Iain Duncan Smith has become a figure that the left regards with great disapproval. I don't really share this. Duncan-Smith is a brave thinker, as his think-tank the Centre for Social Justice demonstrates. But he has made one gigantic misjudgement which goes to the heart of the mistakes the coalition has made on public services.He says he is proud of his record on payment by results. The truth is that it will become an increasing problem as time goes by.
Shortly after the coalition took office in 2010, I was invited - for reasons I never did understand - to an internal seminar at the Department for Communities A senior civil servant gave us a presentation explaining that it was out with targets and in with payment by results
Nobody questioned this - they may not question things enough in some parts of Whitehall - so I very tentatively put up my hand. Are they not exactly the same thing, I asked? Both targets and PBR are narrowing down the deliverables to a tight numerical definition.
The senior civil servant clearly thought I was being obtuse I was told in no uncertain terms that I had got it completely wrong. So much so, that I began to wonder myself.
As a belated reply, I wrote an article in Local Economy about it shortly afterwards.
There is, of course, one major difference. By attaching money to the targets, which is what PBR does, it turbo-charges their effects. That is what bonus payments do too. And bonuses, as we all know, have the power to drag the entire economy down, as they did in 2008.
Targets with bonuses are the curse of the age. They narrow outputs, they blind professionals and make organisations stupid. They waste staggering amounts of money by spreading the costs of all those other things that organisations no longer try and do elsewhere in the system.
For payment by results to actually work, they would have to take actual savings created by the intervention and recycle them. Otherwise, they are like targets on speed. Worse, targets on LSD.
Let me tell you, for example, what I heard about my children's old primary school. Teachers in tempers. Teachers throwing furniture. Staggeringly dull lessons. Why this abomination? Because they now get cash bonuses based on the SATS results of the children in their care.
This is doubly unfair because the children do not benefit individually from the SATS results at all. They are just being used as the tools to deliver target figures, and therefore bonus payments, to individual teachers. It is the precise opposite of professional care, and it is all down to payment by results.
It fits into a wider mistake, and this has nothing to do with Iain Duncan Smith. It is the fantasy that everything can be reduced to numbers. It is the McKinsey Fallacy again, that everything can be measured and what can be measured can be managed. It can't. If you try it will eventually cost you everything.
See more in my book The Human Element.
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1 comment:
This is something that Alfie Kohn has written on in a number of books and essays and as far as I am concerned I have seen no effective refutation of his assertions. In our own context, I am bewildered at the inability of politicians to think outwith the box that if incentives might work in a profit driven environment (and I am with Alfie Kohn on this - they don't) then in the public sector all a bonus culture will do is to encourage figure fiddling to gain reward - activity to no productive end.
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