The Audit Commission's David Walker responds to Demos report
It’s open season on quangos, and Demos (a little tardily) has joined the hunt. Congratulations to the struggling think-tank for securing a slot on the Today programme this morning and a ream of publicity.
But to get attention you have to shout loudly. The cruder the message, the more John Humphrys salivates. Listeners will have been confused by Demos’s political identity – didn’t it used to be enthusiastically Blairite? – but even more puzzled by what the point is.
The new Demos pamphlet is breathless, and its authors hurtle into error. They say ‘since the mid-1980s there has been an explosion of central auditing bodies and reporting requirements – 800 quangos costing around £35bn a year’. Eight hundred auditing quangos? With an average budget of £43m?
Her Majesty’s Inspectorate of Constabulary costs about £15m, HM Inspectorate of Probation costs £4m. The Audit Commission is bigger: our budget is £200m. But who are the rest?
It’s a double error. ‘Audit’ (what we do) is not what Ofsted or HMIC do. Audit means an examination of financial accounts. Lumping audit, inspection and generic regulation together is a recipe for misunderstanding and (if you are a genuine reformer) is a good way to miss the target.
The Demos authors style themselves ‘progressive Conservatives’. Both Ofsted and the Audit Commission were created by Conservative governments. Conservatism (it’s not necessarily a paradox) changes but it would have been enlightening to hear from Demos in what ways the Thatcher and Major governments were – their sense, not mine – ‘reactionary’.
Let’s get to the Demos argument. Trust the people, trust the frontline service deliverers. That’s a strong proposition. Why not dispense with outside regulation and supervision of local authorities altogether?
But Demos gets cold feet. We can’t, it turns out, entirely trust councils or even head teachers, let alone the directly elected police commissioners the authors sort-of support. The pamphlet tracks back. ‘These bodies carry out a critical function of ensuring that institutions perform and are held to account.’
Well, that’s a different approach and I don’t think I heard that endorsement aired on the Today programme. Next, ‘frontline professionals and citizens often see them as a valuable way of assessing how public services are doing and holding them accountable’.
I couldn’t have put that better myself. Parents and frontline service deliverers (the pamphlet says) back inspection. Confused? The authors want to believe that full local accountability could work; that citizens don’t need external assurance to get services that meet their expectations and willingness to pay. Why not markets: at best they can mobilise information? The authors’ logic leads inexorably to abandoning independent audit or inspection altogether.
But at this point, they seem to hesitate. They remember David Cameron and the exigencies of power, public trust and confidence, professional power, the limits to local self-government – which spending cuts could make more not less complex. They wonder if they’ve gone too far and run a risk of embarrassing the leader of the Opposition.
Perhaps we need audit and inspection after all. It’s at this point the authors suggest they don’t want to abolish quangos after all but create, instead, a mega-quango. A single giant to do all the inspection of schools, health care, police, probation, prisons, councils, job schemes, as well as ensuring public money is spent well and wisely not just by hundreds of councils but by Whitehall departments and agencies. But, don’t worry, it would be run on a shoe-string with a minimalist staff. David Cameron’s planning for office will, I’m sure, be a bit more realistic.
David Walker is managing director, communications and public reporting at the Audit Commission. These are his views.
This blog first appeared on the website of Public Finance magazine.
http://opinion.publicfinance.co.uk/category/pf-blog/
Andrew Preston
To Mark Nicholas
The reason that the Audit Commission responded was because a straightforwardly false accusation was made against them.
WL
David Walker's protestations should come as no surprise.
As the Head of Communications at the Audit Commission, Walker has interpreted his role as protect the Audit Commission at all costs and basically fend of any demands for change at this most insular of institutions.
The world that they constructed was compellingly plausible.
A - Specify the things that good organisations do
B - Put it all into documents that organisations have to follow
C - Inspect organisations on how well they follow these documents
D - Give then scores on how well they meet this
It sounds so plausible and neat and the Audit Commission sit at the centre, the arbiters of all they survey, the protectors of public sector virtue.
It quickly falls to pieces when it is understood that the things that have enshrined as things that good organisations do, turn out to cause widescale damage in organisations.
Their view on the world is one that is top-down. Leaders sit at the top, and specify what people at the bottom should do. These 'good ideas' are then passed down through a series of tools such as targets, policies and procedures, plans and visions.
The frontline workers, obviously not as intelligent as those at the top, should then follow what the Audit Commission prescribe. If they do exactly what has been prescribed then services will be excellent.
The reality was so far from the truth, that the Audit Commission is trying to subvert any criticisms because if they were allowed the stand the whole edifice comes into question.
The targets actually caused unintended consequences in many public sector services (many examples).
All public sector organisations ended-up with a policy and procedure for everything, none of this improved service. The plans and visions were quickly redundant.
Instead of admitting that the Audit Commission had made a mistake, it ignored the problem, and didn't try and understand or learn why its detractors said what they did. Why? Decades of scoring organisations upon this false premise meant that those who had scored no stars or one stars were in all probability providing as bad services as those providing 4 star services. Careers have been wrecked upon the Audit Commission's best practice regime. Imagine the court cases and legal challenges.
The unintended consquences of this hermetically sealed world is that innovation was driven-out unless it was sanctioned by the Audit Commission. In fact it wasn't innovative unless this conservative, insular and command and control organisation recognised it as such. Everybody spent all day providing the audit commission with what it required so that they could get the 4 stars that they ignored the customer.
And the final point has to be that it isn't possible to inspect in quality. The cost to the tax payer is massive.
Nobody says scrap the Audit Commission, although the Audit Commission characterize those who criticize it in this way to rubbish their ideas. In the Audit Commission's fight for survival it is all about their survival and nothing to do with the improvement of public services.
I argue that it is time to reel them back to a simple audit function and have a much more refined and simple inspection approach. Slimmer, thinner and one that removes the problems that get in the way of good performance and don't add tons of 'guidance' that kills quality.
Anthony W
I have worked in an Audit Commission excellent-rated authority and also a poor-rated authority. The differences are cosmetic. The Authorities who get the star ratings are the ones that follow the demands of the Audit Commission. The services actually received by customers shows little difference. The belief that the Audit Commission are capable of distinguishing what good quality services look like, is as much of a myth as father christmas. It feels good to believe that it is true, but the reality in grown-ups is a costly mistake. David Walker appears to stab kick at anybody who suggests that things should change!
MG
David Walker: 'Minimalist staff'? Don't you mean 'minimal staffing'?
It is absurd to say that giving front-line public service workers more responsibility leads inexorably to no central oversight whatsoever. That argument only works if this is a zero-sum game, which it is not. It is a question of proportion. At the moment there is too much auditing which is blunt and bureaucratic. There should be less and what there is should be more sensitive to context. The authors make this point well.
Mark Nicholas
I work within public service and Leading from the Front hits the head of the what's-wrong-with-public-service nail so firmly that it's hardly surprising the shock waves have rattled the windows at the audit commission. However, the audit culture is now so institutionalised in public services that changing it will be an almighty task. When there are so many vested interests and cosy relationships dependent on the existence of a self-perpetuating soviet style bureaucracy it will be a very brave and determined politician who will break it down. It needs to happen though - the sclerotic nature of real outcomes related change caused by over management and a lack of trust is one of the hidden scandals of modern public life.