Posts Tagged ‘Management Consultants’

Get the Big Accountancy Firms Out of My Government

September 2, 2020

Mike yesterday put up a piece reporting and commenting on the news that the Tories have squandered £100 million on the usual ratbag assortment of management consultants and big accountancy firms. You know – the usual offenders – PwC, Deloitte and McKinsey since March. This is work that should properly be done by the civil service. They were trained and required to adhere to high standards of impartiality. Unfortunately, too many of them didn’t. I heard much of Thatcher’s and Major’s privatisations, especially of British rail, was strongly supported by one particular senior servants. But the ideal of genuine public service was there. It was why the Sidney and Beatrice Webb, civil servants themselves, had such respect for their profession that their socialist views were strongly bureaucratic. They honestly believed that enlightened servants, guided by an involved public kept informed by honest reporting and the public of official statistics, would make a better job of running the country than the current political class.

The management consultants don’t. They’re in there for their own private profit, and they’ve made one stupid, incompetent decision after another. Mike’s article mentions several which were so bad they had to be reversed almost immediately. But they still keep getting contracts.

This is another piece of corporatist corruption that began with Thatcher and Major. I remember how they’ve royally screwed up the civil service. This started with the former Anderson Consulting, who were called in to reform the Department for Health and Social Security, turning it into the Benefits Agency as a form of half-way house to privatisation. They then went on to do something similar to the Inland Revenue. All this could have changed with the election of Blair. He had the popular mandate. But after the Tories rejected one of Anderson Consulting’s little schemes, Blair fished it out of the dustbin and made it his official policy.

Mike argues that Johnson has called them in because he can’t think for himself. That’s part of it, but not all of it. There’s a piece by Tony Benn in the book ‘The Best of Benn’ where the great socialist criticises the way industry uses management consultants to make conditions in firms worse and start laying off their workers. He states that, in practice, the firms have already decided on this course of action. They’ve called in the management consultants to present their decision as the result of object research into present working conditions. I think much the same is going on here. The Tories and New Labour stand for privatisation. And this is what they’re given by the management consultants and accountancy firms. Plus, I think some of the politicians may well have staff recruited from them and in return are expecting positions on their boards after their political career ends. It’s the constantly swinging open door between politicians, senior civil servants and industry. And its corrupt.

I’ve come to despise the big accountancy firms and look on them the same way the Sirius Cybernetics Corporation are described in Douglas Adams’ The Hitch-Hiker’s Guide to the Galaxy. This is a fictional robotics company that is so incompetent, its complaints division now covers the major landmasses of three planets in its home system. They are so bad that the Guide itself describes them as ‘A bunch of mindless jerks who will be first up against the wall when the revolution comes’.

Well, I wouldn’t go that far. But I do want them out of politics and out of government. I’ve started to wish there were demonstrations against them, and the other big businesses that have wormed their way into politics through the sponsorship of the political parties, in return for which they’ve been given positions in government. I wish people were marching against PwC, Deloitte, McKinsey and the rest, parading caricatures of their chief executives and burning them in effigy. Because I think this corporatist corruption will only stop if we show that we aren’t tolerating their interference, for their own profit, in our public affairs.

Johnson’s government has spent £100 million on consultants because he can’t think for himself

Shirley Williams on the Growth of Bureaucracy under Thatcher

May 25, 2016

SWilliams Book Pic

The great boast of Margaret Thatcher and the Conservatives is that private enterprise, unfetter by state control, somehow magically reduces bureaucracy. Apart from ignoring the fact that firms also necessarily have their own bureaucracies, the economic and social importance of many of the industries taken into state control means that even after these industries were privatised, there still had to be a state bureaucracy to make sure these industries continued to act in a fair and responsible manner. So there are a plethora of regulatory bodies supervising telecommunications, electricity, water and the environment. And one effect of privatisation was to make these regulatory authorities and the state supervisory bureaucracy bigger than they were under state ownership. Private Eye in the 1990s during John Major’s administration ran story after story noting the massive increase in such bureaucracy in the electricity, water and environment agencies. The Eye also noted how Thatcher’s successors attempted to cut down this bureaucracy by increasingly depriving them of their statutory powers and limiting their remit. Bureaucracy was reduced not be being more efficient, but by being deliberately cut down to prevent it interfering. And thus was public protection against the predation and mismanagement by the newly privatised companies removed.

Shirley Williams, the former Labour MP, who became one of the founders of the SDP also noted the growth of bureaucracy under the Conservatives before Thatcher in her book, Politics Is For People. She wrote

Another paradox can be seen in Britain, and no doubt in many other countries as well: the growth of administration. In 1970, the then Conservative government brought in the American industrial consultant, McKinsey & Co., to advise them on the reorganisation of the National Health Service. the reorganisation, in which professional interests were extensively consulted, led to a substantial increase in the number of administrative and clerical posts, and a higher proportion of administrators and clerical employees to doctors and nurses, the front line of the service. Local government reorganisation, under the same Conservative government, had similar consequences: more highly paid administrative posts, no evidence of improvement in local government services. Big government has its own impetus which is hard to stop, whatever the philosophy of the executive in charge. But opposition to it rubs off most on political parties identified with a substantial role for it. (Pp. 29-30).

Labour has suffered because, as the party most identified with big government and state expenditure, it has also been criticised by its Right-wing opponents as the party of waste. Yet the Tories have vastly inflated the bureaucracy involved in the remaining areas left under state control. Private Eye noted that the creation of the internal market in the NHS, and the PFI financing of hospitals, vastly increased bureaucracy in the Health Service. Successive governments have carried on the marketization of the NHS, with a further increase in bureaucracy. Within the BBC, the Eye also noted that John Birt’s administrative reorganisation of that once-great and respected institution resulted in the expansion of the upper management grades on vastly bloated salaries coupled with a damaging reduction in the production staff, who actually made the programmes people watch.

Britain’s public services and industries have been made increasingly inefficient through the creation of a corrupt and parasitic class of managers, who seem to serve only to perpetuate themselves at the expense of their own companies and their workers. Indeed, Ha-Joon Chang in his book, 23 Things They Don’t Tell You About Capitalism in one of the very first chapters describes the cases of several companies that actually went to the wall because their managers cut investment and wages, and sold of the companies’ assets, in order to increase their share price and their own salaries.

The Conservatives are the party of parasitic, useless bureaucracy. And the management consultants they have called in to advise them on how to reform British state administration have done nothing but wreck it. Arthur Anderson, later Anderson Consulting, destroyed the Benefits Agency and the Inland Revenue in the 1980s and 1990s. Their successors in PriceWaterhouseCoopers and the rest of the accountancy firms sending their senior staff to help both Tories and Labour draft their policies on tax and so on are part of the same poisonous trend. The Tories should be thrown out of government, and the management consultants and accountancy firms firmly excluded from the business of government.

MPs and NHS Privatisers: Lord Darzi

February 1, 2015


I’ve blogged recently about right-wing entryism into the Labour party through Demos and other thinktanks set up by Tony Blair’s New Labour. New Labour also carried on and expanded the Tories’ policy of the gradual privatisation of the NHS. Readers and commenters at Mike’s blog over at Vox Political have repeated questioned the failure of many Labour MPs to attack the Tories properly on their manifestly cruel and unjust policies towards the poor. Well, they’re manifestly cruel and unjust, unless you’re a reader of the Sun, Telegraph and Daily Mail. Then they’re exactly what this country needs, and anyone who doesn’t have an income of £50,000 a year is a scrounger, who deserves all they get. Part of the problem is that under Blair, the Labour party became ‘Labour Plc’, as the title of one book on the subject declared. MPs developed very close links with the companies hoping to profit from the privatisation programme, and provided cosy directorships and other lucrative posts for MPs when they left government.

Lord Darzi

Lord Darzi: Health Minister under Gordon Brown, subsequently joined GE Healthcare.

Lord Darzi, Gordon Brown’s health minister, is a case in point. Private Eye ran two stories about him in 2009 and 2010. The first marked his departure from government by describing his meetings and links with a number of commercial firms, including banks and private healthcare companies. The second story the following year was on how he had joined one of these private healthcare companies, GE Healthcare. Together these stories illustrate how privatisation can provide a lucrative career for MPs seeking to profit from the privatisation of the NHS, whether they are Labour or Tory.

The first story comes from Private Eye’s edition for 24th July – 6th August 2009.

Buy-Buy from Him

Lord Darzi’s departure as health minister in Gordon Brown’s “government of all the talents” is a blow for the prime minister, but it’s also a pain for the bankers, private health firms and consultancies who have spent so many hours talking to him.

No doubt they hoped his Next Stage Review of the NHS would lead to the creation of lots more privately funded and run clinics, all set up with loads of management consultancy help. But their gains have been modest so far.

Following freedom of information requests, it emerged that in 2008 and 2009 so far, Darzi had meetings with bankers NM Rothschild & Sons, Apax Capital, UBS Investment Bank and Cinven; with private medical companies Humana Care UK, Humana Europe, United Medical Enterprises, GE Healthcare and the MCCI Medical Group; and with computing and management consultants from IMS Health, IBM, Capita, Dr Foster Intelligence and Serco Solutions.

The minister also had a couple of meetings with Boots the Chemist (which employs former health minister Patricia Hewitt). But now all these executives and lobbyists are going to have to go through the whole process again with another minister (who will probably only be in the job until the election in the first half of next year).

The second story about Darzi was published in the Eye’s edition for 25th June – 8th July 2010.

Revolving Doors
Healthy Appetite

Lord Darzi, the former Labour health minister who has taken a job with GE Healthcare, the medical corporation, was just the first through the revolving door as ex-Labour ministers snap up jobs in the private sector.

The US firm has multiple contracts with the NHS for scanning and IT work – and Darzi had official meetings with GE Healthcare shortly before he stood down last year. He has joined GE’s “healthymagination” board, an initiative that the records show he discussed with the firm when he was a minister.

Darzi says he will only take expenses for joining the US board and will put the rest of the cash into his research fund at Imperial College, London. GE, however, hopes to profit from “healthymagination”, which is a branding and marketing exercise. The company recently ran into controversy when it tried to sue Danish academic Henrik Thomsen for libel in the London courts after he raised safety concern over one of its drugs. The firm dropped the case after a public outcry earlier this year.

The Labour party did not invent the ‘revolving doors’ between government, the civil service and private industry, by which the officials and ministers involved in privatisation took up lucrative posts afterwards with the very private companies either created from or purchasing the former nationalised industries. It began in the 1990s under John Major, where it was a large part of the ‘sleaze’ marking his administration. The French, however, have legislation against it. According to the Financial Times, when a French official was asked about Major’s privatisations and the sleaze, they replied, ‘You call it ‘sleaze’. In France we simply call it ‘corruption’.’ Which is something to think about the next time the Mail goes berserk at the cheek of Johnny Foreigner, and particular the French, to criticise fine upstanding British institutions.

Unfortunately this corruption didn’t end with Gordon Brown and New Labour. It has continued with the Cameron’s and Osborne’s renewed campaign to privatise the NHS. There are at least 92 coalition MPs, who stand to profit from this. One of them is Iain Duncan Smith, the Minister for Incompetence and Killing the Disabled.

This cannot be allowed to continue.

Ed Miliband has promised to reverse the Tories’ plans to privatise the NHS. He deserves our full support.