There is little doubt we need regulation. Frequent calls for less regulation are, for some, driven by evidence of its dysfunction, but it isn’t less regulation that we need, it is better regulation. Regulation that will foster innovation and productivity improvement. It won’t mean less control; it will mean more and better control.
But let’s start with the problems we see today.
Impact on morale
The current method of regulation is pernicious. We witness the stress induced all the time, from the fear inculcated, to resignations in order to avoid that fear, and even suicides. All inevitable human consequences, as the current method of regulation places the inspector as judge and jury.
The time consumed
Organisations spend enormous amounts of time and resource preparing for the feared inspection event. It extends to briefing staff on what to say / not say / avoid. Woe-betide anyone who exposes things leaders would prefer the inspector not to see. Getting a good judgement is the priority. Reputation is the yard-stick; it requires adherence to the specifications.
Judgements lack validity
While the greatest scandals make the news, for example Harringay and Stafford, where ‘good’ ratings hid the truth, the scope for subjective and wrong judgements in inspection results in copious examples of invalid inspection results. The source of much misery.
Those three problems are well-known, well-evidenced and occasionally become part of the political debate. But the debate never moves beyond doing the wrong thing righter; as, for example, we have seen in the recent Ofsted ‘one-word-assessment’ debate.
But, by far the greater problem is this:
Regulation promulgates diseases; impediments to productivity
The regulator’s directives are frequently not the best ideas and, also frequently, oblige organisations to conform with ideas that actively undermine productivity. Regulators bring with them their management theories, imposing those on the regulated.
A little bit of helpful theory
In all organisations there is a systemic relationship between purpose, measures, and method. The relationship is at work for good or ill. If, for example, a target or any other arbitrary measure is imposed, the de-facto purpose of the system becomes ‘meet the target’ and, as a corollary, the method of working becomes constrained. On the other hand, if measures are derived from the organisation’s purpose and used where the work is done, improvement and innovation are natural consequences.
The fundamental problem with the way we regulate is that regulators and policy-makers dictate measures and methods, flooding the regulatory regime with their management theories. These become egregious constraints on productivity.
Changing the locus of control
The first feature of better regulation is to change the locus of control. Currently the locus of control is with the regulator, we need to have the locus of control with the regulated. While you may think this will lead to less control, it will, as you will see, lead to more and far better control.
Limiting policy-making and regulation to statements of purpose
It is right that politicians should take a stand on the purposes of public services. But they and their policy-makers and regulators should be limited to that. It should be the regulated who make decisions about method(s) and measures.
More reliable and valid inspection
If the regulated have made choices about methods and measures to achieve the policy ambition, the inspector (sans checklist) will only need to ask what choices have been made about measures and methods and then go to where the work is done to assess how and well the choices achieve the purpose, seeing the methods and measures in action.
Greater transparency
This way of inspecting creates total transparency. In the current regime people can hide – they use their ingenuity to give inspectors what they want to see. In this better method of regulation all ingenuity will be placed on achieving the purpose as set out by politicians. This way of inspecting will expose poor management readily.
Improving productivity
It is axiomatic that improving productivity is a question of method. The freedom to innovate is the essential prerequisite.
Further benefit
As well as achieving more reliable and valid inspection, the better way will mean far fewer resources dedicated to policy-making.
A return to sensible thinking
Organisations spend considerable time and effort recruiting top leaders. It is, to say the least, odd that such leaders find themselves constrained by prescriptions governing what they must do.
Why do we believe that people in Whitehall, far from where the work is done, are the people best able to determine how that work should be done?
Politicians believe they need to tell leaders of public services to do so they can hold them to account. Accountability is what’s left when you’ve taken away responsibility. We need to return to responsibility.
Well, those are my arguments. I’m keen to hear what people think. Anyone who has followed my work knows that I have copious examples of wrong-headed prescriptions dictated by regulators, many of which were used to argue for the closure of the Audit Commission many years ago.