Thursday, 2 July 2015

Turning the Lib Dems inside out and upside down

I can’t remember whose joke about the Lamb/Farron leadership contest it was, but I repeat it here. It is a wonderful thing to take part in an election and know that, whoever wins, it’s going to be a Lib Dem.

I’ve even voted already. I’ve been hugely impressed by both leadership candidates and the way they have kept level heads. There have been peculiar incidents but nothing like the ‘calamity Clegg’ business of the last Lib Dem leadership tussle.

I’ve found the focus on what either candidates did or didn’t vote for or against more than frustrating because – in the end – what they did in the past, while interesting, doesn’t really go to the nub of the issue between them. It's an important issue and it needs some resolution.

Which seems to me to be this: should the party shout louder or should it turn itself upside down and inside out?

I’m pretty definitely in the inside out camp. I’m only too aware of how much the future of Liberalism needs to be thought through, how the old slogans seem emptied of meaning, how much thinking has to be done.

Tim Farron is a ferocious campaigner, but I looked at the ‘six steps to rebuild our party’ in his magazine – I don’t know if he wrote them himself – and they really are extraordinarily vacuous.

In some ways, they are a demonstration of the problem: exhausted phrases without underpinning – “defend our values”, “rebuild our base”, “do things better”, “concentrating on winning elections”.

Perhaps emptiest of all is the phrase “grow our membership” – No. 2 of the six points – as if somehow this was a point of issue, or as if there was some particular proposal for doing so.

I feel pretty confident that Tim had little to do with these – the read as if they were written by a random Lib Dem phrase generator – but that’s the problem: I’m sure he has six better steps than this up his sleeve – but why hasn't he set them out?

Norman Lamb on the other hand has a short book which he’s published and which at least has a plan that it might be possible for someone to disagree with.

I've tried to make sure this blog doesn't criticise people individually, and this is emphatically not intended as a criticism of Tim Farron himself, who I'm sure understands this. Also he has written a little more on the subject here.

To be fair to him, the introduction to these six steps hints at something deeper, but the bottom line is this. None of the things the six steps say should be done better - “concentrating on winning elections, building our membership, fundraising, training and development” – can be done without a great deal of rethinking the intellectual underpinnings of Lib Dem policy.

That means turning the party upside down (more thinking) and inside out (open up the party to the outside world) as well.  Otherwise we are in danger of finding ourselves campaigning using a Random Lib Dem Phrase Generator, and that won't feel good. It also won't work.

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Wednesday, 1 July 2015

Heathrow: a sad tale of cost-benefit analysis

Waking up to the miserable and depressing conclusions of the Davies Commission, that there should be another runway at Heathrow, reminded me of the biggest cost-benefit analysis ever carried out - to somehow calculate where to build the third London airport.

I tell the story in my book The Tyranny of Numbers and it casts a sad shadow over the current debate, with its bogus talk of 70,000 new jobs.

Back in 1969, the government had rejected the preferred site at Stansted and, for the next two and a half years, the commission chaired by the senior judge, Mr Justice Roskill, combed the evidence. 

To make sure there was a choice of sites, the Town and Country Planning Association put in their own planning application to build an airport at Foulness, on marshland off the Essex coast much-frequented by Brent Geese. An early version of Boris Airport.

Cost benefit analysis had been used successfully a few years before to defend the idea of extending the Victoria Line to Brixton. But this wasn't so much a calculation – it was a way of giving transport minister Barbara Castle an excuse to say yes, which she duly did. 

The Roskill Commission, on the other hand, were determined to work out the answer mathematically. They would do a cost benefit analysis on all the possible sites - the biggest analysis of its kind ever carried out. They would put a value on the noise of aircraft, the disruption of building work, the delay of flights, the extra traffic and they would calculate the answer. 

For the Roskill Commission, there was going to be no value judgement at all. The figures would speak for themselves.

To avoid any chance of judgement and to keep the process completely ‘scientific', the measurements were put together in 25 separate calculations. They were only added up right at the end of the process. And to the horror of some of the members of the commission, when the final addition was made, the answer was wrong.

The site they believed was best - Foulness - was going to be £100 million more expensive in cost benefit terms than the small village of Cublington. After 246 witnesses, 3,850 documents, seven technical annexes and 10 million spoken words, some of the planners on the commission felt cheated. 

In public, they stayed loyal to Roskill. The commission was excellent, said Britain's most famous planner Colin Buchanan - a member of it – “it just got the small matter of the site wrong".

The team had managed to measure the exact cost of having too much aircraft noise by looking at the effect noise tended to have on house prices. But when it came to measuring the value of a Norman church at Stewkley, which would have to be demolished to make way for the runway, things got more confused. How could you possibly put a money price on that? One joker on the team suggested they find out its fire insurance value. Everyone laughed, but the story got out and reached the press. 

Doing it like that would have measured the value of the church at just £51,000.

As it was, the government rejected Cublington for political reasons, and went for Foulness/Maplin/Boris. This in turn fell victim to the energy crisis and the airport was built at Stansted anyway.  As we know.

The planning professor Peter Self - Will Self's father - wrote a book about it as a revenge for the mauling he received at the hands of the commission's planning barristers. "It struck me at the time as strange," he wrote, "that so many intelligent people should apparently accept trial by quantification as the only sensible or possible way of reaching such a decision."

The whole thing was a "psychological absurdity and ethical monstrosity", he said. He advised economists to take Dr Johnson's advice and kick a wall hard to convince themselves that the external world exists. His attack destroyed cost-benefit analysis for nearly two decades.

What I find bizarre about cost-benefit, of the kinds put forward by the Davies Commission, is that this of nonsense gets accepted by the Treasury - which is so sceptical about cost-benefit arguments about jobs put forward by anyone else. And rightly so. 

At least Roskill's team tried to do some subtraction, but somehow Heathrow's lobbyists convince people that there will be no jobs lost by making London dirtier and noisier and by accelerating climate change.  As if somehow you can construct a financial 'package' that will offset the noise.

And there is the rub.  What anyone who loves London wants to know is if there are any limits to the destruction of London's environment - especially today when the heat becomes intense and the air like soup.

I don't live there any more. But I don't want London to become any more of a third world city than it already is - the noise and air pollution visited on the poor, the ridiculous house prices visited on everyone, and the vanity runways for the international elite who can't re-arrange the existing runway slots to accommodate new priorities.

Go to some of the nearby suburbs, like Southall, to see where it leads. Dirty, overcrowded, polluted, ruined. That's the future for London by cost-benefit analysis.

Are there limits?  Would they ever stop? Or do we really believe the Heathrow chief executive who implied we had been vacillating about a runway for half a century, when the first runway was only built by stealth, and wartime emergency requisition powers, in 1946?

It isn't vacillation.  It's civilisation.

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Tuesday, 30 June 2015

Public services could be more effective, less expensive

I wrote last week about the emerging new kinds of public service organisation, and got quite a response. I didn't write about it before, but I'm constantly struck by the gap between the way public services have been run since the Blair-Brown years - like assembly lines - and the lessons from the most innovative enterprises emerging in the USA, which genuinely understand their staff have something to offer beyond mere obedience.

But fascinating new research from Birmingham University seems to demonstrate something of what I've been saying about scale. They have spent the past two years studying micro-enterprises in social care.

There are opportunities under the new Care Act, one of the legacies of the coalition years, to encourage micro-enterprises, because they tend to be more innovative, more personal and more flexible.

What I hadn't realised until I read the research (thanks, Alex), was that they are also more cost effective.  This is what the research summary says:

"The distinctive contribution of micro-enterprises appears to be the ability to offer more personalised and valued care without a high price tag. Price data provided by all of the organisations in the research indicated that the hourly rate for micro-enterprises was slightly below that of larger providers. As we indicated above, this was not at the expense of quality, as responses on personal control and use of time ... were at least as positive as for larger providers. With the larger providers it was easier to identify trade-offs between price and quality: the cheapest prices were offered by those that conformed to the 15 minute care visit model, and the people who used these services reported high rates of turnover among care staff. At the more expensive end of the market, larger providers were able to match the micro-enterprise offer more closely, providing longer care visits and better staff continuity."

This is important. It is a continuing mystery that there are models available for problem areas of public services in other parts of the world, which are actually more cost-effective than the problem models that dominate the UK - yet we are only tiptoeing in that direction.  

Here are three of them:

1.  Micro-enterprises in social care. See above. They exist in ever greater numbers in the UK, but policy-makers seem somehow to overlook them.

2.  Co-operative nurseries, considerably less expensive than conventional ones, but using some parent energy and knowhow, as they do across Scandinavia and North America, but barely here.

3.  Local area co-ordination, also in social care, the informal solution from Western Australia, and working very well already in Middlesborough, Derby and some other places, but being rolled out ever so slowly.

So here's the question, and it is one I try to answer in my book The Human Element. Why, despite the austerity years, are UK public services so staggeringly stuck?  And why are big changes not even advocated by the Left or Right?

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Monday, 29 June 2015

The unforgiveable sins behind the Greek tragedy

Back in 1999, an emergency IMF loan to Russia of $4.4bn disappeared completely from their central bank within hours of its arrival.  You know you're in economic trouble when that kind of thing happens.

But I was always fascinated, not so much by the failure of the Russians to rebuild their economy - which they did eventually, after all - but how the ordinary Russian people survived the banks closing and the dwindling of the money circulating around.  What Keynes once described as "a perigrination in the catacombs with a guttering candle".

They did so partly by growing their own food, and by highly complex - and highly inefficient - barter exchanges, and the fact that so many of the old Soviet era flats had district heating schemes which you couldn't turn off even if you wanted to.

The Far Eastern currency crisis, also in 1998, was faster and fiercer, with soldiers throwing hospital patients onto the street because the hospitals had run out of money.

All these now seem possible for the long-suffering Greeks.

I've no idea what kind of local economic contingency plans the Greeks have made, but you can't help wondering whether they haven't actually managed anything, for fear of upsetting the European Central Bank.

Have they got emergency plans in place to reintroduce the drachma, or a variety of regional currencies? Have the got plans for something local, on the basis of the Clubs de Truque which kept two million Argentinians alive during their debt crisis in 2000? We know they had schemes up their sleeve for a version of bitcoin which would be engineered to pay off their euro debts - can they launch it at short notice?

Because, if not, they have condemned the Greek people to the catacombs without any medium of exchange just as surely as the European Central Bank.

It is perfectly possible just to carry on writing almost ad infinitum at the failures of successive Greek governments, but there are two major wrongs visited on the Greeks by the eurozone. And they are what this post is about.

Sin #1. The technocrats have turned their backs on democracy. The Greeks have been expected to suffer over the past few years in order that the rest of the eurozone might rest easier. As fellow members of the European Union, the UK has also colluded with the ECB and the so-called Troika to keep our banks solvent at the expense of theirs. That is why they have reacted with outrage at the suggestion that the Greek people should be consulted on the terms of the next deal. We keep the Greeks imprisoned because it is more comfortable to do so for us.

Sin #2. The euro as presently constituted was a disaster waiting to happen. Even those most in favour of the euro before 2000 recognised that it would tend to impoverish the outlying areas, and benefit the central ones - which is why the original plans allowed for major regional transfers to counteract this problem. They were never put in place.

The idea that one currency, and one interest rate, could possibly suit a diverse continent like Europe was always insane. It was always liable to unleash dark and intolerant forces. It was always going to impoverish.

I take no credit for this, because lots of people raised the same concerns, but this is what I said to the Lib Dem conference in 2001:

"There is a fundamental problem at the heart of the euro that makes me fear for the future of Europe. And it’s this: single currencies tend to favour the rich and impoverish the poor.  They do so because changing the value of your currency, and varying your interest rate, is the way that disadvantaged places are able to make their goods more affordable. When you prevent them from doing that, you trap whole cities and regions – the poorest people in the poorest places – without being able to trade their way out.  That’s the danger of the euro as presently arranged, and don’t underestimate it. It means success for the cities that are already successful. It means a real struggle for the great Lib Dem cities of Liverpool and Sheffield. It means a potent recruiting ground for the next generation of fascists in the regions that no longer count."

Unfortunately, the cities of Liverpool and Sheffield are not exactly Lib Dem any more. But the fascists are on the march, and when we ignore the needs of people for some kind of economic self-determination, that's what happens.

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Thursday, 25 June 2015

How to launch a new preventive service sector

I wrote a blogpost a couple of days ago about new kinds of organisations emerging in the nether world between the public sector and voluntary sector.  I used the Dorset Coast Forum as an example.

But I've had such interesting responses that I can't resist coming back to the issue.  One in particular - I haven't asked whether I can quote her so I'd better not say who it was - complained at the way that, because of the way seed funding for social enterprise works, effective new ideas tend to stay small:

"You can have great results, demonstrate traction but there is nowhere to go to develop something from a 'that's nice' to something real!"

That is quite right. There are so many innovative people working away at solving problems related to ineffective public services, only to find the funders just want 'innovation'.  The moment one of these projects proves itself, the funders lose interest.

So let me say what I think is happening.  Partly because of austerity - one of its few positives - public services are forced to think in revolutionary ways about their effectiveness.  Often they can't think further than a ten per cent cut, which just makes things worse, but that's another story.  But there are imaginative commissioners and managers out there who realise how the system gets in the way.

They ask how services might reach out upstream and 'prevent'? How do they also manage the transition from professional support to nothing?  In both cases, these are often problems of co-production - bringing in patients, their families and neighbours, and asking for their help.

So clustering around these innovative managers are projects which work on a small scale, and may well stay small scale. But you can imagine that small plus small plus small plus small amounts to something much bigger.

The problem is that they are managed as exceptions rather than integrated, and they struggle for funding and are often replaced by something identical and unproven but new.

The answer, I think, is that these clusters will begin to link to GP surgeries, hospitals, police stations, housing estates, schools as a new preventative layer of services - paid for because they work and save money by the organisation they are linking to.

This preventative infrastructure will overlap with each other. It will look untidy, because that is its nature.  It is already involving what seems to me to be a whole new co-production professional - recognisable in time banks, local area co-ordinators in social care, health champion co-ordinators, enterprise coaches, community justice panels. They use a similar set of skills and I know, from experience, that the traditional professions are not suited to it.

The big question is: why will traditional services eventually pay for this, given that they resist doing so now, even when these semi-services are effective?

I think what can shift this is quite simple, though far-reaching. There needs to be a change in the agreements with all public services contractors, inside the public sector and outside.

They all need to set out how they will do the following:
  • Use their beneficiaries as equal partners in the delivery of services.
  • Reduce demand during the lifetime of the contract.
The answer is to broaden and deepen the objective of each service. Often, the most convincing way of explaining how they will do this is to reveal which aspects of the preventative infrastructure they are building partnerships with.

There might be an objection that, by sub-contracting aspects of their work, services will cost more to run.  This is true in the narrow sense, though they are doing it already - especially when they are aware that they can't have the personal impact they need without local organisations.

It is true that while these projects are funded because they are 'nice' then there is more than a possibility that sub-contracting will simply be exploitative.  It depends how seriously those contractors will be held to their assurances that they will reduce demand.  If they have to do that, and are paid accordingly, then they need to nurture the preventative infrastructure very seriously indeed.

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Wednesday, 24 June 2015

My top ten irritatingly shared policy delusions

I heard Professor Alison Wolf this morning (0830am) confronting politicians with a perennial truth. So sensible was she about the numbers of apprenticeships we need that it slightly took the breath away.

But of course she's right.  David Cameron's target of three million apprenticeships - building on the pioneering work of Vince Cable - is automatically undermined just by setting a challenging target.

It means, the government's obedient machine being what it is, that there will be three million empty opportunities for cheap labour.  Even 300,000 worthwhile apprenticeships, with genuine and accredited training at their heart, would be better than that.

When Harold Macmillan set a target of 300,000 new homes a year, he built new slums. When the Pentagon set kill targets in the Vietnam War, they killed terrifying numbers of civilians but still lost.  See more in my book The Tyranny of Numbers.

Most people seem to understand the corrosive effects of numerical targets, except - it seems to me - politicians. It is part of the Westminster sickness, of course, and it unites Labour and Conservative.

So it occurred to me that this might be the moment when I should list some more of these fantasies that are shared, at least in the UK political system, by right and left alike.  Here we are.  My top ten.

Fantasy #1. The banks don't want to lend to small business.  It's true they don't lend, and they collude with this little fantasy, which - for reasons I might go into another time - it suits them too. The truth is they are no longer geared up to lend to SMEs. Right and Left in any case believe that somehow banking isn't that important, or they would act to build institutions that can lend.

Fantasy #2. House prices are so high because there aren't enough homes. It's true that there aren't enough homes, but the reason house prices are so high is because too much money is going into the property market. Zoe Williams was spot on in the Guardian this week.

Fantasy #3. Banks lend out money that is deposited to them. In fact, these days, they largely create new money in the form of interest-bearing loans. That's where money comes from.

Fantasy #4. If you spend more money on public services, they will improve. The Gordon Brown years should have cured us of that one. Staggering sums were spent on new systems of control, which has rendered many services inflexible, ineffective and far more expensive than they need to be.

Fantasy #5. We need to be more evidence-based in our policies. It's always a good idea to be informed by the evidence, but 'evidence-based' is a term increasingly used by governments to justify their failure to act on issues for which there can never be evidence - and there is sometimes no evidence for new ways of doing things until you do them. I notice it is also used in the wider political world to mean 'I wear my atheism as a badge of pride'.

Fantasy #6. We want to replace targets with systems that pay contracts by results. This is nonsense. Payment by results contracts just involve targets with money attached. They are therefore more likely to be distorting.

Fantasy #7. When the Bank of England creates money, it creates inflation. Since banks create money all the time (see fantasy #3), this can't be the case. It is only the case when too much money is in circulation for the work going on in the economy, or in that part of the economy - regional or sectoral.

Fantasy #8. Big organisations are more effective. Let's look at the 'evidence' on this one - which is that shared services and merged institutions very rapidly allow economies of scale to be overwhelmed by diseconomies of scale. See how this affects the evidence on big schools.

Fantasy #9. Systems work without the human element. Actually this is the big Blairite fantasy, but the machinery of government has always believed that organisations and services work better if you exclude human variability - forgetting that the human element is also the only guarantee of success.

Fantasy #10. In the UK, we are free to say what we believe. I fear not. In fact, I measure our freedom of speech by the number of times I censor myself in this blog, for fear of the inevitable Twitter storm from offended people. Which is increasingly often (this may be middle age, of course).

That's my top ten, and they are all pretty irritating - and even more irritating that they seem not to be a matter for political debate.  What's yours?

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Tuesday, 23 June 2015

A whole new kind of organisation emerging

Something peculiar is happening to organisations at the moment.

On the one hand, they are becoming bigger, increasingly complex and decreasingly effective, juggling multiple objectives and tens – sometimes hundreds of target figures and KPIs.  On the other hand, there is a sense – which I think most of us will recognise – that we can’t go on like that.

That something new is beginning to emerge. Not just organisations that suit human beings, but organisations that are considerably more effective.

In days gone by, the business of presiding over the environment, for example, fell to ministries, local authorities and a number of strange Whitehall quangos.  Directives came from on high. People jumped. Or didn’t jump.

They still do to a large extent, but conflicting interests stay unresolved - and often the job isn't done.  Those with enthusiasm were excluded, and they assume nobody needed them.

But look around you and you'll find new kinds of organisations - time banks, local area co-ordinators, friends of parks, coastal forums - and they are a glimpse of the future.

They are multi-stakeholder to use the jargon. Flat, non-hierarchical. Seeking out people’s energy and using it. The bottom line for me is that they are human.

I think this is how you recognise these new organisations:

1. They are generalist not specialist.

2. They are facilitators. They don’t tell people what to do – they start from what people around them want to achieve and help them do it.

3. They are non-hierarchical

That, at least, is what I said on Portland Bill last week at the celebration of 20 years of the Dorset Coast Forum.

And it turns out that the Dorset Coast Forum is a prime example of what I was talking about. It is a collaborative venture, owned by all the different organisations which deal with the coastline – from tourist ventures and fishing businesses to the RNLI.

They were proposed by the government as a 'forum of consensus' two decades ago, aware that they might not be able to resolve tensions between rival uses - but they could at least make sure they got a clear idea of the others' points of view.

Other projects have emerged since, involving people who want to be in the business of keeping the beaches clean - using the energy that's out there.  It is also hugely influential abroad - and it is being copied from the Dolomites to the South China Seas.

The conference was in an impressive place and I learned a huge amount, and have begun to alter my own opinions about the direction organisations are going in as a result.  It did set out some of these ideas in principle back in 2011 in The Human Element, but I realise now that it was actually happening already - and underneath my nose!

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