A single Police force in Scotland, a single Fire and Rescue service in Scotland - a costly change for no good reason

Why does centralisation save money?

A common theme in Scottish public sector thinking right now is the cost saving benefits of centralisation. If rumours are true then the Scottish Police forces, and the Fire and Rescue services are to be merged and centralised. Why? Because, it seems that there is a common unspoken understanding that centralisation, whether we like it or not, will save money.

You might imagine that reading recent government reports on these initiatives would explain some of the reasons why centralisation might bring savings. But you would be sadly mistaken. From the document "Sustainable Policing Project - Phase Two Report: Options for Reform" the nearest thing to an explanation of the benefits of centralisation is the sentence on page 5:

"The single force model represents the most significant change; however it provides the greatest opportunity to manage change, drive efficiency and in delivering operations when the change is complete. The eight force model represents the opposite."

In other words, there is no explanation of the benefits of centralisation. As readers, we are expected to accept - without question - that the author of this report is right in saying that single force is best.

This assumption is then reflected in the traffic light style summary of the report on page 62 (reproduced below). If you have a spare moment you might like to try (as I did) to go back through the document and uncover the justification for the colour coding of this:

Scottish Fire and Rescue

The Scottish Government consultation "A Consultation on the Future of the Fire and Rescue Service in Scotland" takes a similar approach to explaining the need for change when it introduces the subject on page 2:

"Many people, both in the SFRS and beyond, now accept that the current structure of eight Services supported by some national support services is unsustainable over the medium-term."

As readers we are clearly expected to agree with this statement because the people are unnamed and the argument is completely unsubstantiated.

Oddly, on page 5 of this report there is a nod towards decentralisation that is repeatedly scattered through the report from then on:

"To ensure that we can deliver the best possible outcomes for the people of Scotland, we want to see a context in which: the full benefits of the SFRS are de-centralised as far as possible…"

But the application of this principal within a single force is finally explained on page 21:

"A single service offers the best opportunity for de-centralising as many elements of the business as possible across Scotland. Under current structures resource cannot be transferred between services. A single service would give us the flexibility to de-centralise and move resource to meet specific, identified needs wherever they occur in Scotland."

In other words, the word "de-centralised" is included in the paragraph to make it appear that de-centralisation is happening when it's actually centralisation. Interestingly the paragraph also claims that current structure prevents the sharing of services when clearly this is not the case and the recent English riots is one well known example of this.

But back to the benefits of centralisation. On the same page this report says:

"A single service approach offers significant scope for bringing together funding streams and reducing the complexity of governance and the duplication of effort and control. It also allows for the rationalisation of back office and specialist services, but with the opportunity to spread back-office and specialist functions more widely across the country. Through simplifying the delivery landscape in this way, the costs associated with the existing multiple governance and co-ordinating mechanisms would disappear."

To be fair this looks like a reasonable attempt at a genuine explanation of the apparent potential benefits of centralisation. But the unfortunate truth is that the last 30 years worth of research in this area provides conflicting evidence of benefits of centralisation or decentralisation within the public sector. See for example: "Centralization, organizational strategy, and public service performance".

The idea that a single service will reduce the complexity of governance may be true, but it will not reduce the overall complexity of the problem. Centralised control allows for rapid decision making at the expense of a lack of detailed and localised knowledge. In effect it could be argued that any efficiencies of centralisation are in the way that it allows rapid and consistent decisions to be implemented nationwide regardless of whether or not they make sense at the local level. In practice centralisation is very likely to result in a nation of demoralised staff who feel the stresses and frustrations of having to work within a bureaucracy that neither understands, listens to, or has the time for local concerns.

The reports pretend that this is not the case by arguing that a single force will, through efficiencies of processes and interfaces, be able to address local needs better than a decentralised organisation could. But this is smoke and mirrors as addressing local needs would decentralise control and increase the interfaces involved in decision making processes. The force as a whole cannot be both centralised and decentralised at once.

Different operating structures favour different ways of working. Centralisation makes for efficient delivery of very simple standardised unchanging services but adds complexity and bureaucracy to the delivery of complex and highly variable services such as are required to address the diverse needs of a nation like Scotland.

Decentralisation is a potentially inefficient way of delivering simple standardised services but excels at motivating staff who are faced with dealing with ever changing diverse and complex issues at the local level.

The recent Christie Report on the delivery of public services in Scotland makes it clear that we can only operate efficiently if we accept that there are different needs and priorities across the country and that we need to address those differences. In other words, we will deliver cost savings, not by delivering the same service throughout the country but by prioritising the delivery of the services that matter in the areas that they are delivered. The simple truth is that delivering the same service everywhere is a waste of money.

Cost of change

Incredibly, the suggestion of moving to a single force for the police, fire and rescue brings one certainty: the cost of change. Whilst there will be arguments about the predicted cost, there is no-one questioning the fact that changing to a single force will be a big and costly change.

If there was a strong argument why, in the long run, a single force would bring savings and improvements in service then you could understand that this cost of change would be something worth investing in.

But the majority of the published cost savings are not dependant upon a single force. They relate to reducing capacity and lowering salaries.

In simple terms the government is proposing to reduce the workforce, cut salaries and simultaneously ask them to completely change the organisational structures they work within. If that is not a recipe for disaster, what is?

Why?

What is driving the push towards centralised control?

The only answer that seems to make any sense is centralised control itself. It seems that we have a government that does not believe in giving out control to other people. It seems to believe that our country is safer in the hands of a few hand-picked individuals in arms reach of government: but out of touch with you and me.

Investigating the figures behind the facts - The future of policing in Scotland - the one force model

"The projected long-term savings under a new structure are up to £154m a year, every year." (Scottish Government Spokesman quoted in Scotsman, 26 July)

I recently read some newspaper articles about the current political debate on merging Scotland's regional police forces into a single force. One figure kept on being quoted (without reference) and grabbed my attention. The £154m annual savings that would come from this change. Where did this figure come from?

The figure appears to come from the document: "Sustainable Policing Project, Phase Two Report: Options for Reform" (March 2011). This report presents an estimate of potential savings (p.55) which totals £153.9m.

But this figure is not the potential savings from restructuring from the current regional forces into one force: the table shows, to quote: "estimated efficiency potential within the various functions of policing if the Target Operating Model were to be adopted". The "Target Operating Model" is a model for operation which is independent of whether the force is 8 forces, regional forces or one force. To quote, "The majority of these efficiencies are achievable irrespective of structure" (p. 68).

£154m is the estimated savings that could come from other changes to the way that the police forces operate. Some of these savings are quoted as potentially taking up to five years to realise. "Efficiencies were calculated and validated using benchmark data" (p. 54) "from other forces (England and Wales) public and private sector (Industry Standard)", "by considering the potential impact of established and well tested levers, for example: management de-layering, process engineering, shared service economy of scale".

The quality of this report is very poor and the savings take no account of the cost of implementing change. Cosla is quoted (by Scotsman) as saying that a Scottish Government business case, "shows that Scotland would have to spend a whopping £230m (equivalent to 7,600 police officers] in start up and restructuring costs for a single force." I haven't been able to find this document, but it is quite possible that this is just the cost of merging to a single force and not the cost of implementing the "Target Operating Model". Remember, it is the Target Operating Model that is quoted as delivering the savings, not the change to a single force.

I am not interested in politics. I am interested in effective public services.

If the SNP are quoting £154m savings as justification for a single police force in Scotland then they are either badly mislead or badly misleading.

I sincerely hope that those with the power to influence this decision get their facts straight before they make a very costly mistake.

I am disappointed that the media in Scotland seem so keen to present political dispute that they have failed in their job of uncovering the true facts behind the story.

Reactions to the Christie report on future delivery of public services in Scotland (or "why a little knowledge is a dangerous thing")

Yesterday saw the publishing of the Scottish Government report "Commission on the Future Delivery of Public Services" chaired by Dr Campbell Christie. Despite presenting a radically different way of delivering public services, it has met with repeated media criticism that the report says nothing new or actionable. Damning with faint praise, the SNP Finance Minister, John Swinney, in a Newsnight television interview, indicated that the proposals were broadly in line with what the government was already doing.

So is this report 100 pages of predictable "Motherhood and apple pie" or is there some substance? If there is substance to this report, then why is the media unable to see it and why are contributors to the report uneasy to back it wholeheartedly?

Lacking substance?

It's clear why many people see this report as lacking substance. It doesn't provide specific steps on moving forward like saying that region X should merge it's 5 frontline services (1,2,3,4 & 5) into a single coordinated user facing service by May 2012.

But the reality is that this report was not commissioned to do this, nor did it have the capacity to get into that level of detail. Politicians know that the media like this kind of bite-size proposition and they are good at delivering them. We should think twice about criticising a report of this quality, depth and coverage for failing to feed the media.

The report presents and argues the case for long term focused strategies for delivering public services. These strategies may not appear radical on paper but the fundamental issue is that these are strategies that are completely different from what is happening today.

It doesn't matter that these individual proposal seem obvious. There is a reality gap between what most people see as obvious and what happens in practice every day. It is a scary truth that a large number of the people who deliver our public services are either working with systems that prevent them from doing the job they want and need to do, or are so isolated from the underlying purpose that they cannot see why they are failing to deliver value.

I shouldn't need to explain these things, because the report actually says them very well. But there is clearly a need to explain how this report will make a difference.

Making a difference

If the proposals and implications of this report are delivered then we will see a massive change in the delivery of our public services. The changes, whilst following common themes, will differ from region to region and service to service. They will be driven by the needs of the communities they serve and those needs vary dramatically across the country.

These proposals are based around service delivery and organisational change that have been tried and tested. If you need evidence then search the internet for some of the books or online video presentations of John Seddon whose company "Vanguard" has become synonymous with the practice of 'Systems thinking' in the UK public sector. Like him or loathe him, John Seddon has applied these principles throughout the UK and collected the evidence to demonstrate the results.

If you want something even more radical but closely aligned to this reports proposals of reducing organisational complexity, get your hands on the BBC Wales series, "Ban the Boss" and the work of Paul Thomas. His truly radical and fairly risky work in the public sector in Wales claims up to 300% increases in productivity. Yet, on paper his strategy of reducing "managers" could so easily be criticised as being nothing new and could, so easily be implemented in a way that delivers a disaster rather than reduced cost and improved service.

The problem

The problem is that most people who read this report have no idea how to implement the changes. These changes might as well be written in a foreign language or complex scientific notation.

Despite being in English, the language of much of the proposals of this report is the language of organisations, systems, complexity and change. This language draws us in to a false sense of understanding with terms that seem to make sense yet hold vast meaning beyond common usage.

Page seven of the report makes cursory reference to "failure demand" which is explained as "demand which could have been avoided by earlier preventative measures." That sounds so obvious and yet the topic of 'failure demand' is the subject of whole chapters if not whole books. It is neither an obvious concept nor one that is well understood or applied either in the public or private sector.

In other words, this report contains big ideas that are compressed into succinct and specialist language that should be fully understood by those who need to implement the proposals but could so easily be missed by the general public or journalists or indeed politicians.

Actions

So, how can these ideas be turned into action? The secret sounds simple. They need to be implemented by people who understand the ideas.

Changing organisations is not something everyone gets taught about at secondary school. Even those with management degrees will be lucky to have received any guidance at all on how to restructure organisations to reduce complexity. Yet, unless something radical happens, this report will be digested and actioned by people who have no specialist knowledge or experience in organisational change and systems thinking.

The Christie report is a radical report. But it's proposals will have little effect unless the government can find and appoint a large enough group of skilled individuals who have the capacity to assess regional issues and turn them into practical proposals. Those individuals need to be given the authority to ask questions and initiate change.

Conclusions

In summary:

• There is no point in trying to turn this into a standardised and centrally driven policy of change across Scotland. It needs to be driven at a local level.

• It has to be implemented by individuals who have been selected because they fully understand the organisational issues being presented not because they are "solid and reliable people who have delivered good reports in the past". This also excludes appointing a group of "management consultants" from some "safe" big brand consultancy.

• By delivering these policies locally the government benefits from spreading its risk. Not every plan will go according to plan. Some of the people chosen to drive change locally will not live up to expectations. But only fudging the facts or avoiding the issues will avoid this and the cost of doing nothing is far, far too high.

• If the government acted quickly they could have a handful of specialists in place by the end of August 2011. Acting locally with central backing they could provide the skills and energy to start delivering the first steps of change immediately.

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Postscript

There is clearly a large overlap in Scope between the Christie report and the last week's McClelland report on the ICT Infrastructure of the Public Sector. If the government is going to deliver joined up services then the proposals of these reports should be joined up too.

Response to Strategic Principles of McClelland Report "Review of ICT Infrastructure in the Public Sector in Scotland"

Apologies in advance for the length of this post. The post consists of the 12 proposed strategic principles of the McClelland Report with comments after each one.

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Direct comments and responses to the 12 Proposed Strategic Principles of the "Review of ICT Infrastructure in the Public Sector in Scotland":

"Although 'information management' is a core activity it is not essential to operate totally self-sufficient local information processing, support and development."

This statement on its own is irrefutable and I would be surprised if any public sector body was truly "totally self-sufficient". However, the implication of this 'strategic principal' within the McClelland report strongly argues the case against local 'in-house' knowledge. And the reduction of local in-house knowledge is a dangerous proposition that does need to be evaluated very seriously in each context.

In short, removal of or outsourcing of local ICT knowledge disempowers the local body from making choices or innovating around the use of technology and process. Given that innovation efficiencies come from local users this is paradoxically a recipe for inefficiency and waste.

At the end of the day skills and knowledge need to be located as close to where they are needed as possible. If local bodies need local skills to make efficient use of ICT and process then the skills need to be there.

"The number of data centres and associated support should be minimised."

Yes.

"The shared hosting of common applications delivers ICT savings and central and regional plans open up ICT and other shared business process service opportunities. The existing clusters of nearly common applications should be built upon by selecting the best single application implementation and associated business processes and then from there achieve a reconciling of and agreement on common business processes so that the number of separately hosted instances can be rationalised and reduced."

The first sentence here is fine and good. Shared hosting of common applications is good and coordination at the regional level to encourage or even mandate the use of shared common applications may well be the right thing to do. Moving staff from using Microsoft Office to using OpenOffice.org would be a classic example of appropriate mandated change as long as all genuine technical data exchange issues had been addressed in advance. Of course such a change has a change management cost which must be costed.

However, as soon as there is talk of trying to merge 'nearly common' applications or business processes the line has almost certainly gone too far.

It is true that organisations may have different processes and procedures for historical reasons and there may be no reason for them to be different. If the end users who are familiar with everyday use of such systems recognise this, even reluctantly, then there is probably a strong argument for merging the processes as long as the costings recognise that there may be a significant 'investment' cost associated with implementing that change process.

Unfortunately one of the commonest reasons for so-called IT disasters in the public sector is the attempt to merge processes that seem (at a distance) to be the same, but are (on close examination) different for good reason. Often the historical reason why different organisations do things differently is that there is something genuinely different about what they do!

Changes in processes are often introduced locally as innovations to reduce cost and increase efficiency. Good reasons why changes in processes can bring local efficiencies include: co-location with other services; the shape of buildings and how long it takes to carry out tasks; office design; shared vs person printers; shared vs personal terminals/computers; and security implications of public access to buildings on logon procedures.

There is nothing worse on staff moral or fundamentally stupid than forcing staff to change a locally efficient process to an inefficient one in order to conform to a standard way of working!

"A framework of oversight and governance for each part of the public sector and at an overarching national level is critical."

Yes, but it should not add layers of bureaucracy or oversee ICT in isolation from other issues which are always interconnected.

However, there must be mechanisms in place to allow innovation from the users. In other words, there must be an open communication channel from users to those who can instigate change.

"Co-ordination of interaction with the ICT industry within each sector and at a national level is essential and will be beneficial."

Yes. There is opportunity for procurement savings by ensuring co-ordinated interaction with suppliers and service providers. It is essential that public bodies have skilled ICT representatives involved in those interactions to ensure that best value is being obtained. There may be a case for involving SMEs as independent ICT advisors in these situations as SMEs tend to be more aware of technological change than public sector ICT departments or large private sector suppliers.

"Relationships with suppliers should have a stronger partnership element."

What does this mean? Many historical suggestions of strong partnerships with the private sector have become costly and anti-competitive relationships which have benefitted the suppliers at the expense of the public sector.

The public sector needs to establish relationships with suppliers that leave the buyer with ongoing control and choice. One of the best ways of doing this would be to ensure that all software development for the public-sector was based on open standards, publicly owned and open-sourced from day one. This would put the supplier under appropriate public scrutiny and enable a poorly performing supplier to be swapped out in favour of an alternative supplier if required.

"It should not be a given that investment in and ownership of ICT assets and capability such as systems development is the norm and all avenues including investment avoidance and transaction / usage based charging should be pursued."

Scotland has a particularly poor history of choosing to do its own thing when something perfectly good is already available to purchase 'off the shelf'. This 'not invented here' syndrome is something that needs to be rectified particularly in the primary and secondary education sector where recognition of Scotland's different education system has to be balanced with a recognition of its similarities.

The rapid growth in cloud based services or 'apps' also means that there are large areas of ICT usage which could be satisfied by 'transaction / usage based charging' models.

However, where systems are developed specifically for the public sector it is very dangerous to do so under an agreement that gives ownership to the supplier and leaves the public paying on a transaction / usage basis. Any system developed specifically for the public sector should be owned by the public.

"Citizen services and data should be seamless and integrated across public sector and should specially address the needs of the elderly, sick and other vulnerable groups which cross organisational boundaries."

It shouldn't be necessary to warn of the mistakes of projects as recent as the NHS National Project for IT. But history shows that the public sector has repeated these mistakes over and over again.

We must not embark on producing any "seamlessly integrated" system across the public sector.

The recognised way to address this need is to establish well defined data standards and protocols for transacting data between systems. Wherever possible these standards should be open standards because we should not be re-inventing them and we should be trying to benefit from re-use of systems that already exist.

Thankfully the NHS in Scotland has largely taken this approach already.

"Most of the required ICT capability is specialised by sector yet there are vital national dimensions and cross-sector imperatives."

Yes and open standards for data sharing should be a big part of the mechanism for addressing this.

"Order of merit should be to first re-use, then buy and build only as a last resort. Existing initiatives and exemplars should be built upon and have their capabilities extended through free sharing with others."

Free sharing could be transformational on the public sector. But this should, wherever possible, be public sharing not just sharing privately between organisations.

Firstly, unless software used by the public sector is made publicly visible and accessible, organisations will find it hard, if not impossible to identify the opportunities for re-use.

Secondly, only through public sharing will the public sector benefit from the untapped resources of SMEs and crowd sourced public individuals.

Open sourcing public sector software massively lowers the barriers for competition from SMEs as it enables them to compete with incumbent providers and enables them to pro-actively offer services tailored specifically to the technical needs of the public sector.

"New technologies and concepts be pursued especially where they can reduce investment and support other efficiency and sustainability goals."

This is a good goal but the original 'strategies' above would all but prevent innovation and the use of new technologies.

"The negative impacts of and positive opportunities from effective ICT on the environment should be addressed and pursued."

Thankfully a focus on cost reduction in ICT tends to naturally deliver environmentally beneficial outcomes.

Shared ICT services are a recipe for holding back change

Today I've been reading John McClelland's report, "Review of ICT Infrastructure in the Public Sector in Scotland". Published by the Scottish government today, the work was started in 2010 at the request of the Scottish Government Cabinet Secretary for Finance and Sustainable Growth.

There's plenty to comment about in this report but I'll focus very briefly on one important point. But first a quote from the report:

"Shared deployment of ICT will reduce ICT cost and deliver savings in costs within individual public sector bodies. However, it can also, by being shared, provide a platform for additional efficiency and savings across multiple public bodies. The establishment of shared hosted information systems, commonly used across multiple organisations makes it very much easier to also share the resources and skills needed to operate other business processes. In this way shared ICT deployment unlocks the gate to shared services opportunities in other operations and processes." (section 4.2)

It is true that the sharing of flexible and completely industry standard infrastructure can help to reduce costs and reduce duplication.

Beyond that, organisations are not the same. So the sharing of services is not about sharing the same thing it's about making organisations work the same way whether it makes sense at the local level or it does not. The cost of making this massive organisational change may completely outweigh any apparent short term savings in ICT procurement. The long term process inefficiencies of forcing different organisations to work in the same way may introduce costs that also outweigh any ICT maintenance savings moving forward.

In short, there can be no assumption that shared deployment of ICT will reduce ICT cost.

The biggest problem

But the biggest problem with shared services seems to be the least understood:

Sharing services in the ways commonly understood in the public sector, lead to tight process dependencies between already huge government organisations. These dependencies, instead of helping to deliver change, actually act to constrain future change.

To put it simply. If you force two organisations to use the same core processes and the same central ICT system, then any future changes in process must be implemented in both organisations at the same time.