The Reluctant Armchair Auditor

Sorting spending fact from fiction

Archive for the ‘government decision making’ Category

Living in the past or Fantasy Island

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It’s probably an age thing but increasingly these days I seem to living in a state of perpetual deja vu. Suddenly it’s the early 90s or 80s again as fear and pestilence stalk public sector land. So much so that I am considering looking out my Don Johnson pastel jackets, raybans and ditching my pringle socks. Loafers don’t need socks.

In many ways it’s a great shame that our national predilection for dressing up in ‘historic’ costumes for ‘living history’ weekends does not extend to reenacting public policy screw-ups. Nope. Each generation of political leaders can re-heat whatever garbage they think the electorate has forgotten about before serving it up fresh.

No one out there is going to get all grumpy because they’ve suddenly remembered that the Big Society sounds eerily similar to the good old days of … well the good old days. Yes, I do mean Back to Basics and the spinster on her blessed bike still cycling to evensong. Although in the Big Society presumably she would have had to deliver some home care support, done a shift at the nearest community asset and filled in some pot holes before getting to church.

Of course ‘no more boom and bust’  has had more outings than an Australian XI. This is even-handed grumpiness on my part. I’ve worked with and for politicians of all views (and none so far as I could tell). What unites almost all of them though is an inability to see the perfectly forseeable consequences of a given policy decision. Or, if they do own that skill, to be pathologically unable to utter in public what they must know to be true.

My first day back post-Christmas with my abacus has found me trying to help clients deal with the impact of CSR2010. My attention was drawn to a highly – unintentionally so – amusing set of comments by a minister from CLG. I’ll not name names because I’ve come to the conclusion that it only encourages them and the SPADs with whom they spend too much time.

Apparently it is only ‘lazy councils’ that will go looking for frontline blood to let to implement the cuts in council spending that CLG was in such a hurry to agree with the Treasury. Here’s the quote from the Sunday Times:

If local authorities cut out excessive chief executive pay, share back offices, join forces to procure, and root out wild overspends, they can safeguard key frontline services. Only lazy councils will attempt to use residents to boost their bank balances.

Let’s run an armchair auditor’s rule over those frontline service savers in some more detail.

‘ … cut out excessive chief executive pay … ‘

A great ministerial favourite this one. Let’s examine the premise. Reducing all Chief Executive pay to let’s say £120,000 – that’s a good £22,ooo less than the garbage comparison of the PM’s pay – would stop 9% reductions in council spending hitting the frontline? Really? A client of mine is looking for around £3 million of savings in 2011/12. Deleting every post in the corporate management team would barely yield 10% of the savings figure needed.

‘ … share back offices … ‘

Procurement takes time. Good procurement takes even more time. Merging back office functions sounds easy doesn’t it? I’m not sure any businessman or woman who has tried it would agree. Getting the Morrisons/Safeways issues sorted took years. Few, if any, of the organisations I am familiar with have not already got various partnering arrangements underway. In any event there’s a perfectly respectable stream of thought that argues that maintaining integrated back and front line functions serves customers better and at less cost too.

‘ … join forces to procure … ‘

There’s always more that can be done on procurement as lots of reviews have shown over the years. So I would cede some ground on this one. But I would offer just one thought. Great procurement depends on clarity about knowing what you want as a customer and having outstanding service providers working with you to achieve just that. At the minute everyone is so focused on putting out the fire in their part of the public service woodland that it’s getting near impossible to see the forest as a whole.

Frontloading cuts to encourage councils to be super innovative sounds pretty clever in a sixth form debating society in the real world in defies believe. In the few weeks now available to sort the 2011/12 budgets scope for innovative procurement approaches will be pretty narrow.

‘ … root out wild overspends … ‘

No evidence was offered here for the sort of overspend the minister had in mind. The thinking behind the quote is the most interesting thing though because it does the thing that upsets Mr Redwood so much. It confuses a structural problem – CSR2010 – with a current account issue. Sorting out an overspend means you return to the spending level of the agreed budget. Of course what CSR2010 does is to lower the budget ceiling. So just sorting out the overspend is not enough.

There comes a time in the life of almost all political administrations when the contest between hope and reality gets too obvious to avoid. Administrations at the end of their lives tend to the fantastical to avoid facing inconvenient truths. The deeper the problems the wilder the statements. It’s unusual for a relatively young administration to be reaching for the hyperbolic but I suppose it shows the depth of the problems it thinks it’s got.

The trouble is that the ‘trouble’ has barely begun yet.

I boggled on Sunday while watching the PM on the Andrew Marr programme. He said that sorting out the public finances was last year’s problem. This year’s was all about growth. That’s an unusually stark illustration of the gap in experience of almost everyone in our national political life. Announcements, interviews, news releases and leaks do not deliver anything except sentiment.

The problem is that the public finances have not yet been sorted. Doing that depends on the work of ‘lazy’ organisations at the sharp end. It’s going to be bloody.

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Written by reluctantarmchairauditor

January 11, 2011 at 7:47 am

Coalition roasted on Quango bonfire

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Many public sector professionals will, like me, have sighed and shrugged a resigned shoulder this morning in reading today’s report of the Public Administration Select Committee Shrinking the Quango State.

Those unfamiliar with the formulation of public policy and its implementation probably still find the flaws PASC found in the government’s review of Quangos shocking. Sadly. I don’t. Here’s a sample of what the committee found.

This review was poorly managed.

There was no meaningful consultation.

The tests the review used were not clearly defined.

The Cabinet Office failed to establish a proper procedure for departments to follow.

The Bill giving the Government the power to bring about these changes was … badly drafted.

The Government has failed to recognise the realities of the modern world.

Much will be written about the report today. What is striking to me is the no-holds-barred language used by PASC. The Committee was deeply unimpressed by what it found. The findings themselves leave me, as an armchair auditor, deeply pessimistic about the government’s stewardship of public funds.

Let’s start at the beginning. Any change process in any business usually has some rationale for being started: the business case. PASC found the business case for the changes proposed by government had shifted around. It was about saving money. Then it was about improving accountability. No, wait a minute it’s about both. With such a muddled start no wonder MPs found such a mess when they looked at the decisions the review had given rise to.

The early confusion led to a set of criteria used in the review that were unclear and a dearth of guidance to individual government departments. So Quangos with broadly similar terms of reference, albeit in different fields, have ended up being treated entirely differently. It’s a dogs’ breakfast and contrasts hugely with the diligence applied by local public sector organisations to their own decision-making. What is also striking is the lack of meaningful consultation and engagement between the reviewers and the reviewed (and their stakeholders).

What is deeply troubling is that all the flaws PASC identify could have been addressed if anyone had paid any attention to the findings of one of the many reviews of governmental lash-ups over the years produced either by the NAO or, indeed, the Audit Commission. Institutional memory seems to be in short supply now the government has declared Year Zero.

For us armchair auditors the PASC report raises ominous question marks over the quality of decision-making in other key areas such as the NHS reforms where similar rumblings about decision-making are already growing. The government has embarked on a radical reform agenda which it has often clothed in the threads of spending reduction. As PASC says,

… the Government faces the much larger challenge of successfully implementing these reforms; any organisation would struggle with changes on this scale.

It’s not at all clear that the machinery of government is up to the task particularly as ministers chop capacity out of their ‘back offices’ i.e exactly the people you need to deliver change if you want the frontline to really focus on the frontline. It’s a recipe for confusion that management consultants everywhere will be looking on and smacking their lips with anticipation.

We risk ending up where other reform programmes have found themselves: vast amounts of money spent with no noticeable improvement in public services or their accountability. Bad enough in economic good times surely indefensible given the problems we face right now.

Written by reluctantarmchairauditor

January 7, 2011 at 9:46 am