Taking on the system, by John Seddon

10 Apr 08
Public service targets often have adverse effects on the outcomes they are designed to improve. By contrast, a 'systems thinking' approach leads to faster and better services, as many councils have found

11 April 2008

Public service targets often have adverse effects on the outcomes they are designed to improve. By contrast, a 'systems thinking' approach leads to faster and better services, as many councils have found

Our elected representatives must often wonder why their surgeries are full of people complaining about housing, benefits and other public services that the Audit Commission has highly rated. The uncomfortable truth is that the commission's narrative doesn't fit with reality.

It believes that targets are essential for improvement. The opposite is often true. Targets are being met, but compliance has created waste, in the shape of poor services, high costs and low morale. The target is, in fact, the problem.

Housing authorities, for example, usually classify repairs as 'emergency', 'urgent' and 'other', and allot each a target time for the work to be done — typically a day, a week and a month, respectively. Sounds sensible? Maybe, but in fact it drives people to use their ingenuity to meet targets, rather than understand and improve the service.

In such a system, a simple repair for a tenant (mending a broken window) can become a number of jobs for the repairs unit, each with its own target. Result: all the workers fulfil their quotas, but the repair can take months. Jobs are driven by target times, not by what matters and is convenient to the customer.

Similarly, the Housing Corporation's target to carry out 70% of repairs as 'planned' might sound like sensible preventive maintenance. In fact, this fixed and arbitrary target leads to costly and unnecessary mistakes. Some tenants will be told their leaky bathroom has to wait months for repair, regardless of need. Others will find their perfectly satisfactory equipment ripped out and replaced whether they like it or not. Managers and inspectors simply have to comply.

The same is true for processing housing benefits. Because local authorities have been obliged by the Department for Work and Pensions to split the work into 'front-office' and 'back-office' components (with respective targets for each), it is common for a local authority to boast of hitting all its targets while the true end-to-end time for meeting often pressing needs is months.

That would be bad enough. But the failure of benefits services to meet those needs has knock-on effects. 'Failure demand' — demand caused by a failure to do the right thing for the customer — is driven into police services (as domestic disputes), housing (rent problems for landlords), voluntary agencies and legal services. Such problems take up 25% of the capacity of one of the busiest courts. The failure demand created by the way housing benefits work (or don't) is surpassed only by that created by Sir David Varney's flagship service factories, the DWP and Revenue and Customs.

The good news is that there is an alternative. 'Systems thinking' — an approach that takes an outside-in view of performance and organisation design — is catching on across the public sector. Instead of creating command-and-control hierarchies, this approach designs services in response to demand, enabling users to receive greater value from the public sector.

The growing number of public sector organisations that have adopted a systems approach — now more than 60 local authorities and registered social landlords — routinely achieve improvements that put government targets in the shade. They also increase capacity, cut costs, improve the morale of public service workers (who now have control of their work) and satisfy the customers.

But Audit Commission inspectors tend to mark them down. Why? Because they don't use targets to manage or assess their work. 'Emergency' times in housing, for example, don't look good. A broken window might take two days to mend, as opposed to 24 hours to board it up and meet the target. But the tenant wants the window repaired, not just boarded up. 'Urgent' times also look bad, because the repairs are done when the tenant wants them done, not when the system says they should. Yet the service performs beyond targets, and is 'personalised' and efficient.

Senior managers at the Audit Commission have known about these problems for years. Yet the commission has 'encouraged' (many would say coerced) local authorities to follow factory-style designs — front and back offices — for benefits processing, and other services. While the current revision of the audit process reflects a general acceptance that there are problems, it amounts merely to doing the wrong thing a bit more correctly.

Successive ministerially inspired audit systems have proved unreliable and incoherent. There is no reason why the Comprehensive Area Assessment should prove the exception. It is the regime that has to go if we are to improve the way we deliver better public services. Starting with the targets.

John Seddon is a visiting professor at Cardiff University, and managing director of Vanguard Consulting. His book, Systems thinking in the public sector: the failure of the reform regime and a manifesto for change, is published this week by Triarchy Press

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