Magazine article The Spectator

Losing Time, Losing Money

Magazine article The Spectator

Losing Time, Losing Money

Article excerpt

ATTEMPTS to overhaul the great engines of public service have two characteristics. They take ten years and they generally don't work. We can't wait ten years for reform in health and higher education; we need government to be more businesslike in every sense.

So far, in their flattering eagerness to adopt techniques from business, British ministers and officials have shown more enthusiasm than discernment. The liturgy has broadly been accepted, as have the vestments, but the theology is ignored or misunderstood. Aspects of business theology the profit motive, for example- may be threatening or even heretical with respect to public sector values; but it's a shame to discard the most valuable bits untried.

Senior managers in companies spend much of their time trying to understand, for both defensive and offensive reasons, long-range trends affecting all aspects of their marketplace. Failure to do this, and to do it early, can be fatal. As a general rule, by the time some phenomenon is evident to more than 5 per cent of the population it's too late for a business to exploit it successfully. A politician may be unable to do something risky or radical until 60 per cent can see why it might make sense.

This is not just a reflex born of the power of the ballot box. I believe it arises from the more or less absolute absence in public life of the concept of pre-emptive urgency, the opportunity cost of time, which is one of the most fundamental drivers of managerial behaviour. 'How much are we wasting by carrying on with this? How much do we stand to lose by not moving in this direction now?' These questions reverberate in managers' heads, since procrastination is the thief of time, which is another name for money.

In the public sector, in contrast, without market pressures, procrastination is the natural reaction to awkwardness or difficultv. Fastidious officials may not be proud of this, but they don't torment themselves with the large capital sums that may be calculated as the cost of indecision. Until they do, society will continue to be much poorer than it need be.

The problem is exacerbated by the number of taboo subjects in political life. (Rotten companies, too, usually have many significant questions about which debate has become impossible.) So the rest of us have a duty to discuss those areas where opportunity cost is immense and policy paralysis most striking.

I'll start with health. One of the many depressing aspects of Peter Lilley's notorious, much-misquoted and costly speech on the public services was its subtextual proclamation that neither major party is interested in developing serious new ideas about an absolutely central and yet unsatisfactory area of government endeavour. Both parties seem to believe that the best thing to do with the National Health Service is to leave it as it is while occasionally - but unpredictably - hurling inadequate amounts of marginal finance at it.

It's very hard, of course, for politicians to talk about health at all. They can hardly praise the service, any more than they can praise the London Underground. On the other hand, it is beyond criticism, being populated by angels and jolly, glamorous, underpaid junior doctors who occasionally pass out through overwork. No wonder ministers generally retreat into the soothing manipulation of waiting-list numbers.

No wonder -- except that the waitinglists are the automatic consequence of applying financial discipline to free-ondemand product provision. The real problem of the NHS arises from the conflict between two long-term trends; we need to confront this conflict and the choices it entails.

The first is that the demand for health care is rising and will rise rapidly - more rapidly, of course, if it costs nothing. Over the next decade or so very large numbers of (expensive) new therapies will become available and will be greatly desired. Even without these new therapies, ambient hypochondria, which is one of the most certain consequences of prosperity, would guarantee rising demand. …

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