Select Committee on Public Administration Minutes of Evidence

Examination of Witnesses (Questions 820 - 833)



  820. We tend to be one of the most deregulated countries in Europe, yet we are the country that has most criticism of our regulation. Did you look at that issue, and is one of the issues the language in which the regulation is actually written that causes the problem?
  (Professor Hood) I find it very hard to comment on that, because my study was not cross-nationally comparative, so I cannot speak with any authority about how regulation is seen elsewhere. I do have a colleague at LSE who looked at food regulation across 11 European countries and found that in every one public confidence was sharply dropping.

  821. One of the things that we tend to be told is, "We want more entrepreneurs in the Civil Service," and "We want them to take the risks." Who do you think the risks should apply to, whose risk is it that they were looking at; when we talk of entrepreneurs, what should they be judging their entrepreneurial skills by?
  (Professor Hood) I am not sure that I have fully understood that question. I do think that one of the key issues that I have observed, in public sector organisations dealing with the risk of blame, is the way that they devise ways of coping with that, through means that I am sure are very familiar to you in your activities, namely, rebuttal, denial, delay, reorganisation, service abandonment, and the like, these are ways that organisations deal with the handling of blame. It does not always—and this is the point that I have been trying to make in my piece on Risk Management—that kind of activity does not often contribute to good social risk management, if I can put it like that.

  822. So the avoidance of risk is to the civil servant and Minister, not to the recipient of a service?
  (Professor Hood) That is the traditional approach, I believe, well, a very common approach.

  823. How do you reverse that so that the risk is protecting the public?
  (Professor Hood) I do not think that there is a way, and I have said this in my paper, I do not think there is a panacea that will enable you to do that overnight, but if you can promote greater transparency, more reasoned consideration of risk, then I think you would be moving in the right direction. I do not say these problems will disappear.

  824. Is the Public Service Agreement the right way forward?
  (Professor Hood) I do not know, again, that I can really make a good judgement of that. I think it is a basis on which something can be built.

Mr Wright

  825. Just to take you back to one of your statements regarding the reduction in the civil servants and the increase in the overseers for the 20 years up to the nineties, there were some pretty major blunders in recent years: to quote a few, SERPS, BSE and, obviously, the passport system crisis that we had. Do you put the blame down to the number of civil servants cut in that particular area, or would there be another issue to look at, in those particular blunders?
  (Professor Hood) I would have had to do a detailed study to look at the links. I think that it might be somewhat different issues in each case, but I am not sure. If I understand it, the Passport Agency collapse involved the management of a complex IT project, a traditional area of weakness within the public service and, indeed, many disasters in the private sector as well. The BSE case involved the identification of a disease for which the science did not exist, a disease which did not even have DNA, so you could not send it off to a laboratory to be analysed. It took a very long time for the science to establish even quite simple things that people wanted to know at the outset, like could the disease be transmitted from cow to calf, could it be transmitted among a herd by contagion, these kinds of simple things were not known and could not be known, even with all the resources that you could throw at them, for a number of years, just because of the reproduction cycle of the beasts. So there you have got a policy-making issue against a moving scientific frontier. So I am not sure that it is necessarily lack of key numbers in either of those cases, it is probably the wrong kinds of skills, and perhaps, in part, the intractable problems that were actually faced in those kinds of cases.


  826. Would it not be a worthwhile research exercise, for you, or someone, to look at the great policy failures of our time and see what they might have in common and what differences they have and what lessons might be learned from them?
  (Professor Hood) Some work has been done on this, in fact, not largely by myself but there has been work done on that, by the late Barry Turner and other people, of that kind. And some of the things that come through in those kinds of studies are that, if you want a really big kind of organisational policy failure, often you need a large organisation, or preferably several large organisations that do not quite fit together, you need time, because you need a lot of little things to go wrong, in unrecognised ways, over time, and you need some kind of clash of culture for misunderstandings to build up. The work of people like Barry Turner has identified those kinds of features as things that tend to be associated with major policy failures. So some of that work I think has been done; not by me, I should say.

  827. You are modest; there is a tantalising footnote here, by you and others, `Assessing the Dangerous Dogs Act: When Does a Regulatory Law Fail?'. When does a regulatory law fail?
  (Professor Hood) I used the example of the Dangerous Dogs Act to show the limitations of the better regulation principles, and the reason why I chose that example was that it was cited by the Better Regulation Task Force as an unambiguous example of regulatory failure, and it was condemned as a knee-jerk reaction. I took that example, that was their example, of bad regulatory policy-making, and in my paper what I tried to show was that, in designing this legislation, the principles of better regulation came into conflict, so that it would only have been possible to have met the test on one of them by failing on another; in other words, that they were not consistent in this particular case. And the example that I have put here, I think I referred to that in my paper, is that the more you go for targeting, if you go for a risk-based approach to dog regulation, of which the Dangerous Dogs Act was an example—it has gone much further now in other countries, like Germany and France—then that is going to come into conflict with some of the other principles of better regulation, and indeed did do so, such as transparency. Because, given that breeds of dog are not unambiguously identifiable, in the nature of the beast, there is no DNA test that will enable you to distinguish one breed of dog from another, given that intractable fact, then the more you try to target the more problems you are going to have with transparency. And the point that I was trying to make was that these principles are, in fact, in some cases, certainly in that case, trade-offs; and what I was arguing was that, if you are going to do really a serious test of good regulation, you have to look at how those trade-offs were arrived at, in designing any particular piece of regulation, and whether you could have made it better able to fit one principle of better regulation without violating another. That was my point.

  828. Yes, I am interested in that, but surely what happened in practice was that you had a tabloid panic about dogs biting people, politicians have to respond to tabloid panics, they introduce lousy legislation that they know is not going to work, to be seen to be doing something, they do not grapple with "Are we getting consistent principles here?" they are behaving as politicians?
  (Professor Hood) I think that may well be the case, but I think that the test then, perhaps, of good regulation is, given the timetable of regulatory development occurs in the way that you suggest, was the approach intelligently crafted, perhaps at the technical level. And what I am referring to here is the idea that, for many kinds of policy initiatives, you have to wait for a window, that is a common feature, I believe, in policy-making of many kinds, and that window perhaps arrives with a tragedy, as in the case that you refer to. But then the test of good regulation is not was it all done in a hurry but when the window opened were the regulators ready with intelligent proposals that were ready to go; and that also does not feature in the principles of good regulation, and I believe it should do, because I think that reflects the reality of how regulatory processes work. And, I think, if you are going to assess regulation intelligently, the test is not whether you had a hasty response to a crisis but whether, when the crisis arrived, when the window opened, there were well-prepared and well thought out proposals. That is my point.

Mr Campbell

  829. I am not sure I am on the right line here, but Professor Hood has been very good, I think he is still going down this line, and it is another example, in fact. These Government inspectors, and particularly the new ones that have just been set up, particularly in local government, I get a bit worried. Because they came into my authority last month and had a look at all the books, and everything, to see how they were run, best value, and all this, and I get a bit worried; because my authority, as far as I am concerned, is well run, they do not waste money. I have seen authorities which have wasted money and built stupid things, but my authority has been well run for years. And yet these new Government inspectors are coming in, although they are Government, and saying to my authority, "You've got two leisure centres here, you've got one at one end of the town and one at the other;" well, they were built before the amalgamation of two local authorities, so they ended up with two. But they are both subsidised by the council tax, and these inspectors are saying, "Oh, we've got to give you a bad mark there, on that one, because you've got two and you're subsidising them." In other words, what they are saying to the local authority is, "You should get rid of one of them, by rights, sell it off," telling them to make a big political decision; and whichever one you close you are going to be wrong in that part of town, whichever administration is in power. And these inspectors are as good as telling these local authorities, where they have got money, where they are subsidising, "You've got to get rid of this;" and these are big political decisions. But they are not telling the people out there that they are telling them that, they are telling the council, and they are making the council take the decision. Do you think that is right?
  (Professor Hood) I said at the outset that I believe that public services need to be overseen. I think that there is a question that you can ask about what the appropriate level of oversight actually is, and what the incremental advantage of extra investment in oversight and regulation is. I do not believe that any study has been done of that. I do not believe that we know what the efficiency advantages of increasing investment in regulation of the public sector are; that evidence, as far as I know, does not exist, I have not seen any. In the case of local government, we did find, in the study that we looked at, that, shall we say, the outer reaches of the public sector, and this perhaps is a London-centric view, and perhaps I should say that, but what I mean is this was Whitehall and the centre were the bits where the regulatory growth had tended to be concentrated, that is quangos and local authorities, schools as well. There may be good reasons for that. I am just saying that that was what we observed, that was where we saw the most growth. And, as I have also said earlier, there is a large number of different inspectors, overseers, evaluators, and I do think, as I have said in my earlier remarks and also in my published work, that the links between these bodies have not, shall we say, been very fully thought out, I think the system has evolved in a relatively unrationalised way.

  830. They were put there to do a political job, do you think?
  (Professor Hood) People have spoken of the politics of reassurance.

  Mr Campbell: I have always had my doubts about the Audit Commission. I think that has been politically manhandled for years by parties, quite honestly, because they come in and tell local government what to do and what not to do, and I think sometimes they can get a bit political. And what I think is happening now, is, all these Government inspectorates and audits, I think the power is being taken away from politicians to make these decisions. I do not mind them coming in and saying, "Look," to the public, wherever they are, "here's a press release; we think you've got too many leisure centres here, that's our opinion, but it's up to the local authority to make the decision, not me, as an inspector." But they are not saying that, they are saying quietly to the chief executive of the council, "You've got to get rid of one of these," and they have got to make a big policy decision, that could nearly put whoever is in power out of power, taking a big decision like that. But they are not going to do that, they will whisper in your ear but they will not tell the public that "We've told the council to do it."


  831. This rather reinforces your line about the need for some oversight of these things?
  (Professor Hood) And a hard look. I am saying that there is a very good case for—

  Mr Campbell: I think they are politically motivated; that is my opinion, honestly, straightforwardly.

Mr White

  832. I would like to ask one final question on risk. One of the fundamental obstacles to much more entrepreneurial activity in the Civil Service and other public services is the Treasury Rules on spending of money. Did you do any analysis of the negative effect of the Treasury Rules and particularly the 1920 and 1930 Acts that govern it?
  (Professor Hood) No. I cannot honestly say that I have; but I do not think that that is the only factor that is affecting risk management in the public sector. I think also the move towards private insurance of public sector activities also has an impact on the way that public bodies manage risk, and may have real implications for the way that they handle issues of financial liability.


  833. Could I say, as we end, because we are doing this broad-ranging inquiry into how Government works, and linking to the Modernising Government White Paper and Civil Service reform programme, you are a distinguished scholar of public administration, we are a humble Committee of Public Administration, is there anything that we have not asked you, that relates to any of that, that you might want to say to us, or is that just an impossible question?
  (Professor Hood) I cannot think at the moment of a major additional point I would like to make. If one occurs to me when I am on the bus going home,—

  Chairman: If I take up your offer, if points do occur to you, I think I would be very interested in your work, and it would be very good if you were just to drop us a note, we would appreciate that very much. And thank you very much for coming along and giving your time today.

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