The False Economics of NHS Integrated Care Systems

Dr John Carlisle 2018/2020

The Keep Our Health Service Public (KONP) Statement to the House of Commons Health and Social Care Committee on Integrated Care: organisations, partnerships and systems (June 2018) missed a trick, i.e. it did not question the assumptions around the economics of Integrated Care. The statement quite rightly pointed out the projected completion time is wholly unrealistic, but does not question the model from a business/economic viewpoint. After all, the Tories are the party of business and like to be seen as “efficient” deliverers when, in fact, economic delivery is their Achilles Heel.
For those who remember Ancient Greek history, KONP could have played Paris and driven a fatal arrow into that heel; but have persistently resisted deploying economic arguments, preferring the legal and human, which this inhuman government has brushed aside.
Here are some figures from international research gathered for the Local Government and Regeneration Committee looking into public sector delivery (2013). The changes have been based on the principle of shared services, i.e. greater “integration” by centralising the resources and creating efficiencies through lower transaction costs and more IT.
 Western Australia’s Department of Treasury and Finance Shared Service Centre promised savings of $56million, but incurred costs of $401 million. Cancelled.
 The NAO report into the Research Councils UK shared services reorganisation showed it was due to be completed by December 2009 at a cost of £79 million. But, in reality it was not completed until March 2011, at a cost of £130 million.
 The Department for Transport’s Shared Services, initially forecast to save £57m, is now estimated to cost the taxpayer £170m, a failure in management that the House of Commons Public Accounts Committee described as a display of ‘stupendous incompetence’.
 The DWP’s Universal Credit fiasco needs no elaboration. Lord Forsyth: “designed by people who had no idea what life is like for people who are living on the breadline, and who have got no savings.”
We can find NHS examples of huge waste without too much effort, especially in IT and care transfer.
Why should the campaigners consider this sort of microeconomic data? Because these principles are behind the thinking of the NHS reorganisation into ICPs etc., and they just do not work in most cases. In fact, mergers in the private sector fail 80% of the time and those that succeed suffer a loss of productivity for around 18 months or more. The best merger companies, e.g. Siemens, allocate a great deal of time and resource to the process, making huge efforts to not hamper production and service activity. Collaboration is a culture, not a structure. The last thing the NHS needs now is further reorganisation. People are exhausted, as is the money.
So, turning their own assumptions against them and question the “return” on the huge disruption, asking how they can be sure the investment is more likely to succeed than just building and rewarding a collaborative culture across the health system..

Setting Stupid Targets for the NHS

Setting Stupid Targets for the NHS
The NHS has been damaged by deluded politicians and their targets strategy

Labour damaged the NHS by its target policy. The Coalition followed Andy Burnham’s proposal to cut the number of targets, but still set them to “name and shame”, which compounded the catastrophic impact of the Lansley bill. In their marketisation drive they have also continued to set ridiculous incentives for GPs and NHS staff, such as the recent £55 for every dementia diagnosis (a Tory pledge). This latter policy just demonstrates the Tories’ utter lack of trust in people, even in our great NHS, and their lies.

Their perception of people is that we are venal and will only respond to selfish incentives, even the most dedicated professionals. It also demonstrates the ignorance among politicians of all stripes of how organisations really work. The following discussion on the use of targets demonstrates this.
Targets and tick boxes

The previous Conservative government had set targets in the 1990s – for example, guaranteeing a maximum two-year wait for non-emergency surgery and reducing rates of death from specific diseases. But what was different about Labour’s approach to targets in the NHS (and across the public sector more generally) was the volume of targets and the vigour with which they were performance-managed from the centre – via Blair’s Prime Minister’s Delivery Unit (operating according to the principle’s of ‘deliverology’).

The diagram of targets for A&E diagram below says it all.

Targets A&E graph

Figure – Targets set without regard to system capability or the nature of demand

The Labour government set an impossible target for A&E, treating it as though there would be no seasonal variation. Note, from 2005-2010, the failures occurred in the first quarter of the year, i.e. holidays and winter. What a surprise! But still marked up as a failure. This is mad management, setting up the NHS to fail (98%) 40% of the time. This is equivalent to the battle orders of the Somme ensuring maximum casualties by continuing to drive soldiers en masse into the German guns. Like the generals who perpetrated this infamy, the politicians sit well behind the firing lines, refusing to even look at the carnage caused by their policies.

The diagram says: from 2005 to 2010 politicians guaranteed failure in 9 quarters by their obsession with targets and scapegoated so-called failing hospitals!

Having seen the failure to achieve the 98% target the Coalition reset the targets to 95%. This despite the fact that the Tories pledged to scrap targets in 2007, highlighting a series of flaws with present targets, which Lansley himself said “distorted the way the NHS works”. (The Guardian, 22 January 2007)

Note that from 2010 to 2015 there would have been a 100% failure rate had the target remained at 98% (the dotted blue line on the diagram). This is the reality. It is also clear evidence that targets DO NOT WORK, i.e. things got worse! This would not have been a failure by the NHS staff! Just a very stupid policy.

For years the NHS had been punished by targets, for which Labour was largely responsible, especially Alan Milburn, who is now the champion of private health (see below). This was tremendously de-motivating and expensive, as it led to rework, readmissions, and lack of beds; all of which cause the nursing staff great stress and strain and wasted millions trying to do the impossible.

Not only did it cause a drop in morale, but it also caused “gaming” – intelligent professionals subverting the system to survive. Professor John Kay in his book Obliquity quotes the example of an eight-minute response target for ambulances which led to the vast majority of emergency calls getting just that, and almost none recorded as longer. The target changed the way the dispatchers allocated vehicles, presumably trumping the prioritisation of patient need.

To his credit, Andy Burnham, admitted that the target emphasis was a mistake; but insisted that initially it was the right strategy. It never was. It contravenes every quality improvement principle, beginning with understanding the real performance capability of the A&E system. They clearly never understood the principle, otherwise they would never have set the 98% target, i.e. understand the normal variation occurs, e.g. winter comes every year from November to February. (Note when the targets were missed, the 1st and 4th quarters above). If the politicians had any wisdom then, with the help of the staff, they could have transformed performance without causing anomalies and heartache.

Never set arbitrary targets, and never, ever, compound the error by using targets to punish or reward people.

Any improvements in results are achieved by understanding and changing the system, driven by the staff. Not by targets! The Royal Bolton Hospital in 2006 is a good example. The staff redesigned the entire process, which improved stabilisation and made access into theatre and discharge rates happen more quickly. The four key effects have been:

  • Reduced length of time it takes a patient to get to theatre from A&E by 38 per cent (2.4 days to 1.7 days)
  • Reduced paper work across the process by 42 per cent
  • Reduced total time patients spend in hospital by 32 per cent (34.6 days in 2004/05 to 23.5 days in 2005/06)
  • Significant reduction in mortality by at least one third. In 2004/05 327 patients were admitted with fractured hips and 75 died (22.9%). In the first half of 2005/06 there were 164 admissions of which 24 died (14.6%)
  • Improvement efforts in the NHS usually amount to gains of 3 or 4 per cent at the margins – these are improvements in the range of 30-40%.

But this is ignored by successive governments who insist on the command and control policies led by targets, while ignoring the cries of the NHS employees who were being damaged by the policy. Between 2001 and 2007 there were about 150 press features criticising, with evidence, the impact of targets. Also in the influential Berwick report in 2014, The Science of Improvement, the word “target” is not mentioned once!

Today, in 2018, the performance levels are even worse, for example so-called “bed-blocking”. So much for targets! The only other country that set as much store by targets in the workplace was the USSR, and look what happened to their economy!


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

The Conservative Government’s Misery Business


The Conservative Government’s Misery Business

The government has for eight years now been successfully building national factories which produces millions of sick, depressed and hopeless people. The recently retired CEO and Chairman, George Osborne and David Cameron, can sit back with great satisfaction at the success of their enterprise: The Austerity Brexit Company.

They have brilliantly cornered the market in misery. The cunning strategy is threefold:

  1. Broaden the customer base by policies that punish those in greatest need and those who have vocations to alleviate suffering, e.g. carers, nurses, doctors, and create anxiety, uncertainty and fear, especially as regards employment, by insisting on a Brexit that is unworkable. The latter is a brilliant marketing ploy, of which Richard Branson himself must be envious.
  2. Enact legislation and policies that supports private enterprise in the public realm (NHS, public transport, etc.) and take money from municipalities to give the Treasury, and social care.
  3. Employ as directors of the great departments of state the “children of Douglas Haig”, who will carry out any neoliberal strategy they have devised, no matter what the cost to the people. In a really fair monarchy Grayling, Duncan Smith and, the recently retired Jeremy Hunt would have been awarded knighthoods for the successful obliteration of the wellbeing of both the employees in these departments and their “customers

Jeremy Hunt, who comes from a military background, would doubtless be proud to be associated with Field Marshal Haig on this day, as we commemorate the centenary of the turning of the tide of World War 1. To quote B.H. Liddell-Hart, a distinguished military historian who had been wounded on the Western Front, from his diary: He [Haig] was a man of supreme egoism and utter lack of scruple—who, to his overweening ambition, sacrificed hundreds of thousands of men. A man who betrayed even his most devoted assistants as well as the Government which he served. A man who gained his ends by trickery of a kind that was not merely immoral but criminal.

To examine the parallels just look at the nurses, who, like the Tommies in the war, are the backbone of the NHS, and whose ratio to patients is the main determinant of good patient care.

NURSES (with grateful acknowledgement to NHS FOR SALE?)

The NHS is spending almost £1.5bn a year on agency nurses while its own staff are leaving in droves, a new report suggests.

The vast outlay on temp workers would be enough to pay the wages of 66,000 full-time positions for a year, according to the study by The Open University.

The RCN branded the situation dangerous, but ministers said steps were being taken to recruit more nurses. Hunt was warned in mid-2017 of the coming crisis: NHS faces staff crisis as student nurse applications plummet after Tories scrapped their grants (The Mirror: 13th July 2017)

The number applying to be student nurses has dropped from 65,620 to 53,010 – a fall of 12,610 on last year. The fall comes after the Government axed student bursaries for trainee nurses and midwives.]

Stressed nurses are leaving the NHS in increasing numbers after 160,000 quit in five years. Long hours and poor pay have been blamed for the numbers leaving increasing by a fifth.

An unprecedented NHS staffing crisis has left at least 40,000 unfilled nursing posts in England alone and wards having to close due to dangerous understaffing. Data released by Government shows 33,530 quit the profession in the year up to September 2017.

This is a 17% increase on the 28,547 who quit in 2012/13 after year-on-year increases for the last four years. In total 159,134 nurses have quit the NHS in the last five years.

The number of nurses and health visitors across the NHS in England has dropped by over 400 people. Sector leaders feel this decline reflects how frontline nursing has become an “easy target for cuts”.

At a time when the government is actively trying to boost workforce numbers to tackle high rates of vacancies across the country, the latest figures from NHS Digital show that the opposite has been happening. Since 2016, the nursing and health visitor workforce has shrunk to 284,000 FTE, a drop of 435 people.

There was also a decrease of 0.2% across the nursing workforce within GP practices, with 27 less staff working in the NHS now than in 2016

Janet Davies, chief executive and general secretary of the Royal College of Nursing, argued the latest statistics are a worrying sign that the number of nurses continues to slide – and they have also come just a day after a major survey revealed public satisfaction with the NHS is dwindling due to staffing worries. This must be a major achievement for the Sickness Business. Well done!

Almost two-thirds of healthcare assistants (HCAs) are performing roles usually undertaken by nurses, such as giving patients drugs and dressing their wounds, in the latest illustration of the NHS’s staffing crisis. The apparently growing trend of assistants acting as “nurse substitutes” has sparked concern that patients may receive inferior or potentially unsafe care because they do not have the same skills.

Of the 376,000 assistants in the NHS in England, 74% are taking on extra tasks, according to findings by the union Unison.

This is the equivalent of Haig’s attrition rate exactly 100 years ago. In Churchill’s chilling phrase, “driving to the shambles by stern laws the remaining manhood of the nation. Lads of 18 and 19, elderly men up to 45, the last surviving brother, the only son of his mother (and she a widow), the father, the sole support of the family, the weak, the consumptive, the thrice wounded—all must now prepare themselves for the scythe.”

We have had our warning for years. Now let us turn on the government and turn the tide of their war against the public sector.

John Carlisle

July 18 2018. This day, 100 years ago the tide turned against Germany for the first and final time


Command and Control Management: The Embodiment of Neo-Liberalism at Work

John and Joe Carlisle, Mad Management[1]

Although the Command and Control style of management is a fairly modern phenomenon, like all ideas, its roots go much further back, to a very dominant model of how to discipline and organise institutions. The philosopher Michael Foucault famously uses 18th Century Utilitarian philosopher Jeremy Bentham’s panopticon as a model for how a modern disciplinary society seeks to at all times to survey, or at least give the possibility of surveillance, its populace. The panopticon is a surveillance structure originally designed by Bentham for prisons but reproducible in any environment. The centre is occupied by a watchman who cannot be seen but who is surrounded in the round by the cells or workplaces of those he surveys. Each in their own compartmentalized sections the watchman, or manager, can see everything the prisoners do. As Foucault describes ‘[t]hey are like so many cages, so many small theatres, in which each actor is alone, perfectly individualized and constantly visible.’[2]

Foucault rightly saw ‘panopticism’ as a paradigm through which individuals could be measured, assessed, marked and surveilled; it was not simply a design for a prison but a “how to” command and control for a whole variety of institutions from schools, hospitals and factories. It is worth quoting Foucault again, this time at length, as he describes the consequences of such a model:

He is seen, but he does not see; he is the object of information, never a subject in communication… if they are workers, there are no disorders, no theft, no coalitions, none of those distractions that slow down the rate of work, make it less perfect or cause accidents. The crowd, a compact mass, a locus of multiple exchanges, individualities merging together, a collective effect, is abolished and replaced by a collection of separated individualities. From the point of view of the guardian, it is replaced by a multiplicity that can be numbered and supervised. 

This top down model of designing the workplace was explicitly compatible with industrialization where work was broken down into small repetitive actions that can easily be measured and codified. What is harder to understand is why the model was placed upon all forms of work. Why so many managers insist upon forcing this model onto industries, such as service, which it does not fit.

It is now common for most people who work now to have a sense of being monitored. Whether through the ubiquitous CCTV camera, which now often can record audio, to electronic clock ins,’ recordings of all phone calls made in a call centres or on workphones, targets to be hit, milometers which time how long a delivery takes to go from A to B, to IPad’s whose programs must followed to the letter. What this produces is an abundance of data, a mountain of information which can be turned into charts, graphs, and reports. This gives the manager a great sense of control; to him nothing is hidden.

Except of course a lot is hidden. Data by its very nature hides vast amounts of knowledge. The time it takes to get from A to B does not reveal that the final stage may add 20 mins because there is nowhere to park the lorry. The failure to reach the target may simply reveal the arbitrary nature of the target. In data the whole complexity of the human world is erased, flattened out into a spreadsheet, and the manager ends up mistaking the map for the terrain.

Not only does it give the illusion of knowledge but command and control management style doesn’t work.  It makes waste rather than reducing it. This article will argue that it is an empirical fact that these modes of supervision fail to achieve what they claim to. Systems thinking is a far more effective way of improving organizations, and ironically, it has the data to back it up.

 Systems Thinking 

In 2003 Professor John Seddon published Freedom from Command and Control. [3]2 It caused quite a stir, demolishing most of the principles upon which the government had based its efficiency drive – which later morphed into wholly inappropriate and damaging austerity policies. It refuted the top down principle of leadership that is implicit in the New Public Management (NPM), which is a promoter of what Seddon calls ‘the management factory’: ‘The management factory manages inventories, scheduling, planning, reporting and so on. It sets the budgets and targets. It is a place that works with information that is abstracted from work. Because of that it can have a phenomenally negative impact on the sustainability of the enterprise.’

The case studies gave irrefutable evidence of the damage caused by this neo-liberal mechanism in the public sector. Seddon’s solution was systems thinking as expanded in his next book, Systems Thinking in the Public Sector.[4] Here example after example illustrated the waste caused by NPM, especially as advocated by the likes of Barber (targets etc.) and Varney (shared services – see appendix)

The research and analysis conducted by Professor Seddon, which has looked at reasons for diseconomies of scale specifically in service organisations, fundamentally challenges the ‘Command and Control’  logics that underpin much of the public sector. Instead case study after case study confirms that concepts such as ‘designing against demand’, ‘removing failure demand’ deliver outstanding success  , while the typical drive to standardisation and specialisation of function results in inappropriate services being delivered, resulting in turn in escalating monitoring, management and correction costs.

This, however, requires a change of thinking about how organisations work best in this the 21st century. Over a hundred years ago the workforce was only one generation removed from an agricultural culture. Their understanding of industrial production and its organisation was very limited. Consequently even the best designers of organisations, e.g. Henry Ford, the Quakers, Cadburys, Rowntrees and Clarks, were at best paternal, and at worst, reductionist pragmatists, i.e. treating workers as intelligent tools. However, even the latter did not mean not trusting them or attempting to look after them. After all, Henry Ford doubled the wages of his workforce overnight and refused to allow women to labour after 5pm so they could look after their families.

Today, we have a workforce that is literate and numerate and is at home with modern organisations, BUT are managed as those of 100 years ago. Why is this? The reason is the Command and Control style is more comfortable for those leaders whose upbringing (conditioning) and training at Business Schools has brainwashed them into feeling that being in charge means taking control. As they cannot be everywhere they therefore use measuring as a proxy for their physical presence. This usually translates into columns of comparative data or run charts, tick boxes compliance, and often targets to be reached as evidence of success of failure.

So, who is the guardian in the panopticon? It is HR. In many public sector organisations HR has seized this opportunity to become the enforcer of compliance for the board. Rejoicing in their power they have abandoned their traditional role of looking after the workforce and now “guard” it.

Politicians are entranced by these governance measures. They can conceive of nothing more confidence boosting than setting targets for, e.g. hospital waits, housing allocations, repairs completed. Their mental model is captured in the Table 1, below, in the left hand column. It is informed by their neo-liberal mindset, something they have imbibed from exposure to the right wing press; the fascination with material success, for example Peter Mandelson, playmaker of the Labour party said twenty years ago that he was “intensely relaxed about people getting filthy rich as long as they pay their taxes”; privatisation continues even though it is clearly an utter failure; and cost-cutting  and targets are the first knee jerk reactions to perceived public sector overspend.

But there is another way. It comes in the form of a System of Profound Knowledge, first propounded by the great management philosopher, Dr W. Edwards Deming, whose principles are best presented in the work of Professor Seddon, head of Vanguard. The Seddon Vanguard model, constructed from his research into effective organisations is the right hand columnneolib-seddon (2)-page-001.jpg2

Why is a bad management model sustained?     The question is why, in particular do UK politicians favour the Command and Control model? My theory is that it is the “control” element that matters most – and which has caused the most waste, and this is because they are comforted by the illusion of control even when it clearly causes so much damage to people and resources as the examples in the appendix illustrate.

Dr W Edwards Deming summed it up perfectly: Most people imagine that the present style of management has always existed, and is a fixture. Actually, it is a modern invention – a prison created by the way in which people interact.  He then asked the question:

How do we achieve quality? Which of the following is the answer? Automation, new machinery, more computers, gadgets, hard work, best efforts, merit system with annual appraisal, make everybody accountable, management by objectives, management by results, rank people, rank teams, divisions, etc., reward the top performers, punish low performers, more statistical quality control, more inspection, establish an office of quality, appoint someone to be in charge of quality, incentive pay, work standards, zero defects, meet specifications, and motivate people.”[5]

Answer: None of the above. (Will someone please tell our politicians!)

All of the ideas above for achieving quality try to shift the responsibility from management. Quality is the responsibility of management. It cannot be delegated. What is needed is profound knowledge. A transformation of management is required, and to do that a transformation of thinking is required – actually the neo-liberal paradigm is so entrenched that that nothing less than metanoia (a total change of heart and mind) is needed.


Shared Services disasters (courtesy of John Seddon submission to the Local Government and Regeneration Committee – Public Sector reform and Local Goverment. 2012)

  1. Western Australia’s Department of Treasury and Finance Shared Service Centre promised savings of $56 million, but incurred costs of $401 million. See for more details (accessed 13/2/12)
  1. A National Audit Office report said that the UK Research Councils project was due to be completed by December 2009 at a cost of £79 million. But, in reality, it was not completed until March 2011, at a cost of £130 million. See‐66fa‐47be‐9773‐686ce60c0218&version=‐1 (accessed 13/2/12)
  1. The Department for Transport’s Shared Services, initially forecast to save £57m, is now estimated to cost the taxpayer £170m, a failure in management that the House of Commons Public Accounts Committee described as a display of ‘stupendous incompetence’. The most recent evidence of the higher cost was documented in a House of Commons Transport Select Committee report ( accessed 13/2/12)


[2]Michel Foucault, Discipline and Punish, trans. A. Sheridan (Vintage books, New York, 1995) p. 200

[3] Seddon 2003 ‘Freedom from Command and Control’ Vanguard Education

[4] Seddon 2008 ‘Systems thinking in the Public Sector’ Triarchy: Axminster

[5] Deming, W.E. (1993) Out of the Crisis MIT: Cambridge

Made in Sheffield – more than just a brand.

Made in Sheffield – more than just a brand.

The Star has launched a business promotion campaign, “Made in Sheffield” to promote the excellence of its various products ranging from sauce and steel to technology and aerospace. Great idea, but the people of Sheffield need more.

For Sheffield, the “friendly” city, to become Sheffield the friendly productive city, we need a moral and material infrastructure of good citizenship, governance and well-run services to complement the industrial investment The Star describes. And so do the businesses. It is a two-way street. The Council provides the platform for industry and industry pays fair wages, good conditions and secure jobs, and its taxes.

As Jane Jacobs would say: “It is an interdependent system”.

There is a good British precedent for this, as I have mentioned before, i.e. Sir Joseph Chamberlain’s tenure as mayor of Birmingham in the 1860’s and 70’s when it became known as the best governed city in the industrial world. He was both a successful industrialist and civic visionary 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 other centres prospered too.


Each_for_all_and_all_for_each (1)

A good business person and great political leader is a rare combination; but they can make great allies if they have shared goals.

A good contemporary model is the state of Vermont in the USA. It has about the same population as Sheffield and its senator is the doughty Bernie Sanders, who would have won the presidency of the USA, had the Democrats had the sense to have elected him.

Bernie Sanders cut his political teeth as the mayor of Vermont’s largest city, Burlington, which is actually only the same size as Ecclesfield. But it really punches above its weight. It has the highest living wage rate in the USA at £8.20 an hour for council contracts (the UK is £7.20), and the lowest unemployment rate – half the national average at 3.4%.

Bernie’s vision was for more affordable housing, locally owned SMEs, greater community engagement in planning, and job development, realised through practical planning strategies that reinforced these goals. This inevitably meant confronting developers who did not get this vision, something Bernie is very good at, personally and politically.

Bernie eventually won over one of the richest and most influential developers, Tony Pomerleau, and he helped Bernie transform Burlington. Here is a summary of some of the achievements: The city’s largest housing development is now resident-owned; its largest supermarket is a consumer-owned cooperative; one of its largest private employers is worker-owned; and most of its people-oriented waterfront is publicly owned. The publicly owned Burlington Electric Department (Utility) recently announced that Burlington is the first USA city of any decent size to run entirely on renewable electricity.

Not bad for an eight year tenure of a socialist politician under the right wing presidency of Ronald Reagan!

The secret? Constancy of Purpose, as Dr Deming would say, plus solidarity with the working and middle classes, and subsidiarity in decision-making, as the Pope would say. Bernie was also collaborative (on his terms) and won over many of the businesses because of Burlington’s stable environment and high propensity to spend.

Another thing, there is no mention of outsourcing; just plain contracting, at living wage levels, not lowest cost. “You don’t want people working 40 hours a week and living in poverty,” says Sanders. “We understand when you put disposable income in the hands of working people, they will spend that money in their communities, and that creates more jobs”. Hence the high propensity to spend; a gift to local industry.

Bernie Sanders understands what it takes to create stable communities. It is no accident that Vermont became the safest state in the Union with him as senator. But, as we found out last year on Monday 22nd, this is the last thing that Islamic fundamentalists want, when Manchester, that bright, breezy, successful city, endured a terrible tragedy.

The following Thursday, as I walked across to the Catholic Cathedral to Mass, the siren for the 11 o’clock one minute silence sounded for Manchester. Fargate in the City Centre froze. The minute passed. A young girl comforted her weeping mother as we all the recalled the enormity of the crime. Two policemen stood quietly by their vehicle, their rifles across their chests, and I mentally thanked them for their vigilance and low profile.

Then I became really angry. These services, the police, the social and council workers, have suffered cut after cut by the remorseless Treasury, implemented by Theresa May, the then Home Secretary, despite protests and warnings from every quarter – as had the fire and ambulance services, and the doctors and nurses who worked tirelessly to treat the victims.


Floral tributes to the victims of the attack in St Ann’s Square in Manchester city centre

The very fabric of our security and well-being is being threatened, just to balance the books – which they have significantly failed to do!! The Home Secretary clearly cared less for her citizens than for achieving Osborne’s arbitrary fiscal targets. What a lack of moral imagination. She is now Prime Minister!!

This is the equivalent of company directors caring more about their shareholders than their staff or customers and running the business down to increase the share price. Great companies like Unilever, John Lewis and Honda reject this distortion, as did great Prime Ministers like Attlee, who, with no money in the Treasury, still set up the NHS, National Insurance and increased social housing.

What a contrast.

Businesses and communities need a new government, one that really does care for its people, and provides the funds for its councils to meet their citizens’ basic needs.

Event: Soviet Healthcare: Are Governments Bringing it into the NHS?

This event is free to attend, just reserve your place here:

Soviet Healthcare Via Targets: Are Governments Bringing it into the NHS?

In association with Sheffield Save Our NHS.

Dr Peter Campbell will present two sessions on ‘Soviet Healthcare: Are Governments Bringing it into the NHS?’ exploring the threat of target-driven management. Originally a GP, Dr Campbell now helps create and lead health projects in ex-Soviet countries, and has been featured on platforms such as TEDx. He is a principal lecturer at Universities in Heidelberg and Berlin. Each session includes breakout and strategy groups, protest songs on NHS themes, and an exhibition on the ubiquitousness of PFI.

This event is one of a number of events at the Festival of Debate on the theme of Democracy & Activism. Events in this strand have kindly been sponsored by Abbeydale Brewery.

Date Wedesday 25th April 2018 :Two sessions: 14:00-16:30 and 19:00-21:30.

Location: Roco Creative Co-op, 338-346, Glossop Road, Sheffield, S10 2HW.

Brexit: Negotiation Disaster


A formidable negotiation challenge with economic consequences now

In order to best understand the whole process Brexit needs to be looked at through the lens of negotiation. This is what drew me into my work at understanding organisations nearly 40 years ago, and was the basis of my successful book, Beyond Negotiation.

When I emigrated to England in 1970 I had recently emerged from the life-changing experience of having become a powerless white man in a new black-run republic, Zambia, where previously I had led the unthinkingly superior existence of a colonial. I was made to realise that I could not always get my own way anymore just because I was white. This is known in Business School jargon as a paradigm shift. Actually it was more like falling off a cliff, scrabbling for handholds all the way down – very, very humbling. Luckily, I had two very wise and kind black colleagues, who showed me the ropes, i.e. how to engage properly with the now empowered black population. I then had the two happiest years of my life in Africa, able to share in the vibrant Zambian social and mining life.   


Our research revealed two very important behaviours that skilled negotiators use that no-one had identified before. The first was to determine the extent of Common Ground, without which the negotiation will not be successful. The second was to be able to disagree on important issues, but never to personally attack the other party. Threats, in particular were a No-No.

When I took the research into the field of industry in 1981 to analyse the economic benefits of win/win negotiations it became clear that there was a correlation with profitability. For example, Xerox in Japan (a country that really understands cooperation) made 7 cents more on each dollar net than Xerox USA (a country that emphasises competition).

Here is the key message: We must build trust, and there is only one way to do so – by negotiating successful implementations step by arduous step – not by clever agreements that turn out to be impossible to implement. Nothing destroys trust as quickly as implementations that fail.

(A negotiation is not a debate – with a winner and a loser, so I suggest we keep Oxbridge- educated politicians out of it.)

Strategically, it is vital to start building trust early. This requires a great planning team to back you up and to identify the Common Ground. Not surprisingly our data showed that 80% of the negotiation failures were a result of poor planning. The best negotiator in the world cannot get a win/win if the planning and preparation is bad. There has not been little evidence of intelligent planning in Brexit so far. That has to be our biggest concern.

Where does that leave the UK with Brexit? I am not optimistic. In the first place, British politicians have a history of poor negotiations. They have two bad habits. The first very bad habit they (and other English people) have is to behave as though they are not taking the other party seriously. The Falklands were as much a result of the Argentinians being offended by the UK not acknowledging their history and taking their claims seriously, as it was by their bellicosity.

The other is taking a win/lose stance from the beginning. This is what Teresa May has already done, saying the EU would find her a “bloody difficult woman”! She has already used threats, i.e. the tit-for-tat of security against economic issues, and treatment of EU nationals in the UK versus the British in Europe. Hopeless, absolutely hopeless! She appears to suffer from an utter lack of (social) imagination. The very thing she fired George Osborn for!

Pity the civil servants who have to unravel this Gordian knot knitted by politicians who demonstrate no understanding of the reality of good negotiations. where the first impulse has always to be to look for Common Ground, which in Brexit is: how do we resolve this huge problem for the UK and EU together? It then becomes a joint problem-solving exercise where everyone must collaborate.

What makes this opening gambit particularly unhelpful is that the UK is in the weakest of weak positions, politically, economically, ethically. We are the ones who have walked away from a union of 27 other neighbours because our previous PM was too incompetent and arrogant to play the long game. It took the USA and Vietnam 5 years to negotiate a peace treaty on just one issue, peaceful co-existence. What will it cost the UK to “demerge” when there are literally hundreds of clauses, and how much uncertainty will that create for businesses and the economy and loss of productivity?

Maybe, as the Quakers would say: “Let us pause for reflection.” – then plan properly for a win/win agreement.

The Management Prison 1

Mad Management: Leaders (not) learning the lessons of history, especially in the Public Sector (original, April 2017)

“Good morning, good morning!” the general said, when we met him last week on the way to the line.

Now the soldiers he smiled at are most of ’em dead, And we’re cursing his staff for incompetent swine.

“He’s a cheery old card”, grunted Harry to Jack as they slogged up to Arras with rifle and pack . . .

But he did for them both by his plan of attack.


This was Siegfried Sassoon’s bitter poem about the World War I battle(s) of Arras. By this time 700,000 British men had died: equivalent to wiping out Sheffield and Hathersage. It is the Arras 101st anniversary this month. In fact, the plan was so bad that Sassoon amended the last line to read “But he murdered them both…”

Rightly, we need to remember and honour all those who died; but we also need to understand why they died in such numbers at Arras and how this ultimately led to the defeat of the British at the second battle of the Somme a year later – and to learn some lessons. The Lloyd George government had been steadily draining the fighting men from the front, leaving exhausted veterans of the first battle of the Somme to carry the burden instead of being reinforced. By the end of 1917 the fighting force had decreased by 7 per cent. The infantry alone was 80,000 short, and was projected to be close to half a million short by October 1918. Then came the second battle of the Somme, 100 years ago this year.

Guess what? From March to August that year 544,000 troops were somehow found and sent to France! The war ended in November. By this time 700,000 British men had died: the equivalent of wiping out the populations of Sheffield and Hathersage. Many, many of the deaths were unnecessary, caused by the outdated “plan of attack” and staff incompetence, and by government interference.

Does not this sound like a forerunner of our infamous Austerity policy? Admittedly the horrific scale and utter tragedy of the war bears no comparison, but the dynamics have some real parallels with today, especially in the withholding of resources (Treasury finance) and treatment of much of our workforce in the private sector, and the NHS and Social Care. Note, I am talking of the employees, not the customers or patients. First of all, the Treasury has systematically starved the public services of funding, for no other reason than the Chancellor could. This policy clearly displayed the contempt Osborne holds for the British people, as does Cameron. It is the act of a bully, as befits a Bullingdon alumnus.

We know what the impact has been for Sheffield. David Blunkett, now chair of the Partnership Board said in the Sheffield Telegraph last year that “austerity has dealt a terrible blow to our area”. Too right, and austerity continues to deal terrible blows to the one institution that we are most proud of, the NHS, achieving above average outcomes, with below average funding and below average staff numbers.

It was estimated to require £30 billion by 2020 to meet predicted demand, leaving it £2.45 billion in the red, while record numbers of nurses are leaving and GP practices closing down. There is no valid reason for this. It can only be that government wants it to fail, then, a bit like that doyen of the business world, Sir Philip Green, Jeremy Hunt can sell it for a pound to a USA health company. In the meantime, just like the workers in the gig economy or on zero hours, those in the NHS are increasingly insecure, underpaid and demoralised. And, we are talking about 1.3 million dedicated people.

This is our Somme, with Jeremy Hunt way, way behind the lines plotting the strategy, and, as Siegfried Sassoon wrote: “He did for them (all) with his plan of attack”.

How do the private and educational sectors meet the challenge David Blunkett has laid down, i.e. to regenerate and grow Sheffield? Well, I believe there is a step before we can work together as he urges us to do, and that is first to put our own houses in order. Do we pay our providers and suppliers on time? Have we minimised waste in our production and delivery systems, or are workers constantly having to rework and correct, just the way the government has done on almost every new plan it devised, from IT failures in the NHS, Defence and Welfare to Universal Credit to privatising probation services.

The May Council elections will be an opportunity to remind them. If not then, then do not expect any rise in productivity or increase in cooperation. Herzberg pointed out 60 years ago in his famous study on motivation: if people don’t feel they are paid enough, or are supervised badly or feel insecure then they will underperform. This means that unless these basic conditions, called Hygiene Factors, are fulfilled, you can forget about trying to apply Motivation Factors for productivity.

The second challenge is: To pay our staff enough, and give them some sense of security and belonging. For far too long too many firms have been disloyal to their staff, for example, Sports Direct and the banks. This is an opportunity to change that. I suggest that our universities blaze the trail with no more zero hours contracts.

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