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Audit Commission fesses up?

A systems thinker reports proceedings from a conference at which Gareth Davies, Managing Director of Local Government, Housing and Community Safety at the Audit
Commission, spoke. The Achilles heel came early on: CPA scores (the scores made up by people who have to check compliance with specifications) show improvement, but public satisfaction with councils has fallen. Now, systems thinkers know this is because councils are working to targets and CPA scores are completely unreliable and invalid. But what does Davies think?

He thinks that CPA has run out of steam. Just like a manager whose initiative has been proven to be bonkers, he rationalises CPA as ‘just a step on the journey’. And how can Davies say this when by his own account CPA scores have shown ‘improvement’?

Davies wants to pass the buck, or maybe he doesn’t…

The new agenda is local accountability. So CAA – the new inspection framework – will mean priorities must be determined locally, so now local managers have to decide. But, they’d better also be working to the centrally-imposed targets. The audience was not stupid; people pointed out that those who appeared to be the best according to targets achieve this by cheating. Davies acknowledged this as a ‘known problem’, but offered no solution.

My correspondent tells me Davies is a nice man. Doing a bad job, in a bad system.

CAA is going to move resources to fulfilling a top-down agenda. That’s how you get good assessments. These resources will be taken away from the services (which will be worse as a consequence), devoted instead to activities that can be recorded for the inspectors. Bonkers. CAA is management by fear. It has no method.

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Satisfying audit, not citizens

Local Area Agreements (LAAs), are the other side of the CAA coin. Guidance for developing LAAs gives clues as to how public-service resources are going to be inappropriately deployed in the near term. It amounts to getting people into a room, deciding what their local priorities are and then developing an action-plan for doing stuff. It is to assume experience is the same as knowledge, something Deming warned against. You end up with a plan that takes resources away from their purpose. The purpose becomes deliver the plan.

We don’t need local area agreements, we need better services. We don’t need heads of services getting in a room to decide what to do to us; we need them to get a smidgeon of knowledge about how their services work from our point of view. But LAA activities will provide a paper trail for the Audit Commission; so that’s OK then.

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Back offices: bad method

The big ‘method’ being promoted by the regime following the budget, already a subject for the Audit Commission bullying local authorities and an expected feature of LAAs, is ‘back-office’ factories. I learned recently of a County Council that spent £6m on such an intervention and their internal audit report showed no improvement occurred. I am sure there are many such examples, but it is hard to get the data. The private sector suppliers claim commercial confidentiality, well they would – I have found (no surprise) they have internal targets for getting more revenue from their host. And in every case of private-sector ‘partnerships’ I know of in local authorities, the parasite is costing more than the host thought would be the case. These guys know how to write a deal.

If you have knowledge of the costs and consequences of such factory interventions and private sector ‘partnerships’, please let me know. Your anonymity will be protected.

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Provider pleas for ministers to push harder

Giving evidence to the Commons Treasury sub-committee, John Sibson, top public sector man at consultants PriceWaterhouse Coopers, said ministers would need to demonstrate willpower if they wanted to see standardisation and simplification between local organisations within an area. To him CAA is another opportunity to sell more factory management and he knows the best way to make sales is for ministers to mandate public-service managers to ‘get on with it’.

But the ministers should hold back. The primary causes of failure demand on public services are to be found in the factory designs. Simplification, standardisation and IT-dominated designs create waste. If only ministers knew.

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Total Place: total nonsense

Another big ‘idea’ being promoted by the regime is something called ‘Total Place’. What it amounts to is every public service in a geography working out what they spend on service provision. There was a pilot in Cumbria (another ‘pilot’ destined to succeed) which calculated that Cumbria spends £7.1bn. If you know how much you are spending, what do you know about what can be improved and by how much? Answer: nothing.

I anticipate that the dumbest will think ‘if we all spend so much on similar functions, why don’t we share the functions to get economies of scale?’ And if they then embark on sharing without good knowledge of operations we’ll see more of the debacles I refer to above.

Total Place is total nonsense. One regional efficiency outfit is spending £500m on it. How you can spend that much crunching numbers puzzles me. And all who play will learn the cost of everything and the value of nothing. It is classic rear-view-mirror management. If they spent a smidgeon of their time studying their services as systems managers would get knowledge and, subsequently, could make a massive difference.

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NI 14 blunders on

The architects of NI 14 (the target for ‘avoidable contact’ – failure demand) have bullied local authorities to measure avoidable contact in order to put the data into a league table. Inevitably it has led to managers using their ingenuity to under-report. A reader tells me the first league table has been published. The average is 22% and the range is from 0.4% and 88%. I am confident only the higher group was close to reporting accurately. But they should get ready for a beating. An average of 22% is simply impossible. Trust me, we’ve been there.

The architects of the league table assume this will ‘motivate’ people to improve. No method provided. More management by fear.

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A last desperate attempt?

You may have noticed public services have (generally) not improved. The regime has hit on a last-ditch inexpensive and vote-winning proposal: ‘Dragon’s den’ for civil servants. People who work in our public services are to come up with ideas and pitch them to a celebrity panel (well, a celebrity and a few senior civil servants).

I know of a brilliant proposal to simplify tax-credits and benefits that got rejected. Changing the system is obviously beyond what they are looking for.

It is a desperate attempt by people who simply don’t have a clue. But we should try to turn it to our advantage. If you are a practicing systems thinker in the public sector, you can submit stuff to the panel at: www.publicexperience.com Go there, tell them what systems thinking has delivered for your citizens; get their attention. But don’t hold your breath.

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NI Housing gets it wrong

Northern Ireland’s Housing Executive has been criticised by the Audit Office for writing off £10m in rent arrears in order to meet its target (for rent arrears). I don’t expect the Audit Commission box-tickers know that the reason for high levels of debt in housing is the debt-collection targets. Systems thinkers know rent arrears is not a ‘debt management’ problem, it is a set people up right problem. But the targets all relate to managing debt, the ‘back-end’ of the flow, so that’s where housing associations put their resources.

Systems thinkers get levels of debt that make the ‘rent arrears’ targets look un-ambitious, it’s because they work at the front end, not the back end.

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Can we stop the TSA wasting £6m?

The new regulator for housing has decided to spend £6m on a national database. Why? I have no idea. Systems thinkers working in housing know that databases generate enormous amounts of waste. They contain people who are never going to be eligible to be housed, they require resources for storing, distributing, managing and cleaning; and they do not accurately reflect need. Doing all this on a national scale will mean amplifying waste. If you work in housing please get talking about this; it is a new regulator, we may have the opportunity to stop him doing the wrong thing. We can only hope he is interested in knowledge.

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The private sector did it first

I am most grateful to one of your private-sector clients who came with me to the Hull University Master Class, where I made the case against factory designs. I wanted the audience to hear first-hand how the private sector went down this path over the last 20 years and how systems thinking revealed both the flaws and provided knowledge for much better designs. I am going to ask a couple of private-sector leaders to do the same for our web site.

Systems Thinking is delivering results that would never have been considered achievable. Maybe if the architects of the reform regime hear it from leaders in the private sector they’ll sit up. But, then again, maybe they won’t.