Public Sector attacks create a failing state

Dr John Carlisle, retired businessman, former Business School professor and author makes the case for the public sector to reclaim its role as the dispenser of real democracy and to challenge the central government’s public sector policies .

The Public Sector: Where Democracy really happens
Birmingham in the 1860’s and 70’s was a great example of good local government. Under Sir Joseph Chamberlain’s tenure as mayor it became known as the best governed city in the industrial world. Chamberlain was both a civic visionary and successful industrialist under whose leadership rates were actually reduced while there was significant investment in services, health and education, which greatly improved. And all around the great city the neighbouring towns prospered too.
However, this is not the autocratic council we need today. We need more collegial, collaborative councils; but who, like Birmingham in the late 19th century, are both visionary and businesslike. The model, therefore, is more like Burlington, Vermont, which has one of the lowest jobless rates in the USA, a living wage of £12.36 when the UK’s was £7.20, and, on the environmental side, runs entirely on renewable fuel.
Part of the secret was the visionary socialist Mayor, now, Senator, Bernie Sanders, who opposed any development that would hurt the middle and working classes. “We don’t want people working 40 hours a week and living in poverty. We understand that when you put disposable income in the hands of working people (both public and private sector), they will spend that money in the community, and that creates more jobs.”
We understand that UK municipalities do not have the freedom to budget to their municipal needs. Treasury policy has put paid to that. Nevertheless, it is all the more important that whatever discretionary budgets councils may have is spent prudently. This puts a heavy responsibility on the councillors to develop the appropriate oversight skills, especially on key delivery decisions.
I suggest the votes in the May elections should go to councillors who demonstrate a real understanding of what makes for an effective delivery of public services – which will rule out half of them at least. But think on this: every day 65 million people in the UK use the public services, or what used to be “public” services. This, therefore, is the real stuff of democracy – the equality of good public service provision, delivered reliably at an economic rate. Democracy may be seen as having the vote, but this means very little if not everyone gets the essential services that are their basic rights.
Bad examples abound in Eastern Europe. In these cultured democracies water is not always potable, sewage spills out into the streets, energy supplies fail, public transport is unreliable, and housing is mostly inadequate. Again, the Arab Spring did not arise from voting rights abuse. I was working in Beirut while it was happening and my students from five Arab countries made it clear that it was born out of the frustration at the lack of equitable and reliable public services.
The warning signs are clear. This is where we are heading as a nation if, for example, our policy makers get away with forcing the balancing of budgets to take precedence over the quality of life of our people.
There are two major problems: Austerity and bad, but officially encouraged, Management Practices.

Austerity: Successive Chancellors have used monetary policy as a means of control instead of as a means to facilitate essential services. The excellent UNISON report: Central government’s hand in the local government till (November 2017) spells it out, citing the LGA budget submission. “…Between 2010 and 2020, local authorities will have seen reductions of £16 billion to core Government funding‟.
Extrapolations indicate that around £9bn of that £16bn will be stripped out of council budgets between 2015/16 and 2020/21 and revenue support grant. As a businessman I would not accept an underfunded assignment as I have seen too many construction companies go under as a result of underbidding.
When councils are systematically starved of funds and then punished for “poor” performance, their attention may be diverted from attending to the most vulnerable to that of saving money and face, sometimes by the most irrational means, e.g. PFI and outsourcing customer-facing services to save money and abdicate responsibility. As we have seen with Carillion et al, the chickens are now coming home to roost.
The lesson here is that when you cut unit costs you will increase aggregate cost.
But the problem is not only one of bad contracts. There is a deeper and more insidious problem. Councils and public bodies have, through this process, lost many of their management and delivery capabilities. They have, in effect, deskilled themselves.

Bad Management practices: Paradoxically, the management loss may not be a bad thing. They now have an opportunity to divest themselves of some really bad management practices (the second problem) exemplified by the tyranny of targets. Targets are the blunt instruments of ignorant policy makers and lazy, authoritarian managers. They become particularly dangerous when linked to penalties or bonuses because these too often lead to “gaming the system” as we have seen so clearly in the NHS. In extreme punitive cultures this means that the leaders will never know what is really happening and why. We have seen the most egregious consequences of combining targets with cost-cutting in policing, child welfare and care homes, e.g. Winterbourne View, which could easily have been an example from most backward of the East European “democracies”.

The remedy? The king has no clothes. Educate your constituents as to where the problems really arise. Persuade them to stand by you and demand changes. Stop coping! You cannot make a wrong thing righter. I commend Ruth Thorlby’s excellent article in the May/June 2017 edition of this magazine. The answers are there.

Originally published in Public Sector Focus April 2018