September 27, 2013 6:57 pm

The Blunders of Our Governments, by Anthony King and Ivor Crewe

The Blunders of Our Governments, by Anthony King and Ivor Crewe, Oneworld, RRP£25, 488 pages

 

When the Conservative leader David Cameron faced the electorate in 2010, he made a solemn pledge. Whatever else he did as prime minister, he would not mess with the National Health Service. This was smart politics. Reverence for the free-at-the-point-of-delivery health service is the nearest a predominantly secular Britain has to a state religion.

Within weeks of entering 10 Downing Street as leader of a coalition with the Liberal Democrats, Cameron had reneged. The new government announced an NHS upheaval described by the country’s top health official as so large “it can be seen from space”. History will record the decision not just as another broken promise but as a huge blunder.

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Philip Stephens

The effect of the changes has been to distract and fragment an NHS already facing severe financial pressures. Billions have been spent rebadging bureaucrats, while the reforms have ignored the central problem for health systems in all advanced economies – how to merge social care for fast-ageing populations with the traditional diagnose-and-mend approach.

The reforms were supposed to transfer control of the NHS’s vast budget to the family doctors, or GPs, on the front line. Bizarrely, as hospitals have begun to fail and treatment waiting times rise, Cameron blames those very same doctors. The mystery is why he embarked on a project that so palpably married bad policy to bad politics.

Sad to say, there is nothing new about such predictable and predicted blunders, as political scientists Anthony King and Ivor Crewe show in their sometimes grimly entertaining catalogue of public policy disasters over the past several decades. Britain prides itself on its parliamentary system and on Rolls-Royce public administration. King and Crewe, veteran and incisive commentators, shatter the delusions.

Blunders, the authors explain, are not the same as mistakes. Politicians and civil servants face a constant rush of choices on how best to adjust to the demands of voters and fast-changing circumstance. They are bound to get some of the decisions wrong. No, mistakes count as blunders when they are stupid and careless – driven by some combination of hubris, laziness, wilful ignorance or sheer incompetence.

Unsurprisingly, The Blunders of Our Governments starts with Margaret Thatcher’s poll tax. As the authors wryly remark: “We might be tempted to call it the blunder to end all blunders – except that far from ending all blunders, it has to be followed by numerous others.” Her attempt to introduce a new flat-rate local tax based on capitation rather than property values came close to bringing revolution to Britain’s streets. It was poorly designed, blatantly unfair (the dustman was asked to pay the same as the duke) and wasted countless billions.

How did it happen? As the authors point out, the ministers who designed the tax were among the brightest in the government. The simple answer is the hubris that arrives when politicians assume they have an entitlement to power.

The other disaster still fresh in many minds was sterling’s exit from the European exchange rate mechanism in 1992 – an event that drained the Bank of England’s foreign exchange reserves and destroyed the reputation of John Major’s government. There are still debates about where blame lay. Suffice it to say that the Treasury did not cover itself in glory.

One of the virtues of this compendium, however, is that it reminds us of all the other, smaller but still costly, blunders that would otherwise fade in the memory. Impatience, arrogance, inexperience and stupidity brought us the now defunct Child Support Agency, pensions mis-selling, numerous IT bungles and a disastrous public-private partnership to modernise the London Underground. Readers will choose their own favourites.

Some will quarrel with the authors’ allocation of responsibility between human frailty and systemic weaknesses, and between politicians and civil servants. For me, the big omission is a chapter devoted to the Treasury – a self-regarding Whitehall institution that has swaggered from costly blunder to blunder over successive decades.

The most calamitous blunder of modern times came as Britain began to benefit from the huge windfall of North Sea oil. Some argued that, as in Norway, the receipts should be invested for future generations in a sovereign wealth fund. This challenged the Treasury’s absurdly ideological objection to hypothecation. The result? All that money was squandered in booms that led inevitably to bust.

The second unforgivable mistake was the Treasury’s unquestioning embrace of liberal financial capitalism after “Big Bang” turned the City of London into a global financial centre. None was more ardent in preaching the now discredited Washington consensus – a stance that led politicians to believe that other productive sectors of the economy could simply be discarded to make way for the expansion of financial services. Little wonder the financial crash of 2008 left Britain in such a dreadful mess.

There is no answer to the Treasury question beyond breaking up the department into separate finance and economic affairs ministries. But politicians and civil servants still have plenty to learn from King and Crewe in other areas of public administration. This book should be a compulsory text for every would-be minister and permanent secretary.

Philip Stephens is an FT columnist

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