The Great Auditing Scandal that is to come

Let's get down to the nitty-gritty about numbers in policy-making, and why they caused such waste, expense and ineffectiveness in public services when wielded by the last government.

Numbers have the appearance objectivity.  They look hard-nosed and unanswerable.  They look like the kind of thing that people who gargle with the idea of 'evidence-based policy' might like.

But here is the tragedy.  The numbers are chained at the other end to definitions, which involve words, and these are endlessly malleable, often illusory, sometimes delusory.

The numbers are trustworthy, but the definitions slip through your fingers, are massaged by frontline staff and managers, by civil servants and also by politicians.

That is the terrible weakness of evidence-based policy.  This is not to say that anyone should embrace evidence-free policy, just that - by defining evidence so narrowly - it began to suck the life and power out of so much of what had been effective in our services.

It rewarded those who tweaked the definitions; it downgraded those who were brilliant at actually doing the job.

It is one of the themes of this blog that the coalition failed to define the problems with New Labour's approach to services - and the target numbers at the heart of their humming, centralised public service machine.  They therefore repeated many of the same mistakes.  They still are repeating them now.

You wouldn't expect that author of The Tyranny of Numbers to say anything different.  But there is now a new twist, and it is partly thanks to the policy-known as payment-by-results.

The cage created for frontline staff, partly by McKinsey, partly by wrong-headed notions like 'deliverology', meant that they often had to massage the definitions just to do their job.

I remember going to a public meeting around 2003, and overheard the organisers say to each other: "If any couples come in, mark them both down as women.  We don't have enough of those."

Ah yes, those days of innocence.  It was necessary to do a little light  massage just to get the funders off your back long enough to do a bit of work.

Remember Richard Elliott, ten years ago a member of the Bristol drugs action team, who had to keep his eyes on forty-four different funding streams, nine different grids and eighty-two different objectives imposed on him by managers, funders and the government. Before he resigned, he reckoned that he and his colleagues spent less than 40 per cent of their time actually tackling drugs issues.

Elliott compared his management regime to a kind of addiction on behalf of the obsessive and narrow measurement of his performance:

“Monitoring has become almost religious in status, as has centralised control. The demand for quick hits and early wins is driven by a central desire analogous to the instant gratification demands made by drug users themselves.”

But now, ten years on, money is attached to the figures.  Even if it isn't payment-by-results, there are legal contracts with the providers.  What was once a bit of mild massaging is now fraud.  It is a police matter.

Hence the news yesterday that the public services giant Serco is being investigated again for "irregularities in records keeping".  The second such investigation, this time for their prisoner escorting contracts.

There is much tut-tutting in the business pages about it.  But there is a much bigger problem here, and it is this: look under any stone in public services, and any private sector contract to deliver them, and there will be something like this.  Some of it will involve fake numbers; some will involve manipulated definitions.  But this is where the system of centralised targets leads to, inevitably.

We can blame the teachers and frontline staff and anyone else who is caught in this way, but it isn't really their fault.  The system is set up to demand this kind of manipulation of definitions, because the difference between success and failure is no longer how you actually perform for the people you help - it is in these little tweaks of definitions that can make hard numbers look so very different.

I make this small prediction.  It started with A4e, but over the next year, more and more of the big outsourcing companies will find themselves involved in this, more schools, more hospitals - until the rewards for the investigating auditors become unsustainable and some other solution will have to be found.

And all because this is a system for arms-length management that works by hollowing out services.

But remember, when it happens, that you read about the Great Auditing Scandal here first.