You WILL increase your productivity … or else! The case for consulting the staff.

This is Blog No 62

The Spring Budget gave many of us a deja-vu moment.

It came when the Chancellor announced “a landmark Public Sector Productivity Plan.” and claimed that ‘raising public sector productivity by just 5% would deliver up to £20 billions of benefits a year’. 

This, of course, is in the context of enabling tax cuts by condemning public services to an ‘inflation + 1%’ forecast spend in the next Parliament – universally regarded by experts as ‘undeliverable.’

Productivity improvement plans are not new, and we have had generations of Ministers fondly assuming – and telling their supporters - that the public sector is grossly inefficient, waste is everywhere, and they can fix it painlessly so we can all have better public services for less money. Most of these have been top-down, and many may well have been highly successful, though there is very little documentation to prove it.

Instead, we have years of depressingly familiar Reports detailing ill-conceived initiatives,  failed projects, and policy U-turns. You can paper your office with National Audit Office investigations and Select Committee Reports - that all identify hopelessly over-optimistic Ministerial promises of savings that Whitehall departments, local government and other public services failed to deliver. After all, sacking 10% of your staff  whilst maintaining the same level of output improves your productivity proportionately, doesn’t it? Simples!

But there is a problem. Let’s explain it in the words of the Government’s latest Public Services Productivity Review progress report (February 2024)

     “Productivity is a measure of how well a society transforms work and other resources into products and    

      services. Typically, this can be explained by how much of an "output" is produced by the quantity of an

     "input". This principle works well in the private sector, but applying this concept to public services is more

     challenging because there is no direct charge or price for the services that are provided to its users, they

     are free at the point of delivery."

    "To help overcome this challenge and ensure measures adequately reflect the value being produced by

     public services, methods can be developed to account for aspects of a "service's quality". Currently, "quality

     adjustments" are applied to fewer than two-thirds of productivity measures (by volume) in government

     services and, along with the variation in the types of adjustments used, this makes aggregating data difficult  

     and headline numbers hard to interpret for overall policy purposes.”

In other words, we are pretty unsure that services delivered by the 90% of staff who avoided being made redundant (as in the example above) would deliver the same quality of services. Far from improving productivity, we may just be delivering worse services. The same report notes that health and education together amount to 55% of the weighted productivity improvement which Ministers seek; two areas where quality of outcome is difficult to measure. There is no bottom-up calculation of how public services’ productivity gain can happen. It is all top-down. Think of a number and then tell Managers to achieve it!

The key, we are told is technology. Invest in new systems, and the productivity gains will come. Provided the systems work, of course. And so, to facilitate the NHS’s desperately-needed gains, £3.4bn will be made available to fund new technology. Great news. The NHS Chief Executive, Amanda Pritchard is certainly enthused. She says it “means the NHS can now commit to deliver 2% annual productivity growth in the final two years of the next Parliament, which will unlock tens of billions of savings.” Similarly, Matthew Taylor, CEO of NHS Confederation, said it … “has the potential to improve patient care and staff productivity as it will help to replace outdated IT systems that keep those on the frontline from spending more time with patients.” Even the BMA is pleased! Wow!

Obviously, someone, somewhere knows about all these projects, has a sound understanding of which ones will deliver what benefits and has added them up, allowed for the usual cost-overruns and figured out they need £3.4bn. To look for this reassurance, I read one of the 29 documents released by the Treasury to support the Budget speech. It’s called Seizing the Opportunity: Delivering Efficiency for the Public and is full of the usual Whitehall wishful thinking. In its 41 pages I only found 2 references to the NHS – both to do with the 2020 announcement of new hospitals – which then never really happened. Oh dear.

So where are all these projects that are waiting for the money? They are clearly (to borrow infrastructure jargon) not shovel-ready. Are they even concept-ready?  How do we know it’s what GPs really want? Or what hospital Managers want? Or, maybe, what the public wants?

And here I turn to my well-thumbed copy one of the best books ever written about UK’s public administration. Back in 2013, Professors Ivor Crewe and the late lamented Tony King wrote the seminal analysis The Blunders of our Government – a devastating critique of how the British state is prone to serious mismanagement.

This week I have re-read chapter 13, called IT – technology and pathology. It describes the countless IT disasters where Government departments failed to reap the expected rewards of massive investments. One of the stories was of the ICL Pathways project to pay social security benefits through post offices. It became Horizon, and ten years later we know rather more about its consequences.

But the other story it tells is of another massive IT investment – personally initiated by Tony Blair over twenty years ago. Its aim was to transform the NHS by building “the world’s largest civil information technology programme.” Known as Connecting for Health, It became a case study in how not to do things. Health Minister after Health Minister believed civil servants and supported the project despite almost every clinician in the land telling them it wouldn’t work until the Coalition put it out of its misery in 2010.

One of Crewe/King’s conclusions caught my eye:-

     “Largely because the intended end-users of the scheme had been so little consulted, the various IT

      suppliers often had no clear idea of what they were supposed to be supplying, and in most cases merely

      sold the NHS whatever they happened to have on hand….” (at page 199)

Now I’m sure the Treasury will claim that everything is now different, and stakeholders are all fully engaged with specifying these wonderful new systems that will produce the productivity savings without which the Chancellor’s numbers won’t add up. Of course, they will say that, but is it true?

The only way to realise true savings is where people who know their jobs intimately discuss potential changes that might improve the services they deliver or reduce their costs. Working with those who understand the technology, what it can, and what it can’t do, there is tremendous scope for ingenuity and     co-producing viable proposals. Even then they may need piloting and ensuring they don’t cut across other parallel innovations and integrate with other essential system and operational interfaces.

I cannot find any sign that there is a £3.4bn programme waiting for the off in the NHS. Nor equivalent programmes in other departments. What we have are provisional political funding allocations with absolutely no idea whether and how much might be the resulting productivity savings.

Yet around this cloud of fundamental dishonesty there is a silver lining. If the money is ever forthcoming, and the projects are barely conceptualised, let alone specified, THERE IS TIME TO GET IT RIGHT. The NHS immediately could and should empower and facilitate its staff in all its dozens of disciplines to work in small teams to identify what really would help. Consulting the staff in any workplace is always a good policy. In change management it is usually the difference between success and failure.

Rhion H Jones

End Note

In 2014, I wrote an article called Lessons from screw-ups  based on the Crewe/King book. You can read it here on the Consultation GuRU website