, 23 October 2015

Why Government Repeats Mistakes - and What to Do about it


We are delighted to be able to post, with his permission, an essay by Richard Bacon MP.   Richard is Member of Parliament for South Norfolk, Deputy Chairman of the Public Accounts Committee, its most long-serving member and, with Christopher Hope, the author of Conundrum.   Richard has probably been involved in the study of more governmental mishaps than any other parliamentarian. 





Sir Michael Barber once observed that the “How” question is relatively neglected in the writing of history and politics. A textbook would say of some medieval king that “he gathered an army and hastened north” without pausing to consider just how difficult that was to do. Yet when governments embark on anything  new, it is quite normal for things not to turn out as planned – and the problems are nearly always to do with the “How” question.

We have seen an NHS dental contract which left large numbers of people without a dentist; a new system for marking school tests where up to three quarters of the marking was wrong; a pension regulatory body which had no objectives; and an urban regeneration project which had no budget. People have died because flawed hospital computer systems meant they were not told about their next vital check-up until it was too late. Holidays have been ruined because the Passport Office couldn’t issue passports on time. Failed asylum applicants with no right to be in the country – who happened to be murderers, kidnappers and rapists – have been released from jail to wander free in our community because no one could be found to deport them.

Farmers have committed suicide because of the Kafkaesque horrors of the Rural Payments Agency. The NHS mismanaged its recruitment of junior doctors so badly that medics – whose training had been paid for by British taxpayers – were forced to flee abroad in search of work, only to be urged to return soon afterwards, at the highest agency rates, due to a government-induced shortage of doctors. Some failures are so infamous they have become household words – the Child Support Agency or the Criminal Records Bureau (CRB) – even surviving Orwellian rebranding efforts to stamp out memories of a fiasco; no one I know calls the CRB the “Disclosure and Barring Service”.

Ministers routinely enter office with no knowledge of why things have gone wrong so often in the past. Few civil servants are around long enough to tell them. After only eighteen months as an education minister in charge of academies policy, Andrew Adonis found he had been in post longer than any of the officials who were supposed to be advising him. The Department for Transport somehow managed to have four permanent secretaries in two years. Given the track record, one might expect the quality of government spending to be a matter of sustained national concern. One can’t say “Oh, that’s management” and expect someone else to do it. It turns out that the “How” question can seriously affect the “What” question or even “Whether” anything happens at all.

The case for examining much more closely the quality of what we are doing has never been stronger. In a rapidly changing world there is an almost perfect storm of problems. As we get better at keeping people alive longer, we face inexorable rises in the cost of pensions and healthcare systems. As our population gets older and the tax base shrinks, our need to invest in better infrastructure – including better broadband connections, roads, railways and airports – only grows more urgent. We have an ongoing skills crisis. Our people need to be more numerate, literate and IT-savvy. We need to produce more housing but we have a dysfunctional model that fluctuates between near-stasis and a market bubble. Across the globe we face a burgeoning population and the need to produce more food on less land with much less water. We also know that if we can’t help the world’s people in situ they will instead come to us, compounding the pressures we already face. And we grapple with all these problems while struggling under a growing mountain of public debt, because successive governments seem quite unable to live within their means.

Squeezing much more out of the lemon is simply essential. We know that our governments must cost us less while being much more efficient and effective, to help us to deliver the changes we need. All this is probably common ground among most political parties, but the truth is that we are very bad at learning from our mistakes. Many politicians, civil servants and journalists are more interested in getting on with the next policy initiative, the next project or the next story.

Who is responsible for all this failure? Many screw-ups are plainly the result of poor decisions by ministers, who either try to do things too quickly or who won’t listen. Officials advising ministers on the Common Agricultural Policy were explicit that using the “dynamic hybrid” method for calculating single farm payments would be “madness” and a “nightmare” to administer; ministers chose it anyway.

The big regional contracts in the NHS’s National Programme for IT were agreed at indecently high speed – and duly signed before the NHS knew what it wanted to buy and the suppliers knew what was expected of them – because of pressure from Downing Street; the result was an expensive catastrophe. Tax credits still cause misery for thousands of low income families who have been overpaid, because HMRC demands repayments they cannot afford; the policy was Gordon Brown’s from its inception.

But what about civil servants? When managers at the Learning and Skills Council failed to count the money for the FE Colleges building programme while handing it out – thus pledging billions of pounds which they didn’t have – the Innovation and Skills Secretary John Denham said grimly that “there was a group of people that we might have expected to know what was going on who did not themselves have a full grasp of it”. In the InterCity West Coast franchising competition, the officials in charge at the Department for Transport were unaware of advice from external lawyers that the Department’s actions were unlawful. And even in the case of the Rural Payments Agency, where decisions were very ministerially driven, the choice of the “dynamic hybrid” method for determining single farm payments was made – as Dame Helen Ghosh, the Permanent Secretary, eventually told MPs – because “ministers were being told it was possible when it was not in fact possible.”

The reality is that there is more than enough blame to go around. We need to spend less time blaming and more time seeking to understand what is going on. In recent decades there has been a whole string of attempts to reform the Civil Service, including Continuity and Change, the Citizen’s Charter and Taking Forward Continuity and Change. Then came Modernising Government and Civil Service Reform: Delivery and Values. Imaginatively, this was followed by Civil Service Reform: Delivery and Values – One Year on, which in turn was followed by the “Capability Reviews”, then Putting the Frontline First: Smarter Government and The Civil Service Reform Plan. Now we have The Civil Service Reform Plan – One Year on. That’s roughly one white paper or major initiative every two years for twenty years. And eight years after the Capability Reviews – more than the time required to fight the Second World War – the Government launched the Civil Service Capabilities Plan. A year later the new head of the Major Projects Authority identifies that there is “a lack of distributed capability around delivery across Government”. The problem is not a lack of "to do" lists.

For sure, it is down to the Civil Service and its accounting officers to make sure there is a system that works. As Richard Heaton, Head of the Cabinet Office put it: “It is our job, without ministerial pushing, to create a civil service that has the capabilities that the Government need”. But what should a civil servant do when a powerful minister is on the rampage and demanding the impossible? The epic scale of the failures should tell us that the problem is systemic. As the former Head of Tesco Sir Terry Leahy put it: “Management and democratic process are not a good mix”. But we will only solve the problem when we stop looking in the wrong place. As Bill Clinton nearly said: “It’s behaviour, stupid.”

Of course, influencing behaviour is almost a new Holy Grail among policymakers. We are told it will help us reduce crime, tackle obesity, ensure environmental sustainability and make sure people pay their taxes on time. It works – and it’s not that new. Making unleaded petrol cheaper than the leaded stuff sees more people buying it. Making it easier for people to recycle achieves better results than moral hectoring.

But what about the behaviour of civil servants and ministers? And the behaviour of Parliamentarians? What about the behaviour of suppliersto government such as big IT firms, who – unsurprisingly – have a preference for large IT projects regardless of what might actually be best for taxpayers. What if you have a civil servant running an IT project whom no one dares challenge? Or a team of civil servants foisted on a project without the right skills? What should you do when you have a permanent secretary and a Cabinet minister who barely talk to each other for months? Just as in Margaret Atwood’s novel The Handmaid’s Tale, this has all actually happened, somewhere, sometime.

As HM Treasury’s Permanent Secretary, Sir Nicholas Macpherson, has observed: “I have worked under Tory governments where Chancellor and Chief Secretary weren’t really speaking to each other. I have certainly worked under Labour governments where that was the case”. Many billions of pounds have been squandered this way. If we really want better outcomes, then understanding this – and changing it – is much more important even than policymakers’ efforts at “influencing” the behaviour of citizens.

Economics has seen a big shift towards studying how people actually behave, rather than how they are supposed to behave. We need a similar shift inside government and politics. The London 2012 Olympics showed we can get it right. The outstanding feature of the Olympics, as Head of Programme Control David Birch put it, was that “we worked hard to generate and recognise one source of truth”.

The world’s most successful organisations, whether in manufacturing or in services, spend a disproportionate amount of time and effort developing people. Our governments need to do the same. MPs are among the most determined people you will meet – otherwise they would rarely have become MPs – but as a class they need much better preparation for ministerial office. In the British Civil Service we have one of the world’s best talent pools but we don’t get the best out of them. Instead of incessant exhortation, we need to think harder about what makes people tick. Sir Ken Robinson, a teacher renowned worldwide in the development of creativity, wrote that “human resources, like natural resources, are often buried deep. In every organisation there are all sorts of untapped talents andabilities”. Don’t we need every hand on deck in order to get out of the mess we have landed ourselves in? It is always sensible to make the most of what you have. The answer is to look more closely at ourselves and our nature – and to act on what we find.

This essay was first published by Reform in "How to run a country: a collection of essays".  

You will find our blog on the competence of civil servants here