If you tell enough stories, perhaps the moral will show up.


I Am My Own Regulator

We've all seen stories like this, and they're getting more common. I first noticed it when the NHS lost crown immunity back in, ooooh, 1986. One branch of government regulates another, finds a breach and issues compliance requirements. The more deranged cases actually have one office fining another. The only person punished is the taxpayer, as the overall costs of goverment rise. In theory, careers suffer, but in fact the civil service requires a consistent record of egregious failure to have any effect on an officer's final pension.

The absurdity does get media attention, sometimes, but the level of comment is muted compared with the gross mentalness of the situation. I think the problem is that the only reasonable conclusion to draw is rather unfashionable: there are things that are unsuitable, by nature, by structure, to be done by the government.

If Brent PCT had been a private insurer or HMO, the costs would be borne -- in a fair setup -- by the shareholders. Fair is the challenge here of course, but it's a question of reasonably hard-nosed negotiation when the contracts are let. "Fair", in this context pretty much means that regulatory consequences fall on the owners of the supplying firm. The dividend reduces, and the board decides whether the problem is severe enough to be worth fixing or insuring against or whether it was better just to take the hit. If the shareholders don't like that choice, they sell out, the price drops and the bag-holders sack the board.... And if the regulation is too hard to be borne, the supplier walks away and society gets a lesson in realism.

There's nothing available, structurally, to deliver the same result from a public sector supplier. Basically, all you can do is dock the pay of the managers, and watch your remaining sliver of talent in the civil service wither away. Except, you'll never succeed in touching their pay, and no-one who makes choices, no executive, will ever be motivated by any sharper spur than the desire to avoid a moderately difficult interview.

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