Thursday, July 23, 2009

Fear And Loathing At The Audit Commission

One of these men will soon be looking for a job

We know all about the fear and loathing it induces in Surrey, but the Audit Commission spreads its bureaucratic misery far beyond the leafy enclaves of Guildford and Dorking.

On BOM we have generally focused on its £210m pa cost, pointing out that taxpayers get no tangible benefit. But it's actually much worse than that.

The Commission is an instrument of central control, and just like government inspectors throughout history, its activities leave a trail of devastation across all the local organisations they inspect.

Now John Seddon - the occupational psychologist and "reluctant management guru" (right pic above)- has penned an excellent article for the Local Government Chronicle in which he pins down precisely why the Commission is so damaging:

"... the Audit Commission fosters compliance rather than improvement; and compliance with bad ideas to boot...

...they descend into our public services and distort the way services are designed and managed – ensuring people are focused upwards to the regime, not outwards to their customers.

The Audit Commission is just part of the wider specifications industry – the army of people in Whitehall who spend their time creating specifications for public-sector managers’ compliance.

Getting rid of all of them would create two savings: The money it costs to have these jobs (significant) and the waste caused by complying with their wrong-headed ideas (much larger)."

And he goes on to illustrate his argument by highlighting the latest Whitehall fad being promoted by the Commission, which is to combine back offices across different bits of the public sector in order to reap "economies of scale".

Not only has the government adduced no serious evidence that this will work, but in the private sector such "scale economies" in service functions are now widely viewed as a myth - they promised much, but have often delivered little, other than a drastic deterioration in service standards (have you tried speaking to your high street bank lately?).

Seddon's article has triggered an explosion of supportive comments from LGC readers who've actually experienced the real world damage wrought by the Commission. You should read them, but here's a taster:

"I am a manager at a Local Authority that was inspected last year. My organization spent over £100,000 on preparation for inspection not including staff time. When the Audit Commission came they gave us a reasonably good score. My colleagues and I know that we manipulated the targets and that service is pretty poor. Although using the centrally imposed targets and measures you wouldn't be able to tell.

When they came they didnt go and spend time with people working on the frontline. They didn't listen to calls. They sat in a room with the policies and procedures and asked staff questions against them. Seddon is right. They enforce the government line, and their decisions are based upon guesswork more than fact and knowledge."

Now the debate has been been lifted to another level by a fear and loathing outburst from David Walker, the Audit Commission's Director of "Communications" (left pic above). Of course, BOM readers will be familiar with Walker*. He used to be editor of the Guardian's Public magazine, and we first met him at a Labour seminar back in the halcyon days of 2005 (appearing alongside his partner, one Ms P Toynbee).

Walker's response to Seddon's arguments? Seddon has got his facts wrong, he has a commercial axe to grind, and he's incontinent. Yes, incontinent:

"Mr Seddon is incontinent in his judgement. To say ‘economy of scale is a myth’ betrays what can best be called a religious rather than an empirical mind set. For us, it’s a matter of what the evidence shows. Unit cost and volume (quality adjusted) are inversely related in some services."

A classic Damien MacBride/Grauniad style playing-the-man kick in the goolies.

Needless to say, Walker doesn't actually vouchsafe what "evidence" he's got. It's presumably some secret commissariat evidence that can't be released - because we've certainly never seen it.

Let's hope that Mr Seddon keeps up the pressure. Yes, he may have a commercial axe to grind, but so what? He's talking a lot of sense about the Audit Commission. At the very least, its abolition would save us a couple of hundred mill pa, and as the comments at LGC make clear, the broader savings across local government and the NHS could easily be the same again.

It's a no-brainer, George. And we could be talking nearly half a bill.

*PS Here's how we summarised Walker's performance at that gob-smacking Policy Exchange seminar back in 2005:

"I’d never seen him before, but he turns out to be a real live Planning Commissar - steel grey hair, thin intense face, and round wire rimmed glasses. He was very proud of all those targets and New Labour statistical reporting systems. “Targeting works! Previous governments have not set enough objectives or provided enough information! An amazingly successful government - the most successful EVER!” He spoke of ‘physical expansion of the plant’, and was about to launch into a couple of hours on production statistics for Volgograd Number 4 Tractor City, when mercifully he was stopped."

Once the AC is abolished, he'll have to go back to the Grun. That is, if they're still in business once Murdoch's finished with them over their News of the World campaign.

(Playing the man not the ball? Yes, but I'm a disreputable blogger, not a senior public employee funded by the taxpayer).

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