tag:theconversation.com,2011:/au/topics/public-sector-7051/articlespublic sector – The Conversation2023-05-24T17:03:32Ztag:theconversation.com,2011:article/2037232023-05-24T17:03:32Z2023-05-24T17:03:32ZThe UK public sector is already using AI more than you realise – without oversight it’s impossible to understand the risks<figure><img src="https://images.theconversation.com/files/527233/original/file-20230519-21-a54gyh.jpg?ixlib=rb-1.1.0&rect=62%2C31%2C2933%2C1963&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/face-detection-recognition-citizens-people-ai-1791158417">DedMityay/Shutterstock</a></span></figcaption></figure><p>The rapid rise of artificial intelligence (AI) products like the text-generating tool ChatGPT has politicians, technology leaders, artists and researchers <a href="https://www.telegraph.co.uk/business/2023/05/05/joe-biden-elon-musk-terrified-ai/">worried</a>. Meanwhile, proponents argue that AI could improve lives in fields like <a href="https://theconversation.com/ai-has-potential-to-revolutionise-health-care-but-we-must-first-confront-the-risk-of-algorithmic-bias-204112">healthcare</a>, <a href="https://www.unesco.org/en/digital-education/artificial-intelligence">education</a> and <a href="https://www.lse.ac.uk/granthaminstitute/news/ai-will-accelerate-tipping-points-for-crucial-green-technologies/">sustainable energy</a>. </p>
<p>The UK government is keen to embed AI in its day-to-day operations and set out a <a href="https://www.gov.uk/government/publications/national-ai-strategy">national strategy</a> to do just that in 2021. The aim, according to the strategy, is to “lead from the front and set an example in the safe and ethical deployment of AI”. </p>
<p>AI <a href="https://www.opendemocracy.net/en/openjustice/unlawful-state/price-and-prejudice-automated-decision-making-and-uk-government/">is not without risks</a>, particularly when it comes to individual rights and discrimination. These are risks the government <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957259/Review_into_bias_in_algorithmic_decision-making.pdf">is aware of</a>, but a <a href="https://www.gov.uk/government/publications/ai-regulation-a-pro-innovation-approach">recent policy white paper</a> shows the government is reluctant to increase AI regulation. It is difficult to imagine how “safe and ethical deployment” can be achieved without this.</p>
<p>Evidence from other countries shows the downsides of using AI in the public sector. Many in the Netherlands are still reeling from a <a href="https://www.politico.eu/article/dutch-scandal-serves-as-a-warning-for-europe-over-risks-of-using-algorithms/">scandal</a> related to the use of machine learning to detect welfare fraud. Algorithms were found to have falsely accused thousands of parents of child benefits fraud. Cities across the country are <a href="https://www.lighthousereports.com/investigation/the-algorithm-addiction/">reportedly still using such technology</a> to target low-income neighbourhoods for fraud investigations, with devastating consequences for people’s wellbeing.</p>
<p>An investigation in <a href="https://www.lighthousereports.com/investigation/spains-ai-doctor/">Spain</a> revealed deficiencies in software used to determine whether people were committing sickness benefit fraud. And in <a href="https://algorithmwatch.org/en/algorithm-school-system-italy/">Italy</a>, a faulty algorithm excluded much-needed qualified teachers from open jobs. It rejected their CVs entirely after considering them for only one job, rather than matching them to another suitable opening.</p>
<p>Public sector dependence on AI could also lead to <a href="https://www.ncsc.gov.uk/collection/machine-learning">cybersecurity risks</a>, or <a href="https://cetas.turing.ac.uk/publications/mitigating-supply-chain-threats-building-resilience-through-ai-enabled-early-warning">vulnerabilities in critical infrastructure</a> supporting the NHS and other essential public services. </p>
<p>Given these risks, it’s crucial that citizens can trust the government to be transparent about their use of AI. But the government is generally very slow, or unwilling to disclose details about this – something the parliamentary committee on standards in public life has <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/868284/Web_Version_AI_and_Public_Standards.PDF">heavily criticised</a>.</p>
<p>The government’s Centre for Data Ethics and Innovation <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957259/Review_into_bias_in_algorithmic_decision-making.pdf">recommended</a> publicising all uses of AI in significant decisions that affect people. The government subsequently developed <a href="https://www.gov.uk/government/collections/algorithmic-transparency-recording-standard-hub">one of the world’s first algorithmic transparency standards</a>, to encourage organisations to disclose to the public information about their use of AI tools and how they work. Part of this involves recording the information in a central repository.</p>
<p>However, the government made its use voluntary. So far, <a href="https://www.gov.uk/government/collections/algorithmic-transparency-reports">only six public sector organisations have</a> disclosed details of their AI use.</p>
<h2>Public sector AI use</h2>
<p>The legal charity <a href="https://publiclawproject.org.uk/">Public Law Project</a> recently launched a database showing that the use of AI in the UK public sector is much more widespread than official disclosures show. Through freedom of information requests, the <a href="https://publiclawproject.org.uk/resources/the-tracking-automated-government-register/">Tracking Automated Government (TAG) register</a> has, so far, tracked 42 instances of the public sector using AI.</p>
<p>Many of the tools are related to fraud detection and immigration decision-making, including <a href="https://freemovement.org.uk/home-office-refuses-to-disclose-inner-workings-of-sham-marriage-algorithm/">detecting sham marriages</a> or <a href="https://www.gov.uk/government/news/cutting-edge-data-and-ai-tech-to-help-government-hunt-down-fraudsters">fraud against the public purse</a>. Nearly half of UK’s local councils are also using AI to <a href="https://www.theguardian.com/society/2020/oct/28/nearly-half-of-councils-in-great-britain-use-algorithms-to-help-make-claims-decisions">prioritise access to housing benefits</a>. </p>
<p>Prison officers are using algorithms to <a href="https://www.thebureauinvestigates.com/stories/2019-11-14/prisoner-risk-algorithm-could-program-in-racism">assign newly convicted prisoners into risk categories</a>. Several police forces are using AI to assign similar risk scores, or trialling AI-based <a href="https://www.theguardian.com/uk-news/2023/may/03/metropolitan-police-live-facial-recognition-in-crowds-at-king-charles-coronation">facial recognition</a>. </p>
<p>The fact that the TAG register has publicised the use of AI in the public sector does not necessarily mean that the tools are harmful. But in most cases, the database adds this note: “The public body has not disclosed enough information to allow proper understanding of the specific risks posed by this tool.” People affected by these decisions can hardly be in a position to challenge them if it is not clear that AI is being used, or how. </p>
<p>Under the <a href="https://www.legislation.gov.uk/ukpga/2018/12/contents">Data Protection Act 2018</a>, people have the <a href="https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/individual-rights/rights-related-to-automated-decision-making-including-profiling/">right to an explanation</a> about automated decision making that has legal or similarly significant effects on them. But the government is <a href="https://publiclawproject.org.uk/resources/data-bill-no-2-puts-rights-at-risk-again/">proposing to cut back these rights</a> too. And even in their current form, they aren’t enough to tackle the wider social impacts of discriminatory algorithmic decision-making. </p>
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<img alt="A woman holds a paper letter and looks sad and concerned at it" src="https://images.theconversation.com/files/527244/original/file-20230519-29-wgefkd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/527244/original/file-20230519-29-wgefkd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/527244/original/file-20230519-29-wgefkd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/527244/original/file-20230519-29-wgefkd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/527244/original/file-20230519-29-wgefkd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/527244/original/file-20230519-29-wgefkd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/527244/original/file-20230519-29-wgefkd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Without more transparency, people may struggle to challenge algorithm-made decisions.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/all-lost-frustrated-millennial-businesswoman-receiving-1874616262">fizkes/Shutterstock</a></span>
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</figure>
<h2>Light-touch regulation</h2>
<p>The government detailed its “pro-innovation” approach to AI regulation in a white paper, published March 2023, that sets <a href="https://www.gov.uk/government/news/uk-unveils-world-leading-approach-to-innovation-in-first-artificial-intelligence-white-paper-to-turbocharge-growth">five principles of AI regulation</a>, including safety, transparency and fairness.</p>
<p>The paper confirmed that the government does not plan to create a new AI regulator and that there will be no new AI legislation any time soon, instead tasking existing regulators with developing more detailed guidance.</p>
<p>And despite just six organisations using it so far, the government does not intend to mandate the use of the <a href="https://www.gov.uk/government/collections/algorithmic-transparency-reports">transparency standard</a> and central repository it developed. Nor are there plans to require public sector bodies to apply for a licence to use AI.</p>
<p>Without transparency or regulation, unsafe and unethical AI uses will be difficult to identify and are likely to come to light only after they have already done harm. And without additional rights for people, it will also be difficult to push back against public sector AI use or to claim compensation. </p>
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Read more:
<a href="https://theconversation.com/uk-risks-losing-out-on-hi-tech-growth-if-it-falters-on-ai-regulation-202817">UK risks losing out on hi-tech growth if it falters on AI regulation</a>
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<p>Put simply, the government’s pro-innovation approach to AI does not include any tools to ensure it will meet its mission to “lead from the front and set an example in the safe and ethical deployment of AI”, despite the prime minister’s claim that <a href="https://www.theguardian.com/technology/2023/may/18/uk-will-lead-on-guard-rails-to-limit-dangers-of-ai-says-rishi-sunak">the UK will lead on “guard rails” to limit dangers of AI</a>.</p>
<p>The stakes are too high for citizens to pin their hopes on the public sector regulating itself, or imposing safety and transparency <a href="https://www.howtocrackanut.com/digital-procurement-governance">requirements on tech companies</a>.</p>
<p><a href="https://committees.parliament.uk/writtenevidence/113034/pdf/">In my view</a>, a government committed to proper AI governance would create a dedicated and well-resourced authority to oversee AI use in the public sector. Society can hardly extend a blank cheque for the government to use AI as it sees fit. However, that is what the government seems to expect.</p><img src="https://counter.theconversation.com/content/203723/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Albert Sanchez-Graells received funding from the British Academy. He is one of the Academy's 2022 Mid-Career Fellows (MCFSS22\220033, £127,125.58). His research and views are however not attributable to the British Academy.</span></em></p>Without more transparency about AI use, it will be difficult for people to challenge biased decisions against them.Albert Sanchez-Graells, Professor of Economic Law and Co-Director of the Centre for Global Law and Innovation, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1864702022-07-07T03:28:15Z2022-07-07T03:28:15ZA new report from Queensland offers guidance on integrity to all Australian governments<p>Peter Coaldrake’s report to Queensland Premier Annastacia Palaszczuk, <a href="https://www.coaldrakereview.qld.gov.au/assets/custom/docs/coaldrake-review-final-report-28-june-2022.pdf">Let the Sunshine In</a>, is a clear and frank assessment of culture and accountability in the Queensland public sector today. With one exception, it also offers refreshing guidance to jurisdictions across Australia showing signs of complacency about integrity.</p>
<p>First to the important exception: Coaldrake’s proposal that all cabinet submissions and their attachments, all agendas and all decision papers be published online within 30 days of cabinet decisions.</p>
<p>While the report acknowledges some of the risks associated with such a change – including the possible compromising of frank and fearless advice – it claims that New Zealand’s experience with early disclosure has worked well. As it points out, the NZ system explicitly omits:</p>
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<p>exploratory advice, “blue skies” thinking or advice generated in the early and formative stages of a policy development process and intended to ensure the free and uninhibited exchange of ideas that is necessary for the development of robust policy advice […]</p>
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<p>Coaldrake believes NZ takes a “measured approach” to redacting small sections of documents where free and frank advice is offered. He also firmly endorses NZ’s principle that </p>
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<p>the possibility of a cabinet paper being proactively released must not undermine the quality of advice included in the paper, and therefore the quality of the decision ultimately reached by ministers.</p>
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<p>But it is important to recognise the context in which those rules operate:</p>
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<li>NZ’s voting system means that it doesn’t emulate Australia’s strongly adversarial political culture; indeed, governments tend to be coalitions and cross-party negotiation is common</li>
<li>NZ’s public service commissioner is the employer of departmental secretaries (and other agency heads), limiting their exposure to penalties if advice embarrassing to the government is released</li>
<li>NZ has far fewer ministerial advisers devoted to minimising political risks, including risks from public servants’ written advice.</li>
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<p>Even if governments move towards NZ practice on the latter two points, I wouldn’t support such early release of cabinet papers.</p>
<p>The cabinet system nurtures the important principle of collective responsibility. It requires cabinet ministers to consider fully and frankly all perspectives and expert evidence, enabling each of them to stand by the collective decision regardless of differences robustly debated.</p>
<p>It is likely that Australian governments would adjust their cabinet processes or papers if they knew these documents would soon be available to opposition members and journalists eager to find divisions within cabinet or failures to accept expert advice. </p>
<p>It would be better, in my view, to start at the other end: to go back to a culture in which departments undertake and publish more research and analysis, produce substantial annual reports and perform evaluations for public release. Governments would issue green papers and white papers; the definition of an “exempt cabinet document” would be tighter; attachments to cabinet submissions and memoranda would be released if they didn’t include direct advice or ministerial recommendations.</p>
<h2>The tone at the top</h2>
<p>A number of Coaldrake’s other recommendations echo the key proposals of David Thodey’s 2019 <a href="https://www.apsreview.gov.au/">Independent Review of the Australian Public Service</a> rejected by the Morrison government:</p>
<p><strong>On ministerial staff:</strong> “Development and continual reinforcement of a common framework to determine appropriate relationships among ministers, their staff and senior public servants.” Here, Coaldrake recognises that the tone set at the top – the attitudes of political and public service leaders that foster the culture of the system – is essential. For the Commonwealth, I would go further. A <a href="https://www.canberratimes.com.au/story/7801306/ministerial-staff-like-public-servants-should-be-accountable/?cs=14264">major overhaul</a> of the Members of Parliament (Staff) Act is long overdue, as is a cut in the oversupply of ministerial staff.</p>
<p><strong>On capability and the Public Service Commission’s role:</strong> “Rejuvenation of the capability and capacity of the public sector” to emphasise performance and integrity, with the Public Service Commission playing a key role. For the Commonwealth, I would go further towards the NZ model, with the Australian Public Service (APS) Commissioner as professional head of the APS.</p>
<p><strong>On consultants and contractors:</strong> “Departments [to] more robustly account for the benefits from engaging consultants and contractors with regular monitoring by the Auditor-General.” Hear, hear.</p>
<p><strong>On top appointments and tenure:</strong> “Stability of government and performance of public service [to] be strengthened by appointment of agency CEOs on fixed term, five year contracts, unaligned to the electoral cycle.” For the Commonwealth, I would further strengthen the merit basis of appointments and constrain terminations.</p>
<h2>Institutions matter</h2>
<p>Coaldrake’s recommendations about integrity bodies provide excellent guidance to the new federal government. As it develops legislation for a federal anti-corruption authority, Coaldrake’s proposed “single clearing house for complaints, with capacity for the complainants and agencies to track progress and outcomes” would be of enormous use.</p>
<p>This clearing house would help to ensure the new authority works with existing bodies such as the ombudsman and the Australian Public Service Commission (APSC) – and, indeed, with the departments and agencies complained about. It would also ensure it focuses on serious corruption and major crime.</p>
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<a href="https://theconversation.com/sports-rorts-shows-the-government-misunderstands-the-public-service-130796">'Sports rorts' shows the government misunderstands the public service</a>
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<p>Coaldrake also recommends that integrity bodies’ independence be enhanced by involving parliamentary committees in setting budgets and contributing to key appointments. To some extent this already applies to the Australian National Audit Office. But it should apply more firmly not only to that body but also to the ombudsman, the information commissioner, the human rights commissioners, the electoral commission and, indeed, the APSC.</p>
<p>In essence, Coaldrake’s report is a reminder of the importance of institutions and the need to review their roles and performance regularly. Critical to their effectiveness is the tone at the top, a point also emphasised in NZ’s integrity system. That tone has been wanting not only in Queensland but also in the Commonwealth and a number of other states.</p><img src="https://counter.theconversation.com/content/186470/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Podger does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With one exception, it offers refreshing guidance to jurisdictions across Australia showing signs of complacency about integrity.Andrew Podger, Honorary Professor of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1833612022-05-18T07:38:53Z2022-05-18T07:38:53Z‘A lazy cost-saving measure’: the Coalition’s efficiency dividend hike may mean longer wait times and reduced services<p>On the eve of the election, the Coalition has <a href="https://www.abc.net.au/news/2022-05-17/cuts-public-sector-spending-coalition-policy-costings-election/101072270">said</a> it will impose a higher “efficiency dividend” on public service agencies over the next four years in an effort to cut public service spending and address the budget deficit.</p>
<p>An efficiency dividend is a measure, first introduced by Labor in the <a href="https://theconversation.com/getting-more-bang-for-public-bucks-is-the-efficiency-dividend-efficient-24803">late 1980s</a>, that reduces the budgets of public sector agencies by a certain percentage.</p>
<p>The current efficiency dividend is 1.5%, but the Coalition has promised to boost the figure to 2% for the next three years, with Treasurer Josh Frydenberg <a href="https://www.abc.net.au/news/2022-05-17/cuts-public-sector-spending-coalition-policy-costings-election/101072270">saying</a>:</p>
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<p>What we are doing is offsetting that spending with an increase in the efficiency dividend by half a per cent, which will raise more than A$2.3 billion […] The annual departmental bill across the Commonwealth is about $327 billion. What we’re saying is it will be reduced to about $324 billion, as a result of this additional measure.</p>
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<p>Across-the-board cuts to the public service via the so-called efficiency dividend represent a blunt instrument to achieve budgetary savings. </p>
<p>They have been used by both sides of politics over the years. They allow politicians to avoid taking responsibility for cuts on the pretence they are only about efficiency and that the public sector agency heads can manage them with no impact on services to the public.</p>
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Read more:
<a href="https://theconversation.com/elections-used-to-be-about-costings-heres-what-changed-183095">Elections used to be about costings. Here's what changed</a>
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<p>But many reviews, including by <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2012-2013/EfficiencyDividend">parliamentary committees</a>, have revealed the efficiency dividend often does impact the level and quality of services, particularly for smaller agencies and particularly over time.</p>
<p>It can lead to increased charges, reduced services (for example, the Bureau of Statistics’ Year Book no longer comes out annually) and increased waiting times. </p>
<p>While Labor has strongly criticised the Coalition’s proposed increase in the dividend, its criticism is a little hollow as it has <a href="https://www.canberratimes.com.au/story/7742402/labor-vows-no-spending-cuts-to-aps/?cs=14230">said</a> it will retain it.</p>
<p>Labor is also <a href="https://www.themandarin.com.au/187834-election-2022-labor-will-cut-3b-from-aps-consultant-spend-and-hire-more-staff/">proposing</a> an additional cut in spending on administrative expenses through cuts to funding of consultants, contractors and labour hire – only some of which will be redirected to new public service positions.</p>
<h2>The Thodey report</h2>
<p>Of course, taxpayers should expect the public service to pursue efficiencies and increased productivity – administrative expenses should not be automatically increased in line with increases in input costs. In particular, there is scope to use technology better to drive down costs and improve service provision.</p>
<p>But this requires new investments as recommended by an <a href="https://www.apsreview.gov.au/news/final-report-independent-review-released">independent review</a> of the Australian public service, led by David Thodey AO.</p>
<p>Following the Thodey report’s release in 2019, the government agreed to an audit of its current IT investments but we are yet to see that audit. </p>
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Read more:
<a href="https://theconversation.com/sports-rorts-shows-the-government-misunderstands-the-public-service-130796">'Sports rorts' shows the government misunderstands the public service</a>
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<p>Nor has any mention been made of new investments that might deliver the efficiencies the government expects, let alone achieve the improved services Thodey was looking for.</p>
<p>In the absence of a more nuanced and targeted approach to efficiency gains, there a the risk of further reducing the capability of the public service. </p>
<p>It is likely to mean further reducing resources for longer-term research and being less able to enhance public service wages where there is a need to attract key skills (such as in information technology).</p>
<h2>A lazy cost-saving measure</h2>
<p>While Labor and the unions are highlighting the likely impact on public service numbers, I would be less concerned on that score if the measure was genuinely about efficiency.</p>
<p>The concern I have is that this is not only a lazy cost-saving measure: it also reflects antipathy towards the public service as an institution.</p>
<p>We have seen this before with the <a href="https://www.pmc.gov.au/sites/default/files/publications/independent-review-aps.pdf">imposition of staffing caps</a>, in addition to the caps on administrative expenses. These have forced greater use of consultants and labour hire, even where this is less efficient than using public servants.</p>
<p>And we have seen it in the <a href="https://www.canberratimes.com.au/story/7535285/senate-committees-report-a-missed-chance-for-real-reform/">rejection</a> of key Thodey report recommendations, not only about removing the staffing caps but also about enhancing the role of the public service commissioner. This would have ensured more merit-based senior appointments and a more appropriate way of setting pay and conditions.</p><img src="https://counter.theconversation.com/content/183361/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Podger does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Many reviews over the years have revealed the efficiency dividend often does impact the level and quality of services, particularly for smaller agencies and particularly over time.Andrew Podger, Honorary Professor of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1657772021-08-06T14:50:27Z2021-08-06T14:50:27ZBeyond the cabinet reshuffle – what will it take to renew South Africa’s public sector?<figure><img src="https://images.theconversation.com/files/415010/original/file-20210806-13508-1yvd1gw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South African President Cyril Ramaphosa has reshuffled his cabinet amid growing accusations of of graft, and an outbreak of violence unprecedented in 25 years.</span> <span class="attribution"><span class="source">Photo by Rodger Bosch/AFP via Getty Images</span></span></figcaption></figure><p>South Africa’s President Cyril Ramaphosa <a href="https://www.news24.com/news24/southafrica/news/full-text-ramaphosas-cabinet-reshuffle-whos-in-whos-out-20210805">has linked his cabinet reshuffle</a> to a larger purpose. As he put it:</p>
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<p>We are unwavering in our determination to build a capable state, one which is ably led and which effectively serves the needs of the people.</p>
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<p>Realising this vision will <a href="https://theconversation.com/south-africas-way-forward-abandon-old-ideas-embrace-bold-experimentation-165539">take a transformation in the way</a> in which South Africans conceive of how to achieve public purposes – one that prioritises people and problem-solving over a preoccupation with plans and systems.</p>
<p>South Africans of many ideological hues have in their minds an image of the public sector as a well-oiled, top-down machine – always effective in delivering on clear goals set by planners and political leaders. “Get the plans right.” “Co-ordinate effectively.” “Fix the systems.” </p>
<p>These become the mantras of reform. But continuing pursuit of these dicta will not get the country where it needs to go.</p>
<p>For one thing, the image of a well-oiled machine presumes an omniscience which no organisation anywhere, public or private, actually has. For another, systems reform is a painstaking process; its gains are measured in years, with gains in the quality of service provision coming only after the upstream improvements are in place. Time is running out.</p>
<p>Most fundamentally, the preoccupation with plans and systems ignores a reality that increasingly has become recognised the world over – that, in shaping feasible ways forward, context matters. Even in places where bureaucratic “insulation” seems to prevail, public administrative systems are embedded in politics. </p>
<p>In some settings, background political, economic and social conditions support top-down bureaucratic machines. Such conditions are very far from South Africa’s current realities.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/south-africas-way-forward-abandon-old-ideas-embrace-bold-experimentation-165539">South Africa's way forward: abandon old ideas, embrace bold experimentation</a>
</strong>
</em>
</p>
<hr>
<p>But South Africa’s current public sector challenges are anything but unique. Indeed, counter-intuitive as it might sound to many South Africans, its public sector works somewhat better than those of most other middle-income countries, and those of almost all low-income countries. Yet many countries, even in the midst of messiness, have managed to achieve gains.</p>
<p>How? </p>
<p>By focusing on problems and on people.</p>
<h2>Problems and people</h2>
<p>A focus on concrete problems provides a way to cut through endless preoccupation with empty initiatives – endless plans for reform, endless upstream processes of consultation. Processes that are performative rather than practical, too general to lead anywhere. Instead, <a href="https://bsc.cid.harvard.edu/building-state-capability-evidence-analysis-action">gains in public capacity can come via a different path</a> – through learning-by-doing, focusing in an action-oriented way on very specific challenges, and on evoking energy to address them by the responsible departments (or individual state-owned enterprises).</p>
<p>Action to address concrete problems needs to come, of course, from South Africa’s public officials. How to evoke their sense of agency?</p>
<p>Engaging with South Africa’s public officials, one quickly discovers that even the best of them are deeply disillusioned by their experiences. Yet many continue to have a deep reservoir of commitment to service. Evoking commitment is a classic challenge confronting managers everywhere. As <a href="https://www.cornellpress.cornell.edu/book/9780801442926/state-building/#bookTabs=1">Francis Fukuyama puts it</a>:</p>
<blockquote>
<p>All good managers (private and public) know that it is ultimately the informal norms and group identities that will most strongly motivate the workers in an organisation to do their best … They thus spend much more time on cultivating the right ‘organisational culture’ than on fixing the formal lines of authority.</p>
</blockquote>
<p>Looking beyond the public sector, what of South Africa’s citizens more broadly?</p>
<p>A focus on people also involves transforming the relationship between the public sector and civil society (including the private sector). For reasons both good and bad, public officials generally engage with civil society cautiously. The good reason is that such relationships can all too easily fester corruptly in the shadows. The bad reason is a more generalised wariness – fuelled by a combination of arrogance, fear and inertia – to step outside the comfort zone of tightly managed bureaucratic processes.</p>
<p>The benefits of a transformed relationship can be large. It can be the basis for new, cross-cutting alliances between public sector reformers and reformers within civil society, across national, provincial and local levels. Investment in such alliances can help developmentally oriented stakeholders to overcome resistance to change, including by pushing back against predation.</p>
<p>To renew a relationship, all parties need to change their behaviour. What new behaviours does civil society need to learn?</p>
<h2>Civil society and transparency</h2>
<p>Shaped by its history, South Africa’s civil society organisations generally focus on holding government to account. This is a constricted vision of the role of civil society in a democracy. Indeed, it sometimes can have the unintended consequence of fuelling cynicism and despair, thereby deepening dysfunction. The <a href="https://www.thegpsa.org/about/collaborative-social-accountability">Global Partnership for Social Accountability</a> highlights how less confrontational approaches can add value:</p>
<blockquote>
<p>We have learned that focusing only on scrutinising and verifying government actions can have limited value in our problem solving. When they engage to focus on the problem at hand, civil society, citizens and public sector actors are better able to deliver solutions collaboratively – especially when they prioritise learning. When social accountability mechanisms are isolated from public sector processes they are not as effective as collaborative governance. Collective action requires efforts that build bridges.</p>
</blockquote>
<p>Transparency remains key. Transparency in how civil society engages with officials in the public sector can reduce the risk that more collaborative governance becomes a vehicle for corrupt collusion. Transparency vis-à-vis outcomes can signal to citizens that public resources are not being wasted but are helping to improve results. The combination of participation and transparency can help enhance social solidarity and legitimacy of the public domain.</p>
<p>As Ramaphosa put it in his cabinet reshuffle speech:</p>
<blockquote>
<p>The task of rebuilding our economy and our society requires urgency and focus. It requires cooperation among all sectors of society and the active involvement of all South Africans.</p>
</blockquote>
<p>Or, as per Hugh Masekela’s classic song (quoted by Ramaphosa in his <a href="https://www.gov.za/speeches/president-cyril-ramaphosa-2018-state-nation-address-16-feb-2018-0000">first state of the nation address to parliament as president</a> in early 2018, “Thuma Mina”. Send me.</p>
<p><em>This article builds on a <a href="https://theconversation.com/south-africas-way-forward-abandon-old-ideas-embrace-bold-experimentation-165539">piece that appeared</a> in The Conversation’s ‘foundation’ series.</em></p><img src="https://counter.theconversation.com/content/165777/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brian Levy does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South Africa’s public sector works somewhat better than those of most other middle-income countries. Yet, unlike them, it has not managed to achieve gains in the midst of messiness.Brian Levy, Professor of the Practice of International Development, Johns Hopkins UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1655392021-08-04T14:55:55Z2021-08-04T14:55:55ZSouth Africa’s way forward: abandon old ideas, embrace bold experimentation<figure><img src="https://images.theconversation.com/files/414510/original/file-20210804-15-akwmyh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A protest organised by the Congress of South African Trade Unions in South Africa. The question is: on whose behalf does the union movement advocate?</span> <span class="attribution"><span class="source">Phillip Magakoe/AFP via Getty Images</span></span></figcaption></figure><p><em>Foundation essay: our foundation essays are longer than usual and take a wider look at a key issue affecting society.</em></p>
<p>In the <a href="https://www.marxists.org/reference/subject/economics/keynes/general-theory/preface.htm">preface to his great book, The General Theory of Employment, Interest and Money</a>, written in the 1930s at the height of the Great Depression, the renowned economist John Maynard Keynes suggested that the obstacle to decisive change </p>
<blockquote>
<p>lies not so much in developing new ideas as in escaping from old ones. </p>
</blockquote>
<p>In this moment of crisis, South Africa urgently needs decisive action. But all too often South Africans of all political stripes seem trapped in stale discourses. These are not anchored in South Africa’s political, economic and social realities. Nor do they offer any practical, timely strategy for getting from here to there. </p>
<p>This piece explores how the country might break loose from old, unhelpful ideas in four areas, each introduced below with a question.</p>
<p>The first question concerns the interactions between policy, inclusion and growth. </p>
<p>In recent years, even prior to COVID-19, South Africa’s <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=ZA">economy had come to a standstill</a>. Most South Africans acknowledge that a renewal of growth, with the private sector playing a key role, is a necessary part of the country’s turnaround. And that policies that destroy confidence, undermine hope and block entrepreneurial energy are counterproductive. But:</p>
<h2>Question #1: What economic policies are pro-growth?</h2>
<p>The standard South African discourse has a very business-lobby-oriented perspective of what it means to be pro-growth. It is one preoccupied with reducing restrictive regulation, keeping taxes low and containing government spending. </p>
<p>This dichotomy between pro-growth and pro-inclusion policies is false.</p>
<p>For one thing, an acceleration of growth will do less to address South Africa’s challenges of poverty and inequality than champions of the narrowly pro-business agenda suggest. In a recent discussion of economic policy in South Africa, Harvard University’s <a href="https://carnegieendowment.org/2021/04/07/south-africa-when-inequality-and-institutions-collide-event-7598">Dani Rodrik</a> reflected on:</p>
<blockquote>
<p>the mismatch between what South Africa produces and what the country’s factor endowments are – a production structure largely biased towards skill-intensive sectors, while the labour force largely is unskilled … {A crucial challenge} is to stimulate labour-intensive production … This is structural transformation in reverse. It requires an industrial policy that promotes relatively low-productivity perhaps informal activities that are mostly services … This takes us into such new terrain that it is not entirely clear how to proceed …</p>
</blockquote>
<p>For another, in South Africa’s current circumstances pro-inclusion policies may be necessary to kickstart growth. Albert Hirschman’s <a href="https://www.jstor.org/stable/1882024">classic analysis</a> of Latin America’s “changing tolerance for inequality” lays out the logic:</p>
<blockquote>
<p>It can happen that society’s tolerance for increasing disparities may initially be substantial {for example, South Africa in the first 15 years of democracy post-1994}. Tolerance for inequality is extended in the expectation that eventually the disparities will narrow again … Nonrealisation of the expectation that my turn will soon come will at some point result in my ‘becoming furious’, that is, in my turning into an enemy of the established order…</p>
</blockquote>
<p>Hirschman <a href="https://press.princeton.edu/books/paperback/9780691021942/the-new-authoritarianism-in-latin-america">distinguished</a> between:</p>
<blockquote>
<p>Two principal tasks or functions {that} must be accomplished in the course of the growth process. The first is the unbalancing function, the entrepreneurial function, the accumulation function … Increasing social and income inequalities are an important part of this picture.</p>
</blockquote>
<p>Once hope has curdled into anger and despair, renewing growth will depend on:</p>
<blockquote>
<p>the ‘equlibrating’ distributive, or reform function … to correct some of these imbalances, to improve the welfare and position of groups that have been neglected or squeezed, and at redistribution of wealth and income in general.</p>
</blockquote>
<p>Viewed from this perspective, employment subsidies, basic income grants and other social interventions to address poverty and improve prospects for upward mobility all become part of an (extended) pro-growth policy. These don’t come free. They will require a move away from pro-austerity fiscal policies. And, in time, some tax increases on higher-income earners. A hike in taxes will be dependent for its legitimacy on the likely effectiveness with which the public sector implements the social agenda. (More on this in the discussion of questions #3 and #4.)</p>
<h2>Question #2: What economic policies are ‘pro-worker’?</h2>
<p>On the surface, this question has a straightforward answer: pro-worker policies are the policies advocated by organised labour. But beneath the surface things aren’t that straightforward. </p>
<p>In recent decades, the composition of South Africa’s trade union membership has shifted from blue-collar workers, predominantly in the private sector, <a href="https://digitallibrary.un.org/record/815246?ln=en">towards white-collar public sector employees</a>. In addition, within the public sector, wage gains have <a href="https://www.businesslive.co.za/bd/opinion/2021-06-08-wider-personnel-reforms-should-be-paramount-in-public-wage-debate/">gone predominantly to middle-management cadres</a>. There have been limited gains for teachers, nurses and other frontline workers.</p>
<p>A <a href="https://ideas.repec.org/a/eee/wdevel/v110y2018icp88-103.html">recent study</a> sorted South Africa’s population into five broad income categories. It highlights a cliff. At the bottom of the cliff, about half of the population is chronically poor. At the top is the affluent elite, comprising a little more than 3% of the population, plus an additional 20% in a stable economic middle class. </p>
<p>In between are a “vulnerable 15%” that hover on the edge of the middle class, plus a “transient” 12% that move in and out of poverty.</p>
<p>It is not for me to pronounce on the strategies adopted by South Africa’s trade unions. Nevertheless, in the spirit of this article’s exploration of “the things we know that just aren’t so”, the following can be said: If South Africa is to effectively address its twin challenges of poverty and inequality, the focus of attention cannot be on competition for status and further wealth accumulation within the elite. Or on the pursuit of further gains for the already stable middle class. </p>
<p>Rather, it must be on the chronically poor and (especially, I would argue) on enhancing opportunities for accelerated upward mobility by the “vulnerable and transient” groups. This would also bring hope of a better life to the populace more broadly. Indeed, continuing extreme barriers to upward mobility comprise perhaps the greatest failing of the first quarter century of democracy. Thus the question arises: on whose behalf does organised labour advocate?</p>
<h2>Question #3: How can public sector capacity be mobilised?</h2>
<p>To reinvigorate growth and make inroads into inequality, South Africa urgently needs a nimbler, more results-oriented and more efficient public sector. On this, there’s both bad news and better news.</p>
<p>Here’s the bad news. </p>
<p>South Africans of many ideological hues have in their minds an image of the public sector as a well-oiled, top-down machine. In other words a capable, “developmental” state, always effective in delivering on clear goals set by planners and political leaders. </p>
<p>But that kind of well-oiled public sector machine isn’t going to appear any time soon.</p>
<p>The dream that the public sector can readily become a well-oiled machine is based on a misconception of the relationship between politics and bureaucracies. This relationship has been explored in depth by professor of politics and international affairs <a href="https://www.cambridge.org/core/books/statedirected-development/FF2DE2441F160254D72E3815D0FC750A">Atul Kohli</a>, and <a href="https://www.sup.org/books/title/?id=28707">numerous</a> other <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674065703">scholars</a>. </p>
<p>As they show, always and everywhere, even in places where bureaucratic “insulation” seems to prevail, public administrative systems are embedded in politics. </p>
<p>In some settings, the ways in which politics support top-down bureaucratic machines – the repressive authoritarianism of the apartheid state, or of a comprehensively planned economy and society – aren’t ones that most South Africans want. </p>
<p>In other settings, very benign initial conditions provide the basis for bureaucratic insulation – high incomes, reasonably equitable societies, and deeply rooted, broadly accepted institutional norms and practices. Such conditions are very far from South Africa’s current realities.</p>
<p>Here’s the better news.</p>
<p>South Africa’s current public sector challenges are anything but unique. The 2019 <a href="https://info.worldbank.org/governance/wgi/Home/Reports">Worldwide Governance Indicators</a> located South Africa in the 66th percentile globally for “government effectiveness”. And in the 59th percentile for “control of corruption”. This is well below the rankings for, say, Spain and Portugal. They ranked around the 80th percentile for both indicators. </p>
<p>But per capita incomes for Portugal and Spain are four times that of South Africa. And there is abundant evidence globally that per capita income and governance quality improve together. For both indicators, South Africa’s 2019 percentile rank remained above those of other middle-income countries – for example, Brazil, Colombia, Mexico, Thailand and Turkey (all countries with higher per capita incomes than South Africa’s) – as well as almost all countries with lower per capita incomes. Examples include India, Indonesia and Kenya.</p>
<p>Rather than indulge in unachievable fantasies of some well-oiled public machine, South Africa would do well in this moment of crisis to look for lessons on how to mobilise public sector capacity from the many places that have managed to achieve gains in the midst of messiness.</p>
<p>One set of lessons comprises the value of shifting focus away from an exclusive preoccupation with strengthening systems towards a more targeted, learning-by-doing, problem-driven approach. (These lessons have been synthesised in an <a href="https://bsc.cid.harvard.edu/building-state-capability-evidence-analysis-action">influential recent book on building state capability</a> by a group at Harvard’s Kennedy School.)</p>
<p>Avoid empty initiatives – endless plans for reform, endless upstream processes of consultation that are performative rather than practical, too general to lead anywhere. Strengthen “pockets of effectiveness”. Focus in a more action-oriented way on specific problems, specific departments (or individual state-owned enterprises) within government.</p>
<p>A second set of lessons highlights the importance of context – of letting go of a preoccupation with unimplementable “best practices”. Instead, look for a good fit between policy design and implementation on the one hand, and the prevailing political and institutional context on the other. </p>
<p>As the economist Mushtaq Khan put it <a href="https://ace.soas.ac.uk/publication/making-collective-action-effective/">in a recent briefing paper</a> on “strategic realism”:</p>
<blockquote>
<p>Look at data, but look also at the organisation of the society and sector to assess the relative power of relevant organisations, their interests and capabilities and their likely support for or resistance to particular solutions … While some powerful groups are inevitably going to lose out, there are powerful supporters who may in their own interest support the implementation of the policy.</p>
</blockquote>
<p>Underlying both of these lessons is a fundamental insight on how to effect change: focus on the human factor, the evocation of agency. Prioritise people and problem-solving over systems reform.</p>
<p>In <a href="https://press.princeton.edu/books/paperback/9780691070100/the-forging-of-bureaucratic-autonomy">a brilliant book, professor of government Daniel Carpenter</a> explores how motivated mid-level bureaucratic managers, acting as “public entrepreneurs”, can foster change by working to strengthen both internal capability and external alliances. The principal internal task is to get the organisation’s staff to embrace the developmental mission. As <a href="https://www.cornellpress.cornell.edu/book/9780801442926/state-building/#bookTabs=1">Francis Fukuyama puts it</a>:</p>
<blockquote>
<p>All good managers (private and public) know that it is ultimately the informal norms and group identities that will most strongly motivate the workers in an organisation to do their best… They thus spend much more time on cultivating the right ‘organisational culture’ than on fixing the formal lines of authority.</p>
</blockquote>
<p>Innovative public managers use external alliances to resist pressure to deflect the organisation away from its developmental mission. “Successful bureaucracies,” says Carpenter,</p>
<blockquote>
<p>practise a politics of legitimacy … Leaders build reputations for their organisations … They ground this reputation in a diverse coalition … {As a result} political authorities see it as in their interest to defer to agency action … because failure to do so would forfeit the publicly recognised benefits of agency capacity, and/or because the agency can build coalitions around its innovations that make it costly for politicians to resist them.</p>
</blockquote>
<p>This has profound implications for how civil society organisations engage, which brings us to:</p>
<h2>Question #4: How can civil society become part of the solution?</h2>
<p>This question has a seemingly obvious answer: the task of civil society is to hold government to account. Such a focus aligns well with the crucial role that civil society activism played in the overthrow of apartheid. It also is a natural response to a difficult lesson of the first quarter century of democracy – that scaling back activism (or joining the public sector) and embracing the dictum that “government should deliver” left a vacuum within which impunity could thrive. </p>
<p>However, a narrow preoccupation with holding government to account comprises, at best, a constricted vision of the role of civil society in a democracy. Indeed it can sometimes have the unintended consequence of fuelling cynicism and despair. In turn deepening dysfunction. </p>
<p>Learning from experience elsewhere can enrich the repertoire of ways in which civil society might engage.</p>
<p>One set of lessons was recently summarised by the <a href="https://www.thegpsa.org/about/collaborative-social-accountability">Global Partnership for Social Accountability</a>. It highlighted how less confrontational approaches can add value:</p>
<blockquote>
<p>We have learned that focusing only on scrutinising and verifying government actions can have limited value in our problem solving. When they engage to focus on the problem at hand, civil society, citizens and public sector actors are better able to deliver solutions collaboratively – especially when they prioritise learning. When social accountability mechanisms are isolated from public sector processes they are not as effective as collaborative governance. Collective action requires efforts that build bridges.</p>
</blockquote>
<p>Learning-by-doing in partnership with committed reformers within the bureaucracy enables civil society organisations to move beyond small self-contained non-governmental initiatives, and to leverage public resources and effect change at scale.</p>
<p>A second set of lessons, under the rubric of “<a href="https://accountabilityresearch.org/publication/social-accountability-what-does-the-evidence-really-say-2015/">strategic social accountability</a>”, explores how civil society engagement can help reshape power dynamics by building new cross-cutting coalitions. This could be among civil society reformers and reformers within the public bureaucracy, across national, provincial and local levels. As per Carpenter, investment in such alliances can help developmentally oriented stakeholders overcome resistance to change, including by pushing back against predation.</p>
<p>A third lesson is, at least in part, an affirmation of a more traditional dictum of champions of holding government to account: sunlight can indeed be the best disinfectant. Transparency in how civil society engages with officials in the public sector can reduce the risk that coalitional governance becomes a vehicle for corrupt collusion. Transparency vis-à-vis outcomes can signal to citizens that public resources are not being wasted but are helping to improve results.</p>
<p>The combination of participation and transparency can help enhance social solidarity and legitimacy of the public domain. Kenya’s education sector offers a striking example of how this can work. Here is how Ben Piper, a seasoned educational specialist and long-term resident in Nairobi, <a href="https://theconversation.com/active-citizens-for-better-schooling-what-kenyas-history-can-teach-south-africa-92534">described</a> the “special sauce” that accounts for the country’s unusually positive learning outcomes:</p>
<blockquote>
<p>In rural Kenya there is an expectation for kids to learn and be able to have basic skills … Exam results are far more readily available than in other countries in the region. The ‘mean scores’ for the Kenya Certificate of Primary Education and its equivalent at secondary school are posted in every school, and over time so that trends can be seen. Head teachers are held accountable; paraded around the community if they did well, or literally banned from school and kicked out if they did badly.</p>
</blockquote>
<p>A participatory approach to improving outcomes, along the lines of the Kenya example, <a href="https://global.oup.com/academic/product/the-politics-and-governance-of-basic-education-9780198824053?cc=us&lang=en&">currently is not part of the DNA of South Africa’s policymakers and activists</a>. </p>
<p>But need this continue to be the case?</p>
<p>Back in 1932, the United States was trapped deep in the economic and social disaster of the Great Depression. The president at the time, Herbert Hoover, unable to look beyond the blinders of the American ethos of rugged individualism, failed to craft an effective response. Franklin Delano Roosevelt defeated Hoover by a landslide, by embracing (and then as president following through with) a radically different governing vision. His <a href="https://www.presidency.ucsb.edu/documents/address-oglethorpe-university-atlanta-georgia">description of his approach</a> speaks directly to South Africa’s current crisis:</p>
<blockquote>
<p>The country needs and, unless I mistake its temper, the country demands bold persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all try something.</p>
</blockquote><img src="https://counter.theconversation.com/content/165539/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brian Levy was Academic Director at the Nelson Mandela School of Public Governance at the University of Cape Town from 2012 to 2019.</span></em></p>In this moment of crisis, South Africa urgently needs decisive action. But all too often South Africans of all political stripes seem trapped in stale discourses.Brian Levy, Professor of the Practice of International Development, Johns Hopkins UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1112232019-02-13T23:32:04Z2019-02-13T23:32:04ZWhy governments are so bad at implementing public projects<figure><img src="https://images.theconversation.com/files/258288/original/file-20190211-174883-1k7tek5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Around the world, government officials fail often at implementing policy and public sector projects. Here's why.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>As Canada’s federal government starts looking for a replacement for <a href="https://www.cbc.ca/news/canada/ottawa/ibm-not-bid-phoenix-replacement-1.5006682">its failed payroll system</a> and the Ontario provincial government launches yet another <a href="https://www.theglobeandmail.com/canada/article-ontario-government-employee-fired-after-leak-of-fords-health-plan/">major shake-up of its health-care system</a>, it’s useful to remind decision-makers of a long history of failures in major public sector implementations.</p>
<p>Research from around the world shows a consistent pattern of failures in public sector policy and project implementation. Yet we continue to embark upon implementation built on bias and faulty logic.</p>
<p>So maybe it’s time to better understand the architecture of failure and what can be done to overcome it. </p>
<p>Recent publications from Australia, Canada, the United Kingdom and the United States deliver some consistent messages. <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1478-9302.12100_82"><em>The Blunders of Government</em></a> delves into the many restarts of the UK National Health Service. The <a href="https://www.apsc.gov.au/sites/g/files/net4441/f/learningfromfailure.docx">Learning from Failure report</a> details major project failures in Australia. In the U.S., <a href="https://www.brookings.edu/research/a-cascade-of-failures-why-government-fails-and-how-to-stop-it/">A Cascade of Failures: Why Government Fails, and How to Stop It,</a> reports similar themes. In Canada, the <a href="http://www.oag-bvg.gc.ca/internet/English/att__e_43045.html?wbdisable=true">auditor general’s latest reports on the Phoenix pay system</a> echo the common basis for implementation failure. It’s not often an auditor uses <a href="https://www.cbc.ca/news/canada/new-brunswick/phoenix-pay-system-alarms-1.4683030">the phrase “incomprehensible,”</a> but there it is. </p>
<p>When distilling all this research and all these investigations, certain themes are common to them all.</p>
<p>First and foremost in the public sector, announcement was equated with accomplishment. This is the equivalent of thinking that just cutting the ribbon is enough. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/258284/original/file-20190211-174861-v8in71.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/258284/original/file-20190211-174861-v8in71.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/258284/original/file-20190211-174861-v8in71.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/258284/original/file-20190211-174861-v8in71.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/258284/original/file-20190211-174861-v8in71.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/258284/original/file-20190211-174861-v8in71.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/258284/original/file-20190211-174861-v8in71.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A group of federal and New Brunswick politicians take part in a ribbon-cutting ceremony as they open the centralized Public Service Pay Centre in Miramichi in May 2018.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Michael MacDonald</span></span>
</figcaption>
</figure>
<p>A corollary of this is that most projects get lots of attention by both political and bureaucratic leaders at first, but that attention fades as the boring, detail-oriented work begins and the next issue, crisis or bright shiny object comes along.</p>
<h2>‘We design it. You make it work.’</h2>
<p>In many cases, there is a cultural disconnect in the project design that prevents bad news from making it to those at the top of the chain of command, minimizes problems that are often warning signs and deliberately downplays operational issues as minor. </p>
<p>What can be called the “handover mentality” often takes over between a project’s designers and the people who have to actually implement it and get it up and running. It’s best characterized by the phrase: “We design it. You make it work.”</p>
<p>The next element is that when things go wrong, those who speak up about the problems are dismissed, discounted or just plain punished. <a href="https://www.psychologytoday.com/ca/basics/groupthink">This leads to groupthink,</a> a failure to challenge assumptions and to just go along, even when danger signs are in full sight.</p>
<p>Policy designers and those who must implement government projects or infrastructure are often guilty of what’s known as <a href="https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/optimism-bias/">optimism bias</a> (“What could possibly go wrong?”) when, in fact, they should be looking at the end goal. They should be working backwards to identify not only what could go wrong, but how the whole process will roll out. </p>
<p>Instead, they focus on the beginning — the announcement, the first stages.</p>
<p>We hear the word <em>complexity</em> a lot when examining government project failures. Indeed, most of the problems examined in the aforementioned research pointed to the increasing complexity in failed implementations that went well beyond IT, and the failure to map those complexities out.</p>
<p>But that complexity increases the risks of some moving part of a government project malfunctioning and shutting down the entire system. </p>
<h2>Gears start slipping</h2>
<p>People get busy and distracted. If a policy is just the flavour of the week and something else becomes popular next week, the project starts to lose momentum, needed attention, reaction and adaptation to inevitable challenges. The gears start to slip. </p>
<p>Then there is the churn of officials. At both the political and bureaucratic level, this is a consistent theme in projects failing or in governments responding poorly to crises as they arise. </p>
<p>The champions for a policy simply move on, and their successors are left to decide how much energy to put into someone else’s pet project. Similarly, the rapid turnover of senior managers in government often leaves well-intentioned people to respond to emergencies in areas where they have little experience. </p>
<p>An interesting element in all of this research is the confirmation that <a href="https://www.verywellmind.com/what-is-a-cognitive-bias-2794963">cognitive biases</a> play a significant role in assessing risks in policy implementation in a number of ways, often in the face of a mountain of contrary evidence. </p>
<p>Cognitive biases tend to confirm beliefs we already have. Biases block new information. While we need biases to short-hand our interpretation of events, they often filter and discount new information. Our experiences are our greatest asset and greatest liability in this process.</p>
<p>The bottom line on the causes of major implementation failure really rests with a culture focused on blame avoidance and getting along. We now know enough to avoid failure, backed by ample evidence that confirms common sense about how to better structure policy, its implementation and our major projects.</p>
<p>Can we do it?</p><img src="https://counter.theconversation.com/content/111223/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Graham does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Research around the world shows a consistent pattern of failures in public sector policy and project implementation. Yet we continue to embark upon implementation built on bias and faulty logic.Andrew Graham, Professor, Queen's University, OntarioLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1098562019-01-15T11:28:53Z2019-01-15T11:28:53ZWhy privatizing the VA or other essential health services is a bad idea<p>The Trump administration <a href="https://www.nytimes.com/2019/01/12/us/politics/veterans-administration-health-care-privatization.html">wants to shift</a> billions of dollars from government-run veterans’ hospitals to private health care providers. That’s true even though earlier this year the administration <a href="https://www.politico.com/story/2018/03/29/david-shulkin-veterans-affairs-secretary-privatizing-491590">vehemently denied</a> it would privatize any part of the Department of Veterans Affairs.</p>
<p>The privatization of essential government services is nothing new, of course. Over the years, countries have <a href="https://www.downsizinggovernment.org/privatization">privatized dozens of services and activities</a> that were once the sole domain of governments, such as the provision of electricity and water, road operations and prisons and even health care, with the ostensible aim of making them more efficient. </p>
<p>But before going down that road, the question needs to be asked whether privatizing essential human services such as those for military veterans serves the public interest. New research <a href="https://academic.oup.com/jpart/advance-article/doi/10.1093/jopart/muy009/4938536">we recently published</a> suggests that privatization may come at a social cost. </p>
<h2>Economic incentives of privatization</h2>
<p>Privatization theory assumes that organizations, including those that <a href="https://academic.oup.com/jpart/article/17/3/501/943117?searchresult=1">deliver social services</a>, thrive on competition and monetary gain. </p>
<p><a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6210.00157">Supporters of privatization</a> argue that companies can perform government functions more efficiently. More competition and more choice for clients are expected to put pressure on providers to be more innovative and aware of financial costs. </p>
<p>In the public sector, however, competition is almost by definition absent, either because users of services cannot be excluded from the service – breathing clean air, for example – or because there is little monetary gain to be made – such as with services to the homeless. </p>
<p>So in situations where there is no real market, governments have attempted to mimic their conditions, such as by giving citizens the freedom to choose a public service provider or negotiating contracts that include certain performance incentives. </p>
<p>But this reliance on performance contracts <a href="https://academic.oup.com/jpart/article/17/2/189/894972?searchresult=1#15497641">can lead business providers</a> to focus on short-term financial targets – such as the number of people processed per dollar spent – often at the expense of long-term outcomes for those served. </p>
<p>This gives business providers a strong incentive to <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.21695">concentrate on serving</a> people who are most likely to help them achieve these goals by either focusing on those clients who are most likely to succeed or disregarding the ones that are harder to serve. By focusing on easier-to-serve clients and shunning the ones who are costly, service providers are more likely to make a profit.</p>
<p>However, it’s often difficult to know in advance who’s going to cost more than someone else. As a result, many service providers end up relying on imperfect, discriminatory cues to help them weed out potential cost burdens. <a href="https://academic.oup.com/qje/article/133/1/191/4060073">Companies do something similar</a> when they use stereotypes about race or ethnicity as discriminatory proxies for unobserved characteristics in job applicants.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The seal affixed to the front of the Department of Veterans Affairs building in Washington.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Veterans-Affairs/3aa69f27e60a47d7b946bf672f481000/80/0">AP Photo/Charles Dharapak</a></span>
</figcaption>
</figure>
<h2>Kenny and Mohammed</h2>
<p>To learn more about whether for-profit service providers treat people of marginalized ethnic backgrounds differently, <a href="https://doi.org/10.1093/jopart/muy009">we ran a field experiment</a> in the Belgian elderly care sector. We chose Belgium because the industry includes both public and private homes, and one of us is based there. </p>
<p>We sent basic information requests to all public and for-profit nursing homes in Flanders, the Dutch-speaking part of Belgium. Half of the requests, randomly assigned, appeared to come from a Belgian citizen (Kenny Maes), while the rest bore the signature of someone with a North African name (Mohammed El Makrini). The names were chosen based on the results of a separate survey we sent out to 2,000 Belgians asking them to rate several names on their perceived ethnicity, age, level of education and wealth. </p>
<p>In the requests, we asked nursing homes for advice on how to subscribe for a place in their facility. Withholding such information would make it harder for a prospective client to apply for a spot.</p>
<p>Of the 223 nursing homes we contacted, 71 percent responded, with public facilities being a little more likely than for-profit ones to get back to us. In general, each type of home responded to our two senders at similar rates. For example, 76 percent of public facilities replied to “Kenny,” compared with 79 percent for “Mohammed.” The response rate of for-profit homes was a bit more lopsided, but it was not what we’d consider a significant difference given the sample size: 66 percent for Kenny and 57 percent for Mohammed. </p>
<p>The really interesting finding was when we analyzed the actual responses. Upon closer inspection, we found that for-profit nursing homes were significantly less likely to provide information to Mohammed on how to enroll. Only about 43 percent of the for-profit homes that responded offered him the info, compared with 63 percent for Kenny. There was basically no difference among public facilities.</p>
<p>This is direct proof of for-profit providers discriminating against prospective clients based on their perceived ethnicity. But they’re not doing it simply out of ethnic animus. If it was, we’d have seen the same discrimination at the public facilities as well.</p>
<p>Rather, the motivation seems to be primarily economic. This is what economists call “<a href="http://www.nber.org/papers/w15860">statistical discrimination</a>.” In other words, average characteristics of the minority group – such as language barriers and having different cultural needs and habits that make them more difficult to serve – are used to stereotype individuals who belong to that particular group.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">For-profit service providers may use discrimination as a way to make more money.</span>
<span class="attribution"><span class="source">wavebreakmedia/Shutterstock.com</span></span>
</figcaption>
</figure>
<h2>Unintended consequences</h2>
<p>The <a href="http://www.governing.com/topics/mgmt/pros-cons-privatizing-government-functions.html">public debate about privatization</a> tends to almost exclusively focus on its supposed financial and managerial advantages – which are <a href="http://www.pogo.org/our-work/reports/2011/co-gp-20110913.html#Executive%20Summary">hardly clear cut</a>. Meanwhile, the potential social costs of privatization are commonly neglected. </p>
<p><a href="https://scholar.google.com/citations?user=PA7TqeEAAAAJ&hl=en&oi=ao">Our</a> <a href="https://scholar.google.com/citations?user=mniink4AAAAJ&hl=en&oi=ao">research</a> suggests that privatizing human services such as health care can result in less access for groups perceived as harder to serve because of language barriers and cultural differences. </p>
<p>Unfortunately, they also happen to be the groups that need such services the most.</p>
<p><em>This is an updated version of an <a href="https://theconversation.com/privatizing-essential-human-services-like-the-va-can-come-at-a-high-social-cost-96092">article originally published</a> on May 18, 2018.</em></p><img src="https://counter.theconversation.com/content/109856/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Trump administration is preparing to shift billions in veterans’ health care spending to private providers. Research suggests privatizing essential services comes with a social cost.Sebastian Jilke, Assistant Professor, Rutgers University - NewarkWouter Van Dooren, Professor of Public Administration, University of AntwerpLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1018892018-09-10T02:10:37Z2018-09-10T02:10:37ZLack of technical knowledge in leadership is a key reason why so many IT projects fail<figure><img src="https://images.theconversation.com/files/233585/original/file-20180826-149493-vf61g1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Poor communication isn't the problem, it's the inability of leadership to understand what's being communicated.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hand-pulling-wood-block-fail-on-757869322?src=6ZBa4ozgbwU5fdoqng6xaw-1-5">Shutterstock</a></span></figcaption></figure><p>Implementing information technology projects in the public sector is challenging. And we seem to experience these challenges with a regularity that is both perplexing and frustrating. Think <a href="http://www.abc.net.au/news/2017-10-19/abs-annual-report-censusfail/9064970">#censusfail</a>, the <a href="https://www.theage.com.au/national/victoria/myki-still-a-disaster-and-public-transport-victoria-is-not-monitoring-it-properly-auditorgeneral-20150610-ghkj77.html">myki</a> smartcard fiasco and the <a href="https://www.theaustralian.com.au/business/business-spectator/learning-from-the-qld-health-payroll-fiasco-/news-story/174743f09e91d9550521b04d45d43ac3">Queensland Health payroll debacle</a>, to name just a few.</p>
<p>Indeed, the failure rates of large-scale IT projects are <a href="https://www.projectsmart.co.uk/white-papers/chaos-report.pdf">unreasonably high</a> across both the public and private sectors, with costs of failure <a href="https://www.researchgate.net/publication/273482112_Research_on_information_systems_failures_and_successes_Status_update_and_future_directions">reported</a> in the hundreds of millions of dollars.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/as-census-failure-blame-points-at-ibm-why-we-shouldnt-be-surprised-by-its-failings-64038">As census failure blame points at IBM, why we shouldn't be surprised by its failings</a>
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</em>
</p>
<hr>
<p>Researchers have been studying the causes of this kind of failure for decades – yet this appears to have had no impact on the problems organisations face when they undertake large-scale IT projects.</p>
<p>Only a few of these studies have considered the role played by the technical knowledge of project leaders. With colleagues, my own <a href="http://journalmodernpm.com/index.php/jmpm/article/view/240">research</a> finds the technical knowledge of leadership plays a key role.</p>
<h2>Understanding the advice being given</h2>
<p>We examined previous <a href="https://www.sciencedirect.com/science/article/abs/pii/S0263786317305240">research</a> alongside a case study of a large-scale public sector IT project failure. Reports on the project and documents obtained through freedom of information requests created a rich pool of data that allowed us to examine the life of the project as it unfolded over many years. </p>
<p>One of our main findings was underpinned by the <a href="https://www.ncbi.nlm.nih.gov/pubmed/10626367">idea</a> that leaders require more than a passing familiarity with the technical skills required to do the job if they are to identify competence in those carrying out the work. Without this, the projects have a poor chance of success.</p>
<p>Technological competence needs to be specific, not generalised. The most senior executive with day-to-day accountability for the project, and who has a direct and material impact on project outcomes, must have experience with, and knowledge of, the technology being developed. </p>
<p>An inexperienced project leader will be incapable of comprehending the advice being provided if they lack the specific experience in the technical domain being managed. That means that it’s not sufficient to surround an inexperienced manager with experts upon whom they would theoretically turn to for advice. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/digital-by-default-efficient-egovernment-or-costly-flop-26182">'Digital by default' – efficient eGovernment or costly flop?</a>
</strong>
</em>
</p>
<hr>
<p>The research and the case study demonstrate that an inexperienced senior executive defers to inappropriate sources for advice and support, choosing not to trust the advice of their internal experts. Instead, they are apt to treat technical disagreements as personality conflicts, and characterise critiques of the vendors’ performance as interference. </p>
<h2>Technical skills on Australian boards</h2>
<p>Australian public companies are investing in very large information systems projects and many of these are at risk. When these projects fail it can have a direct material impact on a company and <a href="https://www.sciencedirect.com/science/article/abs/pii/S0963868709000158">its share price</a>. And when projects are delivered with less than the required functionality, or at an inflated price, they negatively impact upon the performance and effectiveness of those businesses.</p>
<p>Effective oversight requires competence and experience. This means that the boards need some measure of IT knowledge if they expect to provide effective governance, risk management and strategic oversight of IT projects.</p>
<p>We have analysed <a href="https://www.asx.com.au/index.htm">Australian Stock Exchange</a> publicly available information on the qualifications and experience of Australian directors in order to gain some insight into the digital competence of Australian boards. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-road-to-failure-is-paved-with-good-intentions-heres-how-to-turn-them-into-action-30953">The road to failure is paved with good intentions – here's how to turn them into action</a>
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</em>
</p>
<hr>
<p>After examining 35,000 director positions, with 37,500 reported qualifications, we found that just 6% of directors had qualifications in a STEM-related field, or possessed a PhD. </p>
<p>Most directors have qualifications in finance (18%) or accounting (19%). Lawyers figure strongly on boards with 9% representation, while mining qualifications count for 8% of board membership. Those with arts, business or other qualifications accounted for 40%. </p>
<p>The current composition of Australian boards of directors is heavily weighted towards finance, accounting and legal. While this background is not particularly surprising, it means that the accumulated knowledge and experience of Australian boards is not adequate to provide effective governance and oversight when it comes to the significant challenge of IT projects. </p>
<h2>Focus on the problem, not the symptoms</h2>
<p>Lots of factors <a href="http://oro.open.ac.uk/2937/">contribute to the success of information systems projects</a>: support from senior management; clear and realistic goals; a strong, detailed plan that’s kept up to date; good communication and feedback; the involvement of both clients and users; suitably qualified and sufficient resources; and effective change management.</p>
<p>But the absence of some or all of these factors are not a cause of project failure. Rather they are consequences of a poorly run project due to the situational incompetence of project leaders who have direct oversight and accountability for the day-to-day workings of the project.</p><img src="https://counter.theconversation.com/content/101889/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Darryl Carlton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An inexperienced senior executive may defer to inappropriate sources for advice, treating technical disagreements as personality conflicts or interference.Darryl Carlton, Industry Fellow, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/914422018-02-09T17:03:31Z2018-02-09T17:03:31ZThe EU wants to fight climate change – so why is it spending billions on a gas pipeline?<figure><img src="https://images.theconversation.com/files/205470/original/file-20180208-180813-ifievy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:TAP_in_Albania.jpg">Albinfo/Wikipedia</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Over the past few years there has been <a href="https://www.enelgreenpower.com/media/news/d/2017/12/renewables-exponential-growth">exponential growth</a> in clean energy investment – while fossil fuel assets are increasingly considered to be <a href="https://www.fsb-tcfd.org/wp-content/uploads/2017/06/FINAL-TCFD-Annex-062817.pdf">risky</a>. Yet, on February 6, the European Investment Bank, the EU’s long-term lending institution, voted to provide a <a href="http://www.eib.org/infocentre/press/releases/all/2018/2018-030-eib-backs-eur-6-5-billion-energy-sme-transport-and-urban-investment">€1.5 billion loan</a> to the controversial Trans Adriatic Pipeline (TAP).</p>
<p>The TAP is the Western part of a larger Southern Gas Corridor proposal that would ultimately connect a large gas field in the Caspian Sea to Italy, crossing through Azerbaijan, Turkey, Greece and Albania. And while gas might be cleaner than coal, it’s still a fossil fuel. </p>
<p>So how does the EU’s support for this major project fit in with its supposed goal of addressing climate change?</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/205365/original/file-20180207-74487-1cg5u8d.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The proposed Trans Adriatic Pipeline will run nearly 900km from Greece to Italy.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Trans_Adriatic_Pipeline.png">Genti77 / wiki</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<h2>Influencing investors</h2>
<p>A key problem is the message this sends to the private sector, where renewable energy is increasingly seen as a good investment. Technologies once perceived as too risky and too expensive are now delivering worthwhile returns thanks to reduced costs and breakthroughs in energy storage. The price of electricity generated by solar, wind or hydro is now comparable with the national grid. Over the past decade, investor meetings have shifted from discussing whether the transition to a low carbon economy will start before 2050, to whether it will be completed in the same period. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"949194987337650176"}"></div></p>
<p>But there is still not enough money being spent on renewables. While clean energy investment in 2017 <a href="https://about.bnef.com/blog/runaway-53gw-solar-boom-in-china-pushed-global-clean-energy-investment-ahead-in-2017/">topped US$300 billion for the fourth year in a row</a>, this is far short of what is needed to unlock the technology revolution necessary to tackle climate change. There is clearly a gap between what is required and what is being delivered. </p>
<p>The private sector will continue to invest significant capital into energy projects over the next few decades, so one issue facing policy makers is how to influence investors away from fossil fuels and <a href="https://www.sciencedirect.com/science/article/pii/S0301421511005064">towards renewable projects</a>. To really scale up investment into renewable infrastructure, <a href="http://www.unepfi.org/fileadmin/documents/Investment-GradeClimateChangePolicy.pdf">long-term and stable policy is required</a> – which investors <a href="https://www.sciencedirect.com/science/article/pii/S0959652615006277">see as clearly lacking</a>. </p>
<p>By funding the Trans Adriatic Pipeline, the EU’s investment bank is hardly signalling to the private sector that governments are committed to a green energy transition. </p>
<h2>Risky business</h2>
<p>If Europe really was to follow through and successfully switch to green energy – and such a transition is partially underway – then the pipeline project may even represent a risk to public finances.</p>
<p>Studies on climate change point to the need for a greater sense of urgency and ambition and, to stay within its “carbon budget” under current agreed emissions targets, the EU needs to be <a href="http://www.foeeurope.org/sites/default/files/extractive_industries/2017/can_the_climate_afford_europes_gas_addiction_report_november2017.pdf">fossil fuel free by 2030</a>. </p>
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<p>So any large oil and gas infrastructure projects with investment returns beyond 2030 are saddled with risk. In just a decade or two, super-cheap solar and wind power could mean that gas pipelines such as TAP would no longer make financial sense and would become worthless “<a href="https://www.carbontracker.org/terms/stranded-assets/">stranded assets</a>”. Yet TAP backers are touting economic benefits for countries such as <a href="http://www.oxfordeconomics.com/Media/Default/economic-impact/economic-impact-home/Economic-Impact-trans-Adriatic-Pipeline.pdf">Albania</a> extending to 2068 – well beyond the date when Europe must entirely ditch fossil fuels.</p>
<p>The EU’s official stance is to hail natural gas as a cleaner “bridge fuel” between coal and renewables. But <a href="http://science.sciencemag.org/content/343/6172/733.summary">high leakage rates</a> and the <a href="http://www.climatechange2013.org/images/uploads/WGIAR5_WGI-12Doc2b_FinalDraft_All.pdf">potent warming impact</a> of methane (the primary constituent of natural gas) means that the Southern Gas Corridor’s climate footprint may be <a href="https://bankwatch.org/publication/smoke-and-mirrors-why-the-climate-promises-of-the-southern-gas-corridor-don-t-add-up">as large, or larger, than equivalent coal</a>. Abundant natural gas is also highly likely to <a href="http://iopscience.iop.org/article/10.1088/1748-9326/9/9/094008/meta">delay the deployment of renewable technologies</a>. </p>
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<p>For the first decade of this century Europe prided itself on leading the political debate on tackling climate change. Now, it appears to be losing its boldness. To drive through a new technology revolution, the public sector needs to lead from the front and take bold decisions about its energy strategy.</p>
<p>A gas pipeline is not a technology of the future. If California can release <a href="https://www.youtube.com/watch?v=HSKcvoBKYxc">YouTube videos</a> describing the importance of considering stranded assets during this energy transition, and New York City can announce plans to <a href="https://twitter.com/NYCMayor/status/952216497123835906">divest from fossil fuels</a>, then maybe it is time for the EU to turn off the TAP.</p><img src="https://counter.theconversation.com/content/91442/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aled Jones does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The European Investment Bank’s funding of the Trans Adriatic Pipeline will harm the climate and makes little financial sense.Aled Jones, Professor & Director, Global Sustainability Institute, Anglia Ruskin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/876572018-01-26T11:39:03Z2018-01-26T11:39:03ZLessons learned from imposing performance-related pay on teachers<figure><img src="https://images.theconversation.com/files/203380/original/file-20180125-107937-vekqjp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">shutterstock</span> </figcaption></figure><p>One of the toughest subjects in classrooms at the moment is the recruitment and retention of teachers. Their level of pay is often <a href="http://www.bbc.co.uk/news/business-41974408">cited as a problem</a> – and possibly part of a solution. </p>
<p>In England, the public sector <a href="http://www.independent.co.uk/news/uk/politics/public-sector-pay-cap-spending-power-reduced-billions-england-workers-freeze-philip-hammond-tuc-a8065196.html">pay freeze</a> of recent years has meant real terms pay cuts for many teachers. But another part of the picture is the procedure which decides how much an individual teacher gets. Until recently this has been the pervasive public sector approach under which pay has generally increased automatically over time. </p>
<p>But what if that were changed? Could the profession be made more attractive to high performers? Could more teachers be persuaded to keep on teaching?</p>
<p>Back in 2013 the British government introduced one of the most wide-ranging reforms to teachers’ pay for many years. The most striking element was the requirement for all Local Authority (LA) maintained schools to introduce “<a href="http://www.telegraph.co.uk/education/educationnews/9799356/Michael-Gove-to-confirm-plans-for-performance-related-pay-in-schools.html">performance-related pay</a>” (PRP) for all teachers. Set points for teacher pay (known as “spine points”) were abolished and instead pay increases were decided by the school.</p>
<p>Part of the government’s thinking behind this was to attract more high performers to the profession – and retain them. But the reform deliberately came without a centrally mandated framework. Aside from some very general advice, schools were left to design their own pay schemes and choose their own performance measures (though many adopted union or LA recommended templates). </p>
<p>The other main element of the reform removed the requirement for pay “portability” which had guaranteed teachers at least the same pay in an equivalent new job as the old. This meant that teachers quitting one job for another could now in principle be paid less in the new one. </p>
<p><a href="https://www.google.com/url?q=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/652763/Evaluation_of_Teachers__Pay_Reform-Final_Report.pdf&ust=1516943040000000&usg=AFQjCNFaesUtq4_hg_ZaSjWpCrpPM1VbaQ&hl=en&source=gmail">Our report</a> provides the first in-depth analysis of the impact on pay of this major reform using the the <a href="https://www.gov.uk/government/collections/statistics-school-workforce">School Workforce Census</a>, a national census of all English state school teachers. </p>
<p>The report also presents the results from a survey conducted by the <a href="https://www.nfer.ac.uk">National Foundation for Educational Research</a> which explored teachers’ views of the reforms, including their implementation, the performance management system and its perceived fairness. </p>
<p>Clearly it is the level of pay that matters most to many of the players in this market, not least teachers themselves. But our focus was on how the pay reforms affected the teacher labour market across state-funded schools. Did the variation in pay increase? Did teachers start to move to jobs with lower pay?</p>
<h2>Test results</h2>
<p>We know that teachers’ performance differs dramatically, so any reasonable measure of performance coupled with even a moderate incentive scheme should yield substantially higher variation in pay. However, the data showed that while there is greater variation in pay since the reforms, the increase is small. </p>
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<p>That small increase in variability is present across both primary and secondary education, all school types and all the teacher characteristics we included from the School Workforce Census, including whether they were teaching a shortage subject (one where teachers are in particularly high demand, such as physics) or not. </p>
<p>Even in the range of annual pay awards, the story is of some slow change. Many schools continued to award annual pay increases that closely mimicked the old system. For these schools, the requirement to differentiate pay by performance does not appear to be something they wanted to embrace – and it seems that they simply did the least they could to comply with the directive. </p>
<p>Other schools are clearly moving away from the spine point system and differentiating pay awards for their teachers. Overall, the percentage of teachers (below the top level) receiving an annual pay increase in line with the spine point system has fallen, from 76% between 2011 and 2012 to 40% between 2014 and 2015.</p>
<p>In general, after two years of a mandatory policy to base pay on performance rather than tenure, some schools are starting to use their new freedoms. Not all schools, and those that do, not by much. Since the impact on pay and incentives has been minimal, we would expect little early impact on recruitment and retention.</p>
<h2>A for effort?</h2>
<p>But how can this be? In the survey, 99% of headteachers reported that they had implemented the reforms (as they were required to do). </p>
<p>What this suggests is that, for many schools, any implementation was largely symbolic. Actual pay awards varied little from the old system and supposed links to performance were minimal. Given that no performance management system was imposed on schools, they were clearly free to pick metrics that did not discriminate much between the performance of different teachers. </p>
<p>So why did so many schools decide that a stronger approach to PRP would be unwise? Perhaps it’s not so unexpected: <a href="https://academic.oup.com/oxrep/article/19/2/285/465426">economic theory</a> suggests a number of reasons why a straightforward private sector logic for PRP might not translate into the public sector – and teachers in particular. </p>
<p>These reasons include productivity that is hard to measure, outputs produced by teams of people (a maths department for example), as well as concerns about the unpopularity of PRP among teachers and their unions. Finally, PRP was introduced at a time when many schools were facing a tight financial situation, limiting scope for increasing teacher pay.</p>
<p>It’s too early to say how the system might yet evolve. As with any major change, meaningful implementation is likely to be slow, even for something schools are required to do. </p>
<p>Of course, the true test of the policy will be whether there is an impact on pupil attainment from the incentives. While the <a href="https://cmpo.wordpress.com/2015/04/13/education-policy-in-the-election-1-teachers-and-teaching/">international evidence</a> is split, there is certainly reason to think it might appear. </p>
<p>But the key point is this: a lot of <a href="https://cmpo.wordpress.com/2015/04/13/education-policy-in-the-election-1-teachers-and-teaching/">evidence</a> shows that people respond very precisely to what they are incentivised to do. The exact performance metrics that schools have chosen are therefore key to the success of this policy and are largely unknown. Design is key. The decision to allow schools to pick their own may yet come back to haunt the government.</p><img src="https://counter.theconversation.com/content/87657/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Burgess receives funding from ESRC, Department for Education.</span></em></p>The government must try harder if it wants to ensure recruitment and retention in the profession.Simon Burgess, Professor of Economics, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/874052017-11-28T05:43:21Z2017-11-28T05:43:21ZBusiness schools have a role to play in fighting corruption in Africa<figure><img src="https://images.theconversation.com/files/196097/original/file-20171123-17988-1bdoym3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Corruption pollutes the African business environment.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>In 2002, the African Union reported that Africa lost about <a href="http://news.bbc.co.uk/1/hi/world/africa/2265387.stm">USD$148 billion</a> through corruption every year. This represented 25% of the continent’s combined GDP at the time. Nothing much has changed.</p>
<p>Last year, the global business advisory firm KPMG estimated that if South Africa reduced its corruption by one point, as measured by Transparency International’s <a href="https://www.transparency.org/cpi2015">corruption perception index</a>, it could add <a href="https://assets.kpmg.com/content/dam/kpmg/za/pdf/2017/03/Corruption-TL.pdf">R23 billion to its GDP</a>. </p>
<p>The thrust of these facts is that the lost monies could have been used to finance institutional development and reduce the <a href="http://www.doingbusiness.org/reports/%7E/media/WBG/DoingBusiness/Documents/Profiles/Regional/DB2018/SSA.pdf">constraints to doing business in Africa</a>.</p>
<p>In spite of the effects of corruption on the private sector, businesses in Africa are relatively silent about the menace. Efforts to combat corruption are largely championed by <a href="http://uncaccoalition.org/en_US/get-involved/africa-region-anti-corruption-platform/">civil service</a>, non-governmental organisations and <a href="https://www.uneca.org/publications/combating-corruption-improving-governance-africa">international development agencies</a>. </p>
<p>A new <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">study</a> has linked the private sector’s silence to the inadequacy of business education in the region. It notes that business schools can play a vital role in the fight against corruption. They can do this by nurturing business students to become <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">institutional entrepreneurs</a> – people who will bring about institutional change – not only in Africa’s economic domain, but also in the political arena. </p>
<p>Schools can equip students and managers with knowledge and expertise to advocate for public accountability and good governance, as <a href="https://www.weforum.org/agenda/2017/03/5-ways-universities-can-join-the-fight-against-corruption/">advocated</a> by the World Economic Forum. </p>
<h2>Why the private sector is silent</h2>
<p>There are several reasons why private companies often remain silent about corruption. One is that some of them indulge in and benefit from corruption. </p>
<p>In Ghana, for example, a <a href="http://www.myjoyonline.com/opinion/2017/May-29th/why-wont-we-be-poor-when-create-loot-and-share-is-the-new-norm.php">“create-loot-share”</a> model of corruption persists. Politicians, public officers and businesses collude to create and profit from <a href="http://www.myjoyonline.com/news/2015/July-11th/create-loot-and-share-agenda-confirmed-in-shocking-expos-on-woyome-scandal.php">fraudulent</a> acts, including <a href="http://www.myjoyonline.com/politics/2016/May-16th/smarttys-bus-branding-contract-awarded-before-procurement-process.php">inflated contracts</a>. This is also common in Nigeria, where between 2009 and 2014, about <a href="https://www.premiumtimesng.com/news/more-news/188972-contract-inflation-bpp-has-saved-nigeria-n659-bn-says-dg.html">USD$2 billion</a> was salvaged from inflated contracts by the government agency set up to vet procurement.</p>
<p>Even multinational companies from the <a href="https://www.transparency.org/news/feature/corruption_perceptions_index_2016">least corrupt</a> countries gain from Africa’s corrupt political elite. For example, in 2011, UK’s Shell and Italy’s ENI paid <a href="https://www.theguardian.com/sustainable-business/shell-nigeria-oil-payment-corruption-scandal">USD$1.1 billion</a> to Nigerian officials for access to an oilfield currently <a href="http://www.bbc.co.uk/news/business-39544761">worth USD$500 billion</a>. US tyre firm Goodyear paid more than <a href="http://www.bbc.co.uk/news/business-31610495">USD$3.2 million</a> in bribes to Angolan and Kenyan government officials in order to win supply contracts. </p>
<p>The <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">pressure on companies to indulge in corruption</a> is considerable in Africa. According to <a href="http://www.enterprisesurveys.org/data/exploretopics/corruption#sub-saharan-africa">data</a> from the World Bank, 71% of enterprises in Sierra Leone, 66.2% in Tanzania, 64% in Angola, 75.2% in Congo and 63% in Mali expect to give “gifts” to secure government contracts.</p>
<p>The ethical dilemma for business managers is that refusing to pay bribes can <a href="https://theconversation.com/can-businesses-succeed-in-a-world-of-corruption-without-paying-bribes-51777">cost</a> their companies contracts, licences and revenues. Essentially, good companies which do not yield to extortion <a href="http://www.corruptionwatch.org.za/wp-content/uploads/2015/12/Africa-survey-2015-Global-Corruption-Barometer.pdf">may lose out to bad competitors</a> who do. Consequently, most companies yield to corruption or stay silent. Speaking up can make them targets for political witch hunts and discrimination.</p>
<p>A much deeper reason for the private sector’s inactivity is that managers simply <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">lack the political skills</a> required to shape their business environments. This deficiency arises because the link between political institutions and economic markets has not received adequate attention in business schools. So the schools are turning out managers with good knowledge of business but <a href="https://www.mckinsey.com/industries/public-sector/our-insights/how-business-interacts-with-government-mckinsey-global-survey-results">inadequate understanding of public governance </a> and inability to influence public institutions. </p>
<p>Most people, including business managers, feel <a href="https://books.google.co.uk/books?id=yE55DQAAQBAJ&pg=PA131&lpg=PA131&dq=citizens++powerless+against+corruption+in+africa&source=bl&ots=6_16WK5c-o&sig=Fw90KBKtVP8pe8gEVsx_ZHg98xE&hl=en&sa=X&ved=0ahUKEwjLqYnw-rrXAhUDyqQKHQ1tCH4Q6AEIXDAJ#v=onepage&q=citizens%20%20powerless%20against%20corruption%20in%20africa&f=false">powerless</a> when dealing with corrupt government officials. They regard official institutions as too powerful to take on and see corrupt practices, such as bribery, as unchangeable. But with <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">good education and training,</a> this can change. </p>
<h2>African business schools can help</h2>
<p>Corruption is <a href="https://books.google.co.uk/books?id=wM6dBQAAQBAJ&pg=PA34&lpg=PA34&dq=corruption+is+a+multi+faceted+problem&source=bl&ots=INAbTqw9LW&sig=aZAKzdUdrUZ01WDMwVWpY4CPh8c&hl=en&sa=X&ved=0ahUKEwj74daH87nXAhWHyKQKHYiYAPkQ6AEIPDAF#v=onepage&q=corruption%20is%20a%20multi%20faceted%20problem&f=false">multi-faceted</a>. So there is <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2016.1275942?journalCode=rajm20">no simple solution</a> for it. It must be battled on all fronts. Business schools can do their part by developing competence to confront corruption. </p>
<p>Some in Africa have <a href="https://theconversation.com/africas-business-schools-must-champion-anti-corruption-education-44380">already done so</a>: three business schools introduced an anti-corruption programme sanctioned by the United Nations into their classrooms.</p>
<p>But much more can be done. Business schools should teach business-government relations, or corporate political activity. This is crucial because many business managers don’t know how to <a href="https://www.mckinsey.com/industries/public-sector/our-insights/how-business-interacts-with-government-mckinsey-global-survey-results">influence their political environments</a> even though they are affected by government policies. Students and managers may be taught ethics in schools, but ethical values are <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">difficult to uphold</a> in contexts where corruption is highly endemic, such as Africa. </p>
<p>If the fight against corruption in Africa is to <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">succeed</a>, business managers must learn to engage public officers differently. The ability to do this can be developed in business schools. </p>
<p>Students and managers need to learn about political strategies that can change the way institutions work. Techniques for ad hoc management of bribery are no longer enough. Companies can, for example, present a <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">united front</a> against corruption so that none can be singled out for <a href="https://rsf.org/en/news/ethiopian-governments-witchhunt-against-privately-owned-media">“punishment”</a>.</p>
<p>The business community could also learn to self regulate by refusing to deal with corrupt companies, as was <a href="https://www.cnbc.com/2017/10/12/south-africa-firms-are-now-taking-a-stance-on-corruption-central-bank-governor-says.html">recently reported in South Africa</a>. Collective campaigns for public procurement transparency can also prevent politicians from using the private sector to plunder State funds. Inaction breeds corruption, as seen in Kenya’s <a href="https://www.ft.com/content/bf75a7ee-c7f9-11e4-8210-00144feab7de">USD$1 billion Anglo Leasing scandal</a>.</p>
<p>African business schools are valuable in the fight against corruption. They can take bold steps to review their curricula and promote active corporate citizenship. When they see what a difference they can make, the continent may begin to shake off a <a href="http://edition.cnn.com/2015/12/24/africa/africa-corruption-transparency-international/index.html">major hindrance</a> to its development.</p><img src="https://counter.theconversation.com/content/87405/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tahiru Azaaviele Liedong does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Public sector corruption is a major challenge to doing business in Africa and players are mostly ill-equipped to deal with it. Business schools can teach the skills to tackle it.Tahiru Azaaviele Liedong, Assistant Professor of Strategy, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/820932017-09-22T07:56:35Z2017-09-22T07:56:35ZA pay rise for prison officers won’t solve the wider crisis within the justice system<p>Prison officers are <a href="http://www.bbc.co.uk/news/uk-politics-41241295">to receive</a> a 1.7% pay rise in a move which effectively breaks the 1% public sector pay cap, but is far less than the 5% the Prison Officer’s Association had been asking for.</p>
<p>The move comes as the government is trying to recruit 2,500 new prison officers in an effort to combat the current crisis of violence and disorder in prisons. The government argues that the extra officers will allow the newly created HM Prison and Probation Service (HMPP) – formally the National Offender Management Service – to run 109 of the 123 prisons in England and Wales safely and securely. The others are run by private providers.</p>
<p>On paper, being a prison officer <a href="https://nationalcareersservice.direct.gov.uk/job-profiles/prison-officer">presents the possibility</a> of having an interesting and varied career. Officers work in both prisons and secure psychiatric hospitals, earning from £20,000 up to £38,000 a year for a 37- to 39-hour-week. No particular qualifications are required. There is on-the-job training (an initial ten weeks) and the possibility of developing specialist skills in different aspects of rehabilitation.</p>
<p>The latest <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/638467/hmpps-workforce-statistics-30-june-2017.pdf">figures</a> from the Ministry of Justice (MoJ) show that at the end of June 2017 there were the highest number of prison officers in post since 2013 – due to the recruitment of 665 new officers over the previous year. </p>
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<p>This has been helped by the introduction of a new graduate scheme enabling people with university degrees to work in frontline prison roles. The scheme, called <a href="http://unlockedgrads.org.uk">Unlocked Grads</a>, says it encourages the “brightest and the best” to become leaders in criminal justice settings. This is a new initiative and only time will tell if it has a positive impact.</p>
<h2>The state of prisons</h2>
<p>The trade union, the Prison Officer’s Association, says that the prison service is in meltdown. It <a href="https://www.eurofound.europa.eu/observatories/eurwork/articles/uk-prisons-officers-protest-over-staff-shortages-and-safety-concerns">argues</a> that prisons have become a place of violence – for both prisoners and prison officers. </p>
<p>The Prison Reform Trust (PRT) <a href="http://www.prisonreformtrust.org.uk/Portals/0/Documents/Bromley%20Briefings/Summer%202017%20factfile.pdf">has reported</a> that 27% of frontline prison officers quit after completing two years in the role. A decline of support staff means that officers have to cover other tasks, diverting them from direct prisoner work. MoJ figures show that support staff are now at the lowest level since 2010.</p>
<p>On September 15, 2017 the <a href="https://www.gov.uk/government/statistics/prison-population-figures-2017">numbers of prisoners</a> was 86,252, which is 99% of “operational capacity” (the number that can be physically housed) in a system whose “uncrowded capacity” (representing a good and decent standard of accommodation) is considerably lower.</p>
<p>The PRT data shows that nearly a quarter of the prison population are sharing cells that have been designed for one person. Nearly 6,500 fewer staff are looking after 300 more prisoners, many of whom have complex combinations of substance misuse, mental health, physical health and social needs.</p>
<p>In 2009, the <a href="http://www.mac-uk.org/wped/wp-content/uploads/2013/03/Dept-of-Health-Bradley-Report-Exec-Summary.pdf">Bradley Report</a> into learning difficulties and mental health problems in the criminal justice system reported that the majority of prisoners have these complex needs. In my <a href="https://link.springer.com/chapter/10.1057%2F9781137453884_9">own work</a>, my colleagues and I have showed that since the publication of this report very little has changed in meeting those needs.</p>
<p>However, a focus solely on prisons and staff recruitment continues to overlook a number of problems. To understand the prisons “crisis”, we must look beyond what is happening in prisons and to the wider criminal justice system.</p>
<h2>Community sentences failing</h2>
<p>It is encouraging that the current justice secretary, David Lidington, wants to see a <a href="http://www.bbc.co.uk/news/education-40937260">decrease</a> in prison numbers. He also argues for the courts to have more confidence in the use of community sentences. However, prisons reflect the wider dynamics of the community. Currently, they reflect a whole systems failure due to the political choice of austerity and badly thought through “reorganisation”. This has disproportionately affected some of the most vulnerable people in society.</p>
<p>In this respect, the government’s reorganisation of the National Probation Service (NPS) in 2014 <a href="http://www.independent.co.uk/news/uk/politics/national-audit-office-watchdog-savages-governments-disastrous-privatisation-of-probation-services-a7010496.html">has been highly criticised</a>. The service has been split into two: the NPS supervises “high-risk offenders”, with Community Rehabilitation Companies (CRC) supervising “low-risk offenders”. A justification for the change was to ensure that prisoners serving short sentences would be supervised for a minimum of 12 months upon release. The CRCs, made up of charities and peer mentoring schemes run by ex-offenders, were meant to bring valuable expertise to breaking the cycle of crime.</p>
<p>Unfortunately, the PRT has <a href="http://www.prisonreformtrust.org.uk/Portals/0/Documents/Bromley%20Briefings/Summer%202017%20factfile.pdf">demonstrated</a> that the recall population (the number of people being sent back to prison) has increased by nearly a thousand since the changes were introduced. Recent inspectorate reports have been <a href="http://www.justiceinspectorates.gov.uk/cjji/wp-content/uploads/sites/2/2017/06/Through-the-Gate-phase-2-report.pdf">scathing</a> about the performance of CRCs and the impact of schemes to help resettlement. </p>
<p>Prisons, while affected by austerity, still have the most resources in comparison to community and probation services and so when deciding how best to deal with offenders who have complex needs, prison too readily becomes the first option rather than the last.</p>
<p>These decisions are entirely due to sentencing practice rather than more crimes being committed. Criminal justice finds itself in the eye of a perfect storm in which the use of community sentences <a href="http://www.prisonreformtrust.org.uk/Portals/0/Documents/Bromley%20Briefings/Summer%202017%20factfile.pdf">has halved</a> since 2006 despite being more effective in reducing re-offending. When these sentences are used, too many people are recalled to prison often due to cuts in housing and support services. </p>
<p>Recruitment of good quality staff is of course essential, but it is worth remembering that there was still a prison crisis when prisons were fully staffed – precisely because these problems reflect the wider dynamics of the criminal justice system.</p><img src="https://counter.theconversation.com/content/82093/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aaron Pycroft is affiliated with the Institute of Criminal Justice at the University of Portsmouth which receives funding from the Ministry of Justice to provide qualifying awards for trainee Probation Officers </span></em></p>An overhaul of the probation system has left the justice system foundering.Aaron Pycroft, Reader in Criminal Justice and Social Complexity, University of PortsmouthLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/804792017-07-05T12:15:54Z2017-07-05T12:15:54ZHard Evidence: are public sector workers due a pay rise?<p>Debate over whether or not public sector pay should be capped at 1% is raging in the UK. First Theresa May, the prime minister, <a href="https://www.theguardian.com/society/2017/jun/28/public-sector-pay-cap-could-be-lifted-downing-street-hints">indicated</a> she might ditch the cap that has been in place since 2010. She quickly backtracked on the idea but remains dogged by pressure from her backbench MPs to rethink the austerity policies that they feel led to the poor election result. </p>
<p>Meanwhile high-profile cabinet ministers, including <a href="http://www.telegraph.co.uk/news/2017/07/03/boris-johnson-strongly-believes-public-sector-pay-cap-can-lifted/">Boris Johnson</a> and <a href="http://www.independent.co.uk/news/uk/politics/michael-gove-public-sector-pay-cap-independent-review-body-austerity-a7819491.html">Michael Gove</a>, have said they think the cap should be lifted. Clearly politics is at play. </p>
<p>From an economic standpoint there is the issue of how sustainable a long-term cap of 1% (below inflation) is on pay settlements. Pay restraint is a reason why the government struggles to recruit and retain high-quality staff to deliver <a href="https://www.gov.uk/government/publications/national-health-service-pay-review-body-30th-report-2017">health services</a>, <a href="https://www.gov.uk/government/publications/school-teachers-review-body-26th-report-2016">education</a> and other public services.</p>
<p>We recently wrote a <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/623810/Wage_Growth_in_PRB_Occupations_-_final_report__3_.pdf">report for the Office of Manpower Economics</a>, the body supporting the government’s independent Pay Review Bodies (PRBs) which advise on the pay of 2.5m public sector workers (about half of all public sector workers), detailing some of the recent trends. There are four key findings:</p>
<ol>
<li>At the occupational level, average hourly earnings have fallen by 5.8% since 2005 (taking inflation into account – real gross earnings).</li>
<li>The decline was steeper among occupations whose pay is not set by PRBs (6.1%) than it was among PRB occupations (3.1%).</li>
<li>Changes in average earnings varied considerably between PRB occupations, even among those whose pay was set by the same PRB.</li>
<li>Eight of the ten largest PRB occupations experienced a drop in real median earnings.</li>
</ol>
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<a href="https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=508&fit=crop&dpr=1 600w, https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=508&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=508&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=638&fit=crop&dpr=1 754w, https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=638&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/176785/original/file-20170704-32624-l7vgsb.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=638&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Growth in median real occupation earnings, 2005-15 (2005 = 100). Note: these figures are occupation-level median hourly earnings and, as such, do not replicate official earnings trends.</span>
<span class="attribution"><span class="source">Alex Bryson and John Forth</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Of course, average earnings within a particular occupation may vary from year to year with changes in the composition of workforce. But even after we account for those changes, we still find substantial differences in the fortunes of PRB occupations. The findings challenge the popular misconception among commentators and politicians that a 1% cap on pay settlements has a uniform impact on the various jobs it affects. </p>
<p>In fact, changes in actual earnings rarely resemble changes in pay settlements because they reflect not only changes in base pay, but also changes in things like level of overtime pay, different types of shifts, promotion rates and numerous other ways that pay is determined. This leads to gaps between pay settlements, on the one hand, and actual earnings on the other – what economists refer to as “<a href="https://www.jstor.org/stable/2551384?seq=1#page_scan_tab_contents">wage drift</a>”. That is why it is important to look at what has happened to actual earnings in an occupation over time. </p>
<h2>Breaking down the data</h2>
<p>To evaluate whether these changes in average PRB earnings are big or small we compared them with similar non-PRB occupations. Some are public sector jobs such as firefighters, whose pay is not governed by PRBs. In our analyses firefighters are the closest non-PRB occupation to police officers and prison officers. Their pay is set via collective bargaining. They were were recently <a href="http://www.independent.co.uk/news/uk/politics/pay-cap-firefighters-austerity-public-sector-theresa-may-boris-johnson-a7823711.html">offered a 2% pay increase</a> – stirring up the public sector debate even further. </p>
<p>When comparing PRB earnings growth to that among their nearest non-PRB comparator occupations we found that earnings growth was higher for the PRB group in five cases and lower in five cases. But differences were only statistically significant in three: PRB nurses and PRB nursing auxiliaries experienced higher earnings growth than their non-PRB comparison occupations; and PRB radiographers experienced significantly lower growth than their non-PRB equivalent.</p>
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<p>When we account for differences in the composition of the workforce for each occupation between 2005-2015 – factors such as age and experience as people leave and enter – we found that earnings growth was higher for the PRB group in seven cases and lower in three cases.</p>
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<p>Concern over public servants’ pay is compounded by the low pay many of them receive. It is well established in economics that perceptions of wage differences <a href="http://ftp.iza.org/dp9406.pdf">underpin attitudes to wage inequality</a>. Most people don’t compare themselves to celebrities or billionaires such as Bill Gates and Warren Buffett. Our sense of whether or not we are well-off comes from comparing ourselves to our peers. </p>
<p>Of our ten PRB occupations, five were outside the top 100 occupations in terms of median hourly earnings over the whole period. In 2015, nursing auxiliaries were the lowest paid of our ten PRB occupations with median earnings of £10 per hour, putting them in 276th position in the occupational earnings rankings among the 394 occupations in our study. Five of the ten PRB occupations had fallen in the occupational earnings rankings since 2005 with radiographers and physios dropping furthest (30 and 20 places respectively).</p>
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<hr>
<p>Taken together, a picture emerges of earnings stagnation or decline for most occupations – PRB and non-PRB – since 2005. The big difference between PRB employees and those in non-PRB occupations in the private sector is that PRB employees are public servants. As such, the government can determine their annual pay settlement. </p>
<p>When deciding what to do government will weigh public concern over pay equity for groups like nurses, and experts’ concerns regarding public employers’ ability to recruit, retain and motivate staff, against the potential costs of lifting the 1% cap for the public purse. That cost could be quite considerable. Periods of public sector pay restraint are <a href="https://books.google.co.uk/books?hl=en&lr=&id=6iIFDAAAQBAJ&oi=fnd&pg=PP1&dq=1970s+incomes+policy+wage+inflation&ots=mUTKL0psp7&sig=cj9iQ8Z4knmku02-Rbsn5ZlHyJc#v=onepage&q=1970s%20incomes%20policy%20wage%20inflation&f=false">often followed by a period of wage inflation</a>, but weak wage growth since the recession suggests this is unlikely to happen on this occasion.</p><img src="https://counter.theconversation.com/content/80479/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alex Bryson received funding from the Office of Manpower Economics for this study. He is affiliated to NIESR (as well as UCL).</span></em></p><p class="fine-print"><em><span>John Forth received funding from the Office of Manpower Economics for this study.</span></em></p>A deep dive into public sector earnings data since 2005 and how it compares to private sector pay.Alex Bryson, Professor of Quantitative Social Science, UCLJohn Forth, Fellow, National Institute of Economic and Social ResearchLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/665992016-10-18T09:44:21Z2016-10-18T09:44:21ZFirefighters are fighting fewer fires – but that doesn’t mean we should sack them<figure><img src="https://images.theconversation.com/files/141824/original/image-20161014-30255-1elahcl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">How many firemen do we really need?</span> <span class="attribution"><span class="source">Nando Machado / Shutterstock.com </span></span></figcaption></figure><p>Firefighters occupy a unique and special space within the public’s affections. Few other groups of individuals take such risks with their own lives on a daily basis for the protection and benefit of society. Few of us can contemplate the sheer bravery and self-sacrifice of rescuing someone from a burning building. </p>
<p>Yet Peter O’Rielly, county fire officer and chief executive of Greater Manchester Fire and Rescue Service, tweeted in late September that <a href="https://twitter.com/J4mes81/status/779969661093998592">he felt “ashamed”</a> to be a firefighter. O’Rielly – whose twitter account is no longer online – was responding to negative reactions from his staff to proposed changes that will introduce a controversial <a href="http://www.manchesterfire.gov.uk/updates/news/statement-in-response-to-media-enquiries-around-shift-changes/">new 12-hour shift system in April 2017</a>. With £14.4m to be cut from the service’s budget over the next four years and a changing landscape in which services need to be delivered differently, O'Rielly’s tweet reflects the bitterness of feeling within the fire service about the impact of ongoing reforms. </p>
<p>In May 2016, the then-home secretary, Theresa May, set out bold and substantive proposals for <a href="https://www.gov.uk/government/speeches/home-secretary-speech-on-fire-reform">change to the fire service</a>. Citing her previous reforms to the police force, she articulated her vision of a more ethnically diverse, accountable and much slimmer fire service. Rethinking shift patterns and how we deliver frontline fire services are obvious items on any agenda for change. But the fire service is very different from the police force and it does not follow that what may have worked in one of the public sectors will work in another. </p>
<p>Some may argue that firefighters enjoy generous benefits and shift patterns unheard of within the wider public sector. Put that together with significant pension contributions and other benefits, and the life of the typical firefighter seems a very comfortable one. With an annual starting salary for a trainee <a href="https://www.prospects.ac.uk/job-profiles/firefighter">of £22,017</a> and opportunities for quick progression, asking firefighters to reconsider how they work and when in order to deliver services more effectively does not sound unreasonable. </p>
<p>But others would argue that dismantling the terms and conditions of service that firefighters have enjoyed for decades is regressive and just plain dangerous. Firefighter <a href="https://www.fbu.org.uk/news/2016/09/21/greater-manchester-firefighters-step-up-fight-against-mass-sackings">unions are battling</a> against the reforms, which they argue could lead to bitter and protracted industrial action and ultimately have no tangible benefit. They argue that the system we have works and if we want to both protect against fire and prevent it then we need to pay for it.</p>
<h2>If it ain’t broke</h2>
<p>Firefighters are employed on either a wholetime – their terminology for full-time – or a retained basis. Wholetime firefighters normally work a shift pattern of four days on and four days off. Retained firefighters have other regular day jobs and are used as and when they are required with the permission of their employers. But delivering frontline fire-fighting services using a four-day cycle can be expensive. It can also result in a disjunct between the amount of firefighters working at any one time, and how much the public actually needs them. </p>
<p>And firefighters are simply not as busy as they used to be. This is largely attributable to fire services focusing on raising awareness of better fire protection together with the use of fire resistant materials in the home. In 2014-15, there <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/532364/fire-statistics-england-1415-hosb0816.pdf">were approximately 496,000 incidents</a> attended by the fire service in England, compared to 1,016,000 in 2003-4 – a 51% drop. Dealing with these incidents were 44,000 full-time equivalent fire and rescue staff in England as of March 2015 – a drop of 12.6% compared to ten years ago. </p>
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<h2>Fight fire with fire</h2>
<p>Research I conducted in 2015-16 in a large fire service for my unpublished PhD revealed strong objections among firefighters to changing existing shift patterns. In interviews I conducted with firefighters, they saw reducing hours as being unfair and tantamount to an attack on their fundamental employment rights. But they also recognised that the model for delivering frontline firefighting needed change and reform. </p>
<p>Huge advances in fire protection and safety visits meant that this particular fire service – which cannot be named for confidentiality reasons – was dealing with far fewer fires. That has to be applauded and so too do its efforts in promoting diversity and equality among staff. </p>
<p>At the service I looked at, many of May’s suggestions for improvement were already being met both prior to and after she announced her reforms – and this is replicated by many fire services in the UK. Driving a coach and horses through existing employment terms seems incongruous with a more open, transparent and inclusive dialogue with everyone affected by May’s proposals. </p>
<p>Many firefighters and senior managers recognise the case for change, but this needs to be carefully positioned within a wider debate on how fire services could make other savings. Sharing premises with other emergency service providers like the ambulance service, modernising inefficient fire stations and maximising technology are possible avenues to consider. There is no shame in opening what might be an uncomfortable dialogue and working with firefighters and trade unions to find a shared solution. </p>
<p>But unilaterally changing firefighters’ employment terms is something we should be ashamed of. Firefighters should fight fire with fire and resist May’s unworkable calls for reform.</p><img src="https://counter.theconversation.com/content/66599/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Brooks does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There are other ways to make savings that don’t ride rough shod over firefighters’ contracts.James Brooks, Senior Lecturer, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/595332016-05-31T00:08:50Z2016-05-31T00:08:50ZElection FactCheck: Has public infrastructure investment fallen 20% under the Coalition?<p><div data-react-class="Tweet" data-react-props="{"tweetId":"727435682839298052"}"></div></p>
<p>Infrastructure spending is never far from the headlines, especially during an election campaign.</p>
<p>But was Labor right to say in a tweet that public sector infrastructure investment has fallen 20% under the Abbott-Turnbull government? </p>
<h2>Checking the source</h2>
<p>When asked for sources on this claim on Twitter, a Labor spokesperson referred The Conversation to engineering construction data from the Australian Bureau of Statistics between the September quarter of 2013 (when the Coalition government was elected) and September 2015. </p>
<p>The Labor spokesperson said of the ABS <a href="http://abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8762.0Explanatory%20Notes1Sep%202015?OpenDocument">data</a>:</p>
<blockquote>
<p>The relevant table in Table 1 is A1831482J – value of work done for the public sector. We compare the September 2015 quarter with September 2013 quarter when the Coalition was elected. This includes infrastructure work done for the public sector by both the private sector and the public sector. This shows a fall from $7666 million to $6121 million – a fall of 20.2%. </p>
</blockquote>
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<h2>Is a 20% fall accurate?</h2>
<p>To start with, this claim is out of date. </p>
<p>The number quoted in a press release issued by the shadow minister for infrastructure, Anthony Albanese, was correct when he first went public with this claim, in <a href="http://anthonyalbanese.com.au/new-figures-highlight-coalitions-ongoing-infrastructure-failure">January 2016</a>.</p>
<p>At the time of the above <a href="https://twitter.com/australianlabor/status/727435682839298052">tweet</a>, it reflected figures from the ABS’ <a href="http://abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8762.0Sep%202015?OpenDocument">September 2015 report</a> (released 13 January). But those figures were out of date by the time the tweet was issued on May 3. The <a href="http://abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8762.0Dec%202015?OpenDocument">December 2015 report</a> was released on March 30.</p>
<p>The most recent figures have revised the September 2015 number. Now the data show that between September 2013 and September 2015 there was only a 17% drop in real terms. Using the newer data, the September 2013 to December 2015 comparison shows an even smaller drop of 15%.</p>
<h2>Is the decrease attributable to the Coalition?</h2>
<p>The second question is whether this is really driven by the Coalition government, as the tweet implies.</p>
<p>For one thing, it could be argued there is a lag between a new government being sworn in and a significant impact on infrastructure work done. The Coalition government didn’t release a <a href="http://www.budget.gov.au/2014-15/">budget</a> until May 2014, but from the chart we have constructed below it is clear that engineering work had begun to decline in late 2012. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124522/original/image-20160530-7715-cltc7.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Author provided.</span></span>
</figcaption>
</figure>
<p>By September 2013, public sector engineering work had already declined 9% over the past year. The change of government has certainly not halted the decline in infrastructure spending, but the decline began under Labor.</p>
<h2>Who else is responsible for public sector infrastructure?</h2>
<p>It’s also inaccurate to lay the full decline in infrastructure investment at the door of the federal government of the day. </p>
<p>The engineering activity includes <a href="http://abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8762.0Explanatory%20Notes1Dec%202015?OpenDocument">spending by state and local governments</a>, as well as federal money. State governments mostly have the ultimate decision on major infrastructure, and <a href="http://grattan.edu.au/wp-content/uploads/2016/04/869-Roads-to-Riches.pdf">state spending on infrastructure</a> is more than double that of the federal government. While the amount of federal funding, and the projects to which it is directed, will certainly influence the level of state spending on infrastructure, it is far from being the only factor.</p>
<p><a href="http://www.budget.gov.au/2016-17/content/bp3/download/BP3_consolidated.pdf">Federal budget papers</a> show changes in the level of federal infrastructure investment. The majority of federal infrastructure spending is in the form of payments to support state infrastructure services. The chart below shows that these payments are very lumpy from year to year, and it is difficult to determine any clear trends. Federal infrastructure spending is weighted towards larger projects, so these jumps up and down from year to year are to be expected.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124521/original/image-20160530-7706-nrc35l.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Author provided.</span></span>
</figcaption>
</figure>
<p>An alternative assessment of infrastructure trends under the Coalition government is to look at the first two Coalition budget years (2014-15 and 2015-16) against the two preceding financial years. This gives an overall increase of 9% in real terms. </p>
<p>Given the lumpiness of spending, however, it is difficult to make any sensible conclusion about the trend in federal infrastructure investment based on this number alone.</p>
<h2>Verdict</h2>
<p>Labor’s tweet was inaccurate. The ABS figures on which Labor had sourced its information were up to date in January 2016 but out of date by the time the tweet was issued in May.</p>
<p>It is also an exaggeration to link an overall decrease in public infrastructure investment to the federal government, given its relatively small share of spending in this area. <strong>– Marion Terrill and Owain Emslie</strong></p>
<hr>
<h2>Review</h2>
<p>I agree with the findings and the thrust of this fact-finding mission. It’s probably true to say that the ALP statement may not have been meant to be misleading but was indeed an error based on not having the most recent data.</p>
<p>However, it’s also true that most people in the industry would know that the federal government are never the biggest player in this space and so can’t take the blame for the bad news – or the fame for the good news – on infrastructure spending.</p>
<p>Infrastructure is an issue for all three levels of government. Urban rail infrastructure, for example, requires partnership between all three levels of government, and the private sector. It’s a bit much to ask during an election campaign, but I look forward to the time when we are ready to advance Australia in this way. <strong>– Peter Newman</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/59533/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Labor says that public sector infrastructure investment has fallen 20% under the Abbott-Turnbull government. Is that right?Marion Terrill, Transport Program Director, Grattan InstituteOwain Emslie, Associate, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/542692016-02-19T03:59:18Z2016-02-19T03:59:18ZSouth Africa’s civil servants are the country’s new labour elite<figure><img src="https://images.theconversation.com/files/111470/original/image-20160215-22560-py11bi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Public sector trade unions now dominate union membership in South Africa.</span> <span class="attribution"><span class="source">Reuters/Siphiwe Sibeko</span></span></figcaption></figure><p><em>Foundation essay: Our foundation essays are longer than usual and take a wider look at a key issue affecting society.</em></p>
<hr>
<p>The rise of public sector employment in South Africa has a much greater potential import than the private sector for the future trajectory of the economy’s employment path. We find that a key new facet of the South African labour market is an estimated wage wedge between unionised public sector workers and other formal non-agricultural workers in the labour market.</p>
<p>The total number of public sector employments increased from 2.16 million in 2008 to 2.69 million at the end of 2014. Public sector employment’s share of total jobs had risen to 17.5% by the end of 2014, up from 14.5% at the beginning of 2008. The growth was driven by employment in national, provincial as well as local government.</p>
<p>The fastest period of public sector employment growth was during 2009, immediately following the global financial crises. This suggests that the state possibly acted as an unintended creator of jobs during a period of extreme labour market distress.</p>
<h2>Who is being hired?</h2>
<p>The large contributors to public sector job growth are occupations that fall under the category of unskilled workers. These include sweepers, farmhands and labourers, helpers and cleaners, construction and maintenance labourers, and garbage collectors.</p>
<p>The other major contributors are medium-skilled workers. These are police and traffic officers, institution and home-based care workers, other protective services, prison guards, technikon teacher training, cooks and childcare workers.</p>
<p>Higher-skilled jobs such as primary and secondary school teachers, finance and administrative managers and legislators have also contributed to public sector job growth.</p>
<p>It would seem that the government’s Expanded Public Works Program is an important driver of public sector job creation. Launched in 2004, it focuses on providing income relief through creating jobs for the unemployed and unskilled that involve socially useful activities.</p>
<p>The programme creates jobs through government funded infrastructure projects. It does this through non-profit organisations and community work programs, as well as public environment and culture programs. As such, much of the public sector job growth relates to the construction industry, the protection and safety sector, public sanitation and personal care industries.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Higher-skilled jobs, among them legislators, also contributed to public sector job growth.</span>
<span class="attribution"><span class="source">Reuters/Rodger Bosch</span></span>
</figcaption>
</figure>
<h2>More representative</h2>
<p>The public sector has clearly been able to transform its labour force at a faster pace than the private sector. It has hired a higher proportion of both women and African workers in the sector, groups that were discriminated against under apartheid.</p>
<p>Africans make up 77% of public sector employment compared with 66% the private sector. Females make up 52% of the workforce, compared to 44% in the private sector.</p>
<p>In terms of the skills profile, the public sector is more skills intensive. Almost 45% of all public sector employees fall into the top three occupational categories, compared to 26% in the private sector. Both sectors, however, have a similar proportion of unskilled workers. This indicates that private sector workers are concentrated in the medium-skilled occupations.</p>
<p>Interestingly, the proportion of the two most skills-intensive occupations did not change in the public sector between 2008 and 2013, but the proportion of professionals in the private sector increased by 25%. This is consistent with the shift towards more skilled workers.</p>
<p>Growth in public sector jobs was driven by the medium-skilled occupation of service workers, as well as in elementary occupations. The share of medium-skilled workers grew by 31% and and elementary occupations by 23%.</p>
<p>Again, this may point to the state being able to absorb excess unskilled and medium-skilled labour at times of economic and labour market distress.</p>
<h2>Bargaining power</h2>
<p>Another feature of the public sector labour market is the relatively higher rate of unionisation, which is often associated with a wage premium. Union members made up almost 70% (1.4 million workers) of all public sector’s formal workers in 2014, up from 55% in 1997 (834,000 workers).</p>
<p>This compares with the private sector where union density declined from 36% in 1997 to 24% in 2013. Unlike in the public sector too, the absolute number of private sector unionised workers has remained fairly constant.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=370&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=370&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=370&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=466&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=466&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=466&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Public sector labour market is relatively more unionised.</span>
<span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span>
</figcaption>
</figure>
<p>The rise in public sector unionisation is commensurate with the increase in public sector employment. Public sector trade unions now dominate union membership in South Africa.</p>
<p>Powerful labour unions are often associated with creating a wage premium for their members. This is based on their ability to mobilise industrial action and negotiate in favour of their members during times of wage negotiations. There is extensive literature on the union wage gap in South Africa, but slightly fewer studies on the bargaining council premium.</p>
<p>Taking account of this, we found that:</p>
<ul>
<li><p>union members outside of the bargaining council system earned a premium of 7.04%; and</p></li>
<li><p>those members of private and public bargaining councils not belonging to unions earned an 8.97% and 10.5% premium over non-union workers outside of the bargaining council system.</p></li>
</ul>
<p>The total estimated premium to union workers within the public bargaining council stands at 22%. Therefore, there is evidence that belonging to either unions or bargaining councils is associated with statistically significant wage premia. Furthermore unions may negotiate at the plant level for additional gains for their members within the bargaining council system.</p>
<p>When comparing wage levels, both the median and mean wages of the public sector are significantly higher than private sector’s. The real monthly wage of an average public sector employee is R11,668 (US$1209) compared to R7,822 (US$811) for an average private sector worker. In addition, public sector wages have less dispersion than private sector wages, indicating a lower level of wage inequality within the public sector.</p>
<p>Most importantly though, non-unionized public sector workers are concentrated in elementary occupations (30%), service and sales occupations (16%), and technical and associate professional occupations (16%). While it remains uncertain, the non-unionised workers in the first two occupational groups are likely to be those employed under the public works program.</p>
<h2>More nuanced labour market view</h2>
<p>Ultimately though, these wage distributions suggest that, at least in terms of earnings, a dual labour market may indeed be prevalent in the South African labour market. Previous models of segmentation have commonly referred to the distinction between the employed and the unemployed. More recently the formal and informal sector has been used as the key identifying segmentation markers.</p>
<p>We suggest a nuance to South Africa’s segmented labour market.</p>
<p>In particular it would appear that the distinction between public and private sector, in terms of earnings and employment, is a new form of segmentation which has evolved in the post-apartheid South African labour market.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=852&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=852&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=852&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1071&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1071&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1071&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Unionised public sector workers earn a premium as high as 20.7% over private sector colleagues.</span>
<span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span>
</figcaption>
</figure>
<p>Our econometric results show that for unionised workers, the public sector wage premium is 20.7%. In particular, for government workers in the public sector, the wage premium within the group of workers belonging to a union, is 23.5%, whereas there is no significant wage premium for employees of state owned enterprises.</p>
<p>Given the rising membership of public sector unions, together with the growing political influence of these unions, these results possibly allude to the role played by unions in driving higher returns for their members in the post-2000 period. This pattern of wage returns potentially suggests segmentation between unionised public sector workers versus all other formal, non-agricultural workers.</p>
<p>In one conception, we could argue that the post-2000 period has generated new labour elite in the labour market, namely the unionised public sector employee.</p>
<hr>
<p><em>This article is an extract from a <a href="https://www.wider.unu.edu/publication/demographic-employment-and-wage-trends-south-africa">working paper</a>, which is part of a <a href="https://www.wider.unu.edu/project/understanding-african-lions-growth-traps-and-opportunities-six-dominant-african-economies">collaboration</a> between UNU-WIDER, the Brookings Institution and the Development Policy Research Unit (DPRU) at the University of Cape Town on Understanding the African Lions: Growth Traps and Opportunities in Six Dominant African Economies.</em></p>
<p><em>Since the publication of the working paper Kavisha Pillay has resigned from the Development Policy Research Unit (DPRU) at the University of Cape Town</em></p><img src="https://counter.theconversation.com/content/54269/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Haroon Bhorat receives funding from various government departments. </span></em></p><p class="fine-print"><em><span>Karmen Naidoo and Kavisha Pillay do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Rising membership of public sector unions and the growing political influence of these unions have led to government workers earning a premium over their private sector counterparts.Haroon Bhorat, Professor of Economics and Director of the Development Policy Research Unit, University of Cape TownKarmen Naidoo, Senior Researcher, Development Policy Research Unit, University of Cape TownKavisha Pillay, Junior Researcher, Development Policy Research Unit, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/525052016-01-11T11:48:01Z2016-01-11T11:48:01ZDo public sector workers really take more sick leave?<figure><img src="https://images.theconversation.com/files/106989/original/image-20151223-27858-k235dp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sick again?</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=sick%20leave&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=226373290">www.shutterstock.com</a></span></figcaption></figure><p>Since the coalition government was elected in 2010 the UK public sector has become a political battleground. For some, it is complacent and bloated, with a <a href="http://www.spectator.co.uk/2015/11/heres-whats-wrong-with-the-public-sector-ethos/">culture of entitlement</a>, gold-plated pensions with generous early retirement options, automatic pay rises based on “sitting tight” in your job and levels of job security which contrast with the precariousness of the “real world”. For others, especially in the last five years, the public sector has been <a href="http://www.theguardian.com/public-leaders-network/2015/jun/15/tories-impact-500000-public-sector-job-cuts">under siege</a>, with over 450,000 jobs cut since 2010 and up to 400,000 more forecast by 2020. It has been hit by pay freezes, reduced pension benefits, increased workloads and deflated morale. </p>
<p>Either way, the government seems intent on keeping up the pressure. In the 2015 autumn spending review, Chancellor George Osborne announced a <a href="http://www.telegraph.co.uk/news/politics/georgeosborne/12021844/George-Osborne-to-take-axe-to-civil-servants-annual-4.5billion-sick-leave-bill.html">review of sickness absence and sick pay</a> in the public sector. This was met with almost no critical commentary, aside from the usual, unflattering comparisons with sickness rates in the private sector. But is sickness absence among public servants really that bad? And are the stereotypes of “malingering pen-pushers” based on fact? </p>
<h2>Differences can be explained</h2>
<p>It’s true that most surveys do show that levels of sick leave have been higher in the public sector, although the gap is narrowing. The <a href="https://www.cipd.co.uk/binaries/absence-management_2014.pdf">latest data</a> reveals an average of 7.9 days lost each year among public sector workers compared with 5.5 days in the private sector. But I think three significant factors might explain some of the disparity.</p>
<p>The first is demographics. The public sector employs a large number of women in poorly paid jobs, with <a href="https://www.gov.uk/government/publications/review-of-the-sickness-absence-system-in-great-britain">poorer than average general health</a>. Many are susceptible to short-term <a href="http://www.nice.org.uk/proxy/?sourceUrl=http%3A%2F%2Fwww.nice.org.uk%2Fnicemedia%2Fdocuments%2Frevattend_nhs.pdf">childcare and eldercare problems</a> and they are more <a href="http://www.nice.org.uk/proxy/?sourceUrl=http%3A%2F%2Fwww.nice.org.uk%2Fnicemedia%2Fdocuments%2Frevattend_nhs.pdf">dependent on public transport</a> than the average person. Despite employment rights allowing unpaid family and emergency leave, the low paid find it more difficult to take time off to <a href="http://www.acas.org.uk/index.aspx?articleid=4638">deal with domestic crises</a>. For many, sick leave is the only option.</p>
<p>The second is elevated occupational “risk”. Compared with the private sector, public sector workers are at <a href="http://twfold.theworkfoundation.com/research/publications/publicationdetail.aspx?oItemId=225">higher risk of illness or injury</a> through their work. Levels of back injury, needlestick injury, cross-infection from patients, and physical and verbal abuse are <a href="http://www.nhsbsa.nhs.uk/4380.aspx">significantly higher among NHS workers</a> than for other workers. Occupational risks among police officers, firefighters and prison officers <a href="http://twfold.theworkfoundation.com/research/publications/publicationdetail.aspx?oItemId=225">also inflate the public sector absence figures</a>. Workers in health and social care, for example, are twice as likely to <a href="https://www.gov.uk/government/publications/review-of-the-sickness-absence-system-in-great-britain">suffer from stress and depression</a>. This has increased the number of days lost through long-term illness. It should also be remembered that 53% of public sector workers take no sickness absence at all, a <a href="https://www.gov.uk/government/publications/health-and-wellbeing-at-work-survey-of-employees">slightly lower number than in the private sector</a>.</p>
<p>The third is better recording. Chancellors since Gordon Brown in the late 1990s have all targeted public sector absence because it is politically popular. Bureaucrats can, at the very least, be relied upon to keep good records, and a more realistic picture of the actual level of absence in the public sector reinforces the contrast with the private sector, where recorded levels appear lower mostly because the standard of absence recording is notoriously haphazard, especially among smaller firms. Over 90% of public sector employers keep comprehensive absence records compared with <a href="http://www.cipd.co.uk/research/absence-management-survey.aspx">fewer than 75% in the private sector</a>. </p>
<h2>Vicious cycle</h2>
<p>These factors might be regarded by some as a reasonable argument against the stereotype of the “malingering bureaucrat”. However, one important and rarely quoted survey suggests that we may be comparing apples and oranges. Carried out by the Health and Safety Executive (HSE), the survey of workplace sickness, absence and ill health (SWASH) is a survey of over 10,000 UK employees which seeks to understand the influences on workplace absence rates. Standardising the sample by age, gender and size of organisation reveals that differences between private and public sector absence rates are very modest, with public sector employees taking an average of just <a href="http://www.hse.gov.uk/sicknessabsence/swash2005.pdf">0.3 days a year more</a> than their private sector counterparts. </p>
<p>I’m not expecting this finding to weaken the resolve of the Chancellor to crack down on “malingering”. Crucially, the HM Treasury review will also be examining sick pay arrangements to see whether they encourage sick leave. This may look like a soft target given the clearly more generous provisions in the public sector. But does more generous sick pay really cause malingering? A quick look at privatised businesses such as BT shows that, despite having comparably generous sick pay schemes, their absence rates are much lower than the public sector, suggesting that the nature of the work, the way people are managed and the access to early support for ill or injured employees may be better.</p>
<p>The review could come up with constructive ideas for reform and improvement, but my fear is that, in the process, it may add to a pervasive feeling among public sector workers that the government distrusts them deeply, and a perverse consequence of low morale is, of course, higher absence.</p><img src="https://counter.theconversation.com/content/52505/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Bevan and The Work Foundation occasionally receive funding from Government departments and agencies for research on workforce health issues in the UK.</span></em></p>The picture is more complex than George Osborne lets on.Stephen Bevan, Director of the Centre for Workforce Effectiveness, The Work Foundation and Honorary Professor, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/504982015-11-13T11:11:17Z2015-11-13T11:11:17ZMore women on company boards, but what about the public sector?<p>There are now no all-male boards in FTSE 100 companies, marking a watershed in women’s representation, according to the launch of the <a href="http://www.som.cranfield.ac.uk/som/dinamic-content/research/ftse/FemaleFTSEReportMarch2015.pdf">Female FTSE Board Report 2015</a>. Since the <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31480/11-745-women-on-boards.pdf">Davies Report</a> set a target of 25% of women serving on boards of FTSE 100 companies four years ago, women’s representation has almost doubled. </p>
<p>But the successes of the FTSE 100 are not mirrored in the public sector. Despite a number of government interventions since 2010, representation of women, ethnic minorities and those with disabilities remains challenging to say the least. </p>
<p>In health, although women account for <a href="http://www.theguardian.com/healthcare-network/2014/jun/03/nhs-needs-more-women-leaders">77% of the NHS workforce</a> they hold only 37% of board positions. A mere 30% reach the position of chair, compared to 70% of men.</p>
<p>In policing, the picture is even bleaker: the system of elected Police and Crime Commissioners (PCC) introduced in 2012 was driven by the need for greater transparency and public accountability. But the elections resulted in <a href="https://theconversation.com/by-extending-the-remit-of-pccs-the-government-is-playing-with-fire-47909">only six women PCCS compared with 35 men</a>. </p>
<p>Combined with a total lack of representation of ethnic minorities this led to the system <a href="http://www.parliament.uk/business/committees/committees-a-z/commons-select/home-affairs-committee/news/140505-pcc-rpt-pubn/">being described as a “monoculture”</a>. And it makes the current government plans to extend the remit of PCCs to include all emergency services concerning, to say the least.</p>
<p>In spite of the fact that there are around 22,000 schools in England, governed by an estimated 300,000 volunteer governors, we have no idea how representative these boards are. No statistics have ever been kept.</p>
<p>Since September 1, 2015, <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/459032/The_Constitution_of_Governing_Bodies_of_Maintained_Schools_Stat_Guidance....pdf">schools have been required</a> to post certain information regarding their governing body on their websites. The Department for Education is currently looking at ways that this can be made easier, but there is no indication of how this will be monitored or whether diversity data would be gathered at any point. </p>
<p>The <a href="http://www.bris.ac.uk/sps/policypolitcs/policyandpolitics2015/full-papers/">government’s current emphasis on recruiting people</a> with “business skills” as school governors runs the risk of creating exactly the same issues around <a href="https://www.gov.uk/government/news/drive-to-increase-number-of-women-on-public-boards">diversity as have occurred in corporate public boards</a> – the very same issue that the FTSE 100 project sought to eradicate.</p>
<p>In higher education the outlook appears to be more positive with a fifth of the boards of governing bodies in the UK possessing a 40-60% split between men and women members. <a href="https://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/Market%20Sector/Education/women-count-leaders-higher-education-2013.pdf">Out of 166 higher education institutions</a> in the UK, women make up 37% of all governing body members. But only 12% of chairs of these boards are women.</p>
<h2>Quotas or no quotas?</h2>
<p>The FTSE report is impressive, not least because it demonstrates what can be achieved without the introduction of quotas. But it also indicates that achieving diversity on boards doesn’t come without hard work and collaboration. </p>
<p>Lack of supply of qualified female candidates is often quoted as a reason for the lack of diversity on public sector boards. An important part of the <a href="http://www.som.cranfield.ac.uk/som/ftse">FTSE 100 experience</a> lay in encouraging and supporting the pipeline of women as potential leaders. It carries the additional benefit of encouraging women to fulfil their potential on merit rather than relying on quotas to do the job. </p>
<p>The substantial <a href="http://www.quotaproject.org/aboutQuotas.cfm">body of research into quotas</a> – largely relating to their use in political appointments – has shown that although they act immediately, they also have the potential <a href="http://www.smithschool.ox.ac.uk/research-programmes/stranded-assets/publications.php">to reinforce the status quo</a>. This is because they recruit a “particular type of candidate”, which then provides too much “<a href="http://www.theguardian.com/environment/2015/jul/16/lack-of-diversity-on-boards-of-us-oil-firms-increases-risk-of-bad-investments">group think”</a>. </p>
<p>“Group think” is recognised by psychologists <a href="http://www.psysr.org/about/pubs_resources/groupthink%20overview.htm">as being</a> a strong desire for harmony or conformity within a group which can result in an irrational or dysfunctional decision-making. In the worst case scenario, members <a href="http://www.corpgov.net/2015/02/groupthink-boardroom-context/">go to extraordinary lengths</a> to minimise conflict by suppressing dissenting viewpoints and isolating themselves from “outside influences”. In the case of boards, the phenomenon is found far more frequently in those that lack diversity in their membership.</p>
<p><a href="http://www.equalityhumanrights.com/sites/default/files/documents/research/rr85_final.pdf">Research suggests</a> that there are also problems in the appointment process: organisations often employ a narrow definition of experience, essentially seeking candidates with prior board or executive experience. This restricts the access of qualified female candidates, whose backgrounds might not fit this narrow profile. </p>
<p>Interpersonal dynamics are often found to play a part, largely in terms of recruiters’ preference for similar candidates and narrow perceptions of who fits and who doesn’t. Social capital and relationships have also been found to be critical and organisations such as <a href="http://www.womenonboards.co.uk/">Women on Boards</a> have been set up to provide formal and informal support through referencing and sponsorship. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/101477/original/image-20151110-21214-1bdggbf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/101477/original/image-20151110-21214-1bdggbf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/101477/original/image-20151110-21214-1bdggbf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/101477/original/image-20151110-21214-1bdggbf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/101477/original/image-20151110-21214-1bdggbf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/101477/original/image-20151110-21214-1bdggbf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/101477/original/image-20151110-21214-1bdggbf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Good for business.</span>
<span class="attribution"><span class="source">Monkey Business Images/www.shutterstock.com</span></span>
</figcaption>
</figure>
<h2>The benefits of a diverse board</h2>
<p>There is little doubt that diversity on boards is a good thing. A recent report by <a href="http://www.mckinsey.com/insights/organization/why_diversity_matters">McKinsey</a> argued <a href="http://www.mckinsey.com/insights/growth/how_advancing_womens_equality_can_add_12_trillion_to_global_growth">that advancing</a> womens’<a href="http://www.mckinsey.com/features/women_matter">equality could add US$12 trillion to global growth</a>. </p>
<p>Other evidence shows that <a href="http://www.catalyst.org/knowledge/bottom-line-corporate-performance-and-womens-representation-boards">companies with mixed boards</a> outperform <a href="http://www.womenonboards.co.uk/resource-centre/selected-reading/why-women-are-good-for-business.htm">those with all male ones</a>. There is also substantial evidence to <a href="http://www.ifc.org/wps/wcm/connect/b51198804b07d3b2acabad77fcc2938e/Focus9_Women_on_Boards.pdf?MOD=AJPERES">support the fact</a> that women also <a href="http://www.womenonboards.co.uk/resource-centre/selected-reading/articles/women-as-sports-role-models.htm">bring particular skills to the table</a>. </p>
<p>So with the evidence that women on boards increase performance, it’s time the public sector woke up to the benefits of female representation and made a concerted effort to emulate their FTSE counterparts.</p><img src="https://counter.theconversation.com/content/50498/count.gif" alt="The Conversation" width="1" height="1" />
If the FTSE 100 can do it, then the public sector can also wake up to the benefits of female representation.Jacqueline Baxter, Lecturer in Public Policy and Management , The Open UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/453902015-08-18T04:40:47Z2015-08-18T04:40:47ZSouth Africa’s health sector is leaking money: what can be done about it?<figure><img src="https://images.theconversation.com/files/92182/original/image-20150817-5110-1i2vjw6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People wait to be treated at the Jane Fures Hospital in South Africa's Northern Province.</span> <span class="attribution"><span class="source">Reuters</span></span></figcaption></figure><p>New <a href="http://heapol.oxfordjournals.org/content/early/2015/06/22/heapol.czv047.abstract">research</a>, the first of its kind, has found that corruption is a problem in South Africa’s health sector. The nature of corruption, defined as the abuse of resources, power or connections for private gain, makes it difficult to assess. But an analysis of three sources of information shows the country has a problem that warrants serious attention.</p>
<p>According to the country’s <a href="http://www.poa.gov.za/news/Documents/NPC%20National%20Development%20Plan%20Vision%202030%20-lo-res.pdf">National Development Plan</a>, South Africa has high levels of corruption. In 2013 alone, the <a href="http://www.treasury.gov.za/documents/national%20budget/2013/speech/speech.pdf">National Treasury</a> allocated more than R70 million to the Public Service Commission “to combat corruption and address grievances”. </p>
<p>Our study found that to reduce corruption, South Africa needs:</p>
<ul>
<li><p>the political will to run corruption-free health services;</p></li>
<li><p>an effective government that enforces laws; and</p></li>
<li><p>citizen involvement and advocacy to hold public officials accountable. </p></li>
</ul>
<p>South Africa spends about 8.6% of its GDP on health. Of this, half is spent in the private sector catering for the socioeconomic elite. The remaining 84% of the population, who carry a far greater burden of disease, depend on the under-resourced public sector. </p>
<h2>What the numbers say</h2>
<p>Our study assessed information from three sources: </p>
<ul>
<li><p>reports from the Auditor-General of South Africa for each province covering a nine-year period; </p></li>
<li><p>semi-structured interviews with health sector informants; and </p></li>
<li><p>newspaper articles covering corruption in the South African health sector over a three year period.</p></li>
</ul>
<p>Based on the auditor-general’s reports, our study found that almost 6.3% of the combined provincial expenditure in South Africa was classified as irregular in the 2012-13 financial year.</p>
<p>Irregular expenditure reflects spending that does not comply with the necessary rules and regulations. It is not a proxy for corruption but can be an indirect measure for assessing corruption. Irregular or unprocedural spending does not always result in personal gain. But corruption of necessity involves irregular or unprocedural activities. </p>
<p>Our study revealed varying patterns of irregular expenditure across the nine provinces. In Gauteng, irregular expenditure amounted to R5.3 billion (US$533 million) between 2009 and 2012. Although there was an improvement in irregular expenditure as a proportion of the total health expenditure from 11% in 2010-11 to 4.8% in 2011-12, the figure increased again to 6.1% in 2012/2013. In contrast, KwaZulu Natal’s irregular spending as a proportion of the total health expenditure increased over the same four-year period. </p>
<p>There are a number of possible explanations for the differences across the nine provinces. These include:</p>
<ul>
<li><p>Characteristics of provincial administrations;</p></li>
<li><p>Ineffective management;</p></li>
<li><p>Lack of enforcement of existing legislation;</p></li>
<li><p>Capacity constraints and different skill levels across provinces; and</p></li>
<li><p>Selection of officials in various provincial administrations.</p></li>
</ul>
<h2>A fuller picture</h2>
<p>Key informants were selected from government, the private sector, academia, and NGOs. All held senior positions, were knowledgeable, and had been involved in the healthcare system for a long time. </p>
<p>They all believed that there is corruption in the South African healthcare system, across both the public and private sectors. They all had personal experiences of hearing about or dealing with an incident of corruption in the year preceding the study. The majority felt corruption was rampant and had reached uncontrollable levels, particularly in the public health sector. </p>
<p>More than 60% of the newspaper articles on corruption were from the public sector and mainly involved provincial health departments. In more than half of the reports on corruption, the Eastern Cape province was cited, followed by Gauteng, Limpopo, and KwaZulu-Natal. </p>
<h2>Strategies to address corruption</h2>
<p>To address corruption, more regulation to control the behaviour of public servants is often recommended. But South Africa does not need more legislation. It has institutions with extensive powers, numerous laws, and formal and detailed rules and procedures. </p>
<p>Aside from the Auditor General’s mandate to improve accountability and governance in the public sector, there are also Public Service and Public Finance Management Acts. These contain detailed prescripts to regulate the behaviour of public sector employees and manage public resources.</p>
<p>What is needed instead is for staffing levels, competencies and capacity to implement anti-corruption initiatives to be addressed as a matter of urgency. This proposition is made in light of:</p>
<ul>
<li><p>the varying levels of irregular spending across the nine provincial health departments;</p></li>
<li><p>worsening audit outcomes of provincial health departments;</p></li>
<li><p>the crisis of ineffective management and lack of accountability in the health system.</p></li>
</ul>
<p>To assist the fight against corruption, strategies must ensure that public servants have the right skills, ethos and values in place. Their interest must be aligned with <a href="http://heapol.oxfordjournals.org/content/29/6/685.short">organisational goals</a>. Appropriate systems must be in place to detect corruption and sanction inappropriate, illegal, or corrupt behaviour. </p>
<p>Public sector managers must have sufficient authority to prevent and take action against corruption. They also need to be given the capacity to ensure that existing laws are enforced.</p>
<p>Another important component is an active citizenry. Structures do exist through which citizens can have a say in the health system and hold public officials accountable. At a formal level, these include public participation committees in national parliament and provincial legislatures, hospital boards and clinic committees. </p>
<p>At an informal level, South Africa has a vibrant civil society movement, including <a href="http://www.corruptionwatch.org.za/">Corruption Watch</a>, which is increasingly vocal about the need to address corruption. Experiences in <a href="http://heapol.oxfordjournals.org/content/29/6/685.short">other countries</a> show that civil society groups that provide financial monitoring, service delivery reports and advocacy play an important role in combating corruption.</p><img src="https://counter.theconversation.com/content/45390/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>To address corruption in the South African health sector, a combination of political will with an effective government, citizen involvement and advocacy is needed.Laetitia Rispel, Head of the School of Public Health, University of the WitwatersrandPieter de Jager, Honorary Lecturer, School of Public Health, University of the WitwatersrandSharon Fonn, Professsor of Public Health; Co-Director Consortium for Advanced Research Training in Africa; Panel Member, Private Healthcare Market Inquiry , University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/458932015-08-12T05:37:46Z2015-08-12T05:37:46ZUnions under attack in Britain – but they asked for it<p>The nature and scope of the <a href="http://www.theguardian.com/politics/2015/jul/15/trade-unions-conservative-offensive-decades-strikes-labour">Trades Union Bill</a> removes any doubt there may have been surrounding the government’s objectives. This is to reduce Britain’s trade unions – still the enemy within as far as they are concerned – to a level of insignificance hitherto unknown. </p>
<p>Unrestrained by the Liberal Democrats, David Cameron’s Conservatives have launched an attack on the unions that is more radical than anything introduced by Margaret Thatcher in the 1980s. The proposed changes go much further than those <a href="http://www.theguardian.com/politics/2015/jan/10/tories-plan-raise-threshold-public-sector-industrial-action-tuc-strike-conservatives-job-cuts">trailed in the run-up to the election</a>. </p>
<p>The government position is being bolstered by an increasingly strident, right-wing media which appears hell bent on <a href="http://www.thetimes.co.uk/tto/news/politics/article4495998.ece">using 1970s rhetoric</a> to paint the unions in as bad a light as possible. Union barons may well have ruled the roost four decades ago, but now they are few and far between. Unions too are a shadow of their former selves. Even so, it seems that a few days of strike action on the London Underground has the government in a state of panic and the press denouncing unions as public enemy number one.</p>
<p>Likewise the significance of days lost due to industrial action is lost in <a href="http://www.dailymail.co.uk/news/article-3163669/Number-days-lost-strikes-DOUBLES-militant-unions-ramp-campaign-level-not-seen-1980s.html">hyperbolic statements</a>. Although days lost in 2014 were almost double the previous year, they were roughly half the number lost in 2011. There was no “good news” story in the Daily Mail about that. Although the rise in 2014 is mainly attributable to a number of big public sector strikes, the upward trend does make it easier for the government to argue in favour of increased regulation.</p>
<h2>Draconian new laws</h2>
<p>If and when the new legislation is introduced, the balance of power will be firmly in the hands of employers. The extension of notification of industrial action from seven to 14 days will give the employers longer to put contingency plans in place. This, combined with the ability to employ agency staff to replace striking workers, will undermine the collective power of unions. Making unlawful picketing a criminal offence rather than a civil one is draconian and, arguably, not far short of intimidation itself. </p>
<p>One fruitful area for employers to seek High Court injunctions to stop industrial action has been post-ballot information. Unite found it difficult to meet its statutory obligations in the <a href="http://www.bbc.co.uk/news/10119196">British Airways cabin crew dispute</a> when only four pieces of information were required to be communicated. The new proposals impose far greater demands on unions, up to seven separate statistics will be required. The High Court is likely to be busier in future.</p>
<p>The tightening of the law relating to industrial action comes as no surprise, but the devil is in the detail. The definition of “important public services” appears fairly innocuous; health services, education below 17 years of age, fire services, transport services, nuclear decommissioning and radioactive waste management, and border security. </p>
<p>But also included are “<a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/445433/BIS-15-418-consultation-on-ballot-thresholds-in-important-public-services.pdf">activities that are ancillary to the provision of important public services</a>”. What these ancillary activities are remains unclear. Does this include private services contracted into the public sector? There is a danger these ancillary activities become whatever the government wants them to be and a simple means of increasing the scope of the legislation.</p>
<p>The <a href="https://www.gov.uk/government/news/new-steps-to-tackle-taxpayer-funded-support-to-trade-unions">removal of the check-off system</a>, through which union subscriptions are deducted from employees’ wages, will also have a major impact on union finances. Some are already struggling, hence the decision by the Public and Civil Services Union to sell its Clapham offices to save money. Cabinet Office minister Matt Hancock may well argue this change is a modernising step. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"629210689656197120"}"></div></p>
<p>But <a href="http://www.bbc.co.uk/news/uk-politics-33798700">Hancock’s comment</a> that the change makes it easier for members “to choose whether or not to pay subscriptions” makes the government’s objective clear – a reduction in union membership. Replacing the check-off with direct debits will result in some members not bothering. The evidence of the claimed £6m cost-saving on administration is somewhat tenuous. Claims that subscriptions paid under the new system will give union members greater protection under the Direct Debit Guarantee Scheme are also flimsy.</p>
<p>The proposals create a two-tier system under which union members employed in the public sector will be subjected to more stringent rules than their private sector counterparts. Those in the public sector will be denied the check-off those in the private sector will not. Strikes in the “important public services” – such as nursing, ambulances and fire services – require a greater level of member support than elsewhere, but this might creep into other parts of the public sector and, indeed, the private sector though the backdoor.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"624131708301012992"}"></div></p>
<p>The provision of <a href="https://www.tuc.org.uk/sites/default/files/tucfiles/thefactsaboutfacilitytime.pdf">facilities time</a> was introduced for the furtherance of good industrial relations. A distinction was drawn between “duties” and “activities”. Giving the government the ability to set (an undefined) maximum hours a public sector official can spend on union duties will do little to foster a healthy employment relationship.</p>
<h2>Asking for it</h2>
<p>Did the unions bring it upon themselves? Did they invite trouble by deliberately kicking the Tory hornet’s nest? Calling strikes after ballots with low turn-outs, some of which were two years old, did not break the law. They may have been questionable, but they were legal. Almost four years ago <a href="http://www.thetimes.co.uk/tto/business/industries/publicsector/article3237808.ece">I predicted</a> that strike action based on low turn-outs and old ballots would prompt the government to take action. Now they have done so. </p>
<p>Unite has already thrown down another gauntlet by <a href="https://www.politicshome.com/home-affairs/articles/story/unite-removes-%E2%80%98so-far-may-be-lawful%E2%80%99-strike-clause">removing the words</a> “so far as may be lawful” from its rule book. It remains to be seen whether it is prepared to follow this through. </p>
<p>The savagery of the Trades Union Bill is not far short of the <a href="http://www.britannica.com/event/Combination-Acts">Combination Act 1799</a> in restricting unions’ ability to protect workers interests. Sadly workers still require protection from unscrupulous employers. The major challenge facing Britain’s unions is mobilising the apathetic membership to participate in ballots. Something they have failed to do in many cases for a very long time. Unless they can, there is a danger they will become irrelevant.</p><img src="https://counter.theconversation.com/content/45893/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alf Crossman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Government’s new legislation will strike at the heart of union power.Alf Crossman, Senior Lecturer in Industrial Relations and HRM, University of SurreyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/435352015-07-28T04:13:20Z2015-07-28T04:13:20ZThe potential of behavioural economics: beyond the nudge<figure><img src="https://images.theconversation.com/files/89866/original/image-20150728-7646-ncs5gn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Image sourced from www.shutterstock.com</span></span></figcaption></figure><p>Behavioural economics is a revolutionary field. Its champions may not have beheaded any royalty, but they have done the academic equivalent by overthrowing a paradigm that ruled our thinking and shaped our institutions. </p>
<p>Behavioural economists have shown that the hyper-rational, self-interested agents of standard economics are mythical creatures. Real-world people are irrational, struggle to exert control over their emotions and impulses, and are social animals with a fondness for fairness.</p>
<p>This paradigm shift radically changes how we think about behaviour, and it seems poised to change our institutions. But <em>how much</em> change will it bring? </p>
<p>Will the influence of behavioural economics on policy be limited to <a href="http://www.abc.net.au/pm/content/2014/s4017226.htm">improving the wording of parking fines</a> sent out to misbehaving motorists? Or can it also help us institute bold, sweeping reforms of the type that have helped make Australia equitable and prosperous?</p>
<p>The answer is: it depends.</p>
<p>The policy impact of behaviour economics will be limited – and may even be harmful – if public servants focus excessively on the behavioural revolution’s most famous offspring, <a href="https://www.youtube.com/watch?v=pDub6gG1yxw">the policymaking approach called “nudge”</a>.</p>
<p>On the bright side, the focus on nudge is artificial. It does not flow from the evidence. Some of the most important regulatory reforms in Australia’s history could have been justified using behavioural economics – and such opportunities for reform will emerge again in the future. </p>
<h2>The birth of the nudge</h2>
<p>The “nudge” policy approach took the United States and United Kingdom by storm in 2008, when Cass Sunstein and Richard Thaler released their groundbreaking work, <a href="http://yalepress.yale.edu/book.asp?isbn=9780300122237"><em>Nudge</em></a>. </p>
<p>In the psychological weaknesses uncovered by behavioural economists, Sunstein and Thaler saw opportunity. They argued we can exploit cognitive biases to nudge, or gently guide, people into making choices that are better for them and for the rest of us too — while always leaving them free to choose otherwise.</p>
<p>Want people to sign up for organ donations? Then harness their tendency to procrastinate, by switching from a system where they must choose to opt-in to one where they must choose to opt-out. </p>
<p>Want people to use less electricity? Then exploit social norms by showing them how little their energy-efficient neighbours pay for electricity. </p>
<p>Want people to avoid payday loans? Then make the loans’ downsides salient, by directly comparing their enormous interest rates with other borrowing options. </p>
<h2>Confusing nudges with behavioural economics</h2>
<p>Nudges may have grown out of behavioural economics, but evidence from that very field suggests that they often fail to meet the hype. Nudges designed to discourage people from taking out ludicrously expensive payday loans, for example, tend to be <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2011.01698.x/abstract?userIsAuthenticated=false&deniedAccessCustomisedMessage=">toothless in practice</a>.</p>
<p>In a new policy brief at the Melbourne Institute, <a href="https://www.melbourneinstitute.com/downloads/policy_briefs_series/pb2015n04.pdf">The Potential of Behavioural Economics: Beyond the Nudge</a> I examine what behavioural economics tells us about the promise of both nudges and tools beyond them. </p>
<p>There is, right under our noses, an unnoticed world of behavioural evidence showing that <em>traditional</em> policy tools — like taxes, transfers and mandates — are in many cases superior to nudges.</p>
<p>Rather than throwing out the baby with the bathwater, behavioural economics suggests we should take a fresh look at how we might use traditional policy tools to counter cognitive biases. </p>
<h2>A nudge bias</h2>
<p>Why has the behavioural evidence on traditional tools been so overlooked? The reasons are largely political. </p>
<p><em>Nudge</em> was written for a US audience, in a political climate shaped by the anti-paternalistic sentiment that would later coalesce into the Tea Party. </p>
<p>It has become tough, in this context, to pursue rational and equitable reforms of the traditional variety. Government is seen less as the tool the people use to democratically shape the society they want, and more as a suspicious intruder interfering with the benevolent market. </p>
<p>Sunstein and Thaler promoted nudges specifically because they promised a “middle way”: they <em>influenced</em> choices without <em>coercing</em> choice. </p>
<p>This justification turns out to be fanciful. In practice, many non-coercive nudges are too weak to provide serious benefits, and making a nudge effective often means making it coercive. </p>
<p>Take the nudge “success” story of the <em>Save More Tomorrow</em> scheme, designed to counter the strong biases that affect retirement savings decisions. Its central innovation is the automatic escalation of the savings rate over time, so people sign up to save more in future years without losing a dime today.</p>
<p>Though certainly a clever nudge, in practice it <a href="http://www.sco.ca.gov/Files-EO/2013_sco_flac_benartzi_behavioural_econ_and_savings_crises.pdf">increased the national US savings rate by a paltry 0.33%</a>, which will barely make a dent in the enormous problem of old age poverty. Australia’s superannuation scheme leaves it in the dust, with more than twenty times the impact. </p>
<p>Making <em>Save More Tomorrow</em> effective would require increasing its coerciveness — making it compulsory for workplaces to make it the default for all employees, with a much higher default increase in the rate of savings, and a penalty for opting-out — so that it essentially becomes a mandate. </p>
<p>Even then, as I will touch on below, behavioural economics suggests the opt-out would make the scheme welfare-reducing compared to superannuation.</p>
<p>Another example is the host of nudges applied to cigarettes. We plaster packages with gore and health warnings, and we exile smokers to the cold streets where they puff away under scowls and social stigma. </p>
<p>People can still choose to smoke, but this regime of tough nudges is hardly non-coercive. In fact, it is effective <em>precisely because</em> it imposes high costs on smokers. </p>
<p>The point is that nudges are much like traditional tools after all: they are subject to the same trade-offs between agency and welfare.</p>
<h2>Behavioural economics for traditional tools</h2>
<p>Sunstein and Thaler hoped to make peace between the United States’ warring tribes of progressives and libertarians, and this is precisely how we should understand nudges: they are a political innovation, only sometimes justified by the evidence. </p>
<p>What does the evidence say <em>in full</em>? Behavioural economics has comprehensively falsified rational choice economics. We make serious mistakes, and companies know it. </p>
<p>It would be paradoxical if, after rational choice has been so comprehensively discredited, policymakers responded by relying <em>more</em> on choice-preserving tools like nudges. </p>
<p>Consider the policies that make Australia prosperous and equitable, like publicly-funded universities, superannuation, and financial product regulation. Perversely, the nudge philosophy would reject these as too interventionist. </p>
<p>A more complete behavioural economics only strengthens the case for such policy. Take retirement savings: behavioural economics tells us that people tend to be present-biased, and they succumb to the temptation to withdraw early. One solution is to penalise early withdrawals. </p>
<p>The US Internal Revenue Service, for example, imposes a 10% penalty on early withdrawals — but even so, for every US$1 invested, US$0.40 is withdrawn early, at great cost. </p>
<p>How big should the penalty be? A behavioural savings model including the effects of present bias suggests that a <a href="http://eml.berkeley.edu/%7Ewebfac/seminars/Optimal_Illiquidity_2014.pdf">100% penalty would maximise welfare</a>, because it would stop <em>all</em> early withdrawals even for the most present-biased individuals. </p>
<p>In other words, Australia’s superannuation mandate is optimal. Savings should be made fully illiquid, with no opt-out. The mandate imposes small costs on the few who would have withdrawn rationally, but these costs are dwarfed by the vast welfare gains overall. </p>
<p>Cash transfers too can be reevaluated under the behavioural lens. Research explored in Mullainathan & Shafir’s <a href="http://us.macmillan.com/scarcity/sendhilmullainathan"><em>Scarcity</em></a> (2013) demonstrates that poverty causes IQ to plummet, because dealing with the everyday challenge of being poor takes up so much cognitive bandwidth. </p>
<p>The corollary is that when impoverished Indian farmers receive a cash infusion, they experience a massive boost in IQ. </p>
<p>The behavioural evidence suggests that poverty may be cyclic partly because it is so tough to make good decisions while in poverty. Cash transfers free cognitive resources to focus on longer-term problems like learning, finding work, and planning for the future.</p>
<h2>A way forward</h2>
<p>How should policymakers proceed? They should remain agnostic when choosing between nudges and more traditional policy tools. </p>
<p>The right tool will raise welfare as much as possible, without stopping people from making cherished decisions about their lives. The litmus test will be democratic: do people accept the policy or not? </p>
<p>Superannuation, notably, passes the test with flying colours — it curtails choice, but it creates such large benefits that it enjoys enormous levels of support (<a href="https://www.aist.asn.au/media/128974/2012.03.19%20essential%20media%20poll.pdf">only 7% of people polled were against</a> the increase in super from 9% to 12% of income). </p>
<p>It does not curtail a <em>cherished</em> choice, like what job we can take, where we can live, what we can learn, or who we can associate with. It helps most of us do what we already want to do, but struggle to do. </p>
<p>Nudges will play a valuable, complementary role to traditional tools. The science, however, reasserts that there is no easy middle road. </p>
<p>We must continue to democratically debate big ideas about the kind of society we want to build — and we should always build it upon the firm ground of evidence.</p><img src="https://counter.theconversation.com/content/43535/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Reuben Finighan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>“Nudge” economics have been embraced by policy makers. But how does it fare against more traditional ways of altering behaviour?Reuben Finighan, Senior Research Officer at The Melbourne Institute and Fellow of the ARC Life Course Centre of Excellence, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/418302015-05-15T01:31:21Z2015-05-15T01:31:21ZBudget week reveals an appetite for government but not to govern<p>The <a href="http://www.budget.gov.au/2015-16/index.htm">federal budget</a> confirms a voracious appetite for government in Australia, but a tepid will to govern. The government wants everyone to “have a go”, but seems reticent to do so itself. It’s like the cricket captain sending in the nightwatchman without facing up to the challenge himself.</p>
<p>Dressed up as a reboot, the budget presents as a capitulation. Once you wrap your mind around the cornucopia of policy reversals, inconsistencies and outright hypocrisies, not to mention the <a href="https://theconversation.com/a-dull-and-routine-budget-that-relies-on-group-denial-41599">above-trend forecasts</a>, the overarching impression is the government has decided the task of governing is too complex and that campaigning is a better fit.</p>
<p>The result is a hollow and contradictory approach to fiscal management and a slap-dash approach to supporting the structural economic transition Australia needs. This comes two months after Treasurer Joe Hockey <a href="http://www.abc.net.au/news/2015-03-05/population-projected-to-near-40-million-in-ageing-boom/6282674">told us</a> deficits forecast in the <a href="http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/2015-Intergenerational-Report">Intergenerational Report</a> would make us fall off our chairs. Now he risks being labelled the boy who cried wolf, backflipping on the Coalition’s raison d’etre for government and its life source in opposition. The “urgency” of fiscal consolidation is stalled at best and abandoned at worst.</p>
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<figcaption><span class="caption">Treasurer Joe Hockey’s second budget speech stalled his first budget’s ‘urgent’ fiscal consolidation.</span></figcaption>
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<p>All this comes in the wake of a <a href="http://www.theaustralian.com.au/opinion/columnists/democracy-under-threat-as-trust-in-system-broken/story-e6frg74x-1227333321047">poll</a> indicating 94% of respondents believe Australia “needs a better plan for its long-term future”.</p>
<p>One thing should be obvious: you cannot “have a go” at building the future unless you can describe what it should look like. Let me advance two elements.</p>
<h2>We need to enhance public sector capacities</h2>
<p>First, Australia’s future requires creative and integrated long-term thinking, within which a strong, active and effective public sector will be critical. Yet the budget confirms the “<a href="http://www.financeminister.gov.au/media/2015/0511-smaller-government.html">smaller and more rational government</a>” agenda continues. </p>
<p>The budget trumpets A$450 million in savings from “functional reviews” of the departments of Health and Education and from “efficiencies” in Attorney-Generals and Immigration and Border Security. It has confirmed reviews of another eight departments and agencies including the Department of Foreign Affairs and Trade (DFAT), Treasury, Environment, the Australian Tax Office (ATO) and the Australian Bureau of Statistics (ABS). Having wrung all the “<a href="https://cpd.org.au/2014/06/false-economies/">false economies</a>” out of the blunt approach, the government has swapped the sledgehammer for a scalpel.</p>
<p>After years of <a href="http://www.smh.com.au/business/why-this-obsession-with-cutting-public-service-jobs-20150104-12h1nj.html">indiscriminate cuts</a>, a more surgical approach might allow focus on allocative and dynamic efficiency. But surely these qualities cannot prosper in a public sector cut to the bone – not to mention the A$80 billion of cuts to health and education that remain.</p>
<p>There is no consideration to boosting public sector innovation to enhance workforce capacity. There is no awareness of <a href="http://equitablegrowth.org/2015/04/05/draft-rethinking-macroeconomics-conference-fiscal-policy-panel/">new evidence</a> suggesting 21st-century challenges require a larger, better-resourced and innovative public sector.</p>
<p>The government’s approach ensures a diluted advisory ability within an impotent public service. That a toxic environment for tackling long-term issues like social mobility and climate change.</p>
<h2>We need to invest in an ideas boom</h2>
<p>Second, Australia’s future does not rest on mining. The next boom <a href="http://qz.com/405059/chinas-on-track-for-the-biggest-reduction-in-coal-use-ever-recorded/">will not be a mining boom</a>. It must be an ideas boom. </p>
<p>Yet we aren’t investing in winning ideas. The net result for innovation in the budget was poor: cutting $263 million from the Sustainable Research Excellence program salvaged the Research Infrastructure Fund. Building our creative infrastructure will require catalytic investment by governments and business, a culture of collaboration and a preparedness to fail. </p>
<p>Teaching our kids to code will be essential too. The government’s improvements to the taxation of employee share schemes, along with Opposition Leader Bill Shorten’s call in the <a href="http://www.alp.org.au/budget_reply_speech">budget reply</a> for coding literacy and a $500 million Smart Investment Fund are all steps in the right direction.</p>
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<figcaption><span class="caption">Opposition Leader Bill Shorten’s budget reply offered a couple of steps in the right direction.</span></figcaption>
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<p>An ideas boom would transition our economy to penetrate global value chains and accelerate the move towards a clean economy. Investment in renewable energy fell 35% in Australia last year (it fell 88% in investment in large-scale renewable energy) despite <a href="http://apps.unep.org/publications/pmtdocuments/-Global_trends_in_renewable_energy_investment_2015-201515028nefvisual8-mediumres.pdf.pdf">rising 17% globally</a>. Bizarrely, the only double-dissolution election trigger the government has is its bill to abolish the Clean Energy Finance Corporation, which is forecast to return money to the budget at double the five-year government bond rate.</p>
<p>This is not a <a href="http://www.abc.net.au/worldtoday/content/2015/s4199952.htm">“dull”</a> and do-nothing budget. By continued acts or deliberate omissions the budget undermines long-term policy development and credibility. Our contributions in <a href="https://theconversation.com/a-fair-budget-not-for-the-poor-losing-australian-aid-in-record-cuts-41609">foreign aid are cut again</a> by $3.7 billion over the next three years, diminishing our influence in the region and making us more vulnerable to the butterfly effect of poor development.</p>
<h2>Bulging ‘too hard’ basket is jeopardising our future</h2>
<p>Make no mistake: the <a href="http://cpd.org.au/wp-content/uploads/2015/04/IGR-Response-Final-15-April.pdf">largest deficit</a> Australia has is between the conversation we need to have about the future and the one we’re having.</p>
<p>Small-target politics is a far cry from what Australians want: effective long-term policy solutions infused with values as well. Most of us understand tough decisions must be made about our economy, <a href="https://theconversation.com/hidden-crisis-of-liberal-democracy-creates-climate-change-paralysis-39851">democracy</a> and society. Our luck hasn’t run out. It might if we can’t separate real issues from imagined ones.</p>
<p>The knowledge-action gap is as tragic as it is mesmerising.</p>
<p>Australians have much to be proud of but certain facts should concern us. We don’t take climate change seriously. We <a href="http://aamc.org.au/smes-lead-the-way-but-more-collaboration-needed/">rank last</a> in the OECD for collaboration. We <a href="http://www.boundlss.com/blog/perth-startup-ecosystem-report">punt more than twice as much</a> each year on the Melbourne Cup as we do on technology start-ups. </p>
<p>Indigenous Australians comprise <a href="https://theconversation.com/the-state-of-imprisonment-in-australia-its-time-to-take-stock-38902">over 25% of our adult prison population</a> but just 3% of our total population. Nearly nine in ten Australians live in cities, yet we have <a href="https://theconversation.com/without-a-national-cities-policy-who-joins-all-the-planning-dots-24634">no national cities policy</a>. Wage growth is the <a href="http://www.smh.com.au/business/the-economy/wages-grow-at-slowest-pace-since-abs-began-quarterly-records-20150513-gh0e8n.html">lowest on record</a>. Unemployment is <a href="http://www.budget.gov.au/2014-15/content/bp1/html/bp1_bst2-01.htm">predicted to climb</a>.</p>
<p>And, yes, Australia does have a <a href="https://theconversation.com/budget-explainer-what-is-a-structural-deficit-and-why-does-australia-have-one-40089">structural budget deficit</a>. But there are pathways to correct it, including by rebalancing taxes and concessions on wealth, capital, labour, land, emissions and consumption. An informed debate about debt financing might help too.</p>
<p>This budget confirms fiscal consolidation has joined other policy challenges in the “too hard” basket. That leaves us with a grab bag of politicised and capricious policy initiatives that pick around the edges, often ineffectually. </p>
<p>The budget attempts to fix childcare without focusing on the child. It tries to foster “fairness” in paid parental leave by discounting hard-won gains of mothers from employers. And it persists with poorly targeted and extremely costly superannuation concessions.</p>
<p>Former Labor frontbencher Bob Carr <a href="http://www.abc.net.au/lateline/content/2012/s3553747.htm">used to say</a> the US was “one budget deal away from banishing talk of American decline”. Australia is too if she can deal boldly with the issues above. Clear goals and incremental reforms to outlast political cycles would allow us to make the future we want and renew Australia to thrive in the 21st century.</p>
<p>Australia must do more than survive until stumps. It’s time to call back the <a href="https://theconversation.com/maths-test-why-using-a-cricket-nightwatchman-is-off-the-mark-35378">nightwatchman</a> and set ourselves up for the long term.</p><img src="https://counter.theconversation.com/content/41830/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Travers McLeod is CEO of the Centre for Policy Development, an independent, non-profit and non-partisan policy institute.</span></em></p>Joe Hockey’s second budget has two large deficits: the fiscal one, plus the lack of a coherent and creative plan for Australia. The Abbott government failed to ‘have a go’ at building the future.Travers McLeod, Honorary Fellow in the School of Social and Political Sciences, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/361592015-01-12T16:03:37Z2015-01-12T16:03:37ZA&E crisis won’t be fixed until politicians lose the taste for permanent revolution<p>The problems currently crippling the NHS and social care are not happening in a vacuum. The A&E crisis and the critical lack of beds are related to politicians’ love for large-scale, rapid and untested structural change. </p>
<p>There are several contributory factors, but the recent huge organisational upheaval is surely one of them. Our public sector has long been prey to this disease, dubbed “re-disorganisation” by political scientist Christopher Pollitt. In a <a href="http://www.tandfonline.com/doi/abs/10.1080/14719030701726663?journalCode=rpxm20">superb article</a> way back in 2007, he pointed out that there had been serial, breathless restructuring across a number of departments – especially in education and health. </p>
<h2>Re-disorganisation</h2>
<p>Pollitt highlighted that the NHS had been in a state of permanent revolution for a quarter of a century, and comparative studies showed the UK to have been the most activist and hard-driving of comparable countries regarding public sector reform. The relative lack of constitutional checks and balances, he wrote, meant “the British system maximises the temptation to reorganise but minimises political penalties for so doing.”</p>
<p>Since then the pace of re-disorganisation has become even more rapid. There has been no recognition that constant turbulence doesn’t make for good outcomes. In particular we have had the <a href="http://www.legislation.gov.uk/ukpga/2010/32/contents">Academies Act 2010</a> and the <a href="http://www.legislation.gov.uk/ukpga/2012/7/contents/enacted">Health and Social Care Act 2012</a>. These have thrown the education and healthcare systems into confusion and disarray, promoted market-oriented fragmentation and alienated large sections of the relevant workforces. </p>
<p>When it comes to staff alienation, the reforms may now have exceeded the limits of political acceptability. It appears the penalties Pollitt noted are no longer minimal: they have become significant. </p>
<p>The men who drove the two sets of radical changes, <a href="http://www.bbc.co.uk/news/uk-politics-19472688">Andrew Lansley</a> and <a href="https://theconversation.com/why-exit-of-gove-and-willetts-is-unlikely-to-change-the-direction-of-tory-education-policy-29236">Michael Gove</a>, have both suffered demotion because of the political backlash. There is now a chance for politicians to focus more on things that really make a difference but are less newsworthy, such as providing enough doctors, nurses, hospital beds, teachers, school places and opportunities for high-quality staff training and development.</p>
<h2>Structures matter</h2>
<p>But that doesn’t mean restructuring can be forgotten. Whatever the political fallout of these massive changes to the education and health systems under the coalition, they are with us and we are living with their often toxic legacy. </p>
<p>Several recent events, such as the so-called <a href="https://theconversation.com/trojan-horse-plot-exposed-a-fragmented-education-system-35583">Trojan Horse saga</a> concerning certain schools in Birmingham, suggest that the new school structures may be unsustainable. The National Audit Office has been <a href="http://www.nao.org.uk/report/academies-and-maintained-schools-oversight-and-intervention/">highly critical</a> of the present arrangements for oversight of schools. </p>
<p>Organisation always matters. Professionals and other staff cannot give of their best nor can patients and parents make sensible choices and exert proper influence when faced with fragmented, opaque and contradictory frameworks. </p>
<h2>Key principles</h2>
<p>The forthcoming report on the management of the NHS by former Marks and Spencer chief Stuart Rose for the government <a href="http://www.theguardian.com/society/2014/dec/28/nhs-management-system-complex-rose-report">is apparently expected</a> to say that the health changes have produced an over-complex structure which is quashing initiative and leading to poor practices. What doesn’t work in the new set-ups will have to be fixed.</p>
<p>Beyond this we need to work towards more stable, coherent and intelligible systems. Instead of schemes dreamt up by partisan think-tanks being foisted on the public at every change of government – sometimes, as in the healthcare case, without warning – staff and users should be involved in the design. Pilots should be run and independently planned and evaluated. And the larger the restructuring project, the more time should be allowed for its full implementation. </p>
<p>None of these elementary principles has been applied in the successive upheavals that have taken place since the late 1980s, all of which have been driven largely by political imperative, including the electoral timetable. As a result the whole process has been highly dysfunctional and a fundamental rethink is surely overdue. </p>
<hr>
<p>To read more in our A&E crisis series: Graeme Currie on why we <a href="https://theconversation.com/aande-crisis-hospital-managers-arent-to-blame-for-failures-36161">can’t simply scapegoat hospital managers</a>; Jonathan Shapiro on <a href="https://theconversation.com/aande-is-in-crisis-because-we-all-take-it-for-granted-14458">whether we all take a free NHS for granted</a>; Anthea Wilson on how <a href="https://theconversation.com/aande-crisis-monitoring-conditions-through-telehealth-could-transform-nhs-care-36169">monitoring our own conditions</a> could transform NHS care; and Terry Young on how the NHS could use <a href="https://theconversation.com/aande-crisis-understanding-health-at-a-systems-level-could-drive-a-better-nhs-36153">computer modelling to solve complex problems</a>.</p><img src="https://counter.theconversation.com/content/36159/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ron Glatter does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The problems currently crippling the NHS and social care are not happening in a vacuum. The A&E crisis and the critical lack of beds are related to politicians’ love for large-scale, rapid and untested…Ron Glatter, Emeritus Professor of Educational Administration and Management, The Open UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/343532014-11-27T01:42:53Z2014-11-27T01:42:53ZWhen public servants lose jobs it takes years to get back on track<figure><img src="https://images.theconversation.com/files/65419/original/image-20141125-8663-1rfc6ol.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">It can take more than three years for a public servant to climb back to their same level of pay after losing their job.</span> <span class="attribution"><span class="source">Alex Proimos/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>By 2017, some 16,500 public servants will have lost their jobs, or have been shuffled into other positions within the public service, in the government’s ongoing drive for budget savings.</p>
<p>The long-standing Commonwealth “efficiency dividend” also has impacts on jobs, as it works on the premise that increases in productivity make it possible to reduce funding to Commonwealth agencies without compromising outputs.</p>
<p>But what of the impact on the people who lose their jobs? Research from Flinders University’s National Institute for Labour Studies (NILS) suggests the human costs to public servants will last for years.</p>
<p>The research shows public servants are badly affected by job changes. They take more than three years on average to return to pay equivalent to their peers who didn’t leave public service.</p>
<h2>The justification for cuts</h2>
<p>In the 2014/15 Australian budget the annual efficiency dividend of 2.5% is <a href="http://www.budget.gov.au/2014-15/content/overview/html/overview_33.htm">forecast</a> to save A$2.8 billion. The <a href="http://www.financeminister.gov.au/publications/docs/smaller-and-more-rational-government.pdf">“smaller and more rational government”</a> initiative is expected to save another A$530 million. </p>
<p>The first measure is an annual untargeted reduction in the budgeted expenditures of each public sector body. The second identifies specific public bodies for cessation or merger as well as a numerical reduction in public sector staffing overall. </p>
<p>The word “savings” is applied to these cuts as the initial outlay to public sector expenditure appears reduced. The word “efficiency” is used as it is assumed the same services will be achieved with fewer resources, a type of technical efficiency. However, the efficiency of this efficiency is debated, with several <a href="http://www.aph.gov.au/parliamentary_business/committees/house_of_representatives_committees?url=jcpaa/efficdiv/report.htm;">experts</a> judging that this form of restructure is not working as expected. </p>
<p>Budget cuts often result directly in reductions in public servants - people - for example, the <a href="https://theconversation.com/is-this-the-beginning-of-the-end-of-the-abc-as-we-know-it-34536">pruning of the ABC</a>. Faced with technological change, there’s an ongoing need to closely match worker hours with service demand.</p>
<p>We are all familiar with private service industry instances of this. Banks, for example, using innovations in information and communication technology, have vastly reduced the number of people they need to employ, lowering the staffing cost of providing the service. But public sector savings are sometimes made with the horse before the cart, seemingly in the hope that cuts to resources will achieve the same result, regardless of incremental technological change.</p>
<h2>The human cost</h2>
<p>The NILS <a href="http://www.flinders.edu.au/sabs/nils-files/publications/working-papers/WP%20204%20Labour%20mobility%20and%20public-private%20earning%20and%20job-satisfaction%20in%20Australia.pdf">research</a> aimed to assess the restructuring policy for public servants and gather information about the impact on both pay and job satisfaction. A soon-to-be released update shows the movement of the public servants has important economic and social effects. </p>
<p>To inform what might happen over the period to 2016/17, the research looked at what happened recently using 80,000 records for 6,000 Australian workers for the period 2003-2012. </p>
<p>Using simple averages to compare pay or job satisfaction can be misleading because it incorrectly attributes the difference to the sector rather than individual characteristics of the workers, such as differences in occupations, skills, age and background that differ between the sectors. To avoid this danger, sophisticated statistical models were applied to control for these fixed individual specific characteristics from repeated individual survey data. </p>
<p>The research found that three years later public servants who had moved from public service had not returned to pay equivalent to those who didn’t leave. </p>
<p>In the first year, public servants who moved to the private sector had 6.4% lower earnings on average than those who stayed. Three years later, the data showed they were still earning 1.9% less. </p>
<p>This evidence reflects the best-case scenario as future changes might be more involuntary, with fewer voluntary moves compared to the historical changes examined. There was also no account of further income losses from inflation rises, nor were the costs for workers who ended up in unemployment or out of the labour force included. Those remaining public servants with a different employer (those who were shuffled) maintained comparable pay with their peers who didn’t move jobs. </p>
<p>The research also showed significant psycho-social costs to public servants who could find private sector jobs. They had lower job satisfaction related to pay, probably reflecting these same significant earnings losses. Perhaps understandably, those who were shuffled within the public sector had significantly lower satisfaction with job security but also had significant satisfaction with the pay, hours, flexibility and the nature of the work itself. </p>
<p>The government has not presented a clear social cost-benefit with arguments linked to how services are maintained, or performance measures showing improvements from such cuts, and what changes the cuts should achieve. </p>
<p>Public debate on whether it is worth it seems hemmed, perhaps by lack of objective information, despite a number of <a href="http://www.dpmc.gov.au/publications/aga_reform/aga_reform_blueprint/">reviews</a>, including the <a href="http://www.ncoa.gov.au/">National Commission of Audit</a>, that critique and stress the need to re-assess the efficiency dividend and public restructure. Some earlier <a href="https://theconversation.com/how-efficient-is-australias-public-sector-short-answer-very-19908">research</a> shows the Australian public sector is already lean. This research shows the significant human cost of the cuts.</p><img src="https://counter.theconversation.com/content/34353/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Genevieve Knight currently receives funding from the Department for Business,
Innovation and Skills for evaluating an FE policy; Northern Connections for an aged care workforce initiative cost benefit analysis; RCSA for a secondary analysis of the aged care census. Relevant to this research, related research in UK data was a beneficiary of ESRC research council funding. </span></em></p>By 2017, some 16,500 public servants will have lost their jobs, or have been shuffled into other positions within the public service, in the government’s ongoing drive for budget savings. The long-standing…Genevieve Knight, Senior Research Fellow, National Institute of Labour Studies, Flinders UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/296032014-07-24T12:52:58Z2014-07-24T12:52:58ZTime for a clear-headed debate on the future of the public sector<p>Since the election of the coalition government in 2010, the UK has experienced a series of initiatives to reform the structure, funding and operation of the public sector. Under the umbrella of economic strategy based on cutting the deficit through austere reductions to public spending, the government has led a root-and-branch reform of public sector pensions. Most staff now have to work longer, pay in more, and receive less than <a href="http://www.nhsbsa.nhs.uk/Documents/Pensions/hutton_final_100311.pdf">they used to</a>.</p>
<p>This has been in parallel with either pay freezes or settlements <a href="https://www.gov.uk/government/news/public-sector-pay-awards-for-2014-15">averaging 1%</a> against an average inflation rate in the past four years of 3%. In addition, significant changes in public sector structures – especially the NHS – and operational management has seen increases in workload. At the same time, the highly unionised workforce has seen its voice reduced, with senior managers given higher levels of decision-making powers along with higher salaries and reduced accountability. This was highlighed by the <a href="http://www.midstaffspublicinquiry.com/report">Francis Report</a> public inquiry into Mid Staffordshire NHS Trust.</p>
<h2>Entrenched disputes</h2>
<p>As a result there have been long-running disputes on a number of issues. These have ranged from disputes over pensions by the Fire Brigades Union to others over pay by local government workers in UNISON, GMB, and UNITE and university staff in the University and College Union. Other unions have led action over workload, such as <a href="https://theconversation.com/are-the-tables-turning-in-michael-goves-war-on-teacher-unions-25417">teachers in the National Union of Teachers</a>, while the Public and Commercial Services Union have had disputes across the board on pay, pensions, and workload. </p>
<p>The actual forms of industrial action have varied from one-day strikes at random intervals to two-hour strikes on the odd day, to overtime bans, action to <a href="http://www.midstaffspublicinquiry.com/report">only work to contracted hours</a>, and slightly longer stoppages. But there have been no all-out or general strikes as yet.</p>
<p>On July 10 there was a coming together of some of these groups – teachers, local government workers, firefighters, civil servants – in a very large stoppage (estimated at about 500,000) across the nation. News coverage was patchy – some local BBC radio reports were extremely sympathetic and full, whereas much of the national coverage was more hostile (especially to the teachers) and much more subdued. A <a href="http://www.bbc.co.uk/news/business-28444916">second day of strikes</a> has been called for September 30.</p>
<p>In many ways the event was an important one. The unions showed in a very public manner that they are still here and can run a day of strike action. There was high visibility for their case; and there is initial evidence from <a href="http://local.teachers.org.uk/isleofwight/July10strike.cfm">unions such as the NUT</a> that as result there has been an increased membership. </p>
<p>In particular, the union case for more pay was contrasted both with the government’s tale of recovery and the high share of economic income going to an increasingly small but ever richer group – the <a href="http://www.bbc.co.uk/news/28286264">gap between average earnings</a> and those of the highest executives is now 180 times greater.</p>
<h2>Political positioning</h2>
<p>In addition, the government was pushed onto the defensive, leading to <a href="https://theconversation.com/camerons-new-strike-laws-are-more-radical-than-margaret-thatchers-29457">talk of further restrictions</a> on the right to strike – not something required if striking really is futile. </p>
<p>The Labour leadership was unhelpfully silent on the issues and the July strike. Yet this is the moment in the election cycle that requires the Labour Party to create a picture of economic recovery based on growing wages and productivity linked with state investment in infrastructure, housing, and public services. </p>
<p>The strike day asked a real political question: what do our main political leaders consider to be the future of UK public services? Pay cuts, workload increases, further supply-side fragmentation, and privatisation suggest not just a down-grading of all public services but a removal of some services from public access. </p>
<p>This is a part of national life worth debating in totality: the role of the state, its funding of services, the free availability of health and education and the state’s part in the direction of economic recovery. </p>
<p>The Conservative answer seems to be clear – namely a forced retreat from the high tide of welfare – while Labour remains confused by its own legacy and future election chances. The strike day asked the right questions about the future of our public sector in a sharp and public way. Now we must debate them. </p><img src="https://counter.theconversation.com/content/29603/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roger Seifert does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Since the election of the coalition government in 2010, the UK has experienced a series of initiatives to reform the structure, funding and operation of the public sector. Under the umbrella of economic…Roger Seifert, Professor of Industrial Relations, University of WolverhamptonLicensed as Creative Commons – attribution, no derivatives.