The TaxPayers' Alliance - Better Government

Providing welfare - invitation to the private sector

The Governments looks set to ask private companies and charities to help run the welfare state, the Telegraph reports today.

"[In a speech this evening] James Purnell, the Work and Pensions Secretary, will call on firms to help overhaul the payment of benefits" ... encouraging them to "bid to run everything from welfare-to-work schemes to projects to rehabilitate former prisoners."

This 'open invitation' follows Tory suggestions earlier in the year that private companies might play a bigger role in finding jobs for the unemployed. Such schemes in America have proved relatively successful, offering job seekers a more refined service and saving taxpayers millions of dollars. Critically, the numbers returning to welfare after their first year back in work has dropped significantly.

While initially wary of such moves, the ineffectiveness of government reforms have forced Labour to reconsider. Any move towards better services, a smaller state and lower taxes is of course welcome, but as is often the case with potentially positive proposals from this government (proposals albeit often co-opted from their opponents), the end result will no doubt be half-baked, a hollowed out compromise between Labour's pragmatic reformist wing and its old guard. Another missed opportunity.

That the Secretary of State is even considering it though is a welcome development, an indication that even Government now recognises that better government is only possible if there is less government.

Results of TaxPayers' Alliance study of big government projects supported by new research

Near the end of last month the European Services Strategy Unit released a study (PDF) looking at cost overruns in outsourced government IT projects.  They looked at 105 contracts and found:

"The average percentage cost overrun is 30.5%.

57% of contracts experienced cost overruns."

Compare this with the results of our study Beyond the Dome:  Government Projects £23 Billion Over Budget which looked at 305 big government projects of various kinds and found an average overrun of 33.7 per cent and that 57 per cent of projects overran.  The evidence that we are paying a substantial price for endemic overruns becomes stronger by the day.  These overruns are a result of the politicians and civil servants responsible failing to properly specify what is desired from a project before the project begins, underestimating costs to get the project approved and paying over the odds in an attempt to solve the problem.

Crozier vs. Garnier

During the research for a project I'm working on I found myself looking through GlaxoSmithKline's accounts.  Remembering the debate over the Public Sector Rich List I got curious and wondered just how much JP Garnier - the reputedly well-paid boss at a big private company like GSK - gets paid.  The figure is $5,413,000.  That's a lot of money, not bad if you can get it.  However, GSK are really massive and, after you've converted it to pounds, wondered how much more it was than the £1,256,000 that Crozier takes home in total remuneration.

I've done those calculations.  They are entirely reliable with the proviso that the exchange rate is today's rather than last year's.  Royal Mail revenue and operating profit figures are from their accounts:

(click to enlarge)

What that shows is that Royal Mail pay Crozier more compared to their profit and revenue than GSK pay Garnier.  Adam Crozier is, at least compared to JP Garnier, well paid even relative to the scale of the company he is running.  Even at the very top end the public sector now pays really well.

Given that public sector organisations don't depend on success in the market to attract customers or strong financial results to attract shareholders there is no reason to assume these salaries are likely to be justified.

Public Services Keep Failing

In the news today there are two more stories of dismal public sector failure.  Despite countless billions in extra spending within both the education system and the health service we are slipping down the international rankings for educational attainment and primary healthcare service standards are declining.  The Telegraph's leader captures the reasons for this widespread failure well:

"Only the dismantling of centrally dictated, government-monopoly structures will switch control of public-service priorities from the producer to the consumer, and provide the responsive, high-quality services that modern Britons have a right to expect."

There are a number of issues here:

1. Centralisation:  While the NHS does contain 152 Primary Care Trusts and innumerable other local bodies these are not independent local healthcare providers.  Important decisions from the selection of drugs to the allocation of resources within the NHS are made centrally.  All the Trusts are subject to targets and other impositions from above.  The Trusts are still best understood as outposts of a monolithic NHS.  The attempt to run such a huge organisation, the third largest - in terms of number of staff - in the world, as a single bureaucracy is doomed to failure.  Centralised decision making can't take account of local knowledge and differing circumstances.
2. Political management:  This ensures that ultimate control of these services lies with politicians who invariably lack management experience and subject knowledge.  The structural problems with these services are compounded by inexperienced leadership.  Services aren't under the control of local staff and genuinely accountable to their users but instead under the control of a politician with a very limited understanding of what people need and how it can be supplied to them.
3. Monopolies:  Monopoly suppliers have no competition, no threat of customer loss or bankruptcy.  Customers have no choice and no redress.  Monopolies therefore remove the basic tools of management and kill the need to innovate, improve and reduce costs.  Hence politicians set up the Competition Commission to protect the public from business - but not from themselves and their civil servants.

Anti-hospital infection pyjamas

Already this year we've had Kiddie Kevlar stab-proof school jumpers and manufacturers considering adding tracking devices to school uniforms.  Now, the Telegraph reports that Marks and Spencers are marketing pyjamas that they say will protect you against hospital infections.  All of these are just the more egregious examples of people having to pay to protect themselves from the incompetences of the state.

Law and order isn't effectively maintained so people hire private security and kit their kids out like a Securicor van.  Hospitals are full of infections so people go private, go abroad or - if they can't afford to pay twice - buy protective pyjamas.  School standards are shockingly poor so people send their children to private schools or hire tutors.

We have to pay for schools,  police and hospitals.  Those - politician managed - services fail to deliver and then we have to pay again to actually get the security we need, the educational standards we expect for our children and treatment without the risk of leaving hospital in worse shape than you entered.  Isn't it shockingly unfair that people are forced to pay for public services that are so bad they then need to spend more of their money to prevent or undo the damage?

Putting a politician in charge of financial stability

Defending financial stability in an economy near you... soon...

Peter Franklin argues, on ConservativeHome's Platform, for a minister in charge of financial stability:

"Devoting a Cabinet minister to financial stability is no guarantee of financial stability, but it would help and, if nothing else, would send a message to the anxious savers and pension fund holders of Middle England that we take their concerns seriously."

At the moment no one has direct overall responsibility for financial stability. I think that just about the only way you could make things worse is to put a politician in charge. This isn't an area where there are many ideological issues at stake that should be decided democratically. It is, instead, an area that requires expert and experienced judgement.

Your ideal person to put in charge of financial stability is someone respected by the markets with a real knowledge of economics and how the system works. A non-politician. Make it a ministerial post and you're highly unlikely to wind up with someone qualified to oversee the financial system (of course the same can be true with the Civil Service - see Sir John Gieve). There aren't really people with those kinds of qualifications in the Commons - just a few ex-financial journalists and the odd banker.

You'll probably get someone who won't have real experience in anything but politics. Particularly given that it will be a job where people only notice the minister if things go wrong. Just like the Home Office at the moment it will be a poisoned chalice which will mean it won't even get the brightest ministers. Whoever got the job would just have to watch, fearfully, and hope things take care of themselves. If something went wrong there would probably be a carefully established media strategy but little idea of what to actually do about the problem. The stability of the British financial system would be further impaired and Middle England wouldn't be impressed.

The NHS and equality

One of the cardinal virtues that the NHS is supposed to possess is a high degree of equality.  The system clearly fails to deliver quality care relative to other developed country healthcare systems on a host of measures from control of infection to cancer survival to mortality amenable to healthcare.  However, it is felt to be an expression of social solidarity that, quality aside, we are all in the same boat with regard to healthcare.  This principle has been enshrined in the World Health Organisation's ranking of healthcare systems but in a very imperfect manner that was more focussed on how the system was funded and allocated resources than on the actual results for people from different socio-economic groups.

There is a debate to be had on whether equality, as opposed to generally higher standards, is the right objective for a health service.  However, the Telegraph reports a Civitas study showing that even on the measure of equality the NHS is failing to deliver.  Rates of heart bypass operations, for example, are 30 per cent lower in the poorest groups.  The middle class are proving much better able to play the system and this translates into better standards of care.  "Although the poor, the least educated and ethnic minorities visit their GP more often than more affluent, well-educated people, they are less likely to be referred to a specialist."  Even if equality is treated as all-important the NHS is still failing.

Problems with PFI

Reuters report that the Public Accounts Committee has found that many PFI deals have been very expensive, up to 14 per cent more than before the PFI deal was put in place.

Getting private companies involved in the running of public services is a very good idea.  However, the important qualities that the private sector can bring to public services - efficiency, innovation and a focus on customer priorities aren't made use of much in PFI deals.  PFI deals typically have the private sector borrow, put fixed capital (such as a hospital or a prison) in place and then leave the operation of services within the public sector.  In other cases private firms will be asked to undertake particular functions, such as cleaning, rather than the wholesale operation of a facility or service.

Borrowing is one thing that government can do more affordably than the private sector.  Getting private firms in to do the borrowing is to choose perhaps the least useful contribution they can make to the running of public services.  When particular functions are handed over to the private sector they often do not have the flexibility to improve efficiency.

Instead, government and private sector both try to get the best price, for them, that they can.  Sometimes government gets the upper hand but that risks putting the private firm out of business.  If the private firm is put out of business, as in the case of Metronet, that means yet more cost to taxpayers and delays in the provision of important improvements in services.  More often, the private sector wins out and the taxpayer faces a bigger bill than they otherwise would.

By allowing the private sector to run services instead of just contracting out small functions or building facilities we can avoid this entire, expensive, zero-sum game.

Police complaints hit 17-year high

Yesterday the Telegraph reported that police complaints are at record highs.  That isn't much of a surprise and the police themselves saw it coming.  In May the Police Federation warned that targets and other symptoms of political management were turning people off the police force:

"A spokesman for the federation said such cases were a result of officers being "so busy chasing targets and securing ticks in boxes".

As a result, he said, officers were distancing themselves from "middle England"."

Unfortunately, the complaints aren't likely to achieve much.  When the police are forced to choose between satisfying members of the public who can, at best, force an investigation and politicians who have all the real power and want to see targets met the public's priorities go out of the window.

Complaints might even make things worst.  A famous study by Canice Prendergast, reprised here (PDF) for HM Treasury, found that a strengthened complaints system for the Los Angeles police service led to a collapse in their productivity with arrest rates for serious crime and narcotics offences falling and more gang-homicides.  Officers had little incentive to actively pursue crime and confront criminals.  They sat on their hands.

No complaints system can create proper incentives for the police to serve the public instead of politicians.  Only making the police accountable to ordinary people instead of politicians can do that.

Army helicopters falling to pieces

The helicopter force of Apache gunships and Chinook transports that the British Army relies upon for support and mobility is apparently falling to pieces.  Half of the Apache gunships were grounded over summer and one third of the Chinooks withdrawn from service as not "fit for purpose".

These can join the long list of failures to properly equip the armed forces serving in Iraq and Afghanistan.  Nimrods that crash killing their crew, Land Rovers that do not offer proper protection against roadside bombs and malfunctioning radios.  Defence procurement requires careful management to ensure costs are controlled, quality equipment is delivered and the projects do not take too long.  British defence procurement produces equipment with a decidedly mixed record, that comes in way over budget and is often years late.  Despite all this the civil servant in charge, Sir Peter Spencer, was paid £176,800 last year.  The taxpayer is being made to reward failure.

Being globally aware is bad for your health, wealth and freedom

Another day, another depressing headline.  Yet another international league that Britain is at the bottom of:

"UK children aged 11 to 16 have the lowest international awareness among their age group in 10 countries, a British Council survey says."

The British Council receives £195,352,000 per year in government funding supposedly needed to "build mutually beneficial relationships between people in the UK and other countries and to increase appreciation of the UK’s creative ideas and achievements."

In order to do this they've come up with a study that shows us falling behind in our awareness of the world around us:

"British Council chief executive Martin Davidson said: "Our school children cannot afford to fall behind the rest of the world.

"For the UK to compete in a global economy, it is vital that we encourage our young people to have an interest in and engagement with the world around them."

Doees the evidence he has produced at all back that statement up?

Take a quick look at the ranking they've produced:

1. Nigeria 5.15
2. India 4.86
3. Brazil 4.53
4. Saudi Arabia 3.74
5. Spain 3.29
6. Germany 3.24
7. China 2.97
8. Czech Republic 2.51
9. USA 2.22
10. UK 2.19

To compete we apparently need to become more like Nigeria or India and less like the USA, Germany or China.  Let's compare the British Council's index to a few key development indicators (click to expand any of these graphs, data is from the Economist World in Figures 2005):

So, more globally aware countries are poorer.

They're also less, economically, free.  The economic freedom index gives more free economies a lower score.

Finally, they perform worse on the broad measure of the Human Development Index.

How can this be?  Well, one of the questions asked gives a flavour of what the study was really getting at:

"Asked whether they saw themselves as citizens of the world or their own country, most saw themselves as global citizens - except in the UK, USA and the Czech Republic."

A genuine measure of international awareness would include measures like number of foreign holidays or ask questions about foreign customs, faiths and politics.  On that measure the UK might do a lot better.  However, this study isn't looking for that.  The closest it comes is a question about whether people think they keep themselves aware of current events.  Instead, it is looking for countries whose people do not consider themselves a distinct nation - it is looking for transnationalism.

Successful nations are built on a strong sense of national identity among their people.  Thankfully - and despite the efforts of people like the British Council - we still have that in the UK.  That national identity encourages co-operation, compromise and trust .  Those describing themselves as international citizens probably don't feel any more attached to the people of the world than we do.  They just don't feel a special attachment to each other.  In Nigeria inter-ethnic wars show the horrible extremes such a process can reach when an absent national identity is replaced by other group loyalities such as tribe and religion.

Let's hope that unnaccountable quangocrats like those at the British Council don't succeed in convincing Britons that patriotism is some kind of sin.

The Adam Smith Institute on welfare reform

The Adam Smith Institute have published an excellent study (PDF) on the vitally important subject of welfare reform.  It shows how the US has managed to fight poverty by getting people into work. In stark contrast, Britain's over-complicated welfare system masks incentives and tries to spend the poor out of poverty.

The success in the United States is hard to overstate, the ASI study said:

"America’s reforms emphasised work, long–term support and parenting responsibility. The process began with waivers allowing for individual states to opt to try their own welfare programs. These were broadly successful and paved the way for the federal Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996. This changed the face of American welfare provision: between 1994 and 2000, the number of people receiving welfare dropped by half dropped from 5.5 percent of the population to just 2.1 percent."

With dependency blighting so many communities and so expensive for the taxpayer welfare reform needs to be made a top priority.

Blaming the cancer victim

An excellent blog over at An Englishman's Castle (via Devils Kitchen) explains that the report that too much red meat is giving us all cancer is massively overblown:

"I have actually downloaded the report , all 537 pages of it. It is a vast data dredge. I have failed to spot any Relative Risks which approach 2 - (an increase of 100%) - In epidemiologic research, [increases in risk of less than 100 percent] are considered small and are usually difficult to interpret. Such increases may be due to chance, statistical bias, or the effects of confounding factors that are sometimes not evident. [Source: National Cancer Institute, Press Release, October 26, 1994.]"

As he correctly argues if you are serious about saving people from cancer you should look to improve Britain's woeful cancer survival rates.  Michael Moore's film 'Sicko' finally opened in the UK recently.  The US system that he berates has the highest survival rate in the world, the NHS he urges us to celebrate has one of the lowest.  Instead of trying to scare people into making changes in their lifestyle those interested in improving Britain's health should look to our health service.  With political management producing one of the worst healthcare systems in the developed world the first place to look for improvements in the nation's health isn't the bacon sarnie.

More on superbugs

Margarent McCartney's article in the Financial Times on superbugs is well worth reading.  In particular, this section gets at how the inexperience and lack of subject knowledge associated with political management is crucial to the failure to control hospital infections:

"Politicians are tackling MRSA with campaigning zeal. Gordon Brown has pledged to instigate a “deep clean” of hospitals to reduce hospital-acquired infection such as MRSA. Health secretary Alan Johnson is setting up a committee to look into the issue and has also said healthcare staff should be unclothed below the elbow. Unfortunately, there is the delicate issue of evidence for these politically inspired “initiatives” which is not so apparent. Johnson’s statements on uniforms seem to contradict a publication from his own department, “Uniforms and Workwear”, which says “there is no conclusive evidence that uniforms pose a significant hazard in terms of spreading infection”.

[...]

Lack of handwashing might seem an obvious culprit, but at a lecture I attended recently, the futility of pursuing this as a cure-all was made apparent. “Handwashing does make a difference,” says Dr Stephanie Dancer, a consultant microbiologist in Glasgow, “but think. The doctor washes his hands and then pulls close a curtain. The curtain is covered in MRSA. Or he touches the bedside cabinet. That’s not been cleaned recently either. And there you have it, the transmission of MRSA.” Dancer says that while cleaners do a sterling job in tackling all general surfaces and floors, they are not responsible for cleaning lockers, bedside tables and curtains. “In addition”, she says, “there aren’t enough cleaning hours and there are problems with recruitment of domestic staff. The latter is understandable when you look at pay. You could go and stack shelves in a nice clean supermarket for more.”

Unlike most politicians, Dancer is an expert on the subject. One thing is for sure, none of us is sterile. We are all covered in millions of bacteria and shed thousands of them with each step we take. “Probably 5 per cent of us carry MRSA. But where there are outbreaks of MRSA, it doesn’t seem to be the ‘staff’ strains that usually infect patients,” says Dancer. Many factors affect how and where bacteria are spread. Ward design is crucial and inadequate maintenance can make them hard to clean. Open doors or windows create “more turbulent airflow and the possibility that MRSA could be lifted from surfaces and blown all over the ward,” she says. “Fans, very popular in hot wards, are very effective in shifting MRSA around.”

Both workers in the Health Service and people in deprived areas would be better off with real NHS reform

The Telegraph reports statistics from the ONS showing that middle class professionals are outliving builders and cleaners by as much as eight years:

One of the factors that the report cited as possibly affecting a person's life expectancy was interesting:

"But the nature of people's jobs also has an effect. If you have autonomy and control over what you do, you tend to be in better health."

This logic implies that reforms that give public sector employees more autonomy and control over how they provide services, with accountability for outcomes to the public instead of to politicians, are very much in the professionals' interests.  This is possible within public services.  A study, Good people, good systems (PDF), by the Serco Institute found that when public services were managed by the private sector the staff found they had much greater freedom to act on their own initiative.  Here are some quotes from professionals who had moved from the public to the private sector (still working for public services):

‘Implementing change is much quicker.  In the private sector, you have the capacity to change quickly and to react almost instantaneously.  But it is left to individual [contract units] to react to the changing pace of the [customer] – head office is behind on these development most of the time.’

‘I am free to manage with greater autonomy, most certainly.  But that freedom comes with a price.  If you get it wrong – I’ve always accepted that if I’ve made a mess of my job I will be called to account at some stage.  It doesn’t have to be a nasty falling out; it’s just that if I run this contract and it doesn’t go well – either because we lose a lot of money, or the client is permanently unhappy with us, or we have a terrible safety record – it’s quite right that I should be called to account.’

Another factor contributing to poor healthcare outcomes among the poorest is that they tend to get let down most by the poor quality of British healthcare.  Dr. Thomas Stuttaford writes for the Times:

"In many deprived areas high blood pressure is still grossly underdiagnosed and treated poorly. Hyperlipidaemia – raised cholesterol levels – is ignored and few NHS patients know that their low-density lipoprotein levels are an essential indicator of possible trouble ahead. Breast screening, when compared with that of the rich, is too infrequent, discontinued too early and can even be desultory.

The average NHS practice still does not carry out or organise worthwhile cardiovascular assessment. It doesn’t measure blood sugar levels and renal function routinely, or determine the PSA levels of men so that it can diagnose prostate cancer in time for worthwhile intervention, or even understand the cardiac implications of progressive impotence.

Once a potentially lethal disease has been discovered, the quality of care that money can buy either in this country or abroad when compared with the standard NHS treatment is deeply worrying."

More evidence that the scandal at Maidstone & Tunbridge Wells wasn't an isolated incident

Alan Johnson's attempt to fool the British public into thinking that the tragic deaths at Maidstone & Tunbridge Wells NHS Trust are an isolated case becomes more disingenuous by the day.  A new scandal has now emerged at the Royal Blackburn Hospital in Lancashire's neonatal unit.  Six babies have tested positive for an aggresive form of MRSA.  The hospital covered it up and, as a result, one mother caught the disease from her baby and had to be hospitalised.

The Government's argument that their broader health policy has not failed is also looking increasingly tenuous.  Nurse of the Year Justine Whitaker has quit saying:

"Sitting in meetings we are constantly being told 'We're going for this cheaper option with this bandage; we're going for that cheaper option with that dressing; we need to be mindful of resources'.

"I'm absolutely fine with that - I run my household like that - but what I see as a waste of resources is when I'm sitting in a big meeting and as a clinician I am the cheapest person there at £35,000 a year and decisions are still being put off to another meeting."

The lymphoedema nurse, who has 14 years of clinical experience, added: "There is no sign the red-tape is being reduced. It all leads to more bureaucracy, which all leads to more form-filling and paperwork.  But as a nurse, I just want to nurse, I want to look after patients. "

The Sun gets it right:

"But Justine is not alone. Top doctors and consultants are also leaving in droves.

They cite the same problems — indecision, waste and non-stop Whitehall meddling.

Despite extra billions, the health service is in crisis."

Chairman of the Maidstone & Tunbridge Wells NHS Trust quits

James Lee, chairman of the Maidstone & Tunbridge Wells NHS Trust, has resigned following the Healthcare Commission's report on an outbreak of C. difficile there that has claimed over ninety lives.  The Telegraph have seen his letter to Alan Johnson.  He wrote: "We had to be concerned about finance because this trust has been struggling with a state that is pretty close to bankruptcy.  We knew that the Treasury was pumping money into the NHS, but quite frankly none of this seemed to be getting to the 'coalface'."

He added: "It has become clear to the members of my board that the NHS is run on the basis of command-and-control. I personally have never experienced such centralised or detailed control. I doubt whether it can ever work.  This way of managing things is fundamentally incompatible with the whole concept of independent trusts with non-executive directors."

In some ways Lee is quite right.  His letter exposes the extent to which the NHS is managed by diktat from demanding politicians.  Hopefully Lee would support a new system with managers of decentralised services held to account by customers who can vote with their feet.  I worry that he would rather just not be held accountable by anyone.

In other ways he is passing the buck.  While the Trust may have been under financial pressure you only have to look at their Annual Report for 2006-07 (PDF) to see that they had a questionable sense of priorities.  It shows that the number of nurses fell by 123 while the number of admistration and estates staff only fell by 65.  While hospitals do need to be organised and the Trust's estate would obviously need planning, particularly with a new hospital on the way, it appears that these staff were prioritised over the front-line staff who were needed to prevent the horrors discovered by the Healthcare Commission.

Lee is right that the Maidstone & Tunbridge Wells NHS Trust's problems are driven by broad problems beyond the Trust itself but for him to be so unwilling to accept personal responsibility for such a tragedy taking place on his watch is deeply unimpressive.

MoD homes 'scandal' not being fixed

It might be easy to think that once a real crisis like the poor housing that armed forces personnel are provided with breaks, with a furious reaction from the public and in the media, politicians will finally get on the job and ensure it is fixed.  However, today the Liberal Democrats have unearthed that by the Government's own figures they will take half a century to bring armed forces housing up to standard:

"In a written answer to Willie Rennie, the Liberal Democrat MP for Dunfermline and Fife West, Derek Twigg, the defence minister, said that the MoD had spent £16.4million of its housing budget upgrading existing stock to the highest level — called standard one.

Previously the MoD said it would cost £750million to bring all its houses up to standard, meaning it would take almost 46 years at last year's spending rate."

This is another problem with political management.  Measures don't need to be effective, they just need to be enough for the minister to be able to pretend they have responded to the issue.  Exactly the same thing happened with old council houses, before the Thatcher government allowed their occupants to buy them, councils didn't properly maintain them.

If members of the armed forces have to wait 46 years for acceptable housing they won't really be waiting for the funds they'll be waiting for the slow wheels of a politically managed bureaucracy to turn.

Twenty hospitals have worse infection rates than Maidstone & Tunbridge Wells Hospital Trust

Remember Alan Johnson telling us that the Maidstone & Tunbridge wells scandal was an "isolated incident".  We thought this was unlikely at the time:

"Mr Johnson told BBC Radio 4's Today programme this morning that the Kent outbreak was an isolated incident."

He is either fudging the issue or outright lying.  While the scale of the outbreak in Maidstone & Tunbridge Wells is exceptional the scandal of hospital infections is not confined to that NHS Trust."

Now it turns out that the hospital isn't even exceptional.  It is twenty-first on a list of the hospitals with the worst infection rates.  Kettering General Hospital has nearly twice the infection rate.  Hospital infections are a national scandal not an isolated tragedy.

Patients pulling their own teeth due to shortage of NHS dentists

The Telegraph reports that patients are taking to pulling their own teeth as they are unable to find an NHS dentist.  There have been massive increases in the NHS budget, often more than 7 per cent annually, in recent years.  That there should still be such basic, and worsening, shortages in certain areas points to a colossal failure of management.  The money has not translated effectively into improved services as bureaucracy has increased and productivity fallen.

We're still getting more, empty promises of improvement.  As highlighted before on this blog, politicians are only talking about trying to address shortages in NHS dentistry now after it was promised that it would be made a priority a decade ago.  If we're going to pay so much for the NHS we should expect a decent service.

Management in the Health Service and hospital infections

The first three tiers of management in the NHS: the Secretary of State, the Ministers and the Parliamentary Under-Secretaries are all politicians.  As politicians their careers have been spent honing their media skills and their public speaking.  Few politicians have any experience of managing significant numbers of staff.  The current Secretary of State for Health, Alan Johnson, entered politics after a career in the unions.  He doesn't have any experience managing large organisations to prepare him for the challenge of managing the 1.3 million staff in the NHS.

Equally, they only have a limited knowledge of the healthcare sector.  Alan Johnson worked in the postal union but is placed at the top of the NHS chain of command.  While he will have plenty of advisors and civil servants, some of whom may have experience of the sector, he will find it impossible to properly understand their advice or choose between conflicting advice, without experience in healthcare to guide him.

Inexperience at the top is matched by poor management practices further down the organisation.  There were first problems with organisational stability at the Maidstone & Tunbridge Wells NHS Trust, at the centre of the recent controversy over hospital infections, the Healthcare Commission said:

"The lack of organisational stability with numerous structural changes over the last three to four years, meant managers could not settle into roles and focus on the key issues. The high turnover of executive directors and senior managers caused instability and left gaps in leadership as the trust grappled with its very busy agenda. Many staff felt the degree of change had been damaging and had contributed to the lack of clarity on accountability."

The figure at the centre of the problems in Maidstone & Tunbridge Wells NHS Trust is Rose Gibb.  She was the Chief Executive of the Trust, an organisation with a budget of £243 million and 4,527 staff and she was paid between £140,000 and £150,000 per year.  The Commission described an autocratic senior management that failed to build managerial and leadership capacity throughout the organisation.  There was little delegation.  This failure, built on a failure to properly give responsibility to junior staff, is the hallmark of leaders who are uncomfortable in a management position so try to do everything themselves.

Also, Mrs. Gibb is described as difficult to challenge.  All it would have taken is one effective challenge to her repeated assurances that the infection problem was being controlled for the Trust to accept that it had a major problem, after that it could start to do something about it.  Lives could definitely have been saved.

Management in the NHS needs to be improved if we are to avoid more tragedies like the one the Healthcare Commission has just uncovered.

Junior doctors

The Telegraph reports that the failed computer system for recruiting junior doctors to training posts is to be scrapped.  An inquiry headed by Sir John Tooke has found that those running the system failed in two key ways:

• The IT systems were full of errors and did not keep applicants' data secret and secure.  Apparently it was obvious from as early as March 2006 that there could be problems with the online system.
• Senior civil servants were told that the 2:1 ration of applicants to places was a "red risk" - a massive and pretty obvious problem - months before the crisis but that nothing was done to ensure that as few expensively trained doctors as possible would find themselves without a training post.

Once again civil servants and politicians prove unable to manage a major project.  Management inexperience is combined with the slow-moving culture of the civil service and results in a system which doesn't respond promptly even when given ample warning that a project faces big risks.

Crossrail gets the go-ahead

With an expanding population and economy improving London's infrastructure is definitely a good idea.  Anyone who has faced overcrowding on the tube in the morning can see that.  However, with the project expected to cost £16 billion, more than the Olympics and Heathrow Terminal 5 combined and the record of big government projects - one third over budget on average - which the TaxPayers' Alliance discovered it is hard not to feel a certain sense of foreboding.

Hopefully when this project is set up the lessons of the TaxPayers' Alliance report "Beyond the Dome:  Government projects £23 billion over budget" will be taken into account:

• Public sector officials fail to properly specify what is needed from a project at the outset.
• Public officials and contractors underestimate the cost of a project in order to gain approval in the knowledge that projects are rarely cancelled when they later go over budget.
• Fixed-price contracts are not foolproof.
• Politicians and civil servants lack management experience and subject knowledge and change posts too frequently.
   

For more detail and evidence of these problems read the report (PDF). If politicians learn lessons from past mistakes we, at the TaxPayers' Alliance, might not have the sad task of forming 'Crossrail Watch' in a few years time.  Here's hoping.

The Health Commission Wales fail a patient and taxpayers

Channel 4 news reports another story of structural failure in the NHS today.  Doctors told a woman in South Wales that she needed a scan to discover whether a lump on her lungs was cancerous.  The application for a scan was rejected on the grounds that it would be too expensive.

This might sound like just another story of brutal rationing within a service that wastes so much of its budget.  It's worse.  The scan would not only be less invasive and dangerous than the thoracotomy that the Heath Commission Wales recommended it is also less expensive.

That's right.  The Commission made the decision because that would mean the cost coming out of another NHS body's budget.  Insanity.

Hospital hygiene

Reuters report today that the Lancet has condemned Brown's proposals to deep-clean hospitals and make all hospital staff wear short sleeves.  Their central contention is that he has neglected more important measures like making NHS staff wash their hands.

Some of the Lancet's criticisms are ill-founded.  The problem isn't that Brown is being too populist - the public are not fans of staff failing to wash their hands - or that keeping hospitals clean should not be a priority - they acknowledge that cleaning hospitals makes a significant difference to the spread of C. Difficile.  The problem is that once again the headline-grabbing simplicities of a politically managed health service will tend to distort activity towards big initiatives and away from small tasks like washing hands that can be more important.

Politicians need to stop trying to manage healthcare.

NHS fails the elderly

The Telegraph reports a study by the Healthcare Commission today showing a shocking series of failures in the NHS' treatment of older people:

"• Only five hospital trusts out of 23 met all of its standards on dignity in care

• 23 per cent of elderly patients said they had to share a room or bay with someone of the opposite sex

• Only 16 per cent said they had all the help they needed to eat

• 25 per cent of recorded patient safety incidents involving food and drink either caused patients harm or put them at risk

• 94 per cent of elderly patients claimed they were never asked their views of their care while in hospital."

The government response is limited to lame assurances that it takes the issue seriously and will make it a priority.  While there are broader questions that we should be asking as a society about how vulnerable older people are looked after that isn't the problem here.  This is another case of institutional carelessness in the NHS.

A system focussed on responding to political priorities instead of answering to patients is almost pathologically unable to think of the little things.  The NHS is too large for anyone, particularly inexperienced politicians, to really understand.  To get around that problem politicians use simple statistics.  These can't capture intangible basics like patient dignity and care.

Institutional carelessness leads to 84% of staff failing to wash their hands even after contact with an MRSA patient and 99 out of 394 NHS trusts failing to take basic steps to tackle infections like decontaminating reusable medical equipment.  This failure to ensure cleanliness kills thousands each year.  Now we learn that it leads to negligence, starving patients who need help to eat, and to abuse, the Healthcare Commission found patients are being left in soiled clothes or "forced to use lavatories or bedpans in front of other people".

It is becoming clearer and clearer that the NHS is institutionally careless to the point of real brutality.  Reform which puts real power in the hands of patients, rather than more political targets as promised by Brown and his Ministers at the Labour party conference should be an absolute priority.

Christmas threatened by Union-Grinches

The Telegraph reports that the Unite union, which represents 12,000 Royal Mail managers, is threatening strike action over Christmas.  They are protesting plans to end the company's final salary pension scheme and replace it with a career average scheme.

Final salary schemes are in retreat across the economy as firms try to avoid the financial risk of massive future bills.  With people living longer company pensions just can't be as generous without putting firms, and future employees' well-being, at risk.  Most private sector firms are biting the bullet and closing final-salary pension schemes, limiting current and future employees' benefits.  The Royal Mail managers expect that the public sector is different - that politicians will prefer writing a big cheque at the taxpayers' expense to the PR risks of dealing with a strike.

There's another side to this story.  Next time someone tells you that we can't have the private sector provide public services because that will undermine the 'public service ethos' think of cases like this.  If workers in the public sector are kindly, self-sacrificing sorts, better people than you or me, why are they prepared to play the Grinch and threaten to ruin so many children's Christmas?

Restrictive surgery hours costs business £1 billion every year

The Times reports a new survey showing the cost to Britain of time off to visit the doctor.

"The Confederation of British Industry said yesterday that the cost to the economy caused by restricted surgery times and problems booking appointments was more than £1 billion. The CBI argues that patients should be able to register at more than one surgery so they could visit a doctor close to where they work, as well as near their homes, to speed up treatment."

This is the kind of problem that could easily be solved by freeing public services from political management and making them accountable to their customers like any other business.  Then any business that could deliver healthcare at more convenient times would make more money, out-compete its rivals and force them to meet the public need for treatment outside of office hours.  By contrast, we have had to wait for a new government initiative with an eye-catching proposal to put surgeries in shops and will have to hope it doesn't wind up in the long grass once the headlines have faded and ministerial attention has moved on.

Police chief calls for the abolition of targets

Ian Johnston, the president of the Police Superintendents Association, is denouncing Whitehall crime-fighting targets as a "shambles":

"He maintains that performance targets set in Whitehall are preventing senior officers from giving the public the policing they want.

They have no credibility within the police and do nothing to improve the public's perception of crime, he will argue.

Senior officers say they should be given more discretion to set their own priorities based on the needs and wishes of local people."

Does anyone still seriously believe that the complex problem of controlling crime can be understood from desks in Whitehall?  So long as local forces have to respond to the priorities of a central government that can only understand what is going on with clumsy targets that miss the true picture of crime and then analyses it from a perspective not shared by most of the population.

The only way to improve things is to give senior officers more discretion and then make sure they have to listen to local people through elected police chiefs.

Britain lags in quality of life index

Yesterday the Telegraph reported that a new Economist index will reveal Britain lagging behind other countries of similar income in the quality of life it affords its residents.  The difference has a lot to do with our underperforming public services.

While in the private sector we lead the world in attracting international investment in the areas the public sector takes primary responsibility for we have crowded roads and low life expectancy.  Politicians have failed while private sector firms have suceeded.  This has to strengthen the case for moving more personal services that can be provided by Civil Society out of political control.

Unions are getting ready to take advantage of the public sector again

There are certainly problems in the prison system, a lack of space for a start, which prison officers have good reason to be displeased about.  However, the prison officers' illegal wildcat strike, in response to them getting a pay rise near the top of the 'limit' set by Gordon Brown, raises the spectre of a return to 70s militant unionism.

The Times reports today that Gordon Brown is set to clash with unions at the TUC conference.  Nurses are also considering strike action.  Unions managed to force the government to back down over vital reforms to public sector pensions with the Warwick Agreement.  They're confident that they can do it again.

Having personal services provided by the public sector strengthens unions in two ways.  First, the unions know that government are spending other people's money so are less careful about efficiency.  Second, there isn't the threat of putting the company out of business or hurting its ability to create new jobs to force the unions to show restraint.  That is one more reason why privatised services can do more to align rewards with performance, keep pay under control and generally deliver better value for money.

The Conservative strategy on the NHS

Louise Bagshawe, a Conservative candidate, argues on ConservativeHome in favour of the current Conservative strategy on the NHS.  Essentially, she argues that the "Stop Brown's NHS Cuts" campaign has been a political success and is highlighting an important issue.

The problem is that, whatever the short-term results of the "Stop Brown’s NHS Cuts" campaign in the long-term it could hurt the Conservative Party’s credibility.  With colossal increases in healthcare budgets over the last decade it will be hard, and very unwise, to claim that the Conservatives will spend more than Brown.  Reform has been set serious limits thanks to the leadership conflating it with institutional instability – where the reality is that this is only true, in the medium term at least, with too many superficial reforms.  Promises to cut waste without structural reform may hold water in the short-term but will not be sufficient during an election campaign when more concrete proposals for improvement will be expected.

This campaign may do the Conservatives good in the short-term by kicking Labour where they are vulnerable but in the long-term if they cannot propose substantial reforms they will be left looking shallow and opportunistic.

UK worst in western Europe for stroke treatment

Fresh from a report showing how cancer survival rates in Britain compare poorly with other European countries, a new report in the British Medical Journal covered in the media today warns that the UK has the worst outcome for strokes in western Europe despite spending the same amount or more on care as other countries. The report also found that at present less than 1 per cent of patients are eligible for clot-busting drugs get them in the UK, against 20 to 30 per cent in many European countries and North America and Australia.

A National Audit Office report in 2005 calculated that 550 deaths could be avoided a year, and 1,700 patients would recover fully rather than being disabled, if stroke services were better organised.

This is yet another example of how the NHS, run by politicians who lack the management experience and subject knowledge, is failing the nation.

Cancer Survival Rates

Apparently the United Kingdom has some of the worst rates of cancer survival in Europe, significantly worse than others spending a similar amount.  For ovarian cancer 30% survive in the UK whereas 43% survive in countries like Austria.  This difference has not been overcome by the NHS cancer plan, launched in 2000.  Listen to the study being discussed on the Today programme this morning (Real Audio).  The reasons given are shortfalls in radiotherapy and scanning capacity.

By contrast, in the United States - so often held up as a nightmare by those opposed to more private sector involvement in healthcare - rates are better than in Europe.

"Europe’s survival rates are lower than in the US, where 66.3 per cent of men and 62.9 per cent of women survive for five years, compared with 47.3 per cent of European men and 55.8 per cent of women. These figures may represent earlier diagnosis."

There is a more comprehensive table of relative rates of survival in this Telegraph article.  Yet more evidence of the continued failure of political management of the British healthcare system.

Police Community Support Officers

Today the Daily Express reports that Police Community Support Officers solve one crime every six years and hand out fines at a rate of one every four months.  The justification provided by the Home Office for their continued existence and, indeed, the expansion of the programme is illuminating:

"Their primary role is to provide high-visibility reassurance, build confidence in communities and support police officers."

Whether they provide a greater support to police officers than increasing the number of full officers who can share the burden of detecting crime is debatable.  It seems more likely that the real reasons for the expansion in the number of PCSOs are "reassurance" and "building confidence".  This is politician-speak for "we don't really think that having police officers on the beat is worthwhile but the public like it so let's fob them off with the cheapest officers we can find".  The politicians have bought their own spin about falling rates of crime, based upon suspect data.  The public know better so giving them proper democratic control is the way to ensure proper priorities within our police forces.

David Green makes a persuasive case on alcohol, policing and lawlessness

David Green writes for the Telegraph today making a very strong case that failures of policing, rather than too much alcohol, are at the root of yob lawlessness:

"The accepted tactic is to maintain a permanent police presence - not an occasional drive-through by a police car, but regular foot patrols by officers whose job is to get to know the gang members.

It usually turns out that there are a few ringleaders and a lot of hangers-on. Effective policing can easily break the power of gang leaders. They are usually committing crimes every day of the week, providing ample grounds for arrest and conviction.

But Mr Fahy also made another claim. "We cannot have a society," he said, "where adults feel scared to go out and challenge youngsters up to no good."

Fair point. But is fear of retaliation by unruly youths the only thing holding people back? In recent years, the police have increasingly arrested and charged victims of crime for "taking the law into their own hands".

One infamous case occurred in Penzance in June, when the owner of a hardware shop tried to stop three youths from stealing cans of spray paint. One kicked him in the groin, which provoked him to punch and kick the youth in self-defence.

The police arrived, gave the youths fixed penalty notices for shoplifting, then charged the shopkeeper with assault. He was conned into pleading guilty by police officers, who told him he could face six months in jail if he didn't."

Alcohol can, of course, cause people to lose their inhibitions and forget the consequences of their actions.  However, statistics from the Better Government paper show how unlikely it is that criminals will face serious consequences:

"Where 100% represents the total number of offences committed:
    - 45.2% are reported,
    - 24.3% are recorded by the police,
    - 5.5% are cleared up by the police,
    - 3.0% lead to a caution or a conviction,
    - 2.2% are convicted by the courts, and
    - 0.3% are given a custodial sentence."

There just aren't that many consequences for a drunken lout to forget about.  Even in a sober state of mind they're likely to have little fear of the criminal justice system, they don't have much to fear.

Green also hints are the root cause of the problem in this section:

"If Mr Fahy truly thinks that adults should not be frightened to challenge youths, he should take a glance at the "nine principles of policing" framed by Sir Robert Peel in 1829.  One says that the police should "maintain at all times a relationship with the public that gives reality to the historic tradition that the police are the public and that the public are the police, the police being only members of the public who are paid to give full-time attention to duties which are incumbent on every citizen".  In other words, the police should remember whose side they are on."

The problem is that at the moment the police just aren't on the side of the citizen.  They're on the side of politicians who want to see targets met.  These targets aren't a good proxy for an effective police force or the priorities of the citizens that the police are supposed to support.  Only making the police accountable to those citizens again can put them back in the right corner.

A quarter of pupils 'make no progress from 11 to 14'

The Telegraph reports today that in many subjects one in four pupils makes no progress or falls back between 11 and 14.  This suggests that either secondary school standards are truly dire or primary schools are failing to equip their pupils for the jump to secondary school.  Either way for three years of full-time work to yield little or no result is a massive failure in our education system.  It can be added to a litany of other failures; those key statistics on education from the TaxPayers' Alliance Better Government paper again:

• 11 year-olds: 25% leave primary school without sufficient ability in reading and writing to tackle the secondary school curriculum.
• 14 year-olds: almost 30% do not reach the expected levels in English, Maths and Science to tackle GCSEs.
• 16 year-olds: almost 60% do not achieve a GCSE grade C or better in all the three core subjects of English, Maths and Science.
• After 11 years of state education at a cost of over £75,000 per child, pupils are leaving school functionally illiterate, innumerate and unskilled:
  • 40% do not achieve at least a C grade in GCSE English.
  • Some seven million adults in England cannot locate the page number for plumbers in an alphabetical index to the Yellow Pages.
  • 47% would be unable to achieve a grade G at GCSE maths.
  • The OECD finds that Britain has the second highest level of low-skilled 25-34 year olds in the 30 countries of the OECD – twice the level of Germany or the USA.

In fact it will be increasingly hard for the country to operate effectively,
when at present:

• The average attainment of prospective teachers entering a B.Ed course is less than three grade Cs at GCE A-level.
• 52% of would-be prison officers failed a simple literacy and numeracy test.
• 33% of nurses completing their training failed to achieve the 60% pass rate in basic English and Maths tests, despite having GCSEs in these subjects.

Typical questions for the nurses included:

How many minutes are there in half an hour?
a 15 b 20 c 30 d 45
Which of the following times is the same as 8pm?
a 1800hrs b 1900hrs c 2000hrs d 2100hrs
What is the correct decimal nomination for six hundred and fifty pence?
a 605p b £6.50 c £65.0 d £6.05

The expensive NHS

It used to be that low NHS standards, still just about the worst in the world according to EU and British Medical Journal studies, were somewhat compensated for by the fact that it was at least relatively cheap.  These days we spend over the OECD average on healthcare while still getting poor results.  The NHS has gone from cheap and nasty to just nasty.

This year the NHS budget is £104 billion, over £4,000 per household.  Despite that massive subsidy from taxpayers the NHS often charges more for basic dental treatment than many private providers.  People who buy private healthcare pay twice for provision - taxes to pay for the NHS and private insurance premiums or fees to pay for their own coverage.  Only the incompetence of political management could make paying both taxes to pay for the NHS and private treatment costs cheaper than using the services NHS spending is supposed to provide.

Soft A-Levels

"But critics say that there is a growing body of evidence to suggest that examinations are now easier than they were in the 70s and 80s.

It comes as the Government prepares to publish the results of tests taken by children aged 11 tomorrow. 

Dr Coe analysed the standards achieved by students at A-level and GCSE.

He then compared them with the outcome of aptitude tests - which measure pupils' skills in a range of subjects without testing curriculum knowledge – over the last two decades.

This provides a consistent measure of ability from year to year against which grades can be compared, it is claimed. 

At GCSE, Dr Coe found there was an increase of about a third of a grade between 1996 and 1998 for pupils of the same ability.

Since 2004 a rise of a further fifth of a grade. 

At A-level a candidate given an F in maths 1998 would, on average, get a C in 2005."

As the education system appears to be failing by every statistic other than exam results we should be suspicious about how reliable those exam results are.  This research for the Office for National Statistics suggests that exam results cannot be trusted as a measure of educational performance.

However, it isn't just aptitude tests which show failure in the education system.  From the TaxPayers' Alliance Better Government paper:

• 11 year-olds: 25% leave primary school without sufficient ability in reading and writing to tackle the secondary school curriculum.
• 14 year-olds: almost 30% do not reach the expected levels in English, Maths and Science to tackle GCSEs.
• 16 year-olds: almost 60% do not achieve a GCSE grade C or better in all the three core subjects of English, Maths and Science.
• After 11 years of state education at a cost of over £75,000 per child, pupils are leaving school functionally illiterate, innumerate and unskilled:
  • 40% do not achieve at least a C grade in GCSE English.
  • Some seven million adults in England cannot locate the page number for plumbers in an alphabetical index to the Yellow Pages.
  • 47% would be unable to achieve a grade G at GCSE maths.
  • The OECD finds that Britain has the second highest level of low-skilled 25-34 year olds in the 30 countries of the OECD – twice the level of Germany or the USA.

In fact it will be increasingly hard for the country to operate effectively,
when at present:

• The average attainment of prospective teachers entering a B.Ed course is less than three grade Cs at GCE A-level.
• 52% of would-be prison officers failed a simple literacy and numeracy test.
• 33% of nurses completing their training failed to achieve the 60% pass rate in basic English and Maths tests, despite having GCSEs in these subjects.

Typical questions for the nurses included:

How many minutes are there in half an hour?
a 15 b 20 c 30 d 45
Which of the following times is the same as 8pm?
a 1800hrs b 1900hrs c 2000hrs d 2100hrs
What is the correct decimal nomination for six hundred and fifty pence?
a 605p b £6.50 c £65.0 d £6.05

NHS Pay Plan has failed

The Telegraph reports that the 'Agenda for Change' reform of NHS pay has failed to deliver improved productivity, according to the King's Fund health research organisation.  The cost of the change was under-estimated by £200 million and may have made up nearly half of last year's NHS deficits.

This is a colossal management failure.  According to the report the problems are caused by "a combination of rushed implementation, a serious underestimate of the costs involved, and a failure to embed personal development plans for all staff has made it difficult for the new system to bring about real improvements in care."

That could give the impression that this failure is an isolated case.  It isn't.  Failures in an NHS ranked close to bottom among developed country healthcare systems by the EU and BMJ are a result of politicians without management experience of subject knowledge running a department with over a million staff, one of the largest organisations in the world.

This overcentralisation would seem to be made worse by the Agenda for Change which introduces national pay scales within the NHS, further centralising pay decisions.  This means that when politicians make mistakes, as they clearly did in the GP contract that has increased pay and decreased the amount of work done, their failure is exponentially more important.  Increasing the scale of the decision also increases its complexity which increases the chances of a mistake.

"End" Of Targets