John Redwood: Where public bodies are being mismanaged the services must be taken back under Ministerial control
Sir John Redwood is MP for Wokingham and a former Welsh Foreign Secretary.
Labor lost office in 1979 when it lost control of the public sector. Their own union friends and supporters caused a winter of discontent, with rubbish piling up in the streets and the dead unburied. The party had unleashed rapid inflation that it could not control. Workers were fed up with wage controls and the pressure on living standards they were experiencing. At that time, the ministers were to blame for the price increases and the wage policy.
The government thinks differently today. They say an independent central bank and the outbreak of a European war triggered inflation. Public services are now largely run by independent bodies with professional management. It’s their job to manage employees, account for wages, and increase productivity to help pay for it.
There are two main problems for the government. The first is that these independent bodies handle things poorly. The NHS England board has received huge increases in funding from ministers only to tackle the biggest backlog and problems for many patients in accessing a doctor or hospital appointment. The six senior managers there, who each earn well over £200,000, do not appear in the media to support their salary and staffing proposals. What is your plan to hire and retain the staff you need? Where is the long-awaited personnel plan?
The Bank of England created excess money and kept interest rates too low for too long, resulting in an inflation rate five times higher than its target and five times higher than in China, a country also facing high energy prices as a result of the war was. The railways, effectively nationalized by the need to subsidize empty trains over Covid, have continued to lose vast sums and are now awaiting a pay rise from taxpayers. Where are the productivity boost plans and the more popular schedules?
The second problem is that the public expects ministers to handle these things. Finally, they appoint the key people who lead these bodies. They can take them back under ministerial control when they are not working. Weak poll results tell ministers to ‘get a grip’. Provide better service for an affordable tax bill. The NHS has received record funding over the past three years and has presided over wasteful PPE contracts, underutilized contracts for access to private hospitals and the cost of setting up and closing down the Nightingales.
The problem is compounded by the poor performance of many branches of central government that are directly under ministerial control. When it comes to processing asylum applications, productivity has plummeted. There are delays in obtaining probate permits and passport renewals. The civil service is good at delaying the implementation of ministerial decisions it does not like. They often offer advice to align the UK fully with the EU and yield to global soft left forces.
So what should the government do? There is no simple legal solution. Wrestling with legislative changes to force public sector workers to give up their right to strike can exacerbate disputes. The delay in this makes it impossible for this to work for December or January battles. If ministers had wanted a new strike law this month, there would have been plenty of parliamentary time left. What government needs to do is mentor and encourage their CEOs to find ways to increase productivity and negotiate something for something. If they cannot do this, they must replace business leaders who cannot manage their services.
The revelation of how few asylum cases are being processed by Home Office officials compared to previous times shows that in some cases we are talking about a slump in productivity. What are the numbers for probate, for issuance of passports and the rest where there are backlogs? Do we need performance bonuses? More staff? Leaders should organize the responses. Ministers clearly want better service with backlogs cleared and should authorize and switch resources to do so.
The easiest way is to improve the train. There is no reason to give train drivers who are paid way above average a big raise without taking action to improve labor practices. With the collapse of the five-day-a-week commute and the rise of online working from home, the railroad no longer has the same ability to hurt the economy that it once did. Railway management must convey to its employees that the way to maintain and improve higher wages is to run more popular services. Serve people better and you’ll have more money to share with employees. If you go on strike, you’ll lose more travelers and fare revenue, which will require bigger spending cuts.
Productivity in the UK public sector has stagnated throughout this century, despite huge sums spent on digital processing and the decline in personal services. A growing number of high-paying managers, paid well above the prime minister, have increased costs without increasing performance. Whenever a service fails or fails us, ministers are blamed and left with answering the unanswerable questions about what went wrong. There is no substitute for ministers bringing in those expensive CEOs and insisting on better plans to hire and motivate the right staff and start reducing backlogs.
Managers are to administer and ministers are to direct. There are many great explanations about goals and strategies for better services. There is a notable lack of successful management to get there. When managers cannot, ministers must manage as best they can. They could start removing layers of management telling us they can’t make it and aren’t using the extra money to work off the backlog.