Samuel Brittan is one of our very best writers on economics and government, and in the following article he makes telling points against the present British government's adoption of the old Gosplan-type methods of Soviet Russia -- planning, establishing targets, etc -- within the large public sectors of health, education, transport and many more much lesser ones. He is saying that the setting of targets by the highest levels of the civil service causes grief in the middle and lower parts of the services concerned with the consequences of gross distortions and inefficiencies -- indeed, an unnecessary increase in suffering and stress at customer level.

Samuel Brittan is far from being a left-winger and he is not advocating that health and education should be privatised where, usually, the large middle layer of bureaucracy is kept in trim (or else the business fails) and the targeting is really controlled by the customer because they can vote with their feet by going to a competitor. However, the reason he gives in his final paragraph is an inadequate one in my opinion. He writes "Some readers will suspect that I would like to return the activities in question to a private enterprise free-for-all. Alas, no such luck. A glance around the world shows that the state is inextricably involved."

His reason is not inadequate because it is not ultimately feasible. After all, "private enterprise free-for-all" works well enough for most consumer products and services, and it even works well in health and education for those who can afford it. The problem is that private health care and education is far more expensive than it needs to be because the bulk of health care and education is taken care of by the state and supplied freely and there is no incentive for efficiency. If the state didn't supply these, then there would be mass demand and a complete continuum of private services and prices from the richest to the poorest could emerge -- as was beginning to take shape in the latter half of the 19th century. It was only knocked on the head by the incursion of state care under the leadership of a new generation of civil servants alongside liberal politicians. And they were able to do this because the industrial revolution was enabling the country to become so prosperous that even mild taxation of the working class (also brought in at the same time) brought unprecedented wealth into government coffers.

I agree with Samuel Brittan's implicit assumption that extensive privatisation of education and health care in the developed countries would cause outrage and, probably, revolution -- people have got so used to free services. It is politically quite impossible to privatise much further at the present time as Thatcher did in the case of many utilities. However, Samuel Brittan does not take into account the fantastic prosperity that was brought about by the accidentally large deposits of very cheap coal, oil and natural gas that have been discovered and exploited which carried the industrial revolution along effortlessly -- and still does, although the peak is due to arrive very soon. However, when energy prices become increasingly expensive in the coming decades then it will not be so easy for governments to maintain the rich stream of taxation that they presently receive.

State health and education services, already falling far short of what most consumers would really like, will deteriorate in accelerating fashion. Probably within two or three decades, as the whole nation-state experiment starts to fail, we will see the emergence of the sort of health and education services that were beginning to take shape 150 years ago, but this time they will proceed to fruition as governments get closer and closer to bankruptcy -- as indeed they seem to be doing so already with substantial budgetary deficits already building up in all the leading developed countries.

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WHEN HITTING THE TARGET MISSES THE POINT

I suggest that the government loosen up a little and curb its belief that there is a political solution to every human problem

Samuel Brittan

A recent report from the Commons public administration select committee contained some horrifying examples of the blind pursuit of government targets at the expense of genuine service. "Blind" is unfortunately more than a metaphor. One example that attracted attention was the report from Bristol Eye Hospital that 25 patients had lost some vision in the last two years because follow-up appointments had been delayed or cancelled to achieve government waiting-time targets for new outpatient appointments.

Cutting patient waiting lists is far from the only example of the current obsession with targets. Maximum waiting times for accident and emergency have been circumvented by removing the wheels from trolleys or redesignating them as beds on wheels. There are also examples of straightforward cheating, such as ambulance trusts that claimed to be coming to the aid of patients in the near impossible time of less than a minute. Another example is that of "closing the justice gap" which apparently means putting more people in prison. Yet this makes it more difficult for the service "to meet its own targets on overcrowding and re-offending".

The committee remarks that excessive attention may be given to what is easy to measure at the expense of what is hard to quantify, such as patient care, community policing or time devoted to a child's needs. Nearly everyone interviewed, from former ministers to local administrators, felt alienated by the system. Estelle Morris, former education secretary, remarked that the teaching profession felt "no ownership of the targets, none whatsoever". A director of education for Cornwall said that a national target "is of little relevance to a teacher in a school on Bodmin Moor".

The committee puts the blame on a decade or more of so-called structural reform. This country has a complex system of government. A layer of Whitehall officials at the top pontificates on what needs to be done; in the middle is a set of bewildered local authorities and health bodies; and at the bottom are the unfortunate professionals who have to teach, attend to the sick or dispense library books.

The result is "acrimonious dispute about where blame rests if a target is missed . . . It is a recipe for the growth of a blame culture". The government has, in principle, accepted some of the strictures. It has ried to cut the number of public srvice agreements between the reasury and the spending epartments, for example. But, as the ommittee concluded, "service dliverers are unanimous in saying hat there has been no decrease in he total number of targets".

None of the findings would be srprising to students of the Soviet Gsplan. New Labour's "third way" dea is to reject Gosplan for the ommercial sector but to install it in te sector comprising health, education nd, to an increasing extent, transport.

The Commons committee remains in fvour of target-setting. But it hopes, s Mikhail Gorbachev did with Soviet eonomic planning, to improve the rocess. It rejects the idea of "a cull of argets and tables". Instead it wants to bing together the measurement ulture and performance culture.

Its own proposals are, I am afraid, a prody of CommitteeSpeak. For istance, it calls for a willingness to choose and communicate clear priorities" and for local providers "to understand the need for measurement while also innovating and improving". Moreover, "the grey zone between what is possible and is impossible is negotiable". The satirical television series, Yes Minister, could not have put it better. The committee would like a more mature political culture to assess targets but adds that this culture may "prove to be one target too many".

It is, of course, easier to ridicule the control-freak culture than to suggest an alternative. One false solution is localism. Those who have noticed the stream of reports on abuse in local authority children's homes will know that local is not always better than national. Moreover, as the committee hints, a move to local autonomy would require a shift to local taxation.

Onora O'Neill, the distinguished philosopher, gave a profound analysis of the defects of "the new accountability culture" in her 2002 Reith lectures*. But her remedy was based too much on trusting the professionals on the spot. Adam Smith wrote "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." Public service professionals are not immune from such temptations.

Some readers will suspect that I would like to return the activities in question to a private enterprise free-for-all. Alas, no such luck. A glance around the world shows that the state is inextricably involved. All I can suggest is that the government loosen up a little and curb its belief that there is a political solution to every human problem and nothing that will not yield to a regulator, a committee. Act of Parliament, a prime minister's special group, or all of them together. Moreover, where there is some opportunity for competition or direct payment by users, it should be embraced rather than spurned as "right wing". But I am not optimistic about either a Blair or a Brown government letting go to that extent.

* A Question of Trust, Cambridge University Press

Financial Times 17 August 2003