Alistair Darling’s £15bn

I am beside myself with fury. In the budget, Darling announced £15bn of further savings in the public sector through more IT-led change, back offices, sharing etc – more factories. The authors of the Treasury report actually declare that their evidence-base amounts to ‘proxies, assumptions and estimates’ – they don’t let their lack of evidence to get in the way of their prejudices. Yet we have firm evidence on the unintended costs being created by factory designs (Advice UK report – see past newsletters).We have been building public-service factories for a few years now. Isn’t it odd that we don’t have any data from these experiments? We know one county council is kicking out its private-sector ‘partner’, we know many who are discovering that their new factories, developed with their ‘partners’, are experiencing rising costs, we know of one council where an extraordinary spend has resulted in higher costs and worse service. Why doesn’t government publish data?If you have any data and/or experiences with ‘new factory management’ in the public sector, please let me know. We need to start totting up the waste of public funds used for building factories.

I am so mad about all this I decided to make my next visit to Hull University Business School a Master Class on why Darling’s initiative will lead to higher costs and how services ought to be designed for massive improvement. It is free. You can register at: http://www.systemsthinking.co.uk/Hull%20master%20class.pdf

Back in this mad world

Readers have been sending me their experiences of public services, here are two that are representative of the pain the regime creates for us, the people it is supposed to serve:

‘I was called for a blood pressure test by my doctor’s surgery. I went in to see the nurse and we chatted quite happily: Nurse: ‘Now what are you here for?’ Me: ‘Because I was summoned.’ Nurse: ‘Ah, yes, we’ve had a lot of these [blood pressure tests] coming in lately, it keeps the cash coming in.’ A little more discussion elicited the information that there were targets for testing and income related to it. When the nurse told me my blood pressure was slightly up (should have tested it before the conversation!), she said I should come back intwo weeks for another test. After establishing that this was not medically required, I politely declined, with which the nurse was quite content.’

Writing in the BMJ, 7th March, a doctor describes how the NHS target culture is leading to over-diagnosis, over-treatment and unnecessary anxiety amongst the elderly; making happy people ‘ill’. But you make your targets.

The second:

‘My 5 year old son, having falling behind his peers, has triggered the school to develop an individual educational plan for him. I attended the meeting with optimism thinking that this would be a way to agree with the school where he was, experiment with different methods and monitor the difference it made to him. Apparently not. In fact, it consists of a set of targets that he is not aware of, with no change to learning strategies for him. I asked what would happen if he didn’t meet his targets – would this trigger different learning strategies? Apparently not – they will review the plan and make the targets easier. So, we will carry on doing the same thing and hope that writing down the expected results will somehow lead to them being achieved and if they don’t we will list easier results. We will keep doing this until the targets are hit at which point the plan will be successful…..Having read the policy I understand the purpose of
the system….to tick the boxes and create evidence should he get so far behind that he needs additional resources from the LEA.’

We should worry about how much our public services have been drawn away from their purpose by the regime.

HMRC still in the news

HMRC (newsletters passim) is in the news again. A whistleblower says ‘overworked tax staff are routinely ignoring mistakes, refusing to answer phone calls and even binning letters. People who ring in with complaints are cut off simply to meet government targets on answering calls.’ Furthermore, she said ‘Staff have actually been told that, when someone rings in with a tax inquiry and you spot a mistake on a person’s record, you have to ignore it unless they have actually asked you to look at that mistake. It’s all about the government target of answering so many calls in a day.’

Last month there was a TV programme on HMRC’s treatment of small business people whom it (wrongly) drove out of business. The top man at HMRC told us his was a big business and big businesses make mistakes. No. Badly-designed businesses make mistakes. And in these cases the ‘mistakes’ occurred over months and years – anyone with a smidgeon of humanity and half an ounce of common sense would see that the ‘mistakes’ could have been at least mitigated and more probably avoided if anyone in his system had the slightest concern for the poor taxpayer whose business was being driven under. But he didn’t design his system that way, did he?

The Help Desk – a modern oxymoron

Local authorities have been bullied by the regime to ‘share’, ‘out-source’ or ‘centralise’ their IT services. Of course, the designs promulgated are bad, ideological and without good method. Here is one such tale. A reader writes:

‘I work in a department of a large metropolitan council. In the past when we had problems with our IT, we used ring up to our IT section on the floor above. In many cases they could fix the problem over the phone or they would come straight down to look at the problem or you would arrange a time when you could meet to deal with the matter. This system worked perfectly for all involved. After all if you have an IT problem you want to speak to an IT person, don’t you?

WRONG, we were told. What the Council needs is a Central IT Division bringing together all the IT staff from all the departments (regardless of whether they knew anything about the individual department’s IT systems). Of course the tool heads got their way talking about economies of scale and making better use of IT staff down time. No mention of the additional staff they took on for the help desk.

So what happens now? When you ring with a problem you are directed to a help desk. Council staff are no longer allowed to speak to IT staff direct; they are no longer in the internal directory. Instead you have to ring the help desk. You explain your problem and ask for some help. But they don’t help you instead they give you a number and tell you that you will be contacted by the IT staff soon.

‘When is soon?’
‘Can’t say.’
‘Can you help me with my IT problem, after all you are the help desk’.
‘No I can’t. I don’t know anything about IT’.
‘But you’re supposed to be a help desk and you are not helping me so you can’t be a help desk can you’
‘Yes we are’
‘No you’re not! Giving me a number does not help me at all’
‘It’s not my fault. I have just been told to give you the next number and log you on the computer’

He continues:

‘It’s pointless and unfair having a go at the people at the help desk because they are only doing what they have been told to do. So now I wait for the IT person. Unfortunately I have meetings to attend and guess when he comes. Yes. So it’s back to the (contradiction in terms) help desk.

‘Hi one of your staff came when I was out today’
‘Have you got a number?’
‘Yes its 23563’
‘That’s right he is scheduled to come out to you today’
‘Yes I know. I had to go to a meeting and missed him’
‘Do you want to make a new report then?’
‘No, can I arrange a time for him to come?’
‘No, I can’t make appointments. But I could make a new report and give you a new number’

So the next time someone suggests a help desk I will do all I can to strangle it at birth!’

But it would get a tick from the Audit Commission.

Of course the better way to design help desks is to take the systems approach – designing against demand. We have been doing this in the private sector for many years. One of the first to take this route in the public sector will be speaking with me at an event in Copenhagen (see later).

CAA blunders on

Despite peoples’ concerns about national indicators, pressure from regional government offices, excess bureaucracy and the inspection regime (as reported in Local Government Information Unit research), CAA, the all-new replacement for CPA, ploughs on.

At the heart of CAA is the dumbest-ever idea: outcome-based accountability. It is plausible to anyone with half a brain – it goes like this: decide what outcome you want (e.g. less fat people), decide how you might measure that; then decide what to do to get there. The latter step is performed by cascading the Area target to all relevant departments and functions across your ‘partners’ and they all work out what to do. Bear in mind this is going to create a paper trail that the Audit Commission inspector will follow. So you get, for example, Trading Standards people going around chip shops telling owners to reduce the size of the holes in their salt shakers.

Meanwhile, the Trading Standards issues that matter to local communities don’t get dealt with…

Managing by outcomes is to manage without knowledge. CAA will only make things worse.

Ohno warned about top-down standard-setting

I was reading Ohno’s work while writing a paper explaining how the ‘lean tools’ debacle happened and why it is failing, when I came across the following. Ohno was writing about Henry Ford, whom he regarded as a fellow ‘flow-thinker’:

‘Let us hear Ford’s opinion in his chapter on standards in Today and Tomorrow:

‘One has to go rather slowly on fixing standards, for it is considerably easier to fix a wrong standard than a right one. There is the standardizing which marks inertia, and the standardizing which marks progress. Therein lies the danger in loosely talking about standardization.

There are two points of view – the producer’s and the consumer’s. Suppose, for instance, a committee or a department of the government examined each section of industry to discover how many styles and varieties of the same thing were being produced, and then eliminated what they believed to be useless duplication and set up what might be called standards. Would the public benefit? Not in the least – excepting in war time, when the whole nation has to be considered as a production unit. In the first place, no body of men could possibly have the knowledge; it must come from the inside of each manufacturing unit and not at all from the outside. In the second place, presuming that they did have the knowledge, then these standards, although perhaps effecting a transient economy, would in the end bar progress, because manufacturers would be satisfied to make the standards instead of making to the public, and human ingenuity would be dulled instead of sharpened’

We see in Ford’s thinking his strong belief that a standard is something not to be directed from above. Whether it be the federal government, top management, or a plant manager, the person who establishes the standard should be someone who works in production. Otherwise, Ford emphasizes, the standard would not lead to progress. And I agree.’ (Ohno 1988 pp 98-9)

They could have been writing about the public sector.

ISO 9000 on the wane?

An Italian reader writes:

‘I realize that present times are economically disastrous and that many managers are doing almost everything to save their chair and their budget; yet, don’t you think the ISO 9000 case would be worth a deep E.U. committee investigation? Transition from 1994 to 2000 process approach was never adequately explained by T.C. 176 and its accreditation bodies, nor is the 2008 transition, that however costs a minimum of 57 € just to buy the standard: multiplied by the hundreds of thousands ISO 9001 certified companies, it makes quite a business, just the same as ISO 9001:2000, that was a best-seller. Among the top 20s.

Times are a’changing, or may be not; the ISO 9001 certification wave is evidently over, some players still believe it is not and feed on mummies. Eaters of the dead.

I feel T.C. 176 has too much power and gives a long life to ISO 9000, more and more. To the extent that ISO 9001: 2008 intends to kill bureaucracy, how does T.C. 176 prove its innocence?’

Sadly the ISO 9000 brigade has infiltrated the bureaucratic system. It will die through people simply giving it up, the bureaucracy is incapable of excising it.

The dead hand attacks voluntary agencies

Talking to someone working in a charity I learn that the regime is working to kill off voluntary services. Of course that is not their aim but it will be the consequence. The regime is offering money (the ‘incentive’) for voluntary agencies to merge and share ‘back-office’ services. The argument is this will create economies of scale. Instead of voluntary agencies receiving grants (the historic, local, practice), agencies will, in the future, respond to tenders.

We can confidently predict (given tendering in health, trading standards (Consumer Direct) and legal services, for just some examples) the tenders will not reflect demand. Tender provisions will standardise services thus less ability to respond to variety and all of the tension created, as well as the burdensome new reporting, will cause volunteers to leave.

Who should be held accountable?

Economy is in flow, not scale. Voluntary agencies need to be local and flexible, they respond to demand and should be designed against demand. The new regime makes this very difficult. Think about it. It becomes more difficult to do what is most economic, and easier to do what is costly in terms of service, efficiency and morale.

Fudging the numbers

Thanks to the reader who sent me the link to this, a government wanting to make evidence fit policy with Youth disorder:


It’s centralised, it’s nutty, it’s miles from reality

And thanks to the reader who sent me this one, how factory management of the probation service is going (not well):

Targets don’t work

Many readers pointed me to an article in the Economist questioning the benefit of targets. It is good on the problems but not so good on what we should measure:


Schools kill creativity

A brilliant, funny, and relevant presentation, worth twenty minutes of your time:

Systems Thinking in Sweden and Denmark

If Sweden and Denmark have something in common it is that they went overboard on the lean tools. The good news is that small countries find it easier to talk to each other and over the last two years the conversations have been about how the tools thing is failing. I shall be presenting on what went wrong with the tools movement and systems thinking as the better alternative in Copenhagen (9th June) and our Danish experts will be presenting a workshop the following day. For a brochure contact: office@vanguardconsult.co.uk

On September 9th I shall be in Stockholm for a one-day Master Class, then on November 19th I shall be presenting at Sweden’s largest public sector event in Gothenburg. For details: office@vanguardconsult.co.uk

Systems Thinking in New Zealand

For readers in New Zealand: there is a FREE presentation of Systems Thinking in action being given by Sarah Benjamin (Vanguard) and John Cooney (Chief Executive, Otago District Council – yes the council who’s mayor said it was a ‘badge of honour’ to get an adverse report from Audit NZ – see last newsletter). The presentation is touring the country, beginning on June 8th. For dates, locations and a brochure contact: sarahb@vanguardconsult.co.uk

Other events coming up

On May 12th I shall be giving a master class on public sector reform in Glasgow. For information and booking go to:

I shall be at the Deming Forum (I recommend it), 20-21 May. For information and a booking form go to: http://www.systemsthinking.co.uk/events.asp#3

I shall be speaking at the Welsh Local Government Association’s conference in Swansea on June 25th.