On Ineptitude in Public Services
Management Thinker and ResPublica Fellow, Simon Caulkin, on the critical path to better government illuminated by John Seddon's new book
I recently had a threatening letter from HMRC demanding a large amount of ‘overdue' tax. This was a surprise since I didn't remember having received a bill in the first place. I hadn't. The assessment on which I had become overdue in advance arrived several days later – which, while reassuring for my sanity, was anything but for the cause of public-service reform.
HMRC after all is meant to represent the new model of public service. The standard-bearer for all the big business efficiency measures Whitehall believes in – industrialisation, economies of scale, front and back offices, computerised document management, etc – it has been the subject of a so-called ‘Pacemaker' programme aiming to make the organisation ‘lean'. The goal was to slash the workforce, boost productivity by 30 per cent, and turn HMRC into the government's ‘processor of choice'. Whatever that means, it presumably includes getting assessments to taxpayers before rather than after dunning them for late payment.
As it turns out, arse-about-face delivery perfectly encapsulates everything about the HMRC project. Top down, fragmented, target-driven, HMRC's ‘lean' is a crude travesty of the ideas it purports to represent – the consultants who put it in (at a cost of £106 million in 2006 alone) should be made to answer to the Trade Descriptions Act. In human terms it is a disaster. According to a new academic survey, demoralisation and stress are rife. Employees dub the programme ‘pissmaker': 75 per cent want it abandoned, and only one per cent approve. The authors describe it as an ‘assault on workforce traditions, relations and culture' that has so damaged morale and health that it raises issues as to whether HMRC is fulfilling its duty of care obligations to employees.
That's the bad news about public sector reform. But it doesn't have to be that way. The good news comes in the form of a modest volume published by the estimable Triarchy Press entitled ‘Delivering Public Services that Work'. Academically edited and validated, it recounts six case histories of public-sector organisations that have transformed themselves (yes, the term is justified) to deliver better services at no extra cost and often much less, with productivity and capacity gains that would make HMRC green with envy.
Everything about these heartening stories – of housing associations, local authority benefits and planning offices up and down the land – is the opposite of the HMRC experience. Instead of beginning with a grand high-tech solution to a preconceived problem, each starts at the other end – with a careful analysis of demand by the people best qualified to do it, front-line staff who interact with the public. This is the essential, and often neglected, first step in establishing the purpose of the service from the customer's point of view and how well it is being met. Confronted with the findings, managers are always shocked to discover that from the customer's angle their cherished service is awful. They measure the wrong things, which causes them to do far too much that customers don't give a fig about or actively dislike and far too little that they do. So their services are stuffed to the gills with preventable or ‘failure' demand – calls that keep coming back because the organisation hasn't done something, or has done it wrong. In some cases up to 80 per cent of an organisation's activity is mopping up failure demand – ie, re-doing things that shouldn't need doing at all. This is of course awful, but as Vanguard Consulting's John Seddon, who developed and refined the approach described in the book, tirelessly points out, for most organisations failure demand offers huge untapped potential for improvement. The more you can deliver the service that customers want at the first contact, the less time and effort is wasted and the more capacity is freed up for value work.
As the case histories show, this leads to a completely different approach to the dehumanising mass-production methods imposed on HMRC. Instead of standardising demand through dumb computers, you put knowledgeable, concerned people on the front line as the first port of call where they can absorb the myriad variety of human need and allow it to ‘pull' the appropriate solution. Initial transaction costs go up – sharp intake of breath from factory managers at HMRC – but overall costs go sharply down as time and rework are reduced. Processing times fall from weeks to days; customers send cake and flowers instead of brickbats.
Meanwhile, although it doesn't know it, HMRC is an Olympic-class manufacturer of failure demand, both for itself and other downstream organisations. I had to call my accountant three times to sort out the un-overdue tax demand. The local authority benefits and housing association offices in the book, not to mention citizens advice bureaux, council tax offices and indeed the whole justice system, are clogged up with valueless, cost-creating knock-on demand all caused by the failure of HMRC (and DWP, its partner in inepitude) to do their job properly.
That's bad. But look on the bright side. The message of the case studies is that the future of public sector reform does not lie in giant assembly-line factories like HMRC. Paradoxically, transformation starts small, not big. It is a consequence, not the starting point: a by-product of discovering purpose, measuring how it is being met, and freeing people to find better ways of getting the redefined job done. Transformation doesn't begin with the grand designs of ministers or efficiency experts, but the need of the individual citizen for accurate and timely service – by the authorities that collect the nation's taxes, for a start.