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

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.


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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.