Lying to Ourselves over PFI – Private Finance Initiative

PFI was Government outsourcing at its worst as the Independent has uncovered. There is a saying “There are no free lunches” but politicians like to pretend that there are.

PFI was a scheme to bring forward capital spending for hospitals, schools, care homes and others areas of under-funded public utilities without showing it in spending profiles – without being honest and transparent with the public about what it was doing.

Ally this to the cozy relationship between certain politicians and those in the building and construction industry and the inability of civil servants to really understand enough about the risks to dissuade politicians and the recipe was in place.

What we have is a burden on our public sector that will not impact the politicians that made the decisions but will have grave (in some cases literally) consequences for those who will be unable to be provided with the care they need as costs in our public sector rise over the next few decades as the bills are paid.

Back in 1998, when I was a Trustee / Governor at a local school in North London, I identified that the school needed to be rebuilt. It was crumbling, had asbestos, its electrical wiring was unsafe, roofs were collapsing and let in vast amounts of rain water and the school had to make use of temporary facilities that were installed 30 years before. There was a real danger that the school would be closed at some time in the future unless radical steps were taken and the only answer was to rebuild.

I made a presentation to the Board of Governors in 1998 where I proposed that, while PFI was an option being actively touted by Government as a panacea, we should not touch it. In Powerpoint slides, printed and shown on an overhead projector (we could not afford the computer equipment) I tried to persuade reluctant but well-meaning local people to reject the obvious answer because of “long-term high charge over 30 years” and loss of control over our own assets. The slide shown 17 years ago is below:

The school, now Ashmole Academy in Barnet was built without PFI – although it took until 2004 to see it through. Eleven years’ later, the school (where I was Chair for 12 years from 2002 until 2014) remains in excellent condition and is an excellent school – one of the best in England.

When this Government began its enquiry into school buildings a few years’ ago, it commissioned Sebastian James and his team that produced the James Report.

This report, to which a few of us from the board at Ashmole made representations and met with members of the Report team prior to publication, did not condemn PFI but simply said:

Private Finance Initiative

A procurement route established in 1995, and more widely adopted since 1997. It is an important route for much Government spending on assets as it transfers significant risks to the private sector. PFI requires private sector consortia to raise private finance to fund a project, which must involve investment in assets, and the long-term delivery of services to the public sector.

As a result, PFI was allowed to continue on the basis that it meant to provide a “transfer of risks to the private sector”. For this transfer (which is really nonsense as the transfer was merely to get public sector spending off the books and into the books of the companies), the construction and service companies were handsomely compensated.

Not only that, but local and national public sectors were completely overwhelmed by the prospect of architectural excellence rather than practical building and this resulted in grandiose schemes that impress architects and win awards but ended up being hard to maintain, costly to build and a long-term drain on finances.

The lessor, now the School or the local authority is then stuck with a long-term agreement which it has to pay – at costs which are far greater than those which a Government could have loaned the money at – just to get costs off the books so no-one would notice that the financial burden was excessive while the new facilities were being built.

As to the risk being transferred, at Ashmole, we decided to take on such risk and then make sure that we had good contractors, good architects, good project management overseen by knowledgeable Board directors / trustees and good contracts in place. The risk was normal – it was on the suppliers not the school as we were the customers. The risk issue is nonsense.

The James Report is now forgotten but should have been a reminder that PFI was a major accident waiting to happen.

The Independent’s Report highlights not just the crippling costs of PFI but also the problems that are met when government (local and national) become swept away by those in the private sector who promise a free lunch and by their own lack of transparency and inability to understand business.

We entrust Government with much of our future but, while we condemn those that allowed PFI to take place in such a shambolic way, we should bear in mind that we may be expecting far too much in an area of greatest risk – the place where public and private sector meet. Knowledge and capability on either side are varied but neither really “gets” the other. This is why banking crises will always appear from time to time and why outsourcing of public sector often delivers much less than “expected”.

The place where public and private sector meet is a dangerous one and is less well understood than the specific sectors themselves. However, one way that such disasters as PFI could be reduced is through transparency – it was the desire to keep costs “off the books” that took us into PFI when extra expenditure on the public sector financed by low-costs Treasuries would have been a far better investment.

However, the pressure to falsely account was made by the pressure put on politicians by keeping government spending down even in the face of greatest need. It is why, even today, the NHS funding row is all about showing how the £8bn will be afforded in years to come when we all really know that we have very little idea what the UK’s finances will look like in three to five years. Good management of finances does not mean we can possibly be that accurate (no company really believes it knows how it will be doing beyond twelve months and beyond that, forecasts are but guides based on spreadsheets – the same is true of economies but with thousands more indeterminate variables).

So, PFI and similar comes from our desire to lie to ourselves and for politicians to lie to a public that is implicit in the lie.

We need to educate ourselves to reality by being more transparent.

The Cost v Care Dilemma

Contention: there are two opposing forces within our care professions (which include the hospitals and broader care industry) – cost v compassionate care. It is often put forward that they are incompatible. They cannot be.

The Dilemma

My previous post looked at whether the NHS and care industry can provide  “care” and how the charity sector has a single-minded pursuit towards compassionate care that could assist the public sector caring professions and should be sought out to advise on care in the medical and social care services.

Someone for whom I have a great deal of respect, Richard Murphy (through his Tax Research UK ), reminded us of a post he made back in 2011:

He reminded in a more recent blog that, in the UK, we have a National Health Service (NHS) which is highly rated in international comparisons.

This high rating (2^nd out of seven major nations), was at the expense of one measure where we came 7^th – patient centred care. Richard Murphy, who wrote the article shown, declares that “we trade something important here: price for patient focus.”

This shows the dilemma that we appear to face. On the one hand, we (the tax-paying public) may want public sector spending kept down (and thereby keep the taxes we pay as low as possible). On the other hand, we (the hospital-attending public) want our public services to be provided to the highest quality. What does not take place in any rational way is a discussion about the quality of service that we demand and the price we are willing to pay for it. There are reasons for this.

Government, which runs the National Health Service and regulates the rest of the medical and social care industry, has one of two political defaults. It either wants to run everything centrally – which led in the past to doctrinal key performance indicators with its huge range of unintended consequences; or, it wants competition where each hospital trust can do its own thing because they are somehow in competition.

What is not understood (because no-one at a macro-level is putting enough time to do it) is how to establish the qualitative measures that we need so that a real Care Quality Commission (CQC) or other monitors would properly be able to judge performance and adequacy with the same prestige as those who guard costs.

Who Really Cares?

I mentioned in my July post that I was Chief Executive at Willow – where we provide Special Days for seriously ill young adults. I am leaving this month and will genuinely miss Willow. It personifies charitable and compassionate care throughout.

An excellent charity, it was founded in 1999 by Bob Wilson (ex-Arsenal double winner, BBC/ITV broadcaster and now Arsenal Foundation Ambassador) and his wife, Megs, following the death of their daughter Anna from cancer. Willow provides around 1,000 Special Days a year for young seriously ill adults (www.willowfoundation.org.uk) . These Special Days provide benefits on three levels: the day itself – a respite from treatment and an opportunity to do something extraordinary with your family and / or friends; positive emotions that result from the Special Days for at least two months – described by the Centre for Applied Positive Psychology (CAPP) as “Astounding!”; the impact of the Special Day both for those in a palliative condition (where they are able to focus on the Day from the time of application) and for those in a curative condition – where the day often results in a change of lifestyle – providing a momentum to start work again, a drive to get back to family life or something new.

Willow’s stories (and Willow is about to provide its 10,000^th Special Day) are many and varied.

What each story shares in common is the ability to provide something way beyond repair – even beyond care. The degree of wellbeing (as evidenced by 1000’s of stories) results in Special Day beneficiaries and their families wanting to give something back to Willow – to fundraise and volunteer – and we have now formed an Alumni Association (maybe the first in a charity) for our beneficiaries and those close to them.

This is charity-provided wellbeing which adds to the excellent repair services from the medical community and the care services of hospices. It provides a respite for families who are the traditional “carers” and an opportunity for all to spend time in a positive mind-set that we know enables beneficiaries to take advantage of whatever life has to offer.

This microcosm of our society (there are 100,000 young adults in the UK at any one time who are suffering from an illness that could require palliative care) exhibits many of the issues that we confront in our trade-off between price and care (between cost and quality).

Willow does not question the treatment that any of our beneficiaries obtain in hospitals and hospices, for example. We don’t comment on them and have no desire to do so. What we witness is the complete desire on the part of our beneficiaries and their families and friends to take advantage of something so different and so positive. That Willow provides, through charitable contributions, something so remarkable is to the good. The question is why there is such a difference between what Willow provides and what appears to be provided within the NHS and elsewhere? Is the desire to remake the NHS from a repair organisation to a wellbeing one as proposed by Norman Lamb (Social Care Minister) real? Or is the trade-off between cost and care too great?

A caring organisation – the control:care plateau

What does it take beyond government rhetoric to make compassionate  care within the public sector real? It cannot be just a phrase that is uttered by a Minister with an expectation that it will immediately be understood and implemented. Compassionate care requires the whole organisation to absorb the need as a key value – supported by processes, training and monitoring. This requires management who can embody the spirit of care and staff willing to take it on. It requires sufficient staff who have the time to provide the care that it needed – sometimes it is the time itself that provides the ability to show the care.

At Willow, we have four underlying values that shape everything we do. We aim to be:

Effective    /    Positive    /    Innovative    /    Compassionate

We aim that each person that works at Willow (whether as a Special Days co-ordinator – who works with beneficiaries and medical professionals to put on the day – to a fundraiser or someone in Finance) embodies each of these values.

• Effective (rather than efficient) means that we add value and are seen to do so;
• Positive means that we seek to be pro-active (glass half full);
• Innovative means that we are continuously seeking to do things better;
• Compassionate means that we care – and show it to our beneficiaries and to staff and to funders and to whoever else Willow comes into contact with.

So, it is a balance between the two bottom lines that I discussed in my previous post – we have to balance a proper degree of control with a proper degree of care. These are not mutually exclusive. We believe and show that the control : care plateau we have reached is a good one but that we have to continuously strive to raise our sights to a new plateau. For us, a focus on care underlies what Willow is all about.

Within the NHS, this trade off has been seen to be an “either / or”. Richard Murphy’s comment strongly suggests (and Richard never meekly suggests anything)  that the national health service has to make a choice – not a plateau of control : care but a choice between them.

This assumes that the prime requirement is to repair the physical when holistic treatment should be in place. Moving from repair to wellbeing is not just a preventative message but one where the wellbeing of a patient comes from an understanding that they have as much right to a fulfilling existence as anyone else. This does mean that the way they are treated has to be via a care policy that is not just understood but embedded and funded.

From All those Reports to Compassionate Care

The Francis Report showed that the standards of compassionate care were too often far too low. Unfortunately, the remedies that the media have focused on relate to punishment and monitoring. Great quality of care cannot be monitored in; great compassionate care cannot be sought though punishment when things go wrong.

The Berwick Report into safety in the NHS properly focused on what could pro-actively be done to reduce accidents, for example, and that purely quantitative measures (“naïve or mechanistic targets”) are insufficient and, on their own, damaging. The Report stated that the problems in care happens despite the good nature of the staff:

“Most impressive of all, perhaps, has been the consistent dedication to helping their patients among the vast majority of clinicians—doctors, nurses, pharmacists, allied health professionals, mental health professionals and many more—as well as non-clinical staff”.

From all these reports, we now have to move on. I believe there are four, crucial outcomes that include:

• ·         the need for organisational approaches from the top – values have to embody compassionate care; they include the need for qualitative measures which may best be made around stories like in Willow’s case and a process being followed up in a number of hospitals (in Mental Health as an example);

• ·         the need for a cost and care balance – an agreed plateau that provides in each hospital satisfactory levels of both;
• ·         the need for innovation in care and understanding of care needs – just as important in holistic treatment as new equipment or methods of surgery;
• ·         continuous learning and best in class understanding from wherever this can be obtained – often from the charity sector where compassionate care is the underlying value.

Moving from a sense of mutual exclusivity and away from

Costs v Care

to a

Cost : Compassionate Care plateau

Should be the new normal of 21^st patient care wherever practised: no either / or but an acceptable balance of care and costs.

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Who Cares?

Whatever untold strife there is in Syria, Egypt, Afghanistan and Iraq, the undeniable and continuing news story at home is our national health service – the NHS itself and (in the wider community) social care services – especially care homes exacerbated by the government’s desire to cut costs and benefits as a result of government debts from the bank-induced recession.

In recent years, the intolerable conditions under which elderly and mentally challenged residents of social care homes were treated became clear. Attacks by staff on residents have been detailed and prison sentences resulted.

Then, in the last 12 months, publicity has focused on NHS hospitals – amongst them Mid-Staffs, Trafford and now University College in Wales. Poor standards appear to have led to deaths and misery and then a debate about how nurses, for example, spend too much time training and not enough caring, while week-ends are suddenly revealed to be understaffed and A&E (Accident and Emergency) services are under enormous strain.

So, Who Cares?

This is not just a sad reflection on critical institutions but appears to reflect very badly on ourselves as caring human beings and on whatever society we have created. Our demands are for low government spending and for maximum services as long as someone else pays. What has happened that makes us so uncaring? While this may not be on a scale like what has happened in recent years in Bosnia or Somalia or now in Syria, Afghanistan and Iraq, our insensitivities to other people have reached a sorry state – the governing State and its inability to provide the answer and the civil state that appears to be no better.

Quality of life has been subsumed in the message of “quantity of life” for so long – the pursuit of wealth as recorded in terms of money and goods – that we are failing to reconcile ourselves with the softer issues of existence. The pursuit of economic benefits has seems to have clouded out all else as we pursue ever higher GDP.

We blame government for this – but, government represent us, civil society, citizens and we get what, I guess, we deserve. David Cameron and his happiness index is a measure of the difficulties we are in – where we have to measure things before we do anything.

Measurement is a quantitative outcome of real activities. Hospital failures are deemed to be the outcome of rigid focus on targets and it is clear that we have, as a society, been totally brainwashed by the success of business and used its targeting approach to success in all other areas.

So, we set up targets for hospitals without understanding the qualitative targets that need to be set. This is the same as the setting up of government departments to quantify the value of natural capital (Natural Capital Committee at DEFRA) as that, seemingly, is the only way to guard against the complete destruction of our ecology. As a minor example, the only delight that most have in watching Antiques Roadshow is the valuation for each item – the genuine beauty of the item is sidelined as we wait for the valuer to tell us how much an item is “worth”.

We seem completely uncaring as human beings – sacrificed on the altar of quantity and unable any more to see the real quality of life.

Where is the Care?

Yet, not all NHS hospitals are death traps and by no means all medical professionals are uncaring – most aren’t. Indeed, it is likely to be a small minority that exhibits such immoralities. However, we have a developed a structure built on sand where managerialism and devotion to numbers and targets exist throughout and our obsession with quantity overrules quality.

This is why MRSA took such hold in British hospitals for so many years – because other obsessions took firmer hold.

So, where is the care? Will it come from the new agenda that is being pushed  – the wellbeing agenda? Will the Health and Wellbeing Boards (around 150 have been set-up throughout England) result in an infection of caring and quality? Will top-down direction result in a change in culture that is professed throughout.  Will the CQC be suddenly changed into a care organization? Will expert inspections be the savior? Or will the whole be an edifice, behind which politicians hide proclaiming that they did their job and it was the professionals that failed – or are we simply kidding ourselves that top-down, outside inspection and control can fix the problem.

The Caring Sectors? Chaos in Conformity.

The NHS and Care homes suffer from a culture problem and a procedures-driven mentality that eschews common feelings. NHS facilities are procedures-focused to the extent that it is amazing that breathing can be undertaken without supervision. Everything is policy-controlled and process. It is no wonder that care is forgotten. All who have it are in danger of losing it once they enter the profession – those that retain their care mentality are fighters and have to be for their morality to survive.

I have seen the evidence of this, not in a hospital but in the charity sector. – the so-called Third Sector. Charities are centres of care where the whole focus is on the cause. This key focus is driven by founders with vision and caring and with funders who buy into that care and cause agenda.

Sometimes, well-meaning Trustees bring in NHS or NHS-related people to run a charity – thinking that one non-profit is much like another. So wrong!

What often happens is that the charity is swarmed over by policies and procedures and directives and by new people brought in from outside (often the NHS) who “get” the new mantra. Soon, the charity is losing its way and its cause is forgotten in the chaos of conformity that ensues.

I believe that the charity sector (really the second sector in the caring sector as it was the precursor to government involvement) is where real compassion and caring still resides. Like a treasure-box of solace for humanity, the charity sector is built on causes and full of people that care – quality of caring and not quantities of statistics.

I have myself spent many years in the business sector, where care for customers is paramount but so is the quantifiable bottom line. Customer care leads to better profits and well-run companies know that their profits will be hit hard if customers suffer. However, care for customers means doing business well – good design, well priced goods and services, good after-sales, better call centres, smiles and the like. The aim is to make profits – one bottom line – but thorugh a complex array of inputs, outputs and outcomes.

In the charity sector, there are two bottom lines and two customers. The main one is the cause – the caring for the beneficiaries of the charity. The second is the funder – the provider of the funds for the cause and a way to break-even and grow the charity to satisfy the needs of the beneficiaries.

This balancing of the two bottom lines is crucial to the success of any charity and the care side is just as important as the funding. It comes first but is dependent on the other. Two sides of the bargain.

I continue to be overwhelmed by the people that work in and volunteer for and fund charities. From the largest like Macmillan Cancer Care and Cancer Research and WWF to the smaller ones like Willow (where I am CEO) to campaigning charities to health charities, the vast majority are focused, and relentlessly determined to make their charity successful. To do that, they have to positively impact their cause.

This is a learning tool for the national health sector (both public sector and private sector) in the UK. The challenge of wellbeing is to harness real caring into the morass of policies and procedures that entangle the NHS and the profit-motive that engulfs the care homes. Amongst the top-down rules and strategies that the Health and Wellbeing Boards adopt should be the adoption of the basic tenets of the charity sector.

The Third Sector Infiltration

What does this mean? Well, first, ensure that there are charity people on the Health and Wellbeing Boards. This means real, caring people that understand the challenges of the two bottom lines and have shown some success. Such people run and work in hospices across the country as well as service-type charities like MacMillan and many others.

Second, adopt the two bottom lines. Understand that the cause is as crucial as the finances. Just because in the public sector there is only one funder does not mean that that monopoly funder should run the organization. Being “funder led” is a sign of disaster in the charity sector. It should also be in the public sector. Sure, we want effective use of taxation in every public sector area but the balance should be in place and the only area where that balance is in place is in the charity sector.

Third, Government must take the role of the interested funder – not the shareholder. This is civil society money raised from taxation but to be used for a good cause. It is the wrong balance if the Treasury is the only arbiter. The Department of Health (and wellbeing?) is the funder and the CCG (Clinical Commissioning Groups) are the funders – can we trust them (the General Practitioners and members of other NHS organisations) to provide care objectives when they are the “commissioners” – the buyers? Who represents the citizens – civil society – the patients? Where are the patients represented anywhere? Who demands that care forms the agenda – the Health and Wellbeing Boards?

Yet, they are mainly formed of our representatives – local councilors and the like. Where is the care sector involved? The “caring professions” have, unfortunately, been tainted by the recent past – it is now a good time for the Third Sector to be properly represented in the world of care to a far higher extent than David Cameron’s vision of a caring Britain (his Big Society) where charities were lumbered with being low-cost alternatives to local authorities and hospitals. It is time for a reverse takeover – with caring in the lead.

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Information and Trust – Wagging the Long Tail

There is a crisis of confidence in elected and unelected officialdom across the planet.

Whether we watch the scenes from Egypt, Brazil and Turkey or read of the horrendous problems at Morecambe and Thamesmead closer to home along with the allegations surrounding the Care Quality Commission (CQC) and government, as we witness elections in the UK and US attracting less and less voters at each election, it becomes ever clearer that confidence in those that have power has been lost.

Hundreds of years ago, when most believed that those in power were born to have it and exercise it and when information was so scarce, lack of confidence in the powerful would erupt only at times into outright hostility. If the French Revolution could be considered an example of such hostility, contrast that to the relative minimalism of 1968 or the banlieue rioting of a few years ago.

Today, the volcano is not sleeping but constantly rumbling with disquiet that breaks out not necessarily in revolution but in people power as shown by Erdem Gunduz’s standing man (duran adam) in Istanbul.

We are more knowledgeable and educated but we are no less intolerant and the expectation is more widespread. So, the rumbling goes on and our politicians – tied to their 19^th Century establishments of power – are completely nonplussed and have no idea how to react.

The Power over Information

There are waves of contention that sweep across the centuries.

In the West, the political concepts of the 18^th Century and before were founded often on religion and religious intolerance and rising nationalism – this remains the root cause of many conflicts in the Middle East still;

those of the 19^th Century on nationalism;

those of the 20^th Century on dogma – fascism / nazi-ism, socialism, communism;

the 21^st Century still has resonances of all those centuries and many countries remain hidebound by the blood-thirst of years gone by.

However, each century brings its own challenges while technology does much to change our thinking and understanding.  In Europe, the invention of the printing press enabled the spread of knowledge beyond the priests and monks who kept power through their monopoly of the printed word.

In the eighteenth century, Thomas Paine brought his word to the attention of the masses through documents like the Rights of Man that fuelled rebellion in the USA and France.

Writers like Dickens in the 19^th Century caused the wealthy to respond to the crimes committed against the poor of London and the South of England – leading to the philanthropic movement.

This century’s challenge is about the battle between  mass information centralism and decentralism caused by the Internet and cheaper and cheaper forms of computer and mobile technology. It is driven by the extraordinary advances in information, learning and education for most sectors of the world. It is driven by the power that such information provides and the desire of those in power to retain it.

Edward Snowden’s rebellion is about information and the central authority of the National Security Association in the USA to plough information furrows in search of masses of data (see excellent article by Kenneth Roth). Technology now allows so much information to be gathered that those in power’s natural default is to take it. Snowden rebelled in the way he thought right – his own 21^st Century revolution in the same way that Wikileaks did or Bradley Manning attempted – their own duran adam.

Elsewhere, it is the gaining of information that empowers those who rebel against what they see as the wrong use of power. From radio to TV and to the internet and social networks, information in the hands of increasingly better educated citizens means that their concerns can be better disseminated and groups can more easily coalesce. From the printing press to the telegraph and now to social networks running on mobile phones, the acquisition of knowledge and the crowd forming opportunities available (online and offline) challenge authorities worldwide.  In Turkey, The Hurriyet Daily, in one comment piece, headlined: ‘Twitter versus Prime Minister Erdogan’. The “democratic coup” in Egypt was fuelled by the rapid dissemination of information to a population where many tired quickly of the deceit of power.

The Long Tail and “Power Law”

With the extraordinary advances in technology and information, society is splitting into those that have control over it and those that don’t. This is seen clearly in the financial crash of 2007/8. Leading up to this, the banks that control much of the information upon which our economies rely were able to manipulate that information and thereby also manipulate the so-called analysts and quality assurance organisations (like the ratings agencies – Moody’s, S&P and Fitch). They do so still.

The increasing use of social networks and of online systems puts the mass of information in the hands of governments and large corporations. Big data (metadata) means that individual citizens are merely part of the “long tail”, while those who run the large corporations remain independent. There are individuals and there is the long tail. They call the long tail the outcome of a power law – no better description.

Orwell saw this “power law” clearly in his “1984” but could not foresee the means that would be available to those who stand at the top of the big data (as opposed to those who stand beneath or within it). There is a real danger that as society becomes more separated by data collection, we will see confidence in institutions and governance erode progressively more – a leaking of trust that is already weak.

The reason for this is that those within the long tail, despite being so far away from the centre, still have access to large amounts of data – just not in a controlling manner as individuals. This access means that they understand the problems they are facing much more than the militants of previous centuries.

The Information Revolution

Jaron Lanier – a leading thinker on information systems and a pioneer of virtual reality – has written in “Who Owns the Future?” about the destruction of the middle class and the propensity of information systems to force us into the long tail.

The information revolution may not be the stable process that we want it to be. It may be that independent revolutions (like those of Snowden or Bradley Manning) become more common as the common man and woman show their own discontent with the world of big data.

Duran adam – standing man – is one individual silently standing up against centralized power – just like those at Tiananmen Square or Tahrir Square. This stand requires some thought because while the situation in Turkey can be improved by government listening to its people, the answer to the information problem is less clear – even if both require huge changes in thinking.

On the problem in Turkey, the issue is an old one (or a group of old ones): secular versus religious, centralized versus real democracy. In Egypt, it is similar (if more violent).

In the era of big data, the problem that Edward Snowden exposed is the same one that exists outside of the Internet – that centralized power with control of information is often corruptive.  At a more micro level, that is why the Morecambe Bay hospitals issue (where the CQC is alleged to have suppressed a damning report on care in hospitals -that is claimed by campaigners such as James Titcombe  – who lost his nine-day old baby son in that hospital – to have caused loss of life) is similar to Edward Snowden’s concerns.

Power over information – such as at the CQC – can be wholly corruptive. This provides a glimpse into the potential solutions – which are transparency and access to information. It always was, of course, but larger organisations like the NHS (the UK’s National Health Service) easily become power drunk (especially in a secretive nation like the UK).  The same is true in Turkey and Egypt. The same is true at the NSA. This power relies on information.

The release valves are (1) transparency – the same transparency called for in dictatorships where money is looted on a grand scale; (2) access to data – sharing between the centre and the long tail.

“One Word of Truth…shall outweigh the whole world.” Alexander Solzhenitsyn, 1970

It is not too simplistic to say that transparency and data access are at the heart of the problem in the information battles of the  21^st Century. Power centres based on information only function because they have more information than those outside their circle.

This has been so throughout history – from before Pheidippides and his Marathon run to Rothschild and his use of advance information to be the first to know (and profit from) Napoleon’s defeat at Waterloo. Advanced democracies now need to take the next step – the provision of information as the default and a requirement on all governments and companies to make information available unless they can justify the opposite.

The Moral Maze on BBC Radio 4 debated the issue of transparency this week – endeavouring to determine where the boundaries were. David Leigh – formerly of the Guardian argued well for greater access of information for ordinary citizens.

Diane Coyle in “The Economics of Enough” proposed experiments in the use of the Internet to engage citizens. We already have this. Organisations like Avaaz, Witness and 38 Degrees are already providing experiments.  These are not-for-profits set up to access information – including much user-generated content – to create access for citizens and pressure on government and companies. Nowhere in Diane Coyle’s book does it mention the opportunities created by such organisations – Government, public sector and corporations have so much power that top economists like her do not consider the power of citizens to collaborate that already exists.

The problem is that individually lobbyist activities like the three mentioned address the power of the Internet to pursue specific causes – often not the root cause of the Power Law over Information.  Those like Wikileaks attack the issue head-on – quite some experiment that has seen Julian Assange holed up in the Ecuadorian Embassy in London for over a year. The experiments with the Internet – bringing information and access to information to citizens – is under way. We are all already part of it: active or passive.

The question is whether the Long Tail of Information gets to be wagged.   

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Trickle-down Economics – The Thatcher Legacy

This was originally posted in 2013 just after the death of Margaret Thatcher. Now that the Conservatives have amassed a majority at the General Election, I am re-publishing as the message holds even firmer today.

“In our system, everything is done according to a pyramid approach: the order is given from the top and carried out at the base.”

No, this was not Margaret Thatcher but Jiangwen Qu – professor at Kumming’s Centre for Asian Studies, talking about China. (Taken from China’s Silent Army, Juan Pablo Cardenal and Heriberto Araujo).

He went on to say: “We believe that other countries should follow this model, because if you let everybody give their opinion it is difficult to make decisions.”

Yet, it demonstrates how in our so-called democracy, the top-down theory of decision-making was so faulty. Margaret Thatcher won three general elections because the Labour Party was split between the left-wing (originally led by Michael Foot) and the right, which broke away to form the Social Democrats. In the UK’s ridiculous “first-past-the-post” election system, a party needs only 35-40% of the vote for a substantial majority – that was Margaret Thatcher’s luck. This luck had already been seen in her victory over Edward Heath in the leadership contest in 1975 – although it has to be said that she took full advantage of that luck.

Margaret Thatcher always said that she believed in democracy but made great fortune from its deficiencies. Apart from a rigged election system that gives minor parties full majorities, she did not practice democracy in terms of decision-making. Her cabinet (where the Prime Minister is supposed to be prima inter pares – first amongst peers) was where “the order is given from the top and carried out at the base”. This was her style from the time she became Prime Minister to the time she was thrown out by those who had the substance to rebel after 13 years of her idiosyncratic style of democratic rule.

Leadership and Democracy

Within a system such as ours, Margaret Thatcher did not split the country – her support was far less than half the country (usually than 40% of the voting population) and even those that voted for were split between various streams of the Tory party. She fragmented it. Her supporters in 2013 would mainly be found in UKIP today  although she would have still used the Tory Party as it is the only vehicle for power. The split was far worse as it demonstrated that rule of a democratic party would be by just the largest minority and with extreme policies.

Those policies did change the economic landscape that had been moving to rigid control by sclerotic centrist organisations such as Trades unions, Public Sector, old-style corporations and successive governments that had no vision for society.

Thatcher destroyed the comfiness of society in her own terms and put in its place more top-down doctrines around monetarism. Because liberalism had floundered after the first World War, centrist forms such as socialism and corporatism were, it seemed, all that there was left. Even the linking of Liberals and Social Democrats in he 1980’s was to prove a failure of liberalism as the Liberal Party moved towards a centrist European ideal and away from the localism and bias away from the centre that had characterized the party from its inception.

Strong leadership takes advantage of democracy in the UK (and still does) and the trade-off between the two is a constant battle. Where no leadership exists (and this is a story of today) then democracy does not replace it until some form of leadership appears. In the UK, we still have sclerotic centrist organisations that support the status quo and no vision or leadership for the 21^st Century that would inspire the change that wealthier and better-educated citizens would aspire to.

The Centre going Forward

There is a massive danger that the completely centrist and statist system operating in China (as quoted in the first paragraph above) will, because of China’s growth and rapid ascendance, come to dominate political thinking the world over. Liberal Democracy is already wilting in western Europe as major decision-making is made by the unelected (in Brussels and for some time in Italy) with nations such as Portugal, Spain, Cyprus and Ireland ruled from the centre (read Germany). This is far away from localism and screams about the loss of Liberalism. The now-disgraced and jailed Chris Huhne remains a fan of the EU and the Euro – not a surprise that his background is social democracy not liberalism.

The 20^th Century was a battleground between the forces of darkness epitomized by  extreme Nationalism, Communism and Fascism on one hand and the forces of democracy on the other. Millions lost their lives and millions more suffered in gulags and concentration camps for democracy and the end of extremism.

The 21^st Century battleground is more complex as the war between the different political forces of centrist and localism is splintered by the battles for resources and markets (and by the impending battle for climate and conservation) and between north and south and rich and poor and corruptors and corrupted.

Thatcherism knew only Hayek-style liberalism – an understandable reaction against socialism and the fear that fascism was created around that fear. In its place, The Road to Serfdom (Hayek’s best known work and Thatcher’s quasi-bible) postured a place for Government in monetarism and information provision – working to ensure that the market could work through transparent pricing. This was its limit and disregarded the essence of society (although Thatcher did not assert that society did not exist, she might as well) as did Hayek in his complete opposition to anything that wreaked of socialism – even social democracy was something that Hayek viewed as naturally leading to totalitarianism.

The problems that Hayek missed and that Thatcher and Reagan made possible (and that China is already risking) is that while socialism runs everything from the centre, the opposite camp of economic liberalism naturally tends towards a small minority at the top owning all the assets and all the decision-making apparatus. It is clear from the history of the last 30 years that the rich are getting richer while the poor get poorer (in terms of direct wealth and the supporting services offered to them) and that the dynamism needed in society from the other sectors is dying. Margaret Thatcher notoriously believed that there would be a trickle-down effect. That was nonsense and that is now proved.

Worse, a market-led economy which is based around numbers only (with GDP growth as the religion) leads to huge societal dislocations. The NHS is a valid case where management by statistics leads to deaths and the complete abandonment of human character – as evidenced by the maltreatment of the elderly. The opposite system (as in the USA) based on insurance only leads to only the wealthy having good medical services.

Worse, the motivation by quantity alone means that quality of life is abandoned in the drive for more goods. This is the market at work when left to its own devices. The market is driven by the simplest routes to success – numbers. We cannot be solely market-driven even if the market is the best form of driving entrepreneurialism.

People-centricity not Centrism or top-down

Society has experimented with many forms of government and economics. On the latter, we have a general agreement that market-led economics works best, but it is market-led not liberal or libertarian markets. Market-led means that other decision-making mechanisms are relevant wherever the market tends to extremism – such as domination of the market by monopolies or when the rich 1% control all the assets.

In the West, we believe that democracy works best because we all have a stake and are all equal under the law. Huge, developing countries like India and Brazil have similar philosophies but are riven by corruption. China is a centrist “civilization state” which directs from the core and will, at some stage, erupt into democracy. Russia is a centrist state by tradition and a mafia-dominated chaos.

Where we believe in equality under the law, we have to strike balances which Hayek / Thatcher / Reagan economics cannot achieve. This balance has to ensure that the drive is towards the individual but that society steps in to take out excesses. The balance is developed by society – with civil society and civil society organisations strengthened against the powers of the centre wherever they are.

This is far away from a socialist state where assets are owned and / or controlled from the centre and where equalization is the norm. Balance (whatever it is called) rewards entrepreneurship but would not award bankers or managers in the same way. It would not have made the reduction to 45% in the top income tax rate in the UK – whether or not this had been financially sensible in the short-term – as it shows a total disregard to society and the motivation of the great majority of its citizens that are struggling to prosper.

People-centricity and a focus on society using the best of the market and democracy but using brain power and ingenuity as well as technology represent the 21^st Century as we struggle against top-down, centrism, climate change, resource degradation and inequality.

It is not what Margaret Thatcher intended as it requires not just the whip but also the driving force of human capability in all areas of society to see beyond the numbers or the desire to control from the top. It is leadership by motivation and inspiration.

With the death of Margaret Thatcher, let’s lay to rest trickle-down economics  along with socialism and fascism.

When Bush Senior said “it’s the economy, stupid”, society was shelved.

Let’s talk society not just economics. Human brain power not numbers. Ingenuity not GDP. Well-being not hospital stats. Quality not quantity. Society not just economics. Real leadership, motivation and inspiration.

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“Farewell, fair cruelty” – The Age of anti-welfare

The “Safety Net”

Ian Duncan-Smith has introduced a new system of welfare payments in the UK that seeks to better link payments to the sick, disabled and those out of work to their ability to find work and get paid for work. His (and his government’s stance) is that since the introduction of welfare payments (brought in by the post-WWII Labour government following the Beveridge Report in 1942), the world has changed and welfare has become a “right”  that needs to be changed.

Churchill had previously voiced his view that a safety net be provided to all those in society who fell on hard times. In 2006, Greg Clark  (now Financial Secretary to the Treasury) urged the Tories not to be caught up in Churchillian rhetoric as: “The traditional Conservative vision of welfare as a safety net encompasses another outdated Tory nostrum – that poverty is absolute, not relative. Churchill’s safety net is at the bottom: holding people at subsistence level, just above the abyss of hunger and homelessness.”

Mr Duncan-Smith, according to Peter Oborn, writing in the Daily Telegraph “is animated by a profoundly Christian vision of free will, redemption, and what it means to be human in a fallen and imperfect world.” It is this vision that hearkens back to Churchill and pushes this coalition government in the direction of the 19^th Century.

Individual vs. State

The balance in any modern, developed State is to balance the interests of individuals and State (and also at least think through the requirements and abilities of the third sector / civil society). While, as Oborn writes, Margaret Thatcher ignored the welfare system and the NHS by refusing to substantively alter them, and while Blair and most obviously Brown made them more a political football, Duncan-Smith has taken a view that individuals must be given the incentive to work and stand on their feet.

This fits well in a society still in a state of shock following the banking crisis of 2007/8 and where our sovereign debt position is a massive risk for our future.

It fits with Tory doctrine of the 19^th Century (although not with the post-WWII consensus that MacMillan and succeeding Tories espoused).

It fits partially with the Liberals (although not necessarily the Social Democrat wing in the Liberal Democrats) in that the balance between individuals and the State should always veer toward the former – although Liberals will usually point to freedoms and open society issues rather than the “incentives” that Duncan-Smith talks about.

Welfare Stands Alone

The problem is that while it is possible that Duncan-Smith has a mission and feels genuinely that welfare needs to be changed, the world is not just about welfare. It is also about economics and opportunity. Attempting to change welfare benefits (which will naturally come down hardest on the weakest sections of society) without successfully managing up the fortunes of the wider economy and critical areas such as education (a crucial force for change and a massive “enabler” in ensuring people have the skills and capabilities that allow them to stand on their feet) cannot work.

Even Samuel Smiles (the 19^th Century author of Self-Help) said: “I would not have any one here think that, because I have mentioned individuals who have raised themselves by self-education from poverty to social eminence, and even wealth, these are the chief marks to be aimed at. That would be a great fallacy. Knowledge is of itself one of the highest enjoyments. The ignorant man passes through the world dead to all pleasures, save those of the senses… Every human being has a great mission to perform, noble faculties to cultivate, a vast destiny to accomplish. He should have the means of education, and of exerting freely all the powers of his godlike nature.” (my underlining).

Government is split into different areas of control and it is a real dilemma. If David Cameron really wishes to go back to the 19^th Century and bring in welfare reforms that attempt to force people to work or lose benefits, then the same Government has, at least, to generate the capabilities that will allow them to do so.

This means that George Osborne and his Ministers have to attack our substantial problems of growth (or the lack of it) while we seem to be entering a Japanese-style lost decade.

This means that Michael Gove (himself on a mission) has to ensure that those areas of greatest need in education (which are the areas most adversely impacted by Duncan-Smith’s welfare reforms) receive the resources (investment and brainpower) that they need. This could, for example, mean forcing top quality schools (from private and public sectors) to link up with worst performing schools in the country much as Lord Adonis tried to do voluntarily as he describes in his recent book “Education, Education, Education: Reforming England’s Schools”.

Of course, this means jointly pursuing policies as a Government rather than addressing individual issues one at a time because individual Ministers want to make a name for themselves.

Of course, this is the job of a Prime Minister (and in a Coalition, the Deputy Prime Minister) to see that the key decisions of each Ministry complement each other. They have failed to see how disjointed it all is and failed to understand the changes that have been put in place since the 19^th Century that repels the drive to go back in time.

Back to the Poor Laws

There is a real danger that the failure to articulate a vision by our politicians, allied to an economic position that is perilous is leading the UK (or at least England) back to the Poor laws as articulated in 1834. This was the age of the workhouse as described so well by Charles Dickens. The 19^th Century zeal, which Duncan-Smith is bringing to bear, is allied to monetarism and austerity together with an education philosophy which focuses on individual schools (Academies) without much understanding of how to best ensure the worst ones thrive.

This means that a “perfect storm” is likely to erupt: an economy of austerity, a goodbye to welfare and a lack of educational opportunity where it is needed. This may be seen in the future as a Government that forgot the riots of 2011 much like the riots against the Poor Laws in the 1830’s.

Modern times deserve modern remedies and better leadership

The challenge for any Government in a post-2007 world is to sufficiently understand the role it places in providing the underpinning for a thriving society. This is not the old Tory rule from the top – where the top 3% get the resources and everyone hopes for a trickle down effect. The class system in the UK – no longer just three – may have been dispersed but the political class may not have yet picked up on their duties.

Whether or not many welfare recipients have pro-actively taken themselves out of the work markets and work ethics, Government’s job is to enable them to come back into the market. This means motivating and educating at the same time as gradually changing the rewards structure.

Tell a workforce that they are pathetic and they will become so. Tell people that they are work-shy scroungers and they will not co-operate. Cameron and Osborne (and Gove) understand little about leadership. They want to show leadership by forcing issues not by motivation (or nudging – I understand they read that book – shame they never read any on good leadership) in the same way that the Upper Classes ruled in the 19^th Century.

Modern times need a government that motivates and has a vision that is constant throughout – not a bunch of managers with no sense of leadership.

This should mean that rhetoric changes to encouragement not estrangement in a way that Miliband’s desire for “One Nation” (Disraeli) is meant to work. Within that rhetoric (maybe the start of some vision), the economic policies of sustainable growth have to be applied not just hope that austerity will somehow work and shift us to private economy growth; within that rhetoric, an education system that drives the worst schools to function along with the connectivity with local people (including parents); within that rhetoric, a welfare system that rewards such involvement in the community – not just salaried work.

The latter means that people should be able in a modern society to be able to work in a variety of areas – within civil society – rather than for a pittance in a salaried job. This also means spending time with kids where the worst performing schools are victims of poverty and estrangement of parents and local leadership.

This is joined up Government where each part of government takes fully into account what is happening in other sectors of society. It is not what we have now.

Farewell, fair cruelty was said by Viola in Twelfth Night – Viola was trying it on – a woman pretending to be a man.

Duncan-Smith is worried about welfare beneficiaries who shouldn’t be getting welfare – people who are not what they say they are.

This government is pretending to be showing leadership – it isn’t. It is merely repeating the mistakes of their forebears from 200 years ago.

Farewell welfare, indeed. We run the risk of becoming an anti-welfare society that alienates huge sections of it while the rest of government stands aside. Time for some vision and leadership and for this government to understand the impact one part has on another – Duncan-Smith needs Osborne and Gove to help him succeed.  Malvolio’s experiences in Twelfth Night may also be educational for Ian Duncan-Smith – he was also a man more sinned against than sinning.

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