This is an important article from the left-leaning Guardian newspaper. It’s a must read.
Normally, the crises come in the Winter but such is the weak state of NHS finances that alarm bells are being rung in the Summer recess from Parliament.
Once again, the strategic weaknesses of the NHS are being highlighted.
Irrespective of your politics or bias, the NHS is not sustainable. According to the Guardian article the current year’s financial plan cannot be attained.
When I was mid-career, I took some time out and completed a part-time doctorate in three years. My doctorate examined the Japanese approach to strategic cost reduction and to what extent this best practice had been transferred to top private sector companies in the UK. Some years later, I spent about five years in the public sector, UNESCO in Paris and UK public sector organizations – here I pondered the applicability of Japanese and wider private sector best practice to the public sector. What I found was a complex context, with multiple stakeholders, all fighting for their own best interests. For a good insight open this highly popular article on adopting shared services in the UK local authorities. For another interesting insight look at how Australia is ready to shorten the approval process for new drugs.
Sadly, the UK’s NHS and other vast public sector organizations will not reform, until there is a comprehensive independent review of performance against best practice. I suggest that this needs to be done by an independent team, outside of the ‘conventional advisors’, like big consulting firms or UK universities. The stature of the review needs robust terms of reference, and their findings must not be watered down by the political classes. George Osborne was canny enough to poach BoE governor, Mark Carney, from Canada. Perhaps, we should follow Angela Merkel‘s excellent example and look for a team from the IMF?
Let me pose this as an open question:
Should UK Chancellor, George Osborne, invite the IMF to conduct a special competitive review of the UK public sector?
Thoughts?
Dr Alf's Blog 
Dr Alf makes very telling points but bringing in the IMF will not solve the problem of the UK public finances and the NHS. An IMF sponsored bench-marking study of the UK public sector would confirm that the UK compares poorly to international competitors. Also generic prescriptions from the IMF would not help with weaknesses that are already known
Why do I say this?
To begin with, we need to look at the reasons why, and whether or not, the UK keeps two sets of books.
Reasons Why
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1) In 1885, at the height of British imperial power, and with a navy that was the biggest the world had ever known the UK employed just 15,000 civil servants, had access to cheap food and raw materials and had a tiny population.
2) Now the UK has a total public sector, which if you strip out outsourcing contracts, employs more than half the working population.
Worse than that, it’s productivity is just 32% or 70 working days per 220 working day year, which means that 67% of them are effectively in “non jobs”.
Of the days that are worked, the public sector delivers delay, inefficiency and incompetence which is why in Dr Alf’s lifetime (67 years), and even earlier, the Ministry of Defense has not completed a single project or piece of procurement on time and within budget. Cost overruns happen on every single contract and in the worst cases, they are up to 12 times the original estimate with delays of up to 14 years for some equipment to come into service (e.g. the Bowman Radio for the British Army).
It is why the NHS, which is grossly overmanned with managers delivering the worse morbidity outcomes for cancer and all other diseases of any country in Western Europe outside of Greece.
3) Procurement is neither centralized nor effective, so the public sector pays double what it should do for practically everything.
4) The UK’s local authority sector, the police and the fire service have too many layers, too many divisions (these are based on counties), plus in local authorities wholly unnecessary District, Borough,Mid County, City and Unitary Authorities. This means too many fire chiefs, local authority Chief Executives, service directorates, Chief Constables and too many managers. The police have a separate structure for transport and the City of London police are separate again and complete with different uniforms.
5) Each county council, unitary authority, Metropolitan Borough council, London Borough Council and some district and borough councils have their own contact centers, plus additional ones for Adult Social Care. The police normally have two per force area/constabulary, one for non emergency dispatching and one, always under the operational command of a person of inspector rank and above for emergency dispatching and incident management. The NHS then have separate control centers for ambulance dispatching.
It does not take a genius to see that with large shared service centers, covering perhaps an area equivalent to four counties, you could reduce the number and cost of such operations by over 90%.
6) Adult Social Care is the “elephant in the room”, representing 55% of county council, unitary authority and London Borough Council costs.
These costs could be brought down by 33% by aggressive re-enablement, education, the prescription of exercise rather than drugs, zoning laws designed to promote healthier eating, the use of robots in care homes and the transference of Adult Social Care recipients without close relatives to warmer climates, like India and Thailand where they could be looked after at a fraction of the cost.
7) Too many un-elected quangos of doubtful use
8) Too much money wasted on overseas aid, plus another £33 billion wasted on the Barnett Formula on Scotland, Wales and Northern Ireland.
9) True costs of the Monarchy (not just the civil list) are not under control and the Crown lands and land supposedly owned by the Queen in her own right is not managed for the public good but for her as an individual on top of the Civil List monies.
The Possibility of a second set of Books
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Since 1981, the UK has not kept balance of trade figures, yet the gap was £3 billion gbp a month between what we bought and the little we sold, even factoring in “invisibles” from the City of London.
We were able to keep our AAA credit rating until 2012, so what was it that made that possible when our cost of delivering public services was 3 times that of Singapore’s and we were and are 20th in the world for the costs of delivering public services overall and per head?
There should be a forensic audit of the country’s finances to see what was collected, what precisely it was spent on, what was left over and exactly where the rest went.
Currently, one does not need to be a chartered accountant and Doctor of Business Administration, like Dr Alf, to see that the infrastructure and services that taxpayers money has bought cannot and does not reflect anything like what taxpayers have shelled out over the years.
Waste, cock-ups, “mission creep” on projects and duplication accounts for some of it but clearly not all of it, so the forensic examination must/should focus on that which cannot be explained away.
This should extend to those who handled the money and the bank accounts of relatives, spouses, partners, mistresses and lovers and if malfeasance is found then the process should lead to arrest, trial, conviction, incarceration and asset recovery just as it does for lowly benefit fraudsters.
Similarly, there needs to be an audit of monies and assets held by the UK Government and any front organisations it may have to see what monies and assets could logically be brought back onshore to help with the nation’s debts.