From tight to loose

20 January 2012

Reform-HP roundtable seminar introduced by Sally Collier, Executive Director, Policy and Capability, Efficiency and Reform Group, 19 January 2012

Yesterday a Reform seminar debated “tight and loose” i.e. what is pretty much the Cabinet Office’s most important policy idea: that sometimes efficiency means a tight central grip while at other times it means devolving and decentralising. Speaking for Reform soon after the election, Francis Maude argued that the previous Government had achieved the opposite of what is needed:

“It seems to me that the last Government had this almost diametrically the wrong way round. They didn’t control a lot of those things which fall into my “tight” category [such as civil service headcount, ICT and procurement]. They didn’t control them well at all, and yet there were constant attempts to micro-manage delivery from the centre with a plethora of targets and public service agreements and monitoring and auditing and man marking and regulation and guidance so that everyone here at the front line, you felt that you were, instead of being accountable to the the citizenry you were there to serve, you felt actually accountable to an enormously complicated set of relationships to the centre. This is wrong and doomed to fail.”

The discussion, under the Chatham House Rule and sponsored by HP, turned on where this Government draws the line. There certainly can be benefits to tightness. Both the National Audit Office (NAO) and the Audit Commission have found evidence of the benefits of a tight central grip. This is particularly the case where government buys something simple and easily specified – such as basic commodities – and where it buys at great scale. A fierce drive on costs can also help reform and new ways of working. For example, the Government Property Unit is currently reducing the size of the Whitehall estate. This could improve the productivity of civil servants by moving them into the same buildings (and so improving communication) or encouraging them to be more mobile. In general it was felt that Whitehall had been insufficiently “corporate” in recent years, and that a bit of tightness was long overdue.

But most of the discussion set out of the dangers of tightness elsewhere in the public sector. All rigid procurement rules necessarily exclude some suppliers from competition (and often the more innovative ones). Both the NAO and the Audit Commission have shown that, in other cases, efficiency comes when a part of the public sector has the local nous, flexibility and freedom to solve a problem itself. And in general the centre of government overestimates the benefits of central intervention. For example, central targets are less effective than they seem because they are always gamed (the targets may all be hit yet standards may fall). And central government does not have the data – particularly on costs – to be sure that its intervention is worthwhile.

The concern would be that the tendency of the Government (really, of any government) is to drift to the tight. Even this year we have seen the Prime Minister set a new personal rule for the numbers of visits that NHS nurses make to hospital beds per day. His justification was that the issue was so important that he had to intervene. But clearly that opens the door to much greater intervention as time goes on, and not just in healthcare. The Cabinet Office has been much more convincing on “tight” that is has on “loose”, as the difficulty in producing the Open Public Services White Paper showed. The Government, I think, has to set out more thinking on the “loose” side of the bargain if it is to hold the line.

 

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