Examination of Witnesses (Questions 820
- 833)
WEDNESDAY 10 JANUARY 2001
PROFESSOR CHRISTOPHER
HOOD
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.
Chairman
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."
Chairman
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.
Chairman
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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