***
Avarice over service quality

I had lunch with the leader of an organisation that provides out-sourced services to police forces. He knew of me and wanted to impress me. Proudly he said that his organisation practiced ‘continuous improvement’; he told me how they’d cut the processing time for custody services, so that police officers can get back out on the street in minutes rather than hours when they take someone into custody. I pointed out to him that when you study what’s going on in custody suites you learn that many of the people being processed should not be there – the things that need to be done next in the criminal justice process are not ready or will never apply, or the people have committed no crime and have problems that need to be solved. So real improvement would be to tackle the demand problem and solve it end-to-end.
He could see that attending to demand would mean less processing and, as his contracts are based on volumes, less revenue to his firm. He changed the subject.

The conversation reminded me of the time – some eight years ago – that I met with a leader of an out-source provider of ‘back-log-busting’ services to local authorities. He had seen our work on housing benefits in a local authority and was keen to take our ideas and apply them to other local authorities. We were standing in his offices where he was providing back-log-busting services to six councils so I said to him these were his opportunities, he could go to all six councils and explain that he could help them provide such a better service that back-log-busting would no longer be required. He said that wouldn’t be commercial.

***
Volume won’t solve the problem

The UK Research Council’s shared services venture, which is failing to deliver services and is described as ‘already over-stretched’, is about to add further ‘customers’ to make ends meet. ‘Customers’ of the new service blog about how lousy it is – which ought to be seen as a signal of the weakness of centralised standardised service design failing to absorb variety – but, of course, is not. If you are a ‘customer’ of the service you have to use it the way it is designed or go hang. While you might be able to find other sources for advice, you can’t for example, go elsewhere to make expense claims. Putting more volume through a lousy design won’t solve the problem, but will exacerbate it.

See the report here:

http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=420942&c=1

***
SW1 continues South

The same crude and ignorant plan is the vain hope of the leader of SW1, the failed shared services joint venture between IBM and South West councils. Right now IBM is reported to be warming up to sue their ‘partners’, reflecting the fact that private-sector ‘partners’ have lawyers who know how to write deals that ensure they take an aggressive commercial position when everything goes to pot. That, together with the facts that many of the services have now been taken back in-house by the unhappy councils who made the mistake of playing, and the alarming announcement by the leader of Somerset council that it is now too costly to get out of the deal, ought to turn any prospective new players off.

***
NLGN meeting

This week I am joining a New Local Government Network meeting to discuss the future of commissioning. Looking at the list of attendees it seems clear to me that I will be the only one saying that the current approaches to commissioning are driving costs up. As well as talking about some of the things mentioned above, I shall be describing how commissioning is driving up costs in other services.

In essence, the problem is this: Commissioning, as practised, requires a specification – detailing the service you want to buy. When you study what’s going on in drug, mental health, care and health services, you see that the specifications most often don’t meet peoples’ needs, so the people re-present (failure demand), and further services are commissioned, which also fail to meet the needs; and so on it goes. While the fools in their ivory towers crow about achieving lower commissioning costs, they fail to see the true (end-to-end) costs rising.

At the NLGN meeting I’ll describe how commissioning ought to work, to ensure that as services improve costs fall, but I doubt the private-sector parasites will be too enthused as it will prevent them making hay the way they do today.

***
Troubled families or troubled system?

Louise Casey’s initiative on troubled families has been soundly criticised by Professor Colin Talbot for its inadequacies (last newsletter). In short, and rightly, he makes the case that it is spin, not research.

We have been helping local authorities study ‘troubled’ individuals and families and what it reveals is simply shocking. If you are ‘troubled’ and you seek help from the state you can guarantee the interventions from the state are most likely to make you worse off. The many ‘helping’ arms of the state are fragmented, only look at the ‘troubled’ through their own ‘specialist’ lens, focus their efforts on administrative reporting and meeting activity targets over doing anything useful and if they do anything they tend to commission services that don’t meet needs (as described above). It is not putting it too strongly to say that the best advice to anyone who is ‘troubled’ is to avoid seeking help from the state.

Just think of the billions being spent to no avail. Central to the ‘troubled system’ is the top-down nature of the fragmented services. Whitehall thinks it is pulling levers. A better metaphor would be throwing spanners in the works.

***
Universal Credit

The design for the Universal Credit ‘service’ – ‘digital by default’ – will be the most egregious spanner yet. A reader alerted me to a blog: an accountant writes in a humorous way about how the UC will fail to absorb variety, its Achilles heel:

http://sbnca.wordpress.com/2012/08/27/it-does-the-dwp-no-credit-oddities-in-the-draft-universal-credit-regulations/

***
Should we give up on health?

About three years ago we stopped trying to help the health service. After a series of studies which showed massive opportunities for improvement and subsequent prototypes being developed that showed how to realise the improvements, leaders chickened out because of their fear in taking on the Department of Health.

In the last year we have been back but I’m sad to say we are hitting the same obstacle. The amount of central interference through ill-informed directives is astounding and Monitor will only make it worse. We have amassed copious evidence of both the opportunity and the impediments and we are discussing whether to publish it or put it in a drawer for later.

***
More IT failure

The latest report on the failure of government-inspired IT systems comes from Scotland. New computer systems for the Crown Office and Procurator Fiscal Service, Disclosure Scotland and Registers of Scotland have all been delayed or cancelled. Costs so far: £133m. Benefits: none. How long before we hear Scottish ministers saying it’ll be alright when we get better project management?

See the report here:

http://www.publicfinance.co.uk/news/2012/08/scottish-government-it-projects-late-and-costly/

***
Regulation sans knowledge

The new regulator for financial services, the Financial Conduct Authority (FCA) is to get out of the starting blocks with an initiative on incentives in selling. Martin Wheatley, the soon-to-be leader of the FCA, however, operates without knowledge. In his address announcing the initiative he says:

‘I need to be clear here that I do not have an issue with firms having incentive schemes. We believe that firms can have incentive schemes that are well managed and can benefit their customers.

What we are now telling firms is that if you do have an incentive scheme, it has to be structured and managed in a way that treats the people it will affect fairly. As the FCA this will be important to us and we will look at features of incentive schemes and related controls and how they deliver fair consumer outcomes.

… it is obvious firms need to make sure performance incentives are aligned to the goals of an organisation. There is a problem of course if the goals are simply to sell as many products as possible – firms need to make money, but not at the expense of clients and customers.’

What Mr Wheatley doesn’t know is that sales incentive schemes do three things: damage sales, upset customers and create lots of failure demand in customer services. He may think it is ‘obvious’ that firms need incentives and alignment, but it is merely conventional. Firms that learn how to design sales against customer demand learn that you make lots more money without incentives and you lower your costs to boot.

Mr Wheatley is engaged in a knee-jerk reaction to massive mis-selling in the financial services sector. He illustrates the general problem with regulators working without knowledge.

You can read his speech here: http://www.fsa.gov.uk/library/communication/speeches/2012/0905-mw.shtml

Mr Wheatley is inviting views on his initiative. I suggest that those in the know send him a note.

***
The Evidence Tour

The late arrival of this newsletter is due to being busy out on the Evidence Tour. It is heartening to find people still enthused about improving public services in spite of the regime and it has been a delight to bump into so many old friends and make new friends. Many of the dates are full but the following still have some availability: Doncaster, Mon 24th Sept at 4.00pm, York, Tues 25th Sept at 2.00pm, Manchester, Wed 26th Sept at 1.30pm, Carlisle, Thurs 27th Sept at 10.00am, Durham, Fri 28th Sept at 9.30am.

To reserve your place: pr@vanguardconsult.co.uk

And we have accepted a late event on the Tour as it is hosted by people from the health service, so we thought we’d make it a ‘health service special’: Bristol, Tues 30th Oct at 2.30pm. Maybe this will help us decide what to do next about health.