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Cut the Audit Commission, not public services


First in David Cameron’s quango-firing line should be the Audit Commission.

Vince Cable was right to describe the competition for stars awarded by this unelected quango as disrespectful and perverse at the Local Government Association’s annual conference earlier this month.

An instrument of the reform regime, the Audit Commission fosters compliance rather than improvement; and compliance with bad ideas to boot.

Users know public services aren’t working and have said so in the recent Place Survey. Ministers, who believe targets and performance assessments are reliable indicators of good service, think the problems is that citizens have yet to notice the ‘improvement’.

The competition for stars awarded by this unelected quango is disrespectful and perverse

John Seddon

Politicians often wonder why it is that their local services are receive four-star ratings, yet their surgeries are full of people complaining.

The reason? Targets always make performance worse. Mandated, they descend into our public services and distort the way services are designed and managed – ensuring people are focused upwards to the regime, not outwards to their customers.

The Audit Commission is just part of the wider specifications industry – the army of people in Whitehall who spend their time creating specifications for public-sector managers’ compliance.

Getting rid of all of them would create two savings: The money it costs to have these jobs (significant) and the waste caused by complying with their wrong-headed ideas (much larger).

Take, for example, the Treasury’s recent operational efficiency programme, demanding more shared ‘back offices’.

The Audit Commission published its own report a few months earlier, which extolled the virtue of shared back offices, but nothing in the report supported its conclusion.

The Treasury report’s evidence base for more shared back offices is, by its own admission, based on ‘proxies, estimates and assumptions’. It is a blind belief in ‘economies of scale’.

In the private sector, economy of scale has been discovered to be a myth; indeed, the evidence is that these factory designs create massive waste through standardisation, centralisation and outsourcing – all features promulgated by the regime and attracting ticks in boxes by the Audit Commission.

The Audit Commission should be reined back to following the money.

If auditing performance, Audit Commission inspectors should be limited to asking just one question: ‘What measures are you using to understand and improve performance’? This will mean public-sector managers would be free from the considerable burden of preparation for audit, for the measures will be those actually in use.

Councils would rid themselves of their ‘performance management’ departments that are preoccupied with ticking boxes and collating ‘evidence’ for the Audit Commission.

The inspector will have to turn up where the work is done, improving the reliability of inspection at a stroke.

Most importantly, the choice of measures and method will be with the local service managers, fostering innovation rather than compliance, for innovation requires clarity about who has responsibility.

John Seddon, Visiting professor at Cardiff Business School, and managing director of Vanguard consultancy


Readers' comments (11)

  • I am a manager at a Local Authority that was inspected last year. My organization spent over £100,000 on preparation for inspection not including staff time. When the Audit Commission came they gave us a reasonably good score. My colleagues and I know that we manipulated the targets and that service is pretty poor. Although using the centrally imposed targets and measures you wouldn't be able to tell.

    When they came that didnt go and spend time with people working on the frontline. They didn't listen to calls. They sat in a room with the policies and procedures and asked staff questions against them. Seddon is right. They enforce the government line, and their decisions are based upon guesswork more than fact and knowledge.

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  • It is vital to recall that the Audit Commission was established by Michael Heseltine, all those years ago, for reasons which were as much political as managerial. Nothing about it was intended to be ‘friendly’ to local government and it was part of the wider attack by the centre on localism.
    Ever since then, most of its contribution has been based on quite facile nonsense and the latest management-speak gibberish - especially the ‘back-office’ and the ‘economies of scale’ fallacies. During the local government review [well, rather the ‘debacle’] of the 1990s, it showed itself to be a willing tool of government policy in its financial appraisals of unitary proposals. As a previous commentator has indicated, its current visits produce knee-jerk responses within the authorities to be inspected that divert attention from the essential while corrupting proper aims and activities. One of life’s greatest sadnesses must be that the wonderful David Walker, usually a staunch champion of localism in his columns, chose to leave the Guardian for a post essentially promoting the Commission.
    All this has continued while Parliament itself has, as recently exposed, been a vipers’ nest of petty [sometimes not so petty] corruption. What a cheek they have! The problem in the UK is not the efficiency of the shires and districts, it is Westminster itself. Let’s cut Westminster back to a more efficient size by abolishing the Audit Commission and building full devolution on a system of regions and more fully empowered, democratic, local government.

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  • We are one of the Audit Commission success stories - we have 4 stars and as a council are proud of them. But we are not necessarily all so proud of how we got there!

    What really scares me is the fact that so many managers and staff have become so good at the gaming required to achieve this position they no longer know when they are doing it - gaming has become the norm and now occurs in situations where there is no need for it and no associated benefit from it - the behaviour has now reached the point where it is blocking the ability and desire to really improve things - we are now more risk averse than ever and think that mindless cost cutting is the only way to go. Some think that a focus on government targets that supposedly relate to customer desires is the same as customer focus - customer reality and service delivery are moving further and further away from one another.

    So well done the Government and well done the Audit Commission - you've successfully changed the way we think and behave!

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  • 3 anonymous comments! Wow

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  • Why don't we all just adopt the Systems Thinking approach, do just enough box ticking to satisfy the AC, improve all of our services and then wait until the AC just naturally disappears.

    Once the customer is happy because their demand is always met with value, there will no longer be any need for the AC.

    Rather than spending a lot of (wasted) energy arguing with the AC and trying to tell them how bad a job they are doing, why don't we just put all our efforts into proving how good it can be.

    This will be the best use of our resource; if they aren't interested don't involve them. Let them play in a corner on their own with their out-of-date toys while we work to improve our services for the public, while, by default, watching the AC wither away in a puff of their own pointlessness.

    Don't try and make then commit suicide, or even try and collude someone else into murdering them for us by trying to persuade Mr Cameron to disband them - let’s just slowly and surely cut off their oxygen supply.

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  • Frank Wilde

    John Seddon is so right. I have worked in the public service all my working life in the police service and in local government. Some of that time was at managerial level.

    I have seen the deeply flawed target culture take hold which has led, not to effective and efficient service , but to a mind bogglling increase in bureaucrats monitoring the statistics in order to comply with some government diktat which bears no relation to the real world.

    Why do you think there are so few police officers out on the street? The answer is that they are completing paperwork in order to comply with the targets set by government.

    The Audit Commission does not measure real successes that the customer appreciates. No, they measure what they think the customer wants so that their political masters can stand up in Parliament and state how sucessful they are.

    It is absolute rubbish for Mr Walker to claim that there is a difference between Toyota and local government. He says that the difference is that local government is governed by politics whilst Toyota is a business. Perhaps if the policitians starting thinking along the lines of how Toyota works then we would not have such a vast amount of taxpayers' money wasted on irrelevant paperwork and millions could be saved by getting rid of the numerous bureaucrats doing nothing productive .

    Mr Walker's comments are typical of a person who wishes to defend his political masters for without them he would be unemployed.

    John Seddon has for many years been advocating a better way of doing things and those who have tried his methods have shown that they work. Customer satisfaction increases, costs go down.

    Mr Walker, unless you see the light on the road to Damascus, the Audit Commission is a busted flush to be replaced by something that does live in the real world.

    The credit crunch has focused the minds of all. Let us get away from the Orwellian approach of targets for targets sake and start to engage with people at the front line to produce better forms of measurment.

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  • In the 1980's and 1990's audit was the panacea for manufacturing in the UK, setting targets for reducing waste was seen to be the key to manufacturing success, set rates of year on year 'improvement' were the key to ‘funding’ for large manufacturing organisations in UK government.
    The belief that by achieving ‘targets’, UK industry would survive has clearly been shown to be a complete disaster for industry, jobs, families and society.
    UK Manufacturing got paralysed by the auditing fraternity, look at the impact.
    UK public services are reliving the same nightmare, for the sake of our public services please stop this madness, the services fear the commission, this in itself says loads.
    What success has the commission had as a consequence it’s actions?

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  • If you want pointless job for life then go into audit! Not only is it a non value adding activity, the government spend millions if not billions providing what I think is a very expensive checking machine that's killing local services by introducing a target driven culture.

    I work for a small local authority and so far it's taken me very little time to discover what's of value and what is of waste and where to improve it. Why do I need the AC, (if they can spot waste in the first place!!) I'm also angry at the fact the AC have no understanding of what the customers in my town really want. There needs to be a holistic view that looks at the system from the outside in where changes happen for the benefit of the customer not the AC.

    Although Toyota are manufactures of a tangible product the level of thinking is way beyond what the government will ever produce within local government. Central Government are trying too hard to copy the activity and not the thinking. Managers are now concentrating on the AC's targets rather than focussing on change and continuous improvement. Thanks AC for adding yet more bureaucratic waste to our already sinking system.

    Leave us alone, I don't need the Audit Commission to tell us what the customer think they want! I know.

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  • Well what this debate does go to show is how much grass-roots support there is for sytems thinking. As an earlier poster noted, a customer facing, rather than AC or 'target oriented' public services will starve the audit commision of thier 'cost chasing' oxygen.

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  • I wanted to add my voice in support of John Seddon's approach and the damage that audit has done to the public sector.
    I've worked in the NHS, an NDPB (not the Audit Commission!), local government, and now HE.
    In every case I have found internal "industries" devoted to serving the audit beast. These resources serve no useful purpose whatsoever from the customer's viewpoint, and they consume resource that could be delivered to the front line instead. That wouldn't be so bad if there was a useful outcome - afterall one could sort of say the same of any internal service such as HR or finance. But the latter at least have as their objective to make the organisation work better. The "performance police" have only one goal: to serve the audit machine!
    I have recent left LG because the new CEO who joined the council where I worked brought in a regime that is even more "command and control" than before. No doubt its star rating will improve as it gets better at playing the game. But services will suffer.
    Heaven help us if this way of thinking is allowed to continue. What really gets me is that anyone with a modicum of common sense could not but be persuaded by Seddon's systems thinking approach. "Freedon from Command and Control" should be required reading for all managers in the public sector!

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