The Bank of Our Friends in the North

First, a bit of transparency is required. I’m a customer of the Co-operative Bank, and I’ve been irritated with them for ages – long before they imploded – mainly because (silly, I know) of their habit of sending me bank statements with one or two transactions on.

The reason I stay with them, despite the recent revelations, is because the Save Our Bank campaign has told me to wait and see – and I see the logic in that – and also because of their excellent, friendly and effective call centre, which is no small thing.

I promised I would leave the Co-op if the hedge fund deal went through, so I will still leave if they renege on any ethical positions – or if they dump the call centre. The hedge funds need to be kept up to the mark.

But I am also aware, as Lord Myners said yesterday, that the hedge funds are not completely committed either and could pull out if there was a mass walk-out by customers. It looks like Mutually Assured Destruction to me (if only Vince Cable had threatened to veto the name before negotiations with the hedge funds).

What is fascinating about the revelations about their chairman, the Rev. Mr. Paul Flowers, is not how unusual it is but how much it brings the failures at the Co-op into line with the other big banks.

The big banks also had key appointments without enough banking experience (HBOS). They also succumbed to disastrous mergers with rapidly disintegrating loan books (RBS).

It just goes to show, as the Guardian said today, that the Co-op is not in trouble because it is a mutual, but because it is a bank.

What underlies this very public witch-hunt against Mr Flowers is that he was a political appointee, and this is what terrifies the financial establishment about local banking. They are afraid of bankers appointed because of years of service to the Labour Party in some one-party fiefdom, lending public money out to approved vanity projects.

They are afraid of the emergence of the Bank of Our Friends in the North.

But again, the scandal is not about small banks, it is about the hopeless regulation of big banks.

The truth is that most other countries, in Europe and North America, have local banks that underpin their local economies.  They also have banks that are linked in some way to local government.

We have new banks along these lines in Cambridgeshire and Salford, with more on the way, using local assets, pension funds and deposits to support productive business - just as the big banks seem to have lost their ability to do so.

Their track record across Europe is not blameless, but those networks of local banks which rode out the recent banking storm without investing in dodgy bonds or turning to much attention to the global markets - sticking to their core skills – have provided a secure basis for those economies locally which we lack.

Because the truth is that there is a kind of snobbery about the way we have done banking regulation. It allowed the big banks to do pretty much anything they could finesse, but traditionally strangled the small and local banks before they could launch.

And all for fear of the Bank of Our Friends in the North, when all the time political appointees were staring them in the face.

The Guardian also lists some of the facts about the rise of the mutual sector:

• One new co-operative formed every working day of the week.
• Over six thousand co-operatives in all.
• In banking, one million people are now members of credit unions, which are financial co-operatives
• Two thirds of farmers in Scotland are now part of agricultural co-operatives, creating a commercially very highly successful sector.

In short, it is big banks that are in crisis, not the growing mutual sector that is able to achieve things that conventional business can't.

Only leadership will humanise the NHS

My nine-year-old came back from school yesterday evening in a cynical mood.  What had piqued his cynicism was the constant repetition, in rhetoric and on noticeboards, that his primary school is a 'Rights-Respecting School'.

"They say they listen to us and ask our opinions," he said crossly.  "They never do.  They just shout."

I have some sympathy with this, and the vacuous round of tickbox titles.  I also have sympathy with the institutional gap between rhetoric and reality in public services, and their capacity for self-delusion, and the conversation made me think of yesterday's NHS announcement.

The Department of Health has spoken and now we have a response to the Francis Report and all the others that followed the scandal of Mid-Staffs.  The answer is a flurry of measures and controls.

As so often, the influential NHS blogger Roy Lilley hit the nail on the head yesterday morning when he talked about the fear of the regulator, and frontline staff's fear of the managers, being greater than their fear of upsetting the patients.

On the face of it, these measures - forcing wards to declare their nurse-patient ratio, the duty of candour - are all sensible in themselves, but I am still nervous about them as a whole.  I don't want to take a high moral position on this - I don't have to run a ward or look after patients.  I don't have to balance the books of the NHS, but three things worry me.

The first is the Rights-Respecting-School conundrum.  This kind of rhetoric never seems to quite do the job.  Efforts via tick-boxes to make sure reality gets in line just seems to make the rhetoric even more vacuous, and the same I fear will happen to Jeremy Hunt's "safest healthcare system in the world".

You can't measure your way to that kind of objective, and here is my second worry.  On its own, forcing transparency on nursing levels seems a sensible move, but nurses seem scarce these days - because of the very battery of targets, standards, tickboxes and measures that this one adds to.

Separately, they seem sensible.  Together, they amount to the very hollowing out of moral purpose that caused Mid-Staffs in the first place.

The third worry follows on from this.  Policy-makers have grasped that targets can damage the fabric of public services.  What they have yet to grasp is quite how much of the energy and attention of the organisation gets shifted, by managers and frontline staff alike, into managing and massaging the figures.

They have yet to understand what a disaster the targets culture has been for our services (see latest news about police statistics).

Years ago, the author of The Audit Explosion, Michael Power at the LSE - writing at the very beginning of public sector targets - talked about the irony that any failure of accounting was tackled by more accounting.

That is what seems to be happening here.  Every failure of iron control is tackled by ratcheting up the pressure: more measures, bring in the police, legal duties - at this rate we will be jailing health staff.  Maybe there will occasionally be justification for doing so, but what about their managers, what about the board, what about the policy-makers who designed the system that made these horrors possible?

What would I do?  Well, here are two things.

First, I would humanise the wards by turbo-charging volunteering by patients, their families and their neighbours.  Volunteers who work alongside staff are immune to the kind of pressures that are brought to bear on paid staff, and they act as a major humanising force.

Second, I would sack the boards of hospitals which make these kind of scandals possible.  It isn't a solution, but it is a bare minimum that those who took the decisions at the top should be held responsible.

But in the end, the main thing that will shift the problem is inspirational leadership at local level, and at ward level.  That is tough to achieve when staff at every level are motivated primarily by fear, and have had leadership leeched out of them by a generation of disastrous targets and detailed central control.

Why social care has to go beyond needs

For the past generation, Western Australia has been pioneering a different way of organising social care.

It was the brainchild of their new mental health commissioner Eddie Bartnik, and it flew in the face of conventional methods, which assess needs and try to slot people into existing service packages.

What he came up with instead was not just more flexible and more human, it was also less expensive. It was and is called Local Area Co-ordination.

LAC is now working here too, notably in Middlesborough and Derby, and it is run by a group of local area co-ordinators who are the very opposite of specialists. They are more like coaches than social workers, and they start somewhere different.

Rather than asking immediately about needs, they ask what their client wants to achieve in their life – then move on to the personal and social assets at their disposal.

Then they try to see if what they need can be provided informally, from friends or family, or neighbours – it might be regular lifts or other kinds of regular visits.

If the informal approach doesn’t work, then they fall back on conventional care packages. It is the reverse of the usual approach which starts with the care packages, and only if people complain very loudly do they fall back on informal solutions.

The spirit of LAC is the cornerstone of the new Care Bill, thanks to the efforts of people like former social care minister Paul Burstow and Alex Fox of Shared Lives - but still the Care Bill doesn't exactly roll it out. Now Eddie Bartnik himself has been over and I was fascinated to see Alex Fox’s description of his visit.

Of course, I subscribe to the vital importance of a flexible interface with the public, rather than what we currently have.  I absolutely agree that LAC makes possible friendship, love and permanent social assets.  I can see why it was so much more popular in Western Australia (though not in Scotland, but that's another story - about trying to shift unwilling professionals).

But what I really took in from what Bartnik said was this:

"You won’t understand and meet people’s needs, if their needs are all you are interested in."

That is absolutely right, and the way the system has undermined any of the assets that people have except their needs - their only passport to any kind of help - explains some of the way that it tends to maximise needs.  Of course it does, if that's the only thing people have left.

My own feeling is that LAC ought to be in place everywhere.  But like so many of these other innovations, under the broad heading of 'co-production', you find you need a different kind of professional altogether to run them.

A very familiar story, this time in Portsmouth

I've just spent the weekend doing Ports-mouth, and not just because it is a Lib Dem city, but because of the museums, Mary Rose (fabulous), Victory, Warrior and so on.  So just allow me three broad comments about the experience.

1.  The Nelson Touch: we were told the familiar story about Nelson's penultimate words: "Kiss me, Hardy!"  The Victorians, as I've always understood, felt uncomfortable about it and put it about that he had actually said 'kismet' (fate).

I have always wondered about this.  Imagine that Nelson did say "Kismet" after all, and then was surprised when his captain kissed him.  Perhaps, since his last words were not "Hey!  What are you doing?  Gerroff!" we know that Nelson did in fact say "Kiss me, Hardy", after all.  I certainly hope so - it would be in keeping with his character.

What is really happening here was the moment in history that marked the end of the prevailing English character - sentimental, over-indulgent when it came to heroism, and many other things.  It may also have marked the beginning (almost) of the prevailing British character (thanks mainly to Wellington) - stiff-upper-lipped, unemotional when it came to heroism, and many other things.

I have seen signs that this is about to reverse itself.

2.  The importance of 55 years.  I am 55, it so happens.  The gap between the Battle of Trafalgar and the launch of the ironclad Warrior, was exactly that, and what a shift it was (admittedly, Victory was almost a century old by then).  You only have to walk the clean, uncluttered decks of Warrior to see the difference.

Go forward another 55 years and you get to the Battle of Dogger Bank and the clash between battlecruisers that looked nothing like either Warrior or Victory.

These are major shifts, and it kind of strengthens my thesis, after flying in Jumbo Jets and driving in Minis for half a century, that technological change is slowing down.

3.  One war or two.  I had to visit the Submarine Museum, because I have just published an ebook about submarines in the Dardanelles (E14 in particular, now that its wreck has just been found).  To my surprise, they have bundled the First and Second World Wars together, all mixed together in the same glass cases.

Perhaps, now that it is a century since the outbreak of the Great War, this is increasingly how the two will be regarded.  But when it came to submarines (and much else, actually), the two wars could hardly have been more different - as I explain in my book Unheard, Unseen.
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Finally, I was moved and inspired by the film of Alexander McKee at the Mary Rose Museum, describing how he battled to find and then preserve Henry VIII's ship, throughout the 1960s.  Having found the wreck, he tried to get an official search going, and was turned down - leaving him no other option but to rent the wreck site from the HM Commissioner of Wrecks to stop it being despoiled.

McKee was a historian, playwright and diver (I have some of his books), but I never knew this story.  It is actually such a familiar story too - about heroic individual or communal effort to preserve things in the UK, frustrated by boneheaded officials, and finally vindicated by history.

All the way around the museum, I found myself reciting, quietly to myself, Sheelagh Pugh's poem:

"Sometimes things don't go, after all
From bad to worse..."

Why politics needs no little plans

I apologise for my temporary absence (let's hope it makes the heart grew fonder).  I've been busy setting up a new co-operative think-tank, the New Weather Institute, and this post is adapted from the one there

Being a helpful kind of guy, I have written a number of blog posts elsewhere about what frustrates good decisions by governments - and how easy it is to get sucked into making bad ones. Sometimes appalling ones that echo down the decades.

You can read my top ten here.

But what about the good decisions? There has been huge debate about the peculiar tiff between Russell Brand and Jeremy Paxman on Newsnight about corporate control of government decisions, and what might be done about it.

Leaving that topic aside, the source of so-called apathy – often rather principled, in fact – is often that sense of the sheer powerlessness of government: perhaps because of the sheer complexity of the system they are dealing with, perhaps because they don’t want the basic structures of power, on which they now rely for so much, to unravel.

What can be done? The New Weather Institute is dedicated to optimism, and that change – the right kind of change – is not just possible but inevitable.

So to speed the process along, here is my list of the top ten decisions UK governments could take to tackle the sheer intractability in which they so often find themselves.

10. End privileges for out of town and online shopping: We must keep our town centres alive, and it makes no sense to give such tax and parking advantages to the out of town retailers and the big online ones which operate out of Luxembourg, like Amazon. If we want thriving UK retailers, we need to be on their side.

9. Measure well-being and resilience as our main economic objective: Money just confuses matters, and especially now that Ofsted no longer require schools to promote resilience. We need to know whether the economy is doing a useful job or not.

8. Tax bonuses at 90 per cent: All bonuses are pernicious as measures for effective working, and can be disastrous. When bankers get them, they also cause inflation.

7. A speculation tax: the $1.4 trillion that pours through the world’s computers every day, dwarfing the available resources of central banks, is a clear and present danger, and we could do with the revenue. Nearly all of this avalanche of money is speculative.

6. End payment by throughput in public services: Too many service contractors are paid by the number of people they process, so there is no reason why they should make services more effective – especially when they are paid to process them over and over again. This is essential if we are ever going to make services affordable.

5. Institute a right-first-time system in public services: This is the implication of No. 6. It means minimising interventions, rather than maximising them, and putting people directly in touch with human beings with the power and experience to help them, once and for all. It means Human By Default.

4. Build a secondary housing market: No more renting – what we need is home ownership for everyone, which means building social housing and giving 99-year leases away for £30,000, on condition that it can’t change hands for any more than that during the lease (plus what has been spent on it since). This will finally bring down the value of all homes.

3. Major anti-trust action: We need to revitalise enterprise by enforcing the guidelines that no company should build up more than ten per cent of the UK market. Monopoly is antithetical to enterprise. This also means splitting up the big banks and turning them into more useful local and regional networks, capable of providing enterprise with the credit it needs.

2. Create more public money: This means shifting the way money is created from credit – usually in mortgage credit (which will slow down as we ratchet down house prices) – to interest-free direct creation by governments, spent into circulation by creating the green infrastructure we need.

1. Provide a citizens income: To every man, woman and child in the country, as of right, to give them the basics of life, ending the bureaucracy around income support and setting people free to earn, create or work as they see fit.

Do any one of these and the current crises could be transformed; do them all, and the situation may be unrecognisable. All of these measures are designed to give people more independence, and other objectives would yield a different list.

This list doesn’t, for example, include a land tax. It doesn’t do a whole range of things that progressives are supposed to want. That does not make them correct – they may have serious side-effects which would make them counter-productive.

But here is the problem. To discuss solutions with this kind of scope, it means that you would have to do so outside the mainstream political structures, all of which seem to be dedicated to the tiniest imaginable changes.

I’m inclined to think that conventional politics may not recover until it encompasses big debates as well as the smallest ones. Until you can bring big ambitions (I don't mean personal ones) into the party with you, then really – people will say – what’s the point?

The many meanings of 'choice'

I had a fascinating day yesterday with the energetic management team at Nottinghamshire Healthcare NHS Trust, and it was an impressive experience.  It is a big, integrated trust and integration is the big challenge for the NHS right now.

I was there to talk about barriers to choice, the title of my independent review for the Cabinet Office which was published in January, but I found myself talking again about the peculiarities of the word.

I became intensely aware of these while I was doing the review.  One room full of hospital doctors (I won't say where), sat there with their arms crossed, tight-lipped and clearly enraged with me as some kind of ideological emissary from Whitehall.

Here is the problem.  There are many different kinds of choice - from the approved choice of provider, which is the traditional mode, right through to the choice to contribute yourself in some way (co-production).  There are three models of choice, each very different, promoted just within the Department of Health and the Department for Education.

But there is a political problem too, and I was reminded of that while I was talking.

There is a Labour way of 'choice', which is the one introduced by public service economists from 10 Downing Street during the Blair years, which tends to mean a formal choice of provider, promoting competition within the public sector.

There is a Conservative way of choice too, which I think is primarily about competition.  That is how Conservatives understand the word, even though it could mean that the people who choose are actually just service commissioners.

There is also a Lib Dem way of choice, perhaps rather less articulated, which is closer to consumerism.  To have Lib Dem choice, people need to have options.

Now, the difficulty comes because these different interpretations are not obvious, even in Whitehall.  The term is used to cover all three interpretations.  Often it is simply assumed to cover all three.

Outside Whitehall, in some way, the opposite can also be true.  People assume that when they hear the word 'choice', that what was meant was precisely the opposite of what they would like it to mean.

It may be time we dumped the word altogether, because its baggage is weighing it down.  So we need to ask ourselves: what goes beyond choice?  The answer, it seems to me, is flexibility.

And here is the ultimate irony.  Formal choice as constituted might sometimes mean flexibility, but sometimes it means an extra layer of formality in the system, rendering it even less flexible than it was before.

Why start another think-tank?

It isn't every day someone launches a new think-tank, but that's what I'm going to do today (not by myself, but with others).  The New Weather Institute's blog already has a version of my excuse for doing so, but I thought I should put a version of it here.

Because, why would anyone start another think-tank?  It is a reasonable question. The centres of the world’s greatest cities are now heaving with think-tanks, full of young men in pressed blue shirts and young women juggling with PowerPoint presentations.

The problem is that there is something circular about most of them (but not all).  Either they are think-tanks with an agenda of their own, complaining about the present, when their answer to most questions is – well, I wouldn’t start from here if I were you.

Or they are think-tanks plugged umbilically into the establishment, dedicated to suggesting very small solutions to very narrow problems, with as little reference as possible to context or future.

They are idealists or technocrats, and little in between. And neither have much to say about the future.  Both have their attention very much fixed on the present.  What we so badly need is a few more think-tanks in the middle, with the following:

• People with life experience starting organisations and making things happen, who can tell the difference between a real trend and a dud.
• Enough understanding of the complexity and paradoxes of the present to begin to navigate the future.
• Faith in people, communities and creativity, rather than disconnected, dehumanised data.

We humbly submit the New Weather Institute as a different way forward.

We are not young (I fear). We are not complacent about the present, stuck in the past, nor dismissive of the future.

We don’t extrapolate trends. We don’t suffer from the besetting sin of so many conventional think-tanks: that an idea is better if it attracts a few headlines than if it might actually work.

We are a co-operative – as far as we know, the first co-operative think-tank. We have no expensive offices and don’t require huge overheads that our customers need to underwrite.

We have between us extensive experience, not only of working on the projects which map out ways forward for organisations and people – but of making the future happen, by starting the institutions or shaping the ideas that in turn have an effect on those around us.

We don’t know what’s going to happen, of course. Nobody does. But then neither do we pretend we can measure it, bottle it, or reduce it entirely to graphs.

We’re old enough to know that things DO change.  That they change sometimes all of a sudden, and that they need a nudge or two sometimes to change in the right direction.  That's what I hope the New Weather Institute can give.