Failed State book and reflections on NHS

It is very interesting to read the book “Failed State”. I like the book because it starts out saying there is a way out. This is not one of those irritatingly lazy posts about the UK being hopeless and doomed – it is neither – nor is it about UK politicians being corrupt and workshy – they are neither. Sam Freedman has written a very specific and actionable critique about the UK.

The UK is uniquely overcentralised. It started during Thatcher’s years. It means people making decisions who do not have the knowledge to make them. In other words, the central government cannot have the necessary local knowledge. Furthermore, the sheer volume of work coming to the central government overwhelms it, while the plummeting funding for local government eviscerates it. In desperation with the workload, the central government privatises activities that should not be privatised, thinking managing a contractor is the path forward. Meanwhile, they think less and less of giving capacity to local governments because previous underfunding means they are no longer capable. And as the private sector steps in where it does not belong, it overcharges, taking even more funding away.

The most upsetting examples to me were about children. Children’s care homes are 75% in the private sector. They raise prices, leaving less money to build public care homes, and worsening the councils’ debt. Consolidation drops competition and raises prices again. Worse, the private providers choose cheap locations like Blackpool so children are sent there “hundreds of miles away from their homes and friendship networks”. “Grooming gangs” know this and target the children – the book cites this report.

The little funding that councils get is temporary and fragmented. So they can’t make multi-year investments. They have to accumulate a budget from multiple programmes. And they have to compete for the funding. When they win, they are left with higher operating costs after the funding goes away. And when they lose, they have lost what they had to spend on bidding.

Reading this while thinking of our customers in NHS IT explains so much of their behaviour.
From history, the British state periodically gets stuck and always finds a way out. It just takes 40-year cycles for the problem to be so bad that the state starts fixing it. It’s been 40 years. That’s why it’s so interesting to see Labour’s moves: (1) reforming councils so they are larger and more integrated to build up decentralised capacity; (2) the chancellor allowing multi-year budgeting and counting capital investments separately; and (3) making 10-year plans. None of these is fast or easy, but they are doable and beneficial, I do hope they sustain their focus. The UK is a great country.