Towards a new kind of efficiency

For most of this year, the publication of the Treasury’s Public Service Reform white paper has been horribly imminent. David Cameron even gave a speech raising the curtain on it. But nothing happened. It is still imminent.


Of course we know that, behind the scenes, there are struggles to shift the emphasis from mass privatisation to gentle mutualisation. It is far from clear yet whether the Treasury realise that the tools you need for one – big, industrial strength, shared commissioning – is very different from what you need for the other. We shall see.

But the real problem is that the coalition are only half way through a revolution in service thinking. They have got rid of targets, chucked out the Audit Commission, yet commissioning units get bigger and bigger, the disastrous shared back office systems continue to grow, and McKinsey consultants are still at large in the corridors of Whitehall.. The result? Sclerosis.

Will the white paper address this? It doesn’t seem very hopeful, really. But I spent this last week as a 'collaborator' of a pop-up think-tank based in an old Subway shop in Exmouth Market.  The result is my own advice for the government.  Because it seems to me that there is one way (well, four ways, actually) they can both increase the effectiveness and lower the cost of public services in the long term:

1. Make services more flexible
2. Build services which also reduce demand
3. Co-produce services to reach out and rebuild community.
4. Make services human scale

How are they going to do that? Well, you will have to read the POPse report The New Efficiency: Four ways forward to find out:  http://popse.wordpress.com/2011/05/13/the-new-efficiency/

Mea culpa!

Is the collapse in the Lib Dem vote all my fault?

Here is the case for:

http://www.libdemvoice.org/opinion-its-all-my-fault-24124.html

Goodbye, HSBC

One thing I have managed to achieve in the last few months is to get shot of my personal bank account with HSBC.  I have had once since I was fifteen, when I shook hands with the bank manager in Maida Vale (the branch has been closed for years) and was then very proud of it.

When the closed their branch in Crystal Palace a few years ago I vowed I would leave, but it has taken me rather a long time to 'move my money', as the Huffington Post urged so successfully last year.  I feel rather good about having done so.

And one reason or this is that I worked out my own share of their bonus pot this year.  They have about 95m customers worldwide and paid out bonuses this spring to their staff worth £1.2 billion.  That means each of us customers have individually contributed about £12.60 (including about 5p for the chief executive's bonus).  Where else does the money come but from their customers?

I don't feel this is my money well spent.  It certainly hasn't improved their service to domestic customers, who are now expected to interact via robots in their increasingly rare branch network.  The bonuses are inflationary and raise London house prices, making us all worse off.  I feel relieved not to be encouraging that kind of economic corrosion.

Now for my Barclays business account...

Thoughts on extra-judicial killing

I can't exactly mourn Osama bin Laden, or even really regret his passing.  It may be that this was one of those occasions where extra-judicial killing can be justified.  I only know that, if so, it is one of few occasions.  What disturbs me is the reaction to his death.

The ghoulish crowds on the streets of Manhattan reminded me of the crowds that Charles Dickens described, with revulsion, who struggled to get closer in a public hanging.  That doesn't mean you have sympathy with the criminal.  This is an issue of taste not justice.

But the idea of Barack Obama being in at the death virtually, watching the proceedings through a camera strapped to the head of one of the soldiers, gave me a particular nightmare.  It reminded me of something, and I have now remembered what it was - it was the way that Adolf Hitler demanded to see the deaths of the July 20 plotters who had tried to assassinate him in 1944.

Again, I am not complaining about the outcome, simply the lapse in civilised values.  The sight of civilised people marching through one of the most modern cities of the world, baying in delight at the execution of a human being at home sends a shiver down the spine.  And it should do.

Where on earth have you been?

Regular readers of this blog, if there are any, may have discerned a slight slackening of effort on my part over the past few months. No posts since February.

This is of course shocking, and my only excuse is ill-health. I have been suffering from flu which turned into turbo-charged eczema, no doubt thanks to the stresses of the coalition (yes, I know, I flatter myself).

Still, I am feeling better now and really must put in a bit of effort. The reason I feel better is two weeks in the extraordinary village of Avène in the Haut-Languedoc region of France. There is not much happening economically speaking in the area, except for the cosmetics factory of Avène and the thermal spa with an international reputation for curing eczema.  But what an amazing and effective place it is.

The French have a tradition of spa cures which we have lost in the UK, but there are people suffering from skin disorders there – and specialist doctors – from all over the world. Yet Brits are a rarity; where you do see them, it is usually children suffering from shocking eczema who have had to fight their way out of the British NHS.

I put this brutally because, for all its benefits, the NHS tends to retain a blindness about chronic health problems, preferring to maintain people in ill-health for the rest of their lives, rather than actively seeking out some more permanent solution.

This is partly because permanent solutions often require social networks, and – with the exceptions of the thriving time banks in surgeries – the NHS regards this as beyond them. It can also be because of professional disdain for foreign or bizarre treatments like Avène, despite the weight of research and proven results they have managed to garner over the years.

I heard distant rumours of wars while I was there, political battles over the future of the NHS, which made little or no mention of the urgent problems that the current NHS model faces. And I thought: why are Lib Dems being so defensive, clinging to the old, rather than carving out their own practical and humane solutions for the future?

This is not to suggest that the Lib Dems are wrong to demand changes and safeguards in the plan for GP commissioning.  It is that no political party with ambition should forfeit the right to a positive vision of the future, and I can't help feeling that - for all the re-statements of 'principles' and the bleeding obvious - there is still no equivalent Liberal vision for healthcare.

It tolls for thee

Listening live to President Obama’s press spokesman in the early stages of the Egyptian uprising, you might easily have believed – especially as he kept emphasising it – that the right of Egyptians to access social networking sites was the fundamental human right that the United States wanted to defend in the current crisis.

As our own administration shifted the language about Mubarak’s – from ‘government’ to ‘regime’ – there is was discernable nervousness about articulating precisely want they want the Egyptians to do, and what this whole crisis was about.

They used words like ‘democracy’ and ‘freedom’, as if they – the self-appointed representatives of such concepts – are secure in their conviction that no demonstrators are camped in the squares of their own capitals.

This peculiarity goes to the heart of what is happening across the region and on our TV news channels.  And it also implies a challenge for us.  The abuses that lie behind the turmoil in the Middle East are not quite as alien to us as we think.

The uprising is certainly about human rights, but nobody could listen to the occasional explanation by those taking part – from Tunisia to Jordan –without realising that it is just as much about economic rights.

They talk about queuing for bread and about asking for more than subsistence wages.  They talk about the vast wealth of the dynasties in power. 

Of course President Mubarak was right that people have more cars and televisions these days, as if that was somehow a sign of human fulfilment.  But what they also have, right across the region, is ever more flagrant examples of hideous wealth alongside hideous poverty.

We can’t pretend that the uprisings in the Middle East are about a narrow, polite kind of democracy where people vote, freely and secretly every few years, and then go back to their toil.  It is about a broader idea of democracy, where everybody can provide for themselves, have a stake in the nation, and where a few do not have the economic muscle to tyrannise the rest.

That kind of democracy is not the kind where the West has a good track record.  We may not have the kind of obscene extremes of wealth and poverty you might find in Dubai or Cairo.  But we have bankers pushing up the price of homes with their £1 million bonuses.  We have individual hedge fund managers with enough economic muscle to manipulate the entire coffee harvest of the world.

It is, after all, our homegrown traders who are speculating in the price of grain and other staples, and pushing the prices ever higher.

These are intolerable inequalities, and they make a mockery of economic democracy.  Generations that comes after us will be staggered that we were blind to them, just as we are staggered that reasonable people accepted the slave trade.  Every generation has its own hideous abuse, and these are ours.

The uprisings in the Middle East are calling for freedoms that we aspire to as well.  So Barack Obama and David Cameron: never send to know for whom the bell tolls; it tolls for thee.

Why Matthew Oakeshott was right

I don’t know how it came about that Matthew Oakeshott is no longer speaking for the party on economics in the House of Lords. I don’t know whether it was his decision or George Osborne’s. But the fact is that he is overwhelmingly right.

Project Merlin is no solution to the banking problem. In fact, by failing to recognise the real problem here, it may make matters worse.

The real problem is this. It isn’t that banks are somehow unwilling to lend money to small businesses; it is that they are no longer set up to do so. They have no local managers empowered to take decisions. They have risk software that rules out most deals. They have such onerous conditions and charges that many SMEs shun them altogether.

Pretending that our current banking system is capable of doing the job delays a solution that may provide us with a proper lending infrastructure. Worse, it may fuel the next property bubble.

Why? Because 70 per cent of UK bank lending in this area is going into property deals. Force them to lend more to small businesses and all it will do is to funnel more money into property, with another dismal round of the whole economic bubble again.

Banking is fast emerging as the great moral issue of the time – and I speak as someone whose bank charges have gone into Bob Diamond’s obscene bonus. Every generation is slow to wake up to the moral horror in their midst; we are slowly waking up to ours.  A dysfunctional banking system is undermining our ability to build effective, interdependent local economies, while fuelling inflation and corrosive inequality in their pay packets.