Saturday 14 July 2012

The next Governor of the Bank of England

Who will succeed Sir Mervyn King as Governor of the Bank of England?

Way above DMossEsq's pay grade, this is the sort of question for which one turns for an answer to the Thunderer.

Op
Camilla Cavendish, said in the Times on 12 July 2012, Wanted: one governor, two different skill sets:
Gus O’Donnell, the former Cabinet Secretary and bookies’ favourite, would be a shrewd manager with Whitehall knowhow, but he would need a strong cabinet of deputy governors with commercial track records.
Ed
But according to the next day's leader, The Short List:
Lord O’Donnell, the former Cabinet Secretary, has the economics but no commercial experience and surprisingly weak support in the Treasury.
Whitehall – SNAFU
What makes Ms Cavendish think he's a shrewd manager?

Whose bust is it anyway?
What makes the leader-writer think that the economics Lord O'Donnell "has" are the economics we need?

And why is his Treasury support weak?

----------

12 August 2012: An unworthy suitor woos the Old Lady
  • Dominic Lawson considers the technocrat Adair "Widmerpool" Turner an unworthy suitor for the Bank of England, he doesn't mention Sir-Gus-now-Lord O'Donnell and trails the merits of Martin Taylor, sometime chief executive of Barclays
12 August 2012: Wanted: governor for wealthy Old Lady
  • "Many of those who could have done the job have now been tainted by scandal. Remaining applicants have been told the post will be advertised in the autumn in a number of publications and that they should register an official interest then."
18 August 2012: The next Governor
  • Adair Turner and Gus O'Donnell attract more flak, this time from the Spectator editorial, which floats the names of Glenn Stevens (Australia) and Alan Bollard (New Zealand). We might add – these names are not floated by the Spectator – Tim Congdon (England), Terry Smith (England) and John Moulton (England).

8 October 2012: O’Donnell withdraws from BoE race
  • "Gus O’Donnell, former cabinet secretary, has decided not to apply to become Bank of England governor, restricting the already short list of candidates for one of Britain’s most important public appointments."

    • Mark Carney has been named as the new governor of the Bank of England by Chancellor George Osborne ... Mr Carney, the governor of the Canadian central bank, will serve for five years and will hold new regulatory powers over banks.

    The next Governor of the Bank of England

    Who will succeed Sir Mervyn King as Governor of the Bank of England?

    Way above DMossEsq's pay grade, this is the sort of question for which one turns for an answer to the Thunderer.

    Op
    Camilla Cavendish, said in the Times on 12 July 2012, Wanted: one governor, two different skill sets:
    Gus O’Donnell, the former Cabinet Secretary and bookies’ favourite, would be a shrewd manager with Whitehall knowhow, but he would need a strong cabinet of deputy governors with commercial track records.
    Ed
    But according to the next day's leader, The Short List:
    Lord O’Donnell, the former Cabinet Secretary, has the economics but no commercial experience and surprisingly weak support in the Treasury.
    Whitehall – SNAFU
    What makes Ms Cavendish think he's a shrewd manager?

    Whose bust is it anyway?
    What makes the leader-writer think that the economics Lord O'Donnell "has" are the economics we need?

    And why is his Treasury support weak?

    ----------

    12 August 2012: An unworthy suitor woos the Old Lady
    • Dominic Lawson considers the technocrat Adair "Widmerpool" Turner an unworthy suitor for the Bank of England, he doesn't mention Sir-Gus-now-Lord O'Donnell and trails the merits of Martin Taylor, sometime chief executive of Barclays
    12 August 2012: Wanted: governor for wealthy Old Lady
    • "Many of those who could have done the job have now been tainted by scandal. Remaining applicants have been told the post will be advertised in the autumn in a number of publications and that they should register an official interest then."
    18 August 2012: The next Governor
    • Adair Turner and Gus O'Donnell attract more flak, this time from the Spectator editorial, which floats the names of Glenn Stevens (Australia) and Alan Bollard (New Zealand). We might add – these names are not floated by the Spectator – Tim Congdon (England), Terry Smith (England) and John Moulton (England).

    8 October 2012: O’Donnell withdraws from BoE race
    • "Gus O’Donnell, former cabinet secretary, has decided not to apply to become Bank of England governor, restricting the already short list of candidates for one of Britain’s most important public appointments."

    • Mark Carney has been named as the new governor of the Bank of England by Chancellor George Osborne ... Mr Carney, the governor of the Canadian central bank, will serve for five years and will hold new regulatory powers over banks.

    Friday 13 July 2012

    Whither the accountability of civil servants?

    Lord Armstrong of Ilminster was Cabinet Secretary between 1979 and 1987. He's the one who came up with the phrase "economical with the actualité" in connection with the Peter Wright/Spycatcher business.

    Great wordsmith that he is, he's done it again – here's his vintage encapsulation of Whitehall wisdom, a gem, one to treasure, quoted in yesterday's TimesMandarins’ warning over Civil Service ‘politicisation’:
    Lord Armstrong insisted that calling civil servants before committees to blame them for the failure of major projects would not accord with the principles of “natural justice”.
    Turns out the House of Lords Constitution Committee is taking evidence on these upstart select committees being disobliging to Whitehall officials.

    Margaret Hodge at the Public Accounts Committee seems to have particularly upset their Eminences, also Bernard Jenkin at the Public Administration Select Committee. They can't be too pleased with Keith Vaz and his Home Affairs Committee either, forever moaning about having information withheld from them, and recently Andrew Tyrie's Treasury Select Committee ditto.

    The Chairman of the Lords Committee is Baroness Jay and what she's finding is that when you poke a stick in the wasps' nest, out come furious buzzing issues like responsibility and accountability and politicisation and openness and policy and delivery and management and budgeting and contractors and consultants and SpAds and NDPBs and ALBs and public service and, don't forget, natural justice. It's fearful.

    You can read all about it in the written evidence, Rt Hon Peter Riddell's contribution (pp.19-22) highly recommended.

    And you can watch the General Secretary of the First Division Association give evidence to the Committee, followed by four of his lowliest members – Lord Armstrong (see above), Lord Wilson, Lord Turnbull and Sir-Gus-now-Lord O'Donnell – on two hours of the most peculiar-but-fascinating TV.

    Lord Turnbull gives it as his opinion that no-one will ever find out who was responsible for failure, so there's no point these idiotic select committees asking.

    And the combative O'Donnell wants to know about the accountability of the select committees, who are they responsible to and what are their objectives?

    Baroness Jay is in for a fine old time, trying to write up her findings but, in summary, the gist seems to be this – accountability and responsibility need to be distinguished but they can't be defined, no-one's responsible for anything, whatever "responsible" means, and the select committees don't need any new powers to do their job, whatever that is and anyway it's probably unconstitutional, because the present rules work perfectly well and much better than the Americans'.

    It's an almost immaculate defence of the status quo and apparently we have testimony from Sir David "Shifty" Normington to look forward to in the final report. But there is just the tiniest Hodge-shaped chink detectable in the armour.

    What their lordships seem to be saying is that when we taxpayers hand over our £700 billion to Whitehall for their safekeeping every year, there is absolutely no way of knowing how it will be spent or wasted because no-one is in charge, no-one has a clue what's going on, not even our highly esteemed senior civil servants who are scarcely paid a bean for labouring away at the coalface of public service, it would be a breach of natural justice to expect them to and it's no-one's fault except possibly ministers, who are clueless, and would someone please rid us of Margaret Hodge, PDQ.

    ----------

    Updated 16 February 2015

    "... would someone please rid us of Margaret Hodge, PDQ". That was 2½ years ago. Now the magnificent Chairman of the Public Accounts Committee is standing down after five years and she has delivered a valedictory speech recording Whitehall's attempt to get the PAC closed down.

    She likens Whitehall to a collection of Freemasons and accuses it of standing in the way of the high quality public services we want, need, deserve and pay for.

    Long sections of her speech are published by the excellent Tony Collins – please read.

    Whither the accountability of civil servants?

    Lord Armstrong of Ilminster was Cabinet Secretary between 1979 and 1987. He's the one who came up with the phrase "economical with the actualité" in connection with the Peter Wright/Spycatcher business.

    Great wordsmith that he is, he's done it again – here's his vintage encapsulation of Whitehall wisdom, a gem, one to treasure, quoted in yesterday's TimesMandarins’ warning over Civil Service ‘politicisation’:
    Lord Armstrong insisted that calling civil servants before committees to blame them for the failure of major projects would not accord with the principles of “natural justice”.

    The Home Office – what do they do all day?

    5 July 2005 – the UK wins the right to host the 2012 Olympics©®™. 12 July 2012, 2,564 days later, Olympic security contractor G4S told ministers only yesterday it could not fulfil brief:
    On Monday, the Home Secretary assured the House of Commons that she was "confident" that the private company would be able to deliver out its commitments in full.

    Labour accused the Home Office of presiding over a "shambles," after it emerged that 3,500 additional troops would now be needed to fill in for a shortfall in the number of security guards that G4S had been able to recruit.
    We have had five Home Secretaries in the past seven years and they have a huge retinue of officials whose job it is to manage the arrangements for the Olympics including security.

    Officials must have had the odd progress meeting with G4S. What else can they have done for the past 2,564 days? What did they discuss at these meetings? "Are the security arrangements all in place?" seems like one of the more obvious topics to broach. But no, if the headline above is to be believed, the Home Office only discovered the day before yesterday that there is a problem.

    "The disgraceful state of public administration in the UK" – where have we seen that phrase before?


    The Home Office – what do they do all day?

    5 July 2005 – the UK wins the right to host the 2012 Olympics©®™. 12 July 2012, 2,564 days later, Olympic security contractor G4S told ministers only yesterday it could not fulfil brief:
    On Monday, the Home Secretary assured the House of Commons that she was "confident" that the private company would be able to deliver out its commitments in full.

    Labour accused the Home Office of presiding over a "shambles," after it emerged that 3,500 additional troops would now be needed to fill in for a shortfall in the number of security guards that G4S had been able to recruit.
    We have had five Home Secretaries in the past seven years and they have a huge retinue of officials whose job it is to manage the arrangements for the Olympics including security.

    Officials must have had the odd progress meeting with G4S. What else can they have done for the past 2,564 days? What did they discuss at these meetings? "Are the security arrangements all in place?" seems like one of the more obvious topics to broach. But no, if the headline above is to be believed, the Home Office only discovered the day before yesterday that there is a problem.

    "The disgraceful state of public administration in the UK" – where have we seen that phrase before?


    Monday 9 July 2012

    Francis Maude and the economies of scale

    "A seven-year government efficiency programme has backfired and increased costs for the taxpayer by hundreds of millions of pounds, a public spending watchdog said ... Whitehall departments have spent £1.4 billion in an attempt to save £159  million by sharing "back-office" functions such as personnel and procurement ..." – Telegraph readers and followers of DMossEsq have known all about this since March.

    Any 12 year-old management consultant can make the case that sharing services saves money. It stands to reason.

    Except that it's not true.

    And now the Public Accounts Committee have a few words of advice for Francis Maude and the Cabinet Office:
    Committee chair Margaret Hodge said: "Shared service centres have failed to deliver the savings they should have. They cost £1.4bn to set up, £500m more than expected, and in some cases have actually cost the taxpayer more than they have saved. I welcome the Cabinet Office's ambitious new strategy for improving shared services. But unless it learns from the past it will end up making the same mistakes again."
    Will Mr Maude listen to Parliament? Or to the agile 12 year-olds touting shared services in the G-Cloud?

    Francis Maude and the economies of scale

    "A seven-year government efficiency programme has backfired and increased costs for the taxpayer by hundreds of millions of pounds, a public spending watchdog said ... Whitehall departments have spent £1.4 billion in an attempt to save £159  million by sharing "back-office" functions such as personnel and procurement ..." – Telegraph readers and followers of DMossEsq have known all about this since March.

    Any 12 year-old management consultant can make the case that sharing services saves money. It stands to reason.

    Except that it's not true.

    And now the Public Accounts Committee have a few words of advice for Francis Maude and the Cabinet Office:
    Committee chair Margaret Hodge said: "Shared service centres have failed to deliver the savings they should have. They cost £1.4bn to set up, £500m more than expected, and in some cases have actually cost the taxpayer more than they have saved. I welcome the Cabinet Office's ambitious new strategy for improving shared services. But unless it learns from the past it will end up making the same mistakes again."
    Will Mr Maude listen to Parliament? Or to the agile 12 year-olds touting shared services in the G-Cloud?

    Biometrics – don't ask, don't tell

    Police forces all over the UK are introducing mobile fingerprint equipment. Result? Approximately 20% of the criminals who would otherwise have been taken down to the station will now be asked politely to go on their way. That's what we were saying back in May.

    Don't ask
    DMossEsq wrote to his MP asking about this matter. Would Nick Herbert, the policing minister, care to comment? Or the National Policing Improvement Agency (NPIA)? Could they explain why public money is being wasted on technology that doesn't work?

    And thanks to his MP an answer has now come through from Chief Constable Nick Gargan, Chief Executive of NPIA.

    Don't tell
    Does Mr Gargan express confidence in the biometrics being used? No.

    Does he say that mobile fingerprinting will improve crime prevention or crime detection or crime clear-up rates? No.

    He doesn't disagree that there is a 20% failure rate associated with flat print fingerprinting based on the 2004 UK Passport Service biometrics enrolment trial.

    Rather endearingly – obviously a conservative man with a respect for tradition – he tries on the old line that the biometrics enrolment trial wasn't really a biometrics enrolment trial but it won't wash.

    That high 20% failure rate in the biometrics enrolment trial was caused, he says, by using only a small sensor to scan people's fingerprints. That was then. Policemen on patrol are now being issued with so-called "Bluecheck" devices. And what do they use? According to Mr Gargan, only a small sensor to scan people's fingerprints.

    The technology has improved, he claims. Is the failure rate down from 20% to 2%? Or 0.2%? He doesn't say. All he says is that the technology has improved. An unsupported and unquantified assertion.

    What's the point?
    "Finally and perhaps most importantly", Mr Gargan says, policemen on patrol can always ignore the Bluecheck results and take suspects down to the station anyway.

    Don't worry
    The Home Office are investing your money wisely. You are much safer as a result.

    ----------

    Cribsheet
    Given the choice of two giants, Gargantua and Pantagruel, the English choose one and the Italians the other. Whereas we might say in English that the scale of the deception being practised on the public by the Home Office is "gargantuan", for example, in Italian they would call it "pantagruelico". Not many people know that.

    Gustave Doré's 1873 illustration for Gargantua,
    the second (1534) of
    François Rabelais's series of five novels,
    La vie de Gargantua et de Pantagruel

    Biometrics – don't ask, don't tell

    Police forces all over the UK are introducing mobile fingerprint equipment. Result? Approximately 20% of the criminals who would otherwise have been taken down to the station will now be asked politely to go on their way. That's what we were saying back in May.

    Don't ask
    DMossEsq wrote to his MP asking about this matter. Would Nick Herbert, the policing minister, care to comment? Or the National Policing Improvement Agency (NPIA)? Could they explain why public money is being wasted on technology that doesn't work?

    And thanks to his MP an answer has now come through from Chief Constable Nick Gargan, Chief Executive of NPIA.

    Thursday 5 July 2012

    It's the way he tells 'em

    Woody Allen: "This guy goes to a psychiatrist and says, Doc, my brother’s crazy. He thinks he’s a chicken. The doctor says, Well, why don’t you turn him in? And the guy says, I would but I need the eggs".

    DMossEsq: "This permanent secretary goes to a politician and says, Minister, biometrics don't work. But we keep spending money on them. The politician says, Well, why don’t you lock up the cheque book? And the permanent secretary says, I would but I need an identity assurance system".

    It's the way he tells 'em

    Woody Allen: "This guy goes to a psychiatrist and says, Doc, my brother’s crazy. He thinks he’s a chicken. The doctor says, Well, why don’t you turn him in? And the guy says, I would but I need the eggs".

    DMossEsq: "This permanent secretary goes to a politician and says, Minister, biometrics don't work. But we keep spending money on them. The politician says, Well, why don’t you lock up the cheque book? And the permanent secretary says, I would but I need an identity assurance system".

    Wednesday 4 July 2012

    GreenInk 8 – LIBOR and Whitehall

    Let's see if the Times publish this letter:
    From: David Moss
    Sent: 03 July 2012 19:05
    To: 'letters@thetimes.co.uk'
    Subject: Roland Watson and Patrick Hosking, 3 July 2012, Brown and Balls to face grilling on bank scandal

    http://www.thetimes.co.uk/tto/business/industries/banking/article3463792.ece

    Sir

    Government policy, including the "light touch" regulation of the City, is designed partly by politicians and partly by Whitehall. Mr Tyrie's enquiry is due to take evidence from Messrs Brown and Balls. For completeness, it should also call as witnesses officials from HM Treasury, including Sir Gus, now Lord O'Donnell, who was permanent secretary at the Treasury before becoming Cabinet Secretary.

    Yours
    David Moss

    GreenInk 8 – LIBOR and Whitehall

    Let's see if the Times publish this letter:
    From: David Moss
    Sent: 03 July 2012 19:05
    To: 'letters@thetimes.co.uk'
    Subject: Roland Watson and Patrick Hosking, 3 July 2012, Brown and Balls to face grilling on bank scandal

    http://www.thetimes.co.uk/tto/business/industries/banking/article3463792.ece

    Sir

    Government policy, including the "light touch" regulation of the City, is designed partly by politicians and partly by Whitehall. Mr Tyrie's enquiry is due to take evidence from Messrs Brown and Balls. For completeness, it should also call as witnesses officials from HM Treasury, including Sir Gus, now Lord O'Donnell, who was permanent secretary at the Treasury before becoming Cabinet Secretary.

    Yours
    David Moss

    Sunday 1 July 2012

    Whitehall's power without responsibility

    On 12 June 2012, the Institute for Government hosted a seminar on leadership which consisted of a conversation between Sir-Gus-now-Lord O'Donnell (GOD) and his oppo in Australia, Terry Moran. They were due to discuss "the role of leadership in reform, the challenges of making change happen in public service and leading through crises".


    Sadly it is no surprise that the NAO has found substantial problems with the HMRC’s accounts. This year has seen a litany of tax errors and scandals come to light with mistakes made at the most senior level from the Permanent Secretary for Tax downwards.

    The sheer scale of waste and mismanagement at HMRC never ceases to shock me. Without even mentioning the tax gap, in 2011-12 the Department wrote off a staggering £5.2 billion of tax owed, overpaid nearly £2.5 billion in tax credits due to fraud and error and underpaid around £290 million.

    In some areas the Department is moving in the right direction and has made progress to implement improvement plans. But the Department is still plagued by IT problems; limiting, for example, its ability to link together the debts owed by tax payers across different tax streams.

    With its long history of large scale IT failures, the Department needs to get a grip before it introduces its new real time PAYE information systems and begins the high-risk move from tax credits to the Universal Credit.

    That was Margaret Hodge, chairman of the Public Accounts Committee, commenting on the National Audit Office report on HMRC's 2011-12 accounts.

    ("Challenging", of course, means impossible.)
    The event was reported next day by Sue Cameron in the Telegraph, Whitehall’s knights joust over public service reform:
    "Private sector people who come into Whitehall get a big shiny star," remarked Gus O’Donnell, Britain’s former top civil servant this week, adding: "Ministers think they’re wonderful."

    He said it with a rueful smile. Lord O’Donnell reckons that private sector executives are not always as good as they are cracked up to be by some ministers. "I tried to bring in more people from outside and on the whole they did slightly worse than other civil servants," he told a seminar on leadership at the Institute for Government (IfG) in London. "Often they took very big pay cuts to come in. You’d see some of them and you’d think… what was all that about?"
    GOD was in charge of Whitehall from 2005 to 2011. How well did He do? Take a look at Margaret Hodge's verdict alongside, "substantial problems ... litany of tax errors and scandals ... mistakes made at the most senior level ... sheer scale of waste and mismanagement ... wrote off a staggering ... overpaid ... underpaid ... plagued by IT problems ... long history of large scale IT failures ...".

    She's talking about HMRC, just one of GOD's satrapies. Just one of His satrapies where perhaps He failed to show leadership in reform, where the challenges of making change happen seem to have been too much even for Him and the public are left to pay for the crises.

    Smile ruefully. And next time someone alludes to His ability to walk on water, just ask them, what was all that about?

    According to Ms Cameron, it's all about the plans to reform the civil service and particularly, the plans to outsource more policy-making to the private sector. Clearly GOD disapproves.

    The reform plan is said to be the work of Cabinet Office minister Francis Maude and Sir Bob Kerslake, head of the home civil service. Sir Jeremy Heywood, the feline Cabinet Secretary, is quoted as saying of Sir Bob that he is "doing his best at a new level".

    Who knows how the relationship between the knights will develop over the next few years? For the moment, "doing his best at a new level" looks more like scratch-your-eyes-out than jousting.

    No doubt about the relationship between GOD and Bernard Jenkin. Having looked forward to an enjoyable assault on the capabilities of private sector executives, GOD's heart must have sunk when he saw Jenkin in the IfG audience:
    At the IfG, Lord O’Donnell was asked by Bernard Jenkin, Tory chairman of the Commons public administration select committee, about the billions wasted on public sector projects, with nobody resigning or taking the blame and ministers and civil servants sheltering behind each other.
    In Sue Cameron's account, by way of a response GOD started by raving about scope creep:
    Lord O’Donnell said there was a “straightforward” way to cope with this. The reason major projects went off track was because ministers wanted changes.
    Complete nonsense. Lazy thinking. There's nothing wrong with scope creep, it's the sign of a healthy and useful system in its prime, it just needs managing. GOD must know that. His normally smoothly functioning circuits must have been shorted by the languid Mr Jenkin's question.

    That's where the jousting was taking place – between GOD and Jenkin, and GOD was unhorsed.

    "Straightforward"? In the Whitehall temple to deviousness it's hard to imagine a greater insult for a permanent secretary, let alone a Cabinet Secretary.

    The first thing any senior civil servant will tell you is that the minister wants what the permanent secretary tells him he wants (the masculine includes the feminine). And if the minister insists on wanting something else, then that will be sabotaged. Completely. While leaving no incriminating traces.

    It's in the Sue Cameron article as well but the extent to which GOD was wrong-footed by Jenkin's question is clearer in PublicService.co.uk's article about the same encounter, "Only accountable if you're responsible":
    The former Cabinet Secretary told an Institute for Government event on leadership and reform that he is not opposed to the idea of senior civil servants being held to account by select committees ... He said: "I would like to have the situation where we have public servants appearing in front of select committees for things that they are really responsible for, but to be really responsible you have got to have the power ..."
    The only way this argument of GOD's works is if He believes that senior civil servants are not currently responsible. That their job is not a responsible job. That senior civil servants should not currently be called to account by Parliament because they are doing only a menial factotum's job.

    He can't believe that. It's not true. And it's the opposite of what He would normally be expected to argue, viz. that the country is lucky to enjoy such a capable Executive branch of government, dominated by Whitehall. And that, in turn, means that the senior civil service must be accountable.

    A bad day's work for Him, that IfG seminar was another nail in the coffin of GOD's chances of being the next Governor of the Bank of England.

    That's His problem.

    The public's problem, clearly and repeatedly identified by Margaret Hodge and Patrick Jenkin, is that our senior civil service wastes billions of pounds of our money. Whitehall's misfeasance in public office has already survived 30 years of outsourcing to the private sector and of recruiting private sector people and methodologies. More private sector involvement isn't going to solve the problem.

    Neither is moving to cloud computing or using so-called "agile" software engineering methods or making public services digital by default.

    That's all flannel. Whitehall has demonstrated for decades that it is quite agile enough to waste public money digitally, by default, in a cloud or anywhere else. The infantile fascination with technology offers no salvation, only automated misfeasance.

    The solution, also clearly and repeatedly identified by Margaret Hodge and Patrick Jenkin, lies in accountability. More openness, earlier in the life of Government initiatives. Whitehall must acknowledge the supremacy of Parliament. They must be open with Parliament.

    GOD must know that and like an old-style union baron he obtusely refuses to accept it. But He's gone now. He's retired, even if He doesn't realise it.

    It's up to Sir Jeremy and Sir Bob. They're the leaders now. We don't want them jousting. Or hissing at each other. We want them to make Whitehall obey the Constitution. That will be good for Whitehall as well as the public. Sir Jeremy and Sir Bob must make Whitehall accountable. That is their duty.

    Whitehall's power without responsibility

    On 12 June 2012, the Institute for Government hosted a seminar on leadership which consisted of a conversation between Sir-Gus-now-Lord O'Donnell (GOD) and his oppo in Australia, Terry Moran. They were due to discuss "the role of leadership in reform, the challenges of making change happen in public service and leading through crises".