Wednesday 24 June 2015

My top ten irritatingly shared policy delusions

I heard Professor Alison Wolf this morning (0830am) confronting politicians with a perennial truth. So sensible was she about the numbers of apprenticeships we need that it slightly took the breath away.

But of course she's right.  David Cameron's target of three million apprenticeships - building on the pioneering work of Vince Cable - is automatically undermined just by setting a challenging target.

It means, the government's obedient machine being what it is, that there will be three million empty opportunities for cheap labour.  Even 300,000 worthwhile apprenticeships, with genuine and accredited training at their heart, would be better than that.

When Harold Macmillan set a target of 300,000 new homes a year, he built new slums. When the Pentagon set kill targets in the Vietnam War, they killed terrifying numbers of civilians but still lost.  See more in my book The Tyranny of Numbers.

Most people seem to understand the corrosive effects of numerical targets, except - it seems to me - politicians. It is part of the Westminster sickness, of course, and it unites Labour and Conservative.

So it occurred to me that this might be the moment when I should list some more of these fantasies that are shared, at least in the UK political system, by right and left alike.  Here we are.  My top ten.

Fantasy #1. The banks don't want to lend to small business.  It's true they don't lend, and they collude with this little fantasy, which - for reasons I might go into another time - it suits them too. The truth is they are no longer geared up to lend to SMEs. Right and Left in any case believe that somehow banking isn't that important, or they would act to build institutions that can lend.

Fantasy #2. House prices are so high because there aren't enough homes. It's true that there aren't enough homes, but the reason house prices are so high is because too much money is going into the property market. Zoe Williams was spot on in the Guardian this week.

Fantasy #3. Banks lend out money that is deposited to them. In fact, these days, they largely create new money in the form of interest-bearing loans. That's where money comes from.

Fantasy #4. If you spend more money on public services, they will improve. The Gordon Brown years should have cured us of that one. Staggering sums were spent on new systems of control, which has rendered many services inflexible, ineffective and far more expensive than they need to be.

Fantasy #5. We need to be more evidence-based in our policies. It's always a good idea to be informed by the evidence, but 'evidence-based' is a term increasingly used by governments to justify their failure to act on issues for which there can never be evidence - and there is sometimes no evidence for new ways of doing things until you do them. I notice it is also used in the wider political world to mean 'I wear my atheism as a badge of pride'.

Fantasy #6. We want to replace targets with systems that pay contracts by results. This is nonsense. Payment by results contracts just involve targets with money attached. They are therefore more likely to be distorting.

Fantasy #7. When the Bank of England creates money, it creates inflation. Since banks create money all the time (see fantasy #3), this can't be the case. It is only the case when too much money is in circulation for the work going on in the economy, or in that part of the economy - regional or sectoral.

Fantasy #8. Big organisations are more effective. Let's look at the 'evidence' on this one - which is that shared services and merged institutions very rapidly allow economies of scale to be overwhelmed by diseconomies of scale. See how this affects the evidence on big schools.

Fantasy #9. Systems work without the human element. Actually this is the big Blairite fantasy, but the machinery of government has always believed that organisations and services work better if you exclude human variability - forgetting that the human element is also the only guarantee of success.

Fantasy #10. In the UK, we are free to say what we believe. I fear not. In fact, I measure our freedom of speech by the number of times I censor myself in this blog, for fear of the inevitable Twitter storm from offended people. Which is increasingly often (this may be middle age, of course).

That's my top ten, and they are all pretty irritating - and even more irritating that they seem not to be a matter for political debate.  What's yours?

Subscribe to this blog on email; send me a message with the word blogsubscribe to When you want to stop, you can email me the word unsubscribe.


Metatone said...

I like most of yours.
I'll add:

Fantasy A:
Risk pooling doesn't matter. We can break things down into tiny units and their resilience is unaffected.
(Worth noting that some LibDems are particularly prone to handwaving on this issue.)

Fantasy B:
Selling assets (particularly organisations) into foreign ownership has no effects on how those assets are managed or cared for.

Lidl_Janus said...

I assume the TFP enters into this somewhere.

chrisgee said...

I would not want #4 to bar any public service from having the remit and money it needs to deliver that clearly defined remit.
#5 also skews the debate in terms of those most able to fund evidence/data collection. The richer side of the debate can keep collecting until they frame the question to give the answer they need
#6 worries me when the institution (Council's spring to mind) lose the expertise to write a decent contract for the next tender and just employ generalists rather than people who understand the service to do so.