What’s measured gets managed. As a business school truism, this is a straightforward idea. Whatever you measure, all roads ultimately lead to profit. The CEO may quantify her own goals and put real-time displays all over the office to show off how the firm measures up, but real twitchiness will be reserved for the bottom line.
Governments rarely enjoy such simplicity. Picking which numbers take prominence in government is mostly a matter of opinion, even if the original owner of that opinion left the scene long ago. So here’s a theory : if you can get a government to measure something according to the same definition for more than two administrations, it will measure it forever. And if an institution adopts a metric, the metric shapes the institution.
Take the evergreen GDP – widely derided as an indicator of a country’s economic health – as an example. It’s become increasingly popular to call for it to be replaced by metrics that quantify wellbeing or happiness instead. But GDP enjoys the advantages of an incumbent. It has been collected for a long time, giving it immunity from charges of short-term political manipulation or gimmickry. However flawed it is as a measure, those flaws are well known.
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Governments will forgive a thousand sins if you can offer no surprises in return.
Administrations with an eye on reform have spotted the value of using indicators to turn the whole state’s gaze on a problem. The Blair administration was known for its attachment to targets, doubling down on class sizes and hospital waiting lists. Thatcher’s monetarists briefly revelled in increasingly arcane definitions of money supply – M0, M1, M2, M3 – creating a small motorway network’s worth before abandoning most of them. These measures led agendas, in the press and in Whitehall, before ultimately becoming victims of Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.”
For reformers, there are two benefits to changing the dashboard. The first is it costs nothing to do – other than the blood, toil, tears and sweat of bureaucratic warfare and wheedling. The second is it cloaks new thinking in the grey cagoule of a technocratic tinkerer.
When you don’t measure things, the management of them tends to suffer. Take IT spending as an example. The public sector spends £16bn per year on IT – except it almost certainly doesn’t. Taken from a document published in January 2010, three elections ago, that remains the latest publicly available figure. We certainly don’t know how much of this cash is asset or liability, how much we’re wasting, or where we might be missing a trick by not spending anything at all.
The UK is not alone in this. Go to any level of any reasonably-sized government and ask how much it’s spending on technology. The chances of people knowing are slim.
And these figures are not trivial. That £16bn in 2010 is nearer to £22.5bn of today’s money; the total GDP (there it is again) of a small European country.
The story is similar in management consultancy, where the UK public sector could be forking out £3bn or so per year. This number is five years old, speculative, and not from official sources (I’ve taken it from a PhD, which based the figure on estimates drawn out of analysis by the Management Consultancies Association).
IT and consultancy are invisible to most officials, let alone voters. But to ignore them is a mistake, because bad practice in bureaucracies doesn’t swish about in a cape, twirling its moustache between long, thin fingers. Bureaucratic badness is boring. If you read “IT and consultancy” as “how the state delivers a large chunk of public services”, it might seem worthier of closer examination.
The argument against doing so is that buckets of expenditure are usually managed through looking at programmes as a whole. There’s a certain iron logic behind this – ministers and accounting officers must explain spending decisions to parliament and it makes sense for money to be doled out according to lines of accountability. The question is whether lines of accountability should only be drawn on a departmental or programme basis.
Drawing lines of accountability in this way means the only big picture view of how money is spent is framed through the vertical lines of departments. This structure underpins the traditional departmental Spending Review process: a tug of war played by people wearing blindfolds. Much time and energy is spent considering whether the “what” of government activity adds up to a strategic whole. Almost none is spent considering whether the “how” of stuff getting done adds up in a similarly coherent way. With EU exit likely to herald some of the costliest public investments in technology and consultancy ever seen, perhaps now would be a good time to dust off the calculator.