Monday, 30 September 2013

Where Osborne is right - and where he 's horribly wrong

I warmed a little to George Osborne last year when I found myself in the same theatre, watching the musical of Swallows and Amazons.  But I must admit, spending my breakfast listening to him this morning was a threat to my digestion - as the emotions veer between irritation and frustration and back again.

There are two of his propositions which I believe are fundamentally right.  That you should ask people to give something back in return for their benefits, and that you should not let people moulder their lives away on the dole - or its Labour equivalent, incapacity benefit.

The right to lead a useful life is an unacknowledged human right, but an important one, and paying people on the strict condition that they do nothing is a an equally unacknowledged horror.

But there are two big problems with the welfare announcement today, and they are both about the effectiveness or otherwise of public institutions.

The first is that, if we are really talking about a new effective system to help people into jobs, then the emphasis wouldn't be on the sanctions for people who refuse.

There do need to be sanctions, but - let's face it - this is the angle that the Conservatives appear to want to emphasise on the first day of their conference, as they look nervously over their right shoulder at UKIP.

It is no coincidence that the community service described by Osborne, and the community service served by people instead of prison, seem identical.  It can't possibly be transformative if it is a punishment.

The second is that the institutions of welfare have been hollowed out over a generation, as I described in my book The Human Element.  They are now one-dimensional, punitive, slightly brutal and wholly ineffective.  Using them to drive a transformation in the lives of long-term jobless people is like swerving out onto the fast lane in your lawnmower

The reality of the hopeless institutions that Job Centres have become are in Harriet Sergeant's book Among the Hoods, where she describes their complete failure to help the Brixton gang members she befriended.  It made her furious.

Oddly enough, I recently came across someone who had worked in the Brixton Job Centre in the 1980s.  She managed to draw some satisfaction from the job by focussing on a few individuals she could help and battling the system until she found them a job.

This kind of humane, transformative behaviour is that much more difficult in our institutions after 13 years of New Labour 'reforms'.  They will be completely impossible under the dysfunctional delivery system planned for what would otherwise be a transformative idea, the universal benefit..

No, let's imagine for a moment what kind of institution might turn Osbrne's announcement into something genuinely transformative:

  • A system that is really able to get to grips with the complex lives of individuals, on a coaching basis, and make something happen.
  • A real choice of community activity, not just semi-slavery picking up litter.
  • An opt-out for single parents with families, for whom there is far more important work

That kind of system would be more expensive to run, but then it might also have some impact - if that is genuinely what Osborne wants, rather than just headlines.  But, otherwise, what's the point?

Sunday, 29 September 2013

How to save Greece from a debtors prison

When you worry a little about the results of your policies, it is a good time to stop and think.

I don’t mean some of the less successful effects of the coalition, because those are not necessarily Lib Dem policies. They are compromises to achieve other reforms, as any coalition has to make.

I’m thinking of Greece. The people of Greece were sacrificed to save the euro, once a major Liberal contribution to economic policy; now rather an embarrassment.

The Greek debt is still ballooning as a proportion of GDP.  The so-called Troika's rule over Greece, on behalf of the technocrats, has constantly failed in its predictions, yet it is the Greeks who suffer - as I may have mentioned before.

The problem wasn’t the bail-out, which had to happen. It was the major discouragement given to Greece by the European bankers when it came to getting any kind of democratic mandate.  And it was what went with technocratic rule.

The Greek people are now held in the equivalent of a debtors’ prison, which will have potentially devastating consequences to come – and these may not be very far off after the news last week..

But the real problem is the same as every debtors’ prison – the Marshalsea in Little Dorrit was no different – that you can’t exactly trade your way out from inside it. Nor can the Greeks trade their way out from inside the cage constructed by the Troika.

Here is the question, and it needs answering: how does a nation find ways of keeping life going while the debts are paid?

And behind that lies another rather important question too: how does a disadvantaged region or city regenerate itself when the national interest rates are set to prevent inflation in the rich areas?

I think a potential answer is beginning to emerge.

Forget single currencies.  Welcome to the age of multiple currencies, which can be used in countries like Greece while the euro debts are extracted.  They can provide a life-giving liquidity, give advantages to un-used local resources, and encourage enterprise. Not instead of the national currency or euro, but alongside them.

Something along those lines is already emerging in Greece, just as they did in Argentina in similar circumstances a decade ago.  But far too slowly.

But the only country in the world where financial regulators are actually enthusiastic about the idea is Brazil. Ironically, the community banks pioneered there have been using knowhow financed originally by the European Commission.  Yet the idea seems a million miles from the current euro orthodoxy.

There is little evidence yet that complementary currencies are emerging on any kind of scale, but they are increasingly talked about. My colleague Susan Steed found this amazing graph which shows an extraordinary acceleration of interest in the idea (mentions in Google books).  There is also a little blip during the Great Depression (Irving Fisher’s book Stamp Scrip, no doubt).

I think this is an idea whose time has come. It stands for diversity against uniformity and manages to combine a means for self-determination with a commitment to cross-border internationalism.

It does everything the euro claimed to do, in other words, without plunging the poor areas into poverty.

For that and many other reasons, I think Liberals need to embrace this idea. The euro project is dead: it represented a sort of economic naivety on the part of Liberal internationalists, who failed to bheed Keynes' warnings against internationalising money.  But there is no reason why we have to go back to national currencies and central banks.

I’m speaking about this at a meeting on October 9 to celebrate the new edition of Stir magazine. Do come along and argue with me!

Saturday, 28 September 2013

My encounter with Owen Jones

I spent yesterday afternoon in the dark on stage a the Soho Theatre, doing a session on class and power with Chavs author Owen Jones, among others (Harriet Sergeant and Henry Hitchings, who chaired the whole affair brilliantly).

Ever since I horrified the readers of the Guardian and Telegraph simultaneously by writing about the middle classes in April, I have been urged to debate with Owen Jones – so I had been looking forward to it.

In the event, it is hard to disagree with him that the working classes have been demonised.  Just as I think he kind of agreed with my take – that ordinary life is becoming unaffordable for the working and middle classes too (he stresses low pay as the reason, I would stress inflation driven by the financial sector).

In fact, the only time I found myself disagreeing with him was in answer to a question about the political changes that need to happen.

He cited hope and the need to fight for change, as people have always done.  It is true that is how political change happens.  

People will certainly have to fight, in the political sense, but economic change requires something else as well.  The middle classes are great institution builders.  The working classes are great movement builders (the co-op movement).  Both are going to have to start the local institutions and the enterprises that we need to create the kind of economy that can provide for people.

Because in the end, if the economy doesn't provide for nearly everyone, then it will provide for nobody – because the money drains away, even faster than it does now, to the financial institutions and the ubermensch who run them.

We have hardly any local financial institutions in this country (I know we have some credit unions and a handful of CDFIs).  The monopolies have been allowed to close most of our local food producers and hollow out their suppliers.  The number of local newspapers or news outlets is a tenth of what is was a century ago - and the same goes for most economic institutions.

We need new ones, and new businesses, but we also need a political force prepared to defend them, against the powerful monopolies that are coming to dominate in every sector.

So it is more than just about keeping hope alive, or any of the other political rhetoric.  Hope implies that, somehow, politicians are going to change their minds and sprinkle fairy dust and provide for us all.

Because, in the end , if anyone is going to provide, it is going to have to be us – but we will need a political force to defend us while we do it.

Friday, 27 September 2013

When Tesco funds the high street research

Everyone knows that, if you're a blogger, journalist, lawyer, judge, politician, it isn't really enough to be completely open-minded - you really have to be seen to be.

But for some reason, that same injunction doesn't seem to apply to some academics.  When you are passing authoritative judgement on GM crops, for example, it helps your credibility if you are not being funded by Monsanto, as the John Innes Research Centre discovered.

Demos is a think-tank, rather than an academic research centre, but even so there have been a few eyebrows raised about their new research about bank lending to SMEs - which was funded by Barclays of all people.

Their research found that small businesses are not actually being turned down for loans by the big banks.  You might say surprise, surprise, which would be cynical.  But really it doesn't matter because, even if the research was completely independent (which I'm sure it was), the fact that Barclays funded it renders it worse than useless.

I am kind of staggered by the naivety about this.  A politician wouldn't get away with it.  Nor would a judge.  So why do scientists think being funded by an organisation absolutely committed to one particular slant will enhance their reputation for high-mindedness?

I've been thinking a little about this because of the rising clamour of the debate about the future of high streets.  There are retailers who believe that out-of-town or online retailing renders the old way of shopping completely archaic.  There are customers who point out that the shops moved away first, forcing people to follow.  There are a whole range of points of view - these are mine.

It might seem sensible to have an academic centre dedicated to understanding the future of retailing, and the ESRC funds a unit at Southampton University to do exactly this.

But here is the bizarre thing - which renders all their publicly funded seminars and reports useless - Tesco funds it as well, and for some reason even ESRC can't see that this renders their own funding suspect.

Tesco has a very particular take on the future of high streets.  I find it extraordinary that nobody at Southampton or ESRC can see that this compromises their findings, however open-minded they are being (and I am sure they are), and consequently wastes public money.

We do need an academic centre for an impartial understanding of this emerging debate.  Southampton can't be it while they are accepting money from such an involved source.

And here is Tesco's UK managing director Chris Bush explaining why they are abandoning plans to build in Sherborne (it wasn't the protests, apparently).  He sounds open-minded about the questions that need answering:

"The real question driving this debate is this; how do you explain why some high streets untouched by supermarkets fail while others thrive with a mix of large and small retailers trading successfully side-by-side?"

Luckily, I'm in a position to answer his question.  It is about whether the supermarket is genuinely an anchor store, or whether it actually seeks to compete with all the surrounding stores - and be a health centre and post office too.  The monopolist approach is corrosive, the anchor store is - or can be - genuinely, well, anchoring.

For some reason, many planning authorities don't understand the difference, because they don't measure where the money will go - whether it will stay put circulating in the local economy or whether it will be hoovered up by the non-anchor supermarket and vacuumed away elsewhere.

These are important issues.  There is a great deal of research that needs doing, especially if planning authorities are going to be properly informed.  But I want my data produced and interpreted by someone who is not funded by one or other of the protagonists in the argument.

So, in the meantime, next time you are presented with data about the future of high streets or anything else, don't forget to ask where it came from.

Thursday, 26 September 2013

The centre ground doesn't mean doing nothing

I make no apology for returning, for the second day running, to Ed Miliband’s speech (well, OK, I am sorry actually). But the reaction to it by much of the media preyed on my mind all day yesterday.

The overwhelming reaction was that the speech marked the return of ‘Red Ed’. The headlines took the part of the power companies, threatening black-outs if their prices were cut. Matthew d’Ancona in the Evening Standard talked about him “abandoning the centre”.

Now, I’m as sceptical as the next man about the Labour leader. When he talked about bringing back socialism, I did blanche a little – but not because I think he will. But I can’t understand his commitment to a defunct political creed, which lived and died in the era of Fordist modernism.

The main criticism of Miliband seems to be that he has pushed his party to the Left because he has promised to act – on rising prices and market failure.

Yet that is what we used to expect party leaders to do. When they see the damage being done by the monopolies that have been allowed such power over our lives – largely by the Blair and Brown governments – then we expect politicians to tackle them.

And if tackling them means controlling the power of private monopolies – or, as they used to do in medieval times, setting a ‘just price’ – then that is what is has to be done, at least until you can break them up.

I say this partly because of my fears for my own party (the Lib Dems). There have always been marketing people around the leadership – and I have crashed four leaders so far as a party member – who try to reduce the message of Liberalism to mere strategy and positioning.

I don’t believe that the centre ground means never promising to change anything, as Matthew d’Ancona seemed to imply. I don’t believe for a moment that Nick Clegg thinks that either.

But clearly the Conservative press do. So maybe I need to revisit what I wrote yesterday about the Left endlessly defending the past rather than looking to the future.

I don’t believe Miliband represents the future, because he leads a party with no ideological bearings – which could turn out to be absolutely anything in power (and often does).

But I wonder if the complaints of the Right are, in a different way, a sign that they are also falling back on the great mistake of defending the solutions of the past rather than looking to the future.

Personally, I believe, that politicians who act on monopoly power – and find a means of doing so effectively – will inherit the earth, or the nation at least. We will see.

In the meantime, I'm debating some of these issues - around class and the future -at the Soho Literary Festival tomorrow afternoon.  This includes my long-awaited encounter with Owen Jones of Chavs fame.  

The organisers will no doubt want us to clash on class terms - in fact, it seems to me that the interests of the working classes and middle classes are now very similar.  Either way, please come along and join in.  It would be good to talk about it!

Wednesday, 25 September 2013

Why the left is so conservative on services

Ed Miliband's speech was rather good, I thought.  The line about the rising tide only lifting yachts was a telling one - that is the weakness, not just of this recovery, but most UK recoveries in recent decades.  That pinpoints precisely the main criticism that can be levelled at the man in the Treasury.

The only thing that worries me about it is this.  How will a party with Ed Balls as Shadow Chancellor generate the energy and will to shift the domination of the financial sector in Treasury thinking?  How will they create the kind of revolution in enterprise (local economics, local banks) that the nation needs?

I don't see it, I must say.

But there is a more fundamental problem, not just with the Labour Party but with the thinking of the left in the UK, and a courageous article in the Guardian by Compass founder Neal Lawson put the point bravely and effectively:

"In truth, the forward march of Labour was halted long ago. New Labour applied go-faster stripes to a clapped-out vehicle but won elections only by telling the country it wasn't really the Labour party any more. The sugar rush simply accelerated the long-term decline."

It is particularly courageous to call your own party 'clapped out', but he is right.  

Then a more relaxed and thoughtful article on Chris Dillow's Stumbling and Mumbling blog (thank you, Simon) which sets out the difference between the prevailing direction of travel by social democrats, in the Labour Party and abroad, and the direction that I see as a Liberal one.  This is not so much that the Labour Party is clapped out, but that its reliance on central control is indefensible and sclerotic.

Let's face it, public services are the most immediate difficulty.  For those of us who believe in public services that are effective, and under democratic control, then there are three looming problems:

1.  Centralisation has 'hollowed out' services so that they are not nearly as effective as they need to be, and and the way services are being contracted out is making it worse (see my book The Human Element).

2.  This combination of over-complexity and sclerotic process is forcing up costs - just as budgets are under the most ferocious pressure - in a way that threatens the fundamental existence of many services (see the Graph of Doom).

3.  Over-professionalisation and a patronising preference for users to be passive and easier to process is also undermining the sustainability of the services too.  The huge resource represented by service users, their families and neighbours, is almost completely side-lined.

The combination of these crises, the interlinked problem of falling effectiveness and rising costs, threatens to unravel the welfare state set out by Beveridge.  This isn't because he was wrong about slaying the Five Giants.  It was because the way his settlement was put into effect by the Attlee government, and carried on since, has allowed the giants to come alive again every generation.

It isn't fair to blame Beveridge, because he predicted precisely this problem as early as 1948.  So it is no good to wrap yourself in the banner of the Spirit of '45, or defend a system that has been hollowed out - as the left endlessly seems determined to do.  Because that approach threatens to lose us everything.

This is absolutely not an argument to sell everything off or close everything down.  Quite the reverse.  It is an argument to wake up, understand the looming crisis, and re-invent the welfare state in a way that gives it some chance of surviving.  And that means making it much more effective.

Why has the political left been on the retreat for a generation?  Because they are constantly looking backwards - constantly defending the solutions of previous generations - when they ought to be seeking out new ways forward.  So why don't they?  

Tuesday, 24 September 2013

Facing down the Co-op vulture funds

I have had a number of bank accounts with the Co-op for some years now. I’ve complained about them occasionally but, overall, they are light years ahead of the service you get from any one of the big banks, which are like a brontosaurus in comparison, unaware of activity from their own tail.

I believe the difference is that the Co-op is part of a mutual. I am theoretically part owner, and that word 'theoretically' is part of the problem.  It means far too little in practice.

It also failed to prevent the Co-op’s previous management from buying Britannia Building Society, along with all their voluminous debts. Consequently, they are now in some difficulties. I can’t help feeling that, if Co-op had felt a little more like a mutual, that fate might have been avoided, but we shall never know.

They are not in so much difficulty that they have been unable to agree terms with creditors, and he we come to the nitty-gritty.

Because two creditors, American hedge funds which bought into the debt in the summer – particularly notorious vulture funds – are objecting to the plan. They are trying to force the Co-op Bank to abandon its mutual status and be listed on the stock market, though Co-op group will remain the majority owner.

Many of this predatory group remain secret.  A Co-op committee is now deliberating over whether they are right.

It may be a little portentous to put it like this, but: nobody has asked me.

I believe that, technically, I’m not a co-owner of the bank. But I am a customer and a stakeholder, and I did not become a customer to be taken for granted – or to be the customer of a bank listed with shares that can be bought by speculators, at the behest of hedge funds.

Apparently, they believe I will be there as a customer whatever they do. It seems to me that, by making clear this isn’t the case, we might prevent the hedge funds having it all their own way.

If they win this battle, I hereby promise to close my Co-op bank accounts and credit cards, and withdraw my savings from their savings funds, and do whatever I can to leave them with an empty shell.

Who is with me?

Monday, 23 September 2013

How the bubble adds to the welfare bill

There I was minding my own business on Saturday afternoon when the PM programme phoned and asked me what I thought of Rachel Reeves' comments about an income of £60,000 not being rich.

Since I'm not plugged umbilically into Twitter, this was the first I had heard of Labour's swoop on the votes of Middle England.  Next thing I knew, I was on the air.  This is what I said (17 mins in).

The thing is that, depending rather where you live, a salary of £60,000 clearly isn't poor, but in many parts of the UK it isn't rich either.  You still need to be relatively careful of money, if you want a roof over you head.  That far, Rachel Reeves was right.

An income of £60,000 will get you a mortgage of around £180,000.  The average London home is worth £500,000.  Nor is it just about buying homes, because the rental value of homes goes up with the cost of property - as I explained in my book Broke: Who Killed the Middle Classes? - which was why they had invited me onto the programme.

Probably both the Labour Party and the BBC would prefer to leave the argument like this - how can someone earning £60,000 not call themselves rich when people can get by fine on £20,000?  But I managed to get in a sentence or so to look at the reasons for it.

The truth is that the economy in London and the south east, and spreading rapidly out across the whole nation, is increasingly geared for the needs and pockets of the ultra-rich.  They determine the price of homes.  They determine public policy, long after the last believer in the 'trickle down' effect went toes-up.  It is their needs and demands which the Treasury hears.  Of course, in those circumstances, £60,000 isn't going to be enough for comfort.

The BBC may still want to foster the old arguments between the middle classes and the working classes - what, you don't feel well off on £60,000, shame on you! - when actually the interests of both now coincide.

It is to shift policy away from the monopolies and the financial sector, which are hoovering up the available wealth and remaking society as a flat proletariat, except for the 0.5 per cent of ubermensch at the top.

That is to look three decades ahead, to the next generation.  But you can see the effects of the 30-year property bubble now - on welfare.

It is increasingly difficult to live an independent life on much less than, say, £18,000 in London, without support from the state.  Property prices are rising again, cheer-led by the banks, and taxpayers are called upon to subsidise - not just the poor - but the increasing proportion of those who also can't afford to rent or buy.

So perhaps somebody could estimate the extra cost of housing benefit for every one per cent that property prices rise?  Maybe they already have.  If so, perhaps you could tell me.  I think we should be told...

This is unfortunately just the beginning.  Increasingly, ordinary life will become unaffordable, because that is what monopolies do, and that is what speculation does.   It raises prices so that only a few can afford them.  Then the state will find itself picking up the tab - funding for lending, funding for clothing, funding for computers, funding for children's eating, and then what...

Bizarrely, under a Conservative-led coalition, we are heading right back towards subsidised lives.  First the poor, then the middle class, before they too are accused of scrounging for an unaffordable lifestyle.  Can you imagine - why should we foot the bill to live in southern England?  Surely it should be reserved for the rich?

Just because I don't want to live a subsidised life, that doesn't make me a Tory.  Just because I want to lead an affordable life, that doesn't make me a socialist.

Sunday, 22 September 2013

Proof that change is actually slowing down

Last weekend, I found an old VHS of Steven Spielberg's film Back to the Future being sold off in the local library, along with the books, furniture, staff etc etc (thanks for nothing, Croydon Borough Council).

I watched it through with my children, for whom it needed a lot of explaining.

But what I noticed was how strange it was looking back to 1985, when it was made, which is almost 30 years ago.  This is ironic because it is all about going back in time 30 years from then, to 1955.

Regular readers of this blog (if there are any) will know that I am pretty sceptical about the idea, pedalled by American business and IT gurus, that change is accelerating.

Last time I wrote about this, my friend and inspiring blogger Mark Pack pointed me in the direction of a presentation he did which took apart those repeated claims that the take up of new technology is getting faster and faster.  In fact, as he says, the take-up of radio in the 1930s was far faster than mobile phones today.

Well, for me Back to the Future revisited was conformation of this.  The changes between 1955 and 1985 portrayed by the film were vast compared to those between 1985 and 2013 - from the bizarre cars and music through to the drugstores and dresses.  And attitudes.

I have been wondering whether this is a delusion on my part because I can remember 1985 so well (Reagan, miner's strike, Iran-Contra, second Brixton Riot, remember?).  I became editor of Town & Country Planning that year.  It is certainly true that I had not used a computer, still less a mobile phone by then.  IT has changed the way I work, but not vastly (though I certainly wouldn't be blogging).

Yet think of the other technological change over the last 30 years.  Boeing 747s, still flying now.  Volkswagen Golfs.  Minis, for goodness sake.  The clothes of 1985 would hardly look out of place now (heavens, I'm still wearing some of them).

My home might then have had carpets rather than a wooden floor.  The offices we worked at in 1985 now lie empty and rotting.  The value of our homes is corroding our lives - yes, there has been change.  It occurred to me as I watched that one reason why pretend that change is accelerating is that we can't bear to look too closely at the reason it is slowing down: our political culture has lost the ability to imagine, and our administrative machinery is seizing up.

That is why, if I was to find myself in the movie Back to the Future and transported back three decades, I don't believe I would be disorientated in 1985.  I might not even realise I had gone back in time - until, perhaps, I tried to remember how to use a phone box.

Saturday, 21 September 2013

UKIP and the meanings of words

I got a bit of a shock yesterday when I discovered I am six years older than Nigel Farage. This has not helped my self-esteem.  I always thought of Farage as a creature from another age - maybe the 1930s, a sort of Terry-Thomas figure minus a handlebar moustache, a strangely elongated version of Bertie Wooster crossed with Basil Fawlty, practically ageless, but certainly generations older than me.  A terrifying thought. that he is actually younger.

Still, you have to hand it to him.  His political skills seem to have attracted no less than 150 journalists to the UKIP party conference this week.  You have to hand it to him - he has an enviable ability to cut through political verbiage.

Anyone who doubts the Farage phenomenon should watch this clip of his speech to deeply uncomfortable looking German bankers in the European parliament, taking what seems to me to be a genuinely liberal line on the euro crisis.  Politics does need people like that.

But what I wanted to say was this.  I realise I must be the only person in the world, apart from Farage's colleague Godfrey Bloom, to feel sorry for Godfrey Bloom.

There he is making a deeply unwise comment about women not cleaning behind the fridge in a fringe meeting, and the next thing he knows, he is out on his ear.

And of all the things that Farage might need to apologise for - his brand of populism, his strange other-worldly policies on crime, military spending and immigration  (they have to speak "fluent English" apparently) - what really upsets him is that Bloom has not realised that the word 'sluts' has changed in meaning since he was a boy, some centuries ago.

Personally I don't clean behind my fridge.  I've never actually been there.  It is uncharted territory.  It may be a black hole sucking in dark matter for all I know.  No doubt Godfrey Bloom would forgive this on the grounds that, as a man, I ought to be outside slaying things.

But what this strange incident tells me is that UKIP has started worrying about political correctness.  It has started agonising about the impression it gives beyond its core support.  It means they are just like other political parties - and that will blunt Farage's straight-talking. like nothing else

First, you complain about your colleagues understanding of four letter words.  The next thing you know, you are dissembling like all your opponents.  It is a slippery slope and it is fascinating to see that UKIP are now on it.

Friday, 20 September 2013

Why property really isn't theft after all

Three Acres and a Cow.For some peculiar reason, even in this age of the internet, I still get too many magazines.  They pile up for months, and sometimes longer than months, waiting to be read - or at least flicked through.  But one of the few magazines I read all the way through is the Journal of Liberal History.

I don't have to read the whole thing in this latest issue because one of the articles is by me: it is called 'Three acres and a cow' and it is about the story of the man who used the slogan, the Liberal MP and agrarian campaigner Jesse Collings (unfortunately requires password).

It tells the story of Collings' tireless campaign for allotments and smallholdings and why, when he was the inspiration behind the Allotments and Smallholdings Act 1908 - which David Cameron recently had to promise to protect - he actually voted against it.  It is all in my ebook about the strange hidden history of the allotments movement.

The frustrating element of the tale is that the the kind of transformation in land ownership and small-scale agriculture Collings imagined, and could see in other European countries on his summer jaunts with Joseph Chamberlain, never came to pass.

The great opportunity that opened up for land reform on that scale in the UK was a victim Home Rule divisions in the Liberal Party and the frustration of Lloyd George’s Land Campaign by the First World War. 

The 1885 slogan ‘Three acres and a cow’ continued to be associated with the Liberal Party well into the second half of the twentieth century, but with little understanding about its origins or objectives - which was all about giving the poor some measure of economic independence. When the generation after Collings began to pull together the lost and frayed strands of his campaign, they did so outside the Liberal Party.

Why?  Well, it has something to do with Chamberlain's defection - along with radicals like Collings - to the Liberal Unionists.  A generation later, the Fabian influence had crept into the mainstream Liberal Party - always a pity, it seems to me - and confusion about land ownership followed.

The main thrust of the 1906 Liberal government was to build on the idea of security of tenure and they saw it differently to Collings. ‘The magic of property, such as it is, is derived not from ownership but from security,’ said H. H. Asquith, the Home Secretary. So when the Liberals’ twin Smallholdings and Allotments Bills emerged, in 1907 and 1908, security not ownership was the objective. 

In fact, would-be smallholders had to find a fifth of the purchase money themselves. This was the proposal of a commission chaired by the banker Sir Edward Holden, who said that a new land bank should only advance four-fifths of the price at 4 per cent interest. 

New smallholding tenants would have to pay the interest on the loan to buy the land for their farms, but the ownership would still stay with the county councils. ‘It is, in short a communalization of the land, not at the expense of the hated landlord, but at that of the ‘sweated’ tenant,’ said a furious Collings.

The Left has been in a muddle about property and land ownership ever since.  

Small-scale ownership isn't everything - especially if there is no security, as Asquith said - but people want a stake, in their own home or plot of land.  The Left has missed the point by condemning all ownership - as if we should all be dependent tenants - when they should have been condemning large-scale ownership, landlordism, rentiers.

Liberalism remains confused, and has not given the development campaigns, in Latin America and India - to give people real ownership of a plot of land - the attention and support they needed.

The Fabian failure to understand the lure of ownership rights, and why it is so powerful - and why it is reasonable that people should want that kind of personal stake - has allowed the disaster of burgeoning house prices to come close to destroying the whole thing.  It is currently flinging us back into the world of the rentier

In other words, Collings was right.

Thursday, 19 September 2013

When hospitals start gaming with patients

I heard a fascinating anecdote yesterday about a senior doctor at one of the big London teaching hospitals, who joked that his patients left the hospital anaemic because they had gone through so many blood tests in his care.

I was at an inspiring conference in Oxford organised by the Centre for Sustainable Healthcare, so there were a lot of this kind of anecdote around.

The doctor was exaggerating, of course, but for NHS insiders it is always obvious what he was talking about. The NHS payments system is set up so that there are endless blood tests, each one charged to the local CCG, and none of the results shared with other hospital departments.

One of the recommendations of my Barriers to Choice Review was that the Department of Health needs to look more closely at how the payment system is gamed. The initial response by the government agreed that this needed to be investigated and promised to work with Monitor to look at it.  I hope they do.

Here is some of the gaming I’ve come across since then, and it goes way beyond just having blood tests over and over again:

  • Patients who are sent back to GPs when hospital tests reveal some other problem, because first referrals can be charged more than secondary referrals from inside the hospital.
  • Hospital doctors who are forbidden to talk informally to GPs in case it prevents chargeable appointments.
  • Out-patients departments which refuse to do one-stop shops because they can charge more by making patients come back.
  • Regular six-month follow up appointments with hospital consultants, which have to be carried out face to face, whether patients need them or not.
  • Out-patients departments (I heard this about an opthamology department) which fills up slots with patients who don’t really need to be there, to provide them with the income to treat the patients who do.

My feeling is that all these need to be classed as anti-competitive behaviour – deliberately wasting people’s time and wasting NHS resources to game the system for individual institutions or departments – but this is just a stopgap solution.  

It is also unfairly condemnatory: the hospitals are responding to perverse signals by the payments system, and it is hard to blame them for that.

The real question is whether the NHS is being well served either by the split between primary and secondary care (which prevents integration) or by the split between purchasers and providers (which encourages gaming).

Most big corporations don t have internal markets like this because they know it wastes resources.  There are exceptions, and they are usually a disaster (see what happened when they tried it at Sears).

It leads to internal squabbling and major waste.  It also leads to a kind of accountancy arms race.  When foundation trusts employ coders at £1,000 a day to push up each coding to a higher tariff (and they do), it forces CCGs to employ their own coders to challenge them.

Personally, I think the days of the internal market – a money-wasting innovation by management consultants McKinsey – are over. I’m not sure what needs to replace it, but it will certainly include integration, personal budgets, local accountability and flexibility.

Whatever payment system we choose need to encourage health units to reach out upstream of the demand, and act to reduce the number of alcohol-related admissions. Or the weight of depression. Or poor diets, or all the other things that so affect their ability to succeed.  At the moment, they don't see this as their business, despite the huge impact it has on them.

In other words, we need an NHS that can look at the bigger picture intelligently, rather than acting like experimental rats in a maze. The coalition’s health and well-being boards may turn out to key to this at local level.  

It would be ironic if they turned out to be a game-changer after all, but I think they will.

Wednesday, 18 September 2013

School meals mustn’t mean trucking turkey nuggets

‘How on earth in austerity Britain can we afford Clegg’s £600m giveaway,’ asked the Daily Mail’s front page headline this morning, as if this was a bizarre luxury, a peculiar whim by the coalition’s junior partners.

There are a number of ways of addressing this, but it does imply just how strange the idea of prevention and investment to prevent is to the English soul.

Never mind that the Finnish approach to care and youth justice frontloads its spending into the early years to cut spending in later years – the reverse of our pattern in the UK. Never mind that Nurse-Family Partnerships, a mentoring programme for at-risk families giving birth in New York City, with 30 years of data, shows that savings carry on into until the baby is in its early twenties. English policy-makers seem not to get it (though, yes I know, Family-Nurse Partnerships (the UK version) have started here too).

So, of course the initiative to provide free school meals for the first three years in primary school is welcome – and important too. It is prevention in action. But there are two provisos that you can’t ignore.

One is that prevention is a far bigger challenge than school meals. It requires a constant effort to push spending further back up the chain of causality. It means blurring departmental boundaries until they practically disappear – it is ridiculous that prevention should be a burned sacrifice on the altar of long-running rivalry between Defra and the Department of Health on food.

And then there is the cost-benefit problem, constantly justifying prevention spending according to what it would save on budgets long gone by – when real prevention ought to mean a whole new kind of budgeting and a whole new understanding of what causes what.

But there is another proviso, and it is this.

Spending like this can potentially have a double or triple effect. It could be used to kick-start the local food economy in every area – a huge injection of economic localisation. It could mean a whole range of new food production and distribution enterprises, keeping the rewards local.

Alternatively it could go to a handful of big providers, on the grounds that trucking their turkey-chicken nuggets 300 miles a day for reheating is somehow more efficient.

One of the most exciting new food enterprises in Dorset started in reaction to Rentokil trucking in free school meals from Nottinghamshire (see picture).

It matters enormously which policy is pursued. One maximises the knock-on effects of prevention. The other is a waste of time and resources in comparison, and won’t result in effective employment for the disadvantaged children who eat the meals when they reach adulthood.

Tuesday, 17 September 2013

Pretending there's no housing bubble

BrokeI was whizzing back down to London during the Lib Dems economy speech yesterday, but I watched it all later.  Nick Clegg's summing up was highly effective.  So was Vince Cable's 'hated Tories' speech later, not so much laying into his cabinet colleagues - as the news reports say - but laying into the election machinery behind them.

But in retrospect, I find the whole business pretty infuriating.  Clegg wasn't allowed to go over time - a sign of an authentic debate if ever there was one (I can't see Ed Miliband told to "bring his remarks to a close") - but the framing of the economy debate was obscure at best, and manipulative at worst.

It set the two sides arguing with each other on a series of propositions that nobody in the party would really disagree over.  It sought out wafer thin, almost theological, distinctions - and pretended this was somehow a great victory or a great defeat.

Perhaps most annoyingly, it allowed the media to talk up a rift between Clegg and Cable when what was actually happening was a predictable rift between the Treasury and BIS.  The economics motion was written from an irritatingly Treasury-centric standpoint, omitting what BIS was doing to rebalance the economy.  That was what irritated Cable.

But perhaps the most annoying legacy of the debate is that it led otherwise sensible people like Danny Alexander to claim that there was no house price bubble.  This gives the impression that there is somehow no problem about house prices - when actually the 30-year house price bubble is the biggest threat to the well-being of the next generation (see my book Broke).

My own house would be worth £45,000 at average rates of inflation since 1937, when it was built, but it is actually now 'worth' ten times that.  My children won't be able to afford to live in this not particularly prosperous south London suburb - not without 25 years indentured servitude in the financial industry (so much for wanting to be a teacher).

The truth is that the banks are, knowingly or unknowingly, stoking up house price rises because - at the moment - a worrying proportion of their property holdings are in negative equity.  In fact, a quarter of their UK loans on commercial property are in that state.  Of course they want to raise property prices up to the level of the last bubble - and they will: 70 per cent of business loans are on property.

These things matter.  So why did the party engineer a conference debate dedicated to implying that somehow it doesn't?

I know, I know.  It was all about what the government can do now - and the plan is to gear up local government borrowing to build affordable homes.

That is vital, but don't let's pretend that the property bubble hasn't been looming over our lives for a generation now.  Any idea what the average UK home will be worth in 30 years time if prices rise until then as they have in the last 30 years?  The answer is £1.2m.

Monday, 16 September 2013

A nuclear compromise that makes me feel silly

I know.  I look so youthful.  You could hardly believe that I can remember the seventies.   Unfortunately, I can.  Winter of Discontent. Nuclear annihilation. Flared trousers, you know the kind of thing.

We used to talk then about the emergence of a new attitude in the UK: people who valued independence of mind and education, and put that above the need to impress their neighbours, people who believed in innovative local solutions, not big systems.

You might very well call them Liberal Democrats. I couldn’t possibly comment.

Years later, one of the gurus of this idea told me he had done a presentation at the Central Electricity Generating Board, the great bureaucratic monster which used to run energy in those days.  Think of the supreme soviet, think Gromyko, mixed with a bit of Kafka.

The senior executive took him aside afterwards and asked him how he could recognise people like that - the 'inner directed' - in their own organisation.

'Why?' asked the speaker. 'I assume you want to encourage them.'

'No,' said the man from the CEGB. 'We want to root them out.'

So there was the great divide as we saw it then. Between energy produced by huge, technocratic, inflexible centralised systems run by men in white coats, and energy produced locally, where everyone has a stake, by solar panels on every roof top, every lamp-post, every structure, man made or otherwise.  By every kind of renewable source, backed up for a time by the old sources.

And the only political force back in 1978 which recognised this idea, and which stood up against the disastrous nuclear reprocessing plant at Windscale/Sellafield, was the Liberal Party.  Alone they went into the voting lobbies against the plutonium reprocessing plant that year.  Of course I joined them; I joined them because they had a different vision of energy. 

They still do even now, despite yesterdays vote.  

But I'm more than a little sad that the party has abandoned its traditional, not to say heroic, opposition to nuclear energy - and I'm embarrassed too.  The Lib Dems have appeared to have voted for an impossible option - backing nuclear expansion only if it involves no state subsidies - when everyone knows there isn't a nuclear plant in the world that can stand on its own two feet.

I don’t deny that climate change needs urgent action. But we have tried the nuclear path before, and it is achingly slow.  By the end of the 1970s, nuclear was sucking up two thirds of the energy research budget. It will again.  Experience from the seventies is that, once you go down the nuclear route, the sheer expense sucks up the available investment.

It’s the cuckoo in the nest.  The triumph of hope over experience.  Despite all the talk of a diverse portfolio, it squeezes out everything else.

Which brings me to Boyle’s Law.

I don't mean the way that liquids expand when heated, or anything like that.  I mean this: Solar panels are bound to get cheaper and more efficient in the years ahead.

Every time manufacturing capacity doubles, the price of dollar energy drops by 20 per cent.  They’re now so productive in Australia and Spain that the big utilities are trying to suppress them.  The same old centralised CEGB thinking again. Actually, they hate diversity.

But here's the second part of Boyle's Law: nuclear is bound to get more expensive.

Because, of course the UK government is planning to subsidise via the price nuclear operators can sell at, and subsidising their responsibility for nuclear waste, for which there is still no long-term solution. And subsidising the insurance against devastating nuclear accidents. It isn’t economic otherwise.

Every time there’s a scare about terrorists getting hold of plutonium, and there are bound to be scares, the price will rise. Every time we worry about safety or security, the costs will increase. By going down this path, we will lock ourselves into those rising costs.

So I had hoped today we would shun the twentieth century technology, and go for a radical diverse local solution – not the rising costs of the men in white coats.

I might get over the disappointment, especially if we can define 'subsidy' properly, because it would rule out nuclear penjury.  After 34 years in the party, I'm not going anywhere.  But it is a bitter decision, for which I am going to have to suffer a great deal of ridicule in the green movement.

What makes it worse, I deserve to.  It is ridiculous wishful-thinking.  It is a bizarre compromise that makes no sense given the way the world is.  It might feel nice to have a policy promising nuclear energy that pays its way, just as it might be nice to have an education policy where there no failing schools.

It is the politics of magic wands and makes the party look silly.  Because nuclear energy doesn't pay its way anywhere and - according to Boyle's Law - it never will.

Sunday, 15 September 2013

Strange to be blog of the year

Embedded image permalinkWould you believe it.  I can’t quite believe it myself, but you are now reading the Lib Dem Blog of the Year 2013.

I feel slightly embarrassed to admit this, because I have only been blogging seriously since February, and I was among a number of really brilliant fellow nominees, any of whom could have won.  So I am ever so grateful to those who nominated me – and very grateful to my fellow nominees who I have read to learn how to do it.

I have run this blog since 2007, but in rather a fitful way – and gave up entirely while I was at the Cabinet Office organising an independent review.  It didn’t seem to fit very comfortably with being independent.

Then, earlier this year, in a desperate attempt to sell a few of my books, I started doing in every day.  Soon I couldn’t stop.  Goodness knows where all this will end.

So there I was at the Lib Dem Voice awards last night in the Crown Plaza hotel in Glasgow, which – like the conference centre – is a bit like Hampton Court maze, minding my own business, having been assured that I was quite safe and I didn’t have a cat in hell’s chance of winning.

What was I to say?  Well, blogs are an effective protection for people who don’t think very well on their feet.  Of course I hadn’t the foggiest idea what to say then.

So I’m just going to devote this post to a few more expressions of gratitude . . .

. . . to everyone who has been reading what I write, and who devote those minutes from their precious days to visiting my mind, however briefly.  Even if they don’t agree.  Especially if they don't agree.

. . . to everyone who sends me links to things they think will interest me.

. . . to everyone who has encouraged me by tweeting or telling me that they enjoyed reading the blog, and that the ideas I’ve struggled to express are worth struggling to express.

. . . to everyone who has taken the irrevocable step of actually buying one of my books as a result.  You’ve made a middle-aged man very happy.

. . . to all my fellow bloggers who are dedicated to the grand cause that conversation about ideas, with ideas, for ideas, shall not perish from the Lib Dems.

Saturday, 14 September 2013

Why we need new institution builders

Thank you to everyone who came along to hear Harriet Sergeant, Stephanie Flanders and I, slugging it out at the Chiswick Book Festival this morning.  It was packed out in the Tabard Theatre and it was a fascinating conversation, thanks largely to Stephanie's chairing powers.

The session was billed as a discussion about our failing institutions, and - even though I talked about the middle classes and Harriet talked about south London gangs - there did seem to be some parallels.

What I argued in Broke is that the middle classes have been taken for a ride by the financial institutions they clung to.  They were not sinless.  They colluded in the results, confusing the notional value of their homes with real wealth, but they were still taken for a ride - and their miserable pensions, corroded by hidden charges, and the bleak outlook when it faces their children earning a roof over their heads, are the legacy.

But there is another link which we might have missed.

Our institutions have been hollowed out, partly by greed and arrogance (the financial ones), partly by digital Taylorism (the public services ones).  Our leaders delude themselves as they look at the wholly misleading figures that pour out of the frontline - unaware, apparently, of how distant from reality they are.

But the great strength of the middle classes, not exclusively of course, is that they are institution builders.  And never has our economy and society required effective institutions as much as they do now.

As I wrote this, I am travelling to Glasgow in a Virgin train where the seat reservations had not been downloaded until we left Euston, where there are no hot drinks because the boiler has broken down, and where they are too short staffed to provide a service in first class (so they tell me; I'm in third class).  It is the UK's institutional failure in microcosm.

So I hope that the middle classes will realise the plight that faces their children and will create the institutions we need to give them a chance.

Effective banks are urgently required.  Local lending institutions.  Food businesses.  Effective institutions capable of educating everyone, not giant factories dedicated to delivering outputs.  And we need thousands of new enterprises to take on the monopolies - starting with a real UK competitor to Amazon.

So there we are.  The middle classes.  They might look like the problem, but potentially they are part of the solution.

Friday, 13 September 2013

The Sound of Gunfire revisited

Tomorrow, I am reliably informed (thank you, Simon), is the 50th anniversary of Jo Grimond’s famous ‘Sound of Gunfire’ speech – probably the most famous speech he made, and a key moment in the very first Liberal Revival.

I’ve just been reading it and it is strangely dated, perhaps not surprising given that it was given a month after Martin Luther King’s I Have a Dream speech and two months before the assassination of John Kennedy. In other words, it was a long time ago.

But the final peroration is memorable and important, especially for the generation of Liberals before mine, and here it is:

"War, delegates - war has always been a confused affair. In bygone days, the commanders were taught that when in doubt they should march their troops towards the sound of gunfire. I intend to march my troops towards the sound of gunfire. Politics are a confused affair and the fog of political controversy can obscure many issues. But we will march towards the sound of the guns...The reforms which we advocate are inexorably written into the future. We move with the great trends of this century. Other nations have rebuilt their institutions under the hard discipline of war. It is for Liberals to show that Britain, proud Britain, can do this as a free people without passing through the furnace of defeat."

It isn’t just nostalgic reading it now. There is something poignant about it. Take this, for example:

"What should citizenship of Britain mean today? What should we create here to which people would assent, so that people will be able to say, ‘I lived in the Sixties and Seventies and, for all my life, I shall be proud of the public life of my country’­? What can we do to restore that confidence, that optimism, to draw people once again into their country’­s affairs and give back power to the decent, hard-working, general British citizen?"

We know now that what actually lay ahead was stagnation, inflation, industrial standstill and a staggering lack of imagination. We also know that what those of us who actually lived through the 60s and 70s would remember – and the abiding greatness of the time – was the creative and cultural explosion, and which took place despite the absence of political leadership.

I remember, when I first went to a Liberal assembly (1982), I shared some of this sense of exclusion that you get in this speech – and, hey, let’s face it, that is the core of the Liberal psychology: we all feel a little left out.  It seemed to me, then and now, a tragedy that UK politics had excluded its Liberal heritage and tradition.

We may not have changed things if Grimond had really succeeded in marching his troops to the sound of gunfire, but we would have injected that Liberal creativity into the political process as well as the cultural one.

What we did do was to create a revolution in local government, though even that was two decades away or more from Grimond's speech.

I remember, as a local government reporter in the early 1980s, a Labour councillor boasting to me that he simply threw away any letters addressed to him at home, because of the sheer cheek of his constituents writing to him there.

In those days, the public was excluded from many council meetings. They were not allowed to speak. Those one-party states in cities and counties led to stagnation, complacency, corruption, and some of the most inhuman public housing in the world.

The Liberals and then the Lib Dems were history’s chosen instrument. They broke that whole edifice apart.

And then, of course, they found themselves in government, and this is where the metaphor of the sound of gunfire is important. Grimond might equally have talked about Nelson’s injunction to “engage the enemy more closely”.

In both cases, it is critically important for the generals and admirals – and their troops – to know what is possible and who is on their side. They need to know what they are for and where they are heading.  Because, as Grimond said, war is "a confused affair".

So I was fascinated to read Peter Oborne’s unexpected tribute to Nick Clegg in the Daily Telegraph this week, and to his leadership skills. And I think he is right. The Lib Dems haven’t been immune to mistakes in office – far from it – but they have been led with very great skill, hour-by-hour balancing the needs of the party with the needs of the country, and what is possible.

There are a whole list of ways in which the policies of the coalition are imperfect, often worse. But when you march towards the sound of gunfire, it makes no sense to mouth the word ‘betrayal’ at every imperfection and misjudgement, when the people leading us have imperfect information at the time, and have almost no time to form an opinion.

So I was sorry to see the barrage of criticism of Clegg over the David Miranda arrest when all he was guilty of, it seemed to me, was vetoing the idea of prosecuting the Guardian.

Heavens, I’m a Liberal. I believe in independence of mind. The idea of party discipline sticks in the throat. But it isn’t in the spirit of the Sound of Gunfire, the path that Grimond laid down, to constantly question the motives of our colleagues.

The battle is too confused for that. When the gunfire has died away, then we might have a chance to see more clearly. But for now, in the heat of battle, we do have to stick together if we possibly can.  Not uncritically, but remembering that this is a very long march indeed.

It may be portentous to say so, but I think the Grimond legacy is our ability, generally speaking, to do so.  We are able to do so only to the extent that we know what we are as Liberals, and that is thanks to Grimond.

Thursday, 12 September 2013

Come and debate with me in Chiswick

It really is quite extraordinary how much of our newspapers are taken up by two kinds of stories, which now seem to dwarf the rest.  One is allegations of various kinds of sex abuse, the other is the gamut of possible scandals around care, services, measurement and inspection.

When the history of the 2010s come to be written - and it would be nice to think I might write it myself - we may have to understand our obsession with these issues.

I'm not, of course, saying they are unimportant.  I am though wondering why they take up quite so much news space, to the exclusion of so much else.

I also think they have something in common.  Both are about the suspicions we share about the institutions we rely on.  That is the question of the age, because so many of our institutions - public and private - have been hollowed out by the kind of digital Taylorism I wrote about yesterday.

So many of our institutions have had the human element surgically removed, rendering them ineffective and increasingly expensive.

I mention all this because I am doing a session at the Chiswick Book Festival on Saturday (11.45am) with Harriet Sergeant, author of Among the Hoods.  It is called 'How Right and Left both got it wrong' and it is about precisely this: how our institutions failed us.

Harriet will be talking about her experience with gang members in Brixton.  Anyone who has read her absolutely compelling book will know the criticism she reserves for the hopeless processes at the welfare agencies and Job Centre.

I'm talking about my book Broke: Who Killed the Middle Classes? and there is a similar problem there too: the crisis of the middle classes is not despite our financial institutions, it is because of them.  They may have taken the middle classes for a ride with their naive connaivance, but they certainly took them for a ride.  They are still doing so.

So come along and let's talk about whatever happened to our institutions.  And it is being chaired by Stephanie Flanders!

Wednesday, 11 September 2013

Spraying extra costs around public services

Where did it come from, this obsession with targets, with breaking down every aspect of a task into little bits that can be measured and processed?

Some people date it back to the moment in 1903 when the time and motion study pioneer Frederick Winslow Taylor rose to his feet in Saratoga Springs to explain his idea that every factory could be measured to work in what he called ‘the one best way”.  (More about Taylor in my book Broke).

Maybe it was actually James Oscar McKinsey, the first management consultant. Whose consultancy still lives and dies by the highly misleading maxim “everything can be measured and what can be measured can managed”.

Maybe it was the technocrat’s technocrat, Robert Macnamara, who imposed ‘kill quotas’ on soldiers in the Vietnam War, only to find that the deaths rose but victory stayed elusive.

Whatever it was, the management business has spawned a vast industry which churns out targets, specifications, standards and obscure acronyms, while an even bigger industry puts them into effect. The idea dominates consulting just as it now dominates government – the Blair government introduced 10,000 new numerical targets in their first term of office, on everything from vandalism to the state of sailor’s teeth in the navy.

The great mistake this approach makes is that it breaks processes down into parts and measures them, just like an assembly line.

The trouble with processing people according to numerical categories is that it feels alienating. You start feeling outraged and end just feeling hopeless. The feeling of processing us all as assembly lines would has been set out brilliantly by the extremely clear-thinking blog System Thinking for Girls. It is a letter to big organisations explaining what it feels like:

"In big organisations, armies of people are employed to disguise original humans as categories, types and tariffs. This is done via documents and screens often by people who have never met or spoken to the original human." 

This is the philosophy of the 'back office'.  But note this: the letter isn’t really about dehumanising people. It is about the ineffectiveness that creeps in when you do so.

I hesitate to call these ‘inefficiencies’ because the search for 'efficiencies' has paradoxically created these extra costs which now weigh down public services as a result. Because real people aren’t like that – they are complex and usually non-standard and they need to be dealt with by a system that can deal with this variety.

The assembly line system, embedded in IT systems, can’t do this. The costs mount as all us non-standard people start bouncing around inside the system, creating costs, unprocessable. They mount because none of the available interventions on the organisations' dashboards really suit us.  More about this in my book The Human Element.

And here, in a nutshell, is the reason why costs have been rising in public services, and will rise even faster as the big organisations start winning contracts and cut costs in this way – the Virgin Healthcare, Atos, G4S systems of this world.

This is not a privatisation problem. There is no reason why private organisations should not deliver services, as long as they are integrated – as GP surgeries have done since 1948. The problem is scale and wrong-headed systems.

Here is the reason why this kind of out-sourcing, to the out-sourcing giants, is going to be so expensive. Because they don’t just increase their own costs, often paid for on the basis of throughput by unsuspecting commissioners, they spray extra costs around the rest of the system.

They do so by narrowing the definition of what their systems are supposed to achieve, reducing them to numerical outputs which can be measured, and letting someone else pick up the bill for everything else - and for the failure of these Mc-interventions to work.

Then they can get paid for doing it twice, and three times, and so on and so on.

That is the problem a new approach to public services will have to tackle. It isn’t public versus private. It is big versus small.  It is effective systems versus so-called efficient ones.

Tuesday, 10 September 2013

NHS IT: time to try another way

Many years ago, right back in the mid-to-late 1980s, I was editor of a wonderful magazine called Town & Country Planning.  My successor has done an excellent job ever since, but I have always missed it.

I remember, in those days, how many reports used to cross my desk about the estimated value of private sector housing dilapidations - the total amount that was required to repair the UK's housing stock.

One of the peculiar side-effects of the Lawson-inspired house price inflation which hit us about the time I moved on has been that we don't get so many of those reports any more.  A combination of equity in the home and a nearby DIY store has kind of tackled the problem.

Here is the point I'm making.  In the end, the problem wasn't solved by major investment by central government, as the authors of the reports tended to assume.  It wasn't solved by a new government agency sending out approved designs.  It was solved by tens of millions of ordinary homeowners, and especially young ones, going down to the shop and buying paint - and spending their weekends using it.

I simplify, of course.  But sometimes the top-down solution isn't the best one.  Often it isn't possible or  affordable.

I have been thinking about this and how it relates to the perennial problem of NHS patient information, and how you tackle the parallel problem of lost notes.

We can be reasonably sure, after £12 billion went down the drain last time, that the top-down approach does not work, though that will not stop them trying again.

The influential NHS blogger Roy Lilley tackled the issue again a few days ago, and I was distressed to hear that a new attempt is being made. Unfortunately, the new announcement makes horribly similar noises to the old ones.

But Lilley also pointed the way forward towards the equivalent bottom up, DIY solution.  St Helens and Knowsley Foundation Trust have a scheme called 'bring your own device 2 work', which allows all the staff's variety of systems to talk to each other - but not allow information out beyond them.

Last year, I met a pioneer of a similar bottom up solution that I believe will soon be widely adopted.  Patients Know Best is a social enterprise started by a tech-savvy doctor called Mohammad Al-Ubaydli, and chaired by the distinguished former BSJ editor Dr Richard Smith.

It requires us to turn our idea of patient information on its head.  Instead of the NHS owning the information about you, and getting itself into a terrible mess dealing with other agencies, and constantly asking permission to share information, PKB suggests that you should own the information yourself.

It requires a simple piece of software, and it means that you can give or withdraw access to your own information to whichever professionals in whichever public services you need.

Great Ormond Street adopted it for their patients some time ago, and the PKB approach is now spreading through GP surgeries in Kent.  There is no reason either why it should be limited to health.

It requires no vast investment from IT consultancies.  It doesn't require taxpayers to lose another £12 billion organising one inflexible centralised system.

It also fosters the kind of equal relationship between patient and professional that the NHS badly needs.  It also, and here is the real reason for writing this, is the kind of entrepreneurial approach to government described in a fascinating American article about 'agile public leadership' (thank you, Ted, for sending it).

It is characterised by US chief technology officer Todd Park as “think big, start small, scale fast”.  That is precisely the PKB model, rather than the lumbering top-down brontosaurus approach to IT that Whitehall still favours far too often.

Monday, 9 September 2013

Big banks: let's learn from Little Red Riding Hood

The most popular version of Little Red Riding Hood has the woodman storming into the Grandmother's house at the end of the story, killing the wicked wolf and slitting open his stomach - and, unharmed, out pops Little Red Riding Hood and her grandmother, none the worse for a bit of mild digestion.               
I've always wondered about this when I thought of Britain's dysfunctional and over-concentrated banking system, and the announcement yesterday about the rebirth of Trustee Savings Bank as a separate organisation rather confirms it.

Let me explain. In a flurry of consolidation, our banks wolfed each other down in the half century between 1870 and 1920 until there were just five left (and a few stragglers).

The culprit – probably more than the others – was Barclays, then known as Barclay, Bevan, Tritton, Ransom, Bouverie and Co, or in the City of London as the ‘long firm’. In 1896 they persuaded nine smaller banks to join them, mainly in the East and North, in a major enterprise to secure Barclays for the future.

This was a period when the middle classes were flocking to open bank accounts, just as the local banks which had served their forefathers disappeared month by month into the jaws of the City. 

By the outbreak of the First World War, Barclays had doubled their branches, mainly by the most frenetic merger activity, starting straight away with the Newcastle bank Woods & Co. Their biggest takeover was the Consolidated Bank of Cornwall in 1905, itself a recent merger of family banks. The most dramatic was the purchase of United Counties Bank, giving Barclays a major presence across the Midlands.

By 1918, even the government was worried about this merger mania, and appointed a committee of inquiry which urged it to legislate at once. Being the British government, it never quite got round to the task, and agreed to drop the idea of anti-trust legislation – which was bitterly opposed by the banks – on condition that there would be no more mergers between the big ones. 

Desperate to get under the wire, Barclay’s just had time to snap up the massive 601 branches of the London, Provincial and Western Bank. By 1920, they employed 11,000 clerks in 1,783 branches. There were now five big banks left standing: Midland, Westminster, Lloyds, Barclays and National Provincial (not the same Big Five of today, it is true).

It was already the most concentrated banking infrastructure in the world, and deeply conservative - one of the features of industries with no proper competition is conservatism, and so it was back then.  

Left-handed people were banned from bank staff, at least in Barclays. Women were dismissed when they got married. Board minutes were still written by hand. In Barclays, ledger clerks were issued with special ink designed to clog any new fountain pens, which the banking oligarchy disapproved of. 

In Manchester, banks were still transferring cash across the city using the last horse-drawn cabs as late as 1940.
Now our banks have their attentions elsewhere, and take their domestic banking customers staggeringly for granted - as you would expect where there is no competition.  They were allowed to swallow the competition, just as - only a decade ago - they swallowed most of the building societies.

So here is the question, and I asked it with more explanation and anecdote in my new book Broke (because the failing banking infrastructure is complicit in the demise of traditional middle class values) - do these forgotten banks still exist inside the belly of the wolves?

I know, it is true, that the branches being liberated by Lloyds are not the original TSB branches - most of them are former Cheltenham & Gloucester Building Society branches.  It is also true that the new TSB will have to develop the skills required for local lending which have atrophied inside Lloyds.

But it is a start.  Now what we have to do is to have the guts to act like the woodcutter in the tale of Little Red Riding Hood. 

Round up the big bad wolves of banking, slit open their stomachs, and let the institutions we need come back out again into the light – the Woolwich (inside Barclays), Bristol & West (inside Bank of Ireland), Halifax (inside Lloyds), Girobank (Santander), Williams & Glyn’s (Royal Bank of Scotland), Martin’s (Barclays), Birmingham Municipal Savings Bank (Lloyds). And so on and so on.