Sunday, September 14, 2014

Are UK Public Sector Institutions Really Unsustainable?

The most common rhetoric by UK politicians is usuallly how public sector institutions are too expensive to run and therefore unsustainable. But are these institutions really costly to run? If they are, why does most of them when privatized, suddenly start making profits? Isn't the stark reality that they are expensive because they are run [by staff] and used [by the population] with reckless abandon?

In an article in the Guardian today, it is revealed that the Labour party is torn between increasing National Insurance (NI) contribution on taxpayers so to make more money to fund the NHS and not increasing tax. Throughout the article, it is recounted how unsustainable the NHS is, and would be £20b short of funding in 6 years' time; that is 2020. I beg to differ.

Actually, you don't need to tax people more for an efficient NHS. The problem of the NHS and other public sector-run institutions are 3-fold:
1) Government and its Politicians (of any hue) seems to find these institutions as a lucrative conduit to create business for their greedy-profiteering friends.
2) Public sector staff - most of whom operate on an 'I-dont-give-a-hoot' basis - make deliberate ill-decisions when it comes to business cost.
3) A lot of users who also cause waste of available resources because they arent charged at the point of use. Take for instance how they use A&E adn waste Ambulance time for no serious reasons.

If you solve the above 3 issues, mostly the first 2, you'd realize that current NHS budget is [far] too much. And I have worked in the NHS and seen these wastes.

Imagine if the NHS as a whole is handed to a private company with its current budget, it will turn-in huge profits, and we'd wonder why. But watch it, these politicians know what they are doing. They tell us good public sector services are unsustainable so to have reasons to privatize them. To achieve that, they give centralise too much authority, then award contracts bits-by-bits in chunks that are semblance of the system the same public sector service is suffering from. In such operating system, the particular service struggles even to meet standard. Then, its time to privatize it. Once done, the same once-costly service start making profits. Did you not see the most recent about Royal Mail.

Perhaps, an easier solution that will help to end the spiral culture of waste yet not step on toes is to borrow the internal franchisee style used by companies like Nandos in the early 2000s. It means decentralizing certain expenses and decisions to local branches. Make the staff in charge take responsibility for what the branch need while retaining supply and stock to a central place. For instance, NICE can decide what drugs are available on the NHS but local branches decide what drug they need and buy it from the central pharmacy at a standard price. Another example is, instead of giving social care contract to one huge company, each local branch can buy what they need and have the freedom to change them when they want or if the supplier is not meeting expectations. That way, its not only competitive among suppliers, branches can have a direct relationship with suppliers.

While the above may sound too scattered, the central system also retains supervision on an adversarial level. This means that CQC can visit hospitals or care homes, and award marks or closure with the staff in charge losing its bonus. So instead of paying terribly high salary, the local big boss gets a standard remuneration as well as bonus based on satisfaction as found by CQC and local people.

The above can be done to regional and and other levels yet maintaining uniformity without losing quality or availability of services. This of course means identifying responsibilities that can be regional, local, etc. However, overall administrative responsibility is centralized. This works although all the jobsworth running these institutions will argue that it cannot, et al.

However, the UK is not alone in this wasteful system; it only is better because at least, you can query it. Most of other governments are gods in their very right and therefore not to be questioned.

But I rather vote UKIP than a Labour that comes out with more tax increase.

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