In praise of the back office

 

               It is conventional wisdom in all political parties to say that the cuts should be concentrated on the administrative overhead. Front line staff should be spared the cuts.  I have said this myself. No-one wants to be hounded as a  nurse sacker or a doctor reducer or a teacher cutter. Save our schools and hospitals is part of every UK politician’s mantra.

             We need ,however, to think a little more carefully before assuming that all overhead and back up is bad. After all, there has been a long fashion to increase the amount of clerical and support work done for the police by civilian employees, so the police themselves can spend  more time out of the office on duty, tackling criminals. Having the right number of specialist administrators, case workers and the like can make for more efficient policing.

          In the NHS we need good medically trained nurses and cotors. We also need efficient receptionists, computer specialists to ensure the record systems work, procurement experts so the right medical supplies are available, and good administrators to keep a check on everything from patient records through to supplies of medicine.  If we ask nurses and doctors to do too much of this work themselves we may have a less efficient and more expensive service.

          The truth about cutting public spending is this. When it comes to core services like schools and hospitals which the public generally respects and wants, the only worthwhile thing to do is to make it more efficient. Both services will require more money over the years ahead, just as they have enjoyed throughout my lifetime. The sums will only be acceptable to taxpayers if we make the services more efficient whilst keeping or raising quality at the same time. Efficiency and quality go together if you introduce modern management approaches. Getting things right first time both raises quality and cuts costs, for example.

             Anyone trying to achieve this should not be prejudge whether they need an extra front line employee or an extra or better adminsitrative support employee. Careful analysis of each situation should tell the managers whether they need more back up staff to free specialist time for specialist functions, or less back up because systems have become too bureaucratic and complex. Tomorrow I will look at other services where cuts are possible.

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32 Comments

  1. norman
    Posted April 18, 2011 at 6:57 am | Permalink

    I was reading Toby Young’s column in The Spectator yesterday and it was dealing with some report by the head of Dixons (or something) into the Building for Schools programme. The long and the short of it is we wasted vast amounts on bureaucracy compared to other countries, each buildings costs are tens of percents higher than in comparable countries. An average of £4 million was spent prior to anything being done on consultants and lawyers simply to get the paperwork for the bid in order.

    Surely this, and other similar PFI disaster zones (a programme the Conservatives are happy to continue with, unfortunately for hard pressed taxpayers), are areas ripe for the axe?

  2. lifelogic
    Posted April 18, 2011 at 7:09 am | Permalink

    If you tax people waste money in the collection then spend it very inefficiently perhaps getting a little as 30% back to people by providing a sort of rationed second rate health service it is hardly likely every to be very efficient.

    Let the people buy health care themselves just as they buy cars, food and hair cuts and housing. That would actually be far more efficient. A small backstop health system or insurance system of some kind will be needed only for a tiny minority who have serious health problems and no money.

    The same applies to education how can it ever be more efficient to tax then funnel the money through the very inefficient politically driven state and over paid state sector then handing out a few rationed operations and drugs or poor politically influenced schools back to tax payers?

    Clearly back office people are needed but far fewer if you keep the state out of it as much as is possible. You also push less investment and fewer workers abroad with lower tax rates.

    • waramess
      Posted April 18, 2011 at 10:02 am | Permalink

      I have heard that privatisation in any form has to be resisted as the PFI adventure is felt to have already given any value in the NHS to the private sector.

      As such the government cannot afford to see any dilution in the receipts necessary for it to be viable and is unable, even if it wished, to sell off the NHS to the private sector without taking on a huge cost.

      I have seen no figures to support this contention but it would seem par for the course and, by so doing, Brown would have ensured another socialist dream stays in the public sector for a very long time.

      • lifelogic
        Posted April 18, 2011 at 1:43 pm | Permalink

        The huge saving and improved service achieved, by cutting out the dead hand of the state out of health and education are such that it could well afford to pick up the bills for these incompetently delivered PFI contracts indeed it has to pick them up anyway.

        Of topic on the referendum I tend to think the country will just vote against change. If it does go through Cameron will have been a complete disaster first loosing the election by failing to put the moral and practical case for a smaller state against the sitting duck Brown. Then failing to implement any real policies for pro business growth and finally he buries the party perhaps for good with AV.

        He will start to make even Major and Heath look relatively competent at this rate.

        • lifelogic
          Posted April 18, 2011 at 1:46 pm | Permalink

          And he has Libya perhaps about to blow up in his face.

    • acorn
      Posted April 18, 2011 at 12:10 pm | Permalink

      @ Lifelogic and Lola

      I have said before that when the state is both purchaser and provider of a service, discovering the market price of any element of such services is difficult. The easiest way to discover the price is everybody gets an itemised bill. For instance, the physician that does your operation, gets a bill from the hospital for using its assets and its nurses and includes associated back office costs. After a while, your GP might say, the best deal is Surgeon A operating in Hospital B. Subsequently Hospital A starts rethinking its quality and price structure to attract top surgeons. Your GP would become the health equivalent of an independent financial adviser as well as being your primary health care provider.

      The question is; do the back office cost of the present system via multiple government departments, cost more or less than introducing a real billing system for paying the bill for your operation. Your bill may then be paid by a mixture of a basic state funded insurance,topped up by a private insurance system if you want five star meals and be attended by blond nurses under twenty five.

      I am oversimplifying in this short post but you get my drift. Under such a system, the NHS would reorganise itself without a politician in sight.

      • lifelogic
        Posted April 18, 2011 at 2:03 pm | Permalink

        The best system and simplest by far for nearly all cases is one that just pays the doctors, nurses and providers for the services needed just as you do for food, housing and everything else. Any internal invoicing is bound to be distorted political and badly run and will fail to deliver for the customer.

        • lifelogic
          Posted April 19, 2011 at 6:47 am | Permalink

          Free at the point of use is the main reason the NHS and Education do not work well and cost so much. If this system is a good idea as the parties all seem to think why do they not extend it to housing, food, fuel, drink and other essentials?

  3. Posted April 18, 2011 at 7:56 am | Permalink

    I would agree about not over-bashing the back office and support functions, however the private sector has as low a regard for such functions as well. Also there is a limit to how much you can increase efficiency, something cannot be more than 100% efficient and in reality the efforts involved in getting 100% efficiency usually mean that a certain small amout of inefficiency is tolerable. Sooner or later you surely have to decide whether certain functions are worth retaining.

    The problem with politicians always suggesting that everything can be done through efficiencies is that the voting populace have stopped buying the argument. They think they’ve sussed out a con trick, and to be reasonably fair in some ways they have. However I think all that proves is that in some ways Labour still retain the freehold to the terms of the debate and over time Conservatives need to lever it off of them.

  4. startledcod
    Posted April 18, 2011 at 8:56 am | Permalink

    Beyond cutting ‘frontline’ or ‘back office’ staff an important first step for the NHS is to cut some of the conditions it deals with/treats. For instance, tattoo removal should not be on the NHS, cosmetic procedures for any bar the most unfortunate or IVF. Being childless is very unfortunate but it is not an illness.

    Its a start.

    • APL
      Posted April 18, 2011 at 11:23 am | Permalink

      StartledCod: “For instance, tattoo removal should not be on the NHS, cosmetic procedures for any bar the most unfortunate or IVF. ”

      Yes, IVF especially when there are thousands of children awaiting adoption.

      • Andy
        Posted April 18, 2011 at 1:00 pm | Permalink

        Tatoo removal and cosmetic procedures are not normally available on the NHS.

  5. lola
    Posted April 18, 2011 at 9:23 am | Permalink

    Both services will require more money over the years ahead, just as they have enjoyed throughout my lifetime. Without the market discipline of competition you, and no-one esle, can possibly know that. The assumption behind that statement lies at the very heart of what is wrong. You all subscribe to ‘spending other peoples money on stuff’ as the panacea for all evils. Stop it.

  6. Posted April 18, 2011 at 9:25 am | Permalink

    Just as you have pupil-teacher ratios in schools, surely it ought to be possible to establish some front line to administrator ratios for large organisations such as the police forces and NHS trusts.
    Whenever I need to visit the outpatients department at our local hospital I am always amazed by the number of (presumably) administrative staff who seem to be “wandering” around carrying maybe a file or something similar. Yet when I took a friend to a private hospital recently for a post-operative outpatients check-up, the only non-medical staff that I saw were two ladies at the main reception desk, and one more in out-patients. I know that they can’t be compared directly, but there must be figures from all the statistics collected both by our government and elsewhere around the world showing the number of support staff required for an average general hospital of a particular size.

    With regards the police, my daughter has worked on the civilian staff of the Met since she left school, and is convinced that in spite of the best efforts of the police, more paperwork than ever is being generated. Everybody wants statistics, and this means that every crime has to be categorized, then re-categorised, usually so some politician or pressure group can try to make some point.
    The CPS doesn’t help, they apparently seem to require ever increasing amounts of paperwork even for the most trivial crimes, and it is now easier than ever for an accused person to escape justice because of some minor paperwork slip-up. Its time to return to the old days where the police prosecuted minor crimes and CPS involvement limited to the more serious offences.

  7. Nick
    Posted April 18, 2011 at 9:34 am | Permalink

    The problem is that on top of the lack of efficiency, you got vast amounts of money going on past services not paid for at the time. Namely pensions.

    Take an easier example.

    What happens when past pension costs become 50% of the cost of collecting your rubbish?

    Are you going to allow people to opt out and go private and pay, say, cost plus 10%, saving 40% in the process?

    Or are people going to be forced to pay over the odds?

    • REPay
      Posted April 18, 2011 at 2:34 pm | Permalink

      Spot on and Hutton gets round the Tory pledge to cap state pensions at 60k…if you are a civil servant or doctor earning over six figures you should be expected to save for your own retirement – or at least make a proper contribution which would be around 30% of salary for that scale of retirement reward.

  8. waramess
    Posted April 18, 2011 at 10:04 am | Permalink

    We should perhaps bear in mind that it is the managers who decide where the axe falls, not the front line staff. Turkeys and Christmas come to mind.

  9. Tedgo
    Posted April 18, 2011 at 10:26 am | Permalink

    I was listening to a radio interview of a head master about closing his school in the bad weather. One of his main problems was getting ‘his 300 staff’ to school.

    I was gobsmacked. If they were all teachers then with 2000 pupils there would be 1 teacher to every 6.7 pupils.

    Of course they are not all teachers, the current national figure is about 16 pupils per teacher. On that basis the school has 125 teacher and 175 non teachers. I still gobsmacked, what do the 175 non teachers do.

    At my school in the late 1950’s, there was 1 teacher per class, a head master, his secretary, 3 laboratory technicians, a caretaker, 4 or 5 part time dinner ladies in the kitchen and several part time cleaners. Class sizes were 35 to 40 pupils. This was a school of 900 pupils with about 41 staff.

  10. forthurst
    Posted April 18, 2011 at 10:52 am | Permalink

    To remove unnecessary bureaucracy, go into schools and hospitals etc to the headteacher’s, chief administrator’s office, collect all the booklets, doorstoppers etc produced by Whitehall and other external bureaucracies; trace these documents to the chain of command that produced them and dispense with it. The best schools and best (private) hospitals operate very largely without the assistance of people whose function it is to manufacture job creation schemes for themselves whilst impeding other people in the performance of their duties.

  11. alan jutson
    Posted April 18, 2011 at 11:51 am | Permalink

    John
    Yes of course we do need good backstaff, but we need good backstaff that are working to a good system which produces effective working and result,s which is the efficient running of a front line service, no matter what it is.
    Far too often we have too many staff, operating a vastly too complicated system, which simply is not required, indeed what we seem to have in many cases, is front line staff working inefficiently to a system to please and satisfy backroom staff.

    In an age where everyone it seems wants to cover their own backside, and decisions are made at committee, we seem to have lost the meaning of the words service, customers and value for money.

    Computers, inflexable operating systems, the tick box culture, and our obsession with more and more statistics, have complicated matters beyond belief. In private industry some sort of commonsense eventually prevails, but in Government departments and local Authorities it seems everyone has to satisfy the system, and customers come second.

    It has to change, but I fear it will not.

  12. Peter Turner
    Posted April 18, 2011 at 1:00 pm | Permalink

    What is actually meant by the back office compared to the front line? The Health Service is probably the most complex organisation in the country and much is heard of Doctors, Nurses . To many they are the front line. But, in reality, they are only the two professions most seen. It could be argued, for example, that the Clinical Laboratories are actually part of the back office set up – but are they? The work undertaken in these laboratories – haematology, clinical chemistry, blood transfusion, medical microbiology, parasitology, immunology, genetics and so on – have a vital effect on the diagnosis and treatment of patients and no hospital could function without access to these services and yet these highly qualified and professional staff receive little if any recognition. Mention Health Care Scientists and expressions go blank. Unfortunately even health care providers (Health Authorities) themselves do not appear to give the appropriate recognition and consideration that is deserved and yet it is at the level of Doctors, Nurses and Health Care Scientists that appropriate expertise resides and not in the Ivory Towers of Whitehall.

    Health Care Science covers far more than the sciences listed above. The whole field really is complex. But is it a back office? I do not think so.

  13. rose
    Posted April 18, 2011 at 1:47 pm | Permalink

    It is heartbreaking to see the damage being done to our streets because no-one is in overall charge of them. Lots of bureaucratic right and left hands paddling their own canoes, if you’ll forgive the mixed metpahor. So a beautiful Georgian street will be cluttered up with Parking Services posts and machinery; the pavements will be blocked by huge overflowing smelly bins left on the council’s instruction outside unsuitable conversions – HMOs, restaurants, and nightclubs – and the road will be resurfaced when it doesn’t need it, and no-one lears up the mess. Meanwhile the pavements are left cracked and dirty because all these so called services are trashing them and no-one is looking after them.

    The promotion by the council of The Night Time Economy is the most heartbreaking thing of all, as it doesn’t just trash whole neighbourhoods and then move on to others like the predator it is, but it destroys young lives in their thousands. How can it be called an economy and everything be subordianted to its needs? But it is, and the bureaucrats are very careful not to live anywhere near it themselves. In fact they very often live right outside the city in lovely country villages, and, not having come from the city in the first place, have no emotional attachment to it. They are like the multi national property companies who gang up with them to make a killing, at the historic old city’s expense. There is no such thing as a City Father now.

    • rose
      Posted April 18, 2011 at 6:54 pm | Permalink

      They also butcher the trees because they don’t know how to prune them, and the result is a permanent loss of their natural graceful habit. Again, no-one seems to be in overall charge of our historic avenues.

  14. eddyh
    Posted April 18, 2011 at 3:49 pm | Permalink

    When I was appointed a consultant surgeon in 1973 the hospital was run by the matron, 3 consultants (as a subcomittee of all the consultants) and the hospital secretary,
    Now you can’t walk down the corridors witholut tripping over hordes of middle management with their clipboards. My colleagues who are still practising are so fed up with the constant interference by management that they have mainly given up on everything but their clinical commitment.

  15. Iain Gill
    Posted April 18, 2011 at 4:14 pm | Permalink

    many public sector contractors get bad reviews when usually they are just responding to the bid process the public sector and the same small group of consultancies ran in the procurement process

    far too much of the procurement process keeps the people with substance on both sides of the process from speaking to each other, far too much of it is box ticking, and far too much professional BS merchants on both sides

    the best way of sorting it out would be to free up the people with substance from the BS merchants

    this applies in all sorts of scenarios and all sorts of public sector contracts

  16. Brian Tomkinson
    Posted April 18, 2011 at 4:23 pm | Permalink

    Is “efficiency” a word that has any meaning in the public sector? The problem though lies with you politicians who want to keep spending more and more taxpayers’ money.
    It may surprise you all to learn that we would prefer to decide how to spend our own money than leave it to you.

  17. Posted April 18, 2011 at 6:50 pm | Permalink

    We need the kind of mindset that lead to the staggering savings that were made to our retail and automotive supply chains over the past 30 years.

    The back/front office balance and the central/local procurement balance etc were meat and drink to the people that managed to cut tons of fat from these operations and with virtually no union unrest.

  18. Bazman
    Posted April 18, 2011 at 7:00 pm | Permalink

    Any comments from the nuclear fantasists now the Fukushima incident has been raised to Level 7 of nuclear emergencies, the same as for the world’s worst nuclear incident, the meltdown at Chernobyl in the Ukraine in April 1986 and could be argued to be even worse as there are four reactors. Chernobyl only involved one. What do you have to say for your blind apologist position?

  19. james c
    Posted April 18, 2011 at 9:08 pm | Permalink

    It should be easy to cut the cost of care homes by releasing agricultural land to build many more of them.

  20. Mike Stallard
    Posted April 18, 2011 at 9:35 pm | Permalink

    Tescos set out to please the customer. Otherwise they go bankrupt. Public Schools set out to please the parents. Otherwise they have no pupils. Private dentists set out to please the patients.Otherwise they go bust.
    Government schools set out to please the government, not the parent, not the customer, with their children chosen by the government, punished by the government, expelled by the government, teachers paid by the government, meetings set out by the government, blizzards of paperwork belched out by the government and trips banned by the government as too dangerous. Meanwhile, of course, religion is taught by the (largely atheist) government and even sex is arranged by the government.
    Parents? Well, you cannot trust them, can you?
    And the government is so easy to fool. We all know that. That is why, on the whole, State Schools are so utterly failing and why Independent parent based schools are so effective.

    This comment on the back office must take this on board. The back office has pushed far too often in front of the parent in schools, the patient at the doctor’s and the victim with the police.

  21. Mark Baker
    Posted April 18, 2011 at 9:52 pm | Permalink

    On this theme I comment “systems thinking in the public sector” by John Seddon, which describes successful efforts to increase efficiency in management. Should be read by all MPs.

  22. David John Wilson
    Posted April 18, 2011 at 11:31 pm | Permalink

    What the NHS needs is efficient appropriate computer systems. At the end of a recent consultation at the Royal Berks which all went very efficiently. I was sent back to reception to book my next check up in a years time.

    After spending ten minutes while the receptionist tried tobook this in she eventually decided that thecomputer couldn’t handle bookings a year ahead and I had to have an appointment in just over eleven months. In this time a queue of ten people built up behind me.

    I have similar problems at my GP’s where their system cannot handle my monthly blood test and so I have to remember to book it later instead of just after my appointment.

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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