Public Services Keep Failing

December 05, 2007 10:44 AM

In the news today there are two more stories of dismal public sector failure.  Despite countless billions in extra spending within both the education system and the health service we are slipping down the international rankings for educational attainment and primary healthcare service standards are declining.  The Telegraph's leader captures the reasons for this widespread failure well:

"Only the dismantling of centrally dictated, government-monopoly structures will switch control of public-service priorities from the producer to the consumer, and provide the responsive, high-quality services that modern Britons have a right to expect."

There are a number of issues here:


  1. Centralisation:  While the NHS does contain 152 Primary Care Trusts and innumerable other local bodies these are not independent local healthcare providers.  Important decisions from the selection of drugs to the allocation of resources within the NHS are made centrally.  All the Trusts are subject to targets and other impositions from above.  The Trusts are still best understood as outposts of a monolithic NHS.  The attempt to run such a huge organisation, the third largest - in terms of number of staff - in the world, as a single bureaucracy is doomed to failure.  Centralised decision making can't take account of local knowledge and differing circumstances.

  2. Political management:  This ensures that ultimate control of these services lies with politicians who invariably lack management experience and subject knowledge.  The structural problems with these services are compounded by inexperienced leadership.  Services aren't under the control of local staff and genuinely accountable to their users but instead under the control of a politician with a very limited understanding of what people need and how it can be supplied to them.

  3. Monopolies:  Monopoly suppliers have no competition, no threat of customer loss or bankruptcy.  Customers have no choice and no redress.  Monopolies therefore remove the basic tools of management and kill the need to innovate, improve and reduce costs.  Hence politicians set up the Competition Commission to protect the public from business - but not from themselves and their civil servants.

In the news today there are two more stories of dismal public sector failure.  Despite countless billions in extra spending within both the education system and the health service we are slipping down the international rankings for educational attainment and primary healthcare service standards are declining.  The Telegraph's leader captures the reasons for this widespread failure well:

"Only the dismantling of centrally dictated, government-monopoly structures will switch control of public-service priorities from the producer to the consumer, and provide the responsive, high-quality services that modern Britons have a right to expect."

There are a number of issues here:


  1. Centralisation:  While the NHS does contain 152 Primary Care Trusts and innumerable other local bodies these are not independent local healthcare providers.  Important decisions from the selection of drugs to the allocation of resources within the NHS are made centrally.  All the Trusts are subject to targets and other impositions from above.  The Trusts are still best understood as outposts of a monolithic NHS.  The attempt to run such a huge organisation, the third largest - in terms of number of staff - in the world, as a single bureaucracy is doomed to failure.  Centralised decision making can't take account of local knowledge and differing circumstances.

  2. Political management:  This ensures that ultimate control of these services lies with politicians who invariably lack management experience and subject knowledge.  The structural problems with these services are compounded by inexperienced leadership.  Services aren't under the control of local staff and genuinely accountable to their users but instead under the control of a politician with a very limited understanding of what people need and how it can be supplied to them.

  3. Monopolies:  Monopoly suppliers have no competition, no threat of customer loss or bankruptcy.  Customers have no choice and no redress.  Monopolies therefore remove the basic tools of management and kill the need to innovate, improve and reduce costs.  Hence politicians set up the Competition Commission to protect the public from business - but not from themselves and their civil servants.

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