⚠️ Do we have good institutions?

Paul Scully was Minister for Small Business, Consumers and Labour Markets from 2020-2022, a role that included responsibility for the Post Office and dealing with the Horizon scandal. For those not familiar, Horizon was an accounting software system developed for the UK Post Office by Fujitsu. It didn’t work properly, and the false shortfalls it produced were used by the Post Office to prosecute thousands of innocent subpostmasters. Hundreds were sent to jail. Many hundreds more had their reputations destroyed.

It took a decade of campaigning from the likes of Sir Alan Bates and Jo Hamilton for the prosecutions to be struck down and compensation issued. In today’s interview, Paul argues that the real scandal wasn’t the software bug, but the human and institutional failure that followed it: some inside both the Post Office and the Civil Service doubled down and defended the system, rather than addressing the damage that the system had done.

It’s a reminder that institutions institutionalise, through incentive structures that prioritise outputs over outcomes, through groupthink, through a focus on the institution’s survival over its purpose.

That pattern exists in much less high stakes contexts too. Take the one-month media campaign intended to shift a deeply entrenched public attitude. It won’t work. But media campaigns are part of what the campaigning organisation understands itself to be, so a media campaign is what gets run. The institution’s sense of self overrides the question of whether it’s the right work to do.

Tom

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Policy Unstuck with Paul Scully, who has variously been Minister for London, Minister for Tech and the Digital Economy, and Minister for Local Government and Building Safety.

Institutions institutionalise 

The problem with the Horizon scandal was that it wasn’t a software issue. It was a human issue. It was the way institutions responded to the software problem that really caused such outrage: they weren’t looking at the human cost.

I remember when I had to do a value-for-money approach to the Treasury asking for around three quarters of a billion pounds to underwrite the compensation to the victims. I said, ‘we as a state-owned organisation have put people in prison, have caused people to commit suicide, have caused family breakdown, health breakdown. Just get your head out of the paperwork and think about what we have actually done. You just need to throw money at these people. Their trust in institutions is absolutely shot.’

Recognise the context you are operating in

There’s a really pertinent Mitchell and Webb sketch, where Robert Webb is playing the part of a husband whose wife has died in a train accident, and David Mitchell is a journalist saying “we’ve got you on the show today because your wife died, so you must have an interesting insight into trains, and government investment in the train network”.  Webb says “no, I'm the last person you want to speak to because I've got an interest in this”.

Mitchell carries on and asks Webb what he’d say to a minister, and Webb says “good luck in deciding how you're going to apportion your budget to what I’m after versus what other people are after”.

That is the reality of government: it really is whack-a-mole. There is always something else to spend money on, and so if you’re giving compensation to one group, you are taking money away from another. There’s only a finite amount in the pot from taxpayers’ contributions.

Don't just moralise to ministers and wring your hands of that tension. There is nothing wrong with wearing your principles on your sleeve, but don’t moralise for the sake of it. It doesn’t help anyone make progress.

→ Read Kirsty McNeill’s Policy Unstuck for more on why moralising is a bad idea.

What opportunities has the context created?

A really good case study was how we looked at homelessness coming out of COVID. Because we had the ‘everyone inside’ policy during COVID when the hotels were taking people in, what that meant was that you were able to curate a solution because all the homeless people were in one of a few places at any given time.

That meant you could address multiple issues: you could see what was going through their mind, where their mental health issues were, or problems with addiction or employment.

Who else holds the relationships you need?

In COVID, we were giving out grants to pubs and small businesses to support them. The problem local authorities found was that when councils wanted money from businesses they knew how to get it, but they had no idea how to give businesses money. And so we were giving grants based on the way we could, which was via business rates. 

But business rates are actually called non-domestic rates, which meant that councils were handing out cheques to any non-domestic ratepayers, and that includes things like beach huts. Imagine coming back to your beach hut in the summer to find a cheque for £10,000 shoved under the door. No one was doing the checking.

I was doing ring-arounds of about 115 local authorities asking ‘how are you getting this money out quickly?’ One of them said, ‘We are ringing up their accountants. We can’t get hold of businesses, but every business has got an accountant.’ That was a great idea, so I was sharing this with other local authorities. I was getting lots of information from Sage and QuickBooks and Intuit—these companies that do the accounting software. These are outside organisations that government speaks to in some ways, but government doesn’t ask them ‘actually, you have an in on a group of businesses that we could really use, can you help us please?’

Minister for Unintended Consequences

The 10pm curfew still bugs the hell out of me. As Minister for London and hospitality minister, I saw it from both sides. But it felt obvious that if you have a load of restaurants in a big city and you chuck them all out at the same time and pump people underground into a metal tube, while there is an airborne disease going around… That was absolutely crazy. 

Afterwards the mobility data showed that between 10pm and 10:15pm, tube ridership went up by 40%. Forget the posturing, take a look at the real world consequences of policy decisions.

Go to where people are, and ease them in

When I did sales in my early 20s, I was always taught that it’s my fault for not explaining the question or my point clearly enough. So how can you cut the question in a different way if they’re not understanding it and they’re just clamming up? It doesn’t work to lecture people from an ivory tower, you’re never going to get anywhere.

You don’t sit in the deep end of a swimming pool waving and saying ‘come in, the water's lovely’. You go where people are. You go in the shallow end. You put your arm around them and you take them to the deep end together. 

Whether that’s a particular solution to Horizon, whether it’s co-creating solutions with the hospitality sector, or AI safety or digital skills, it’s how you bring people together, making them feel they’re part of a solution. You’ve not just listened to them and then gone off and done something. You’re literally creating policy alongside them, creating a solution with them. Then they feel they’ve been listened to, and it’s a constructive relationship.

Thank you to the 114 Policy Unstuck readers who have referred this newsletter to a colleague. The views expressed in Policy Unstuck interviews are those of the interviewee, and do not necessarily represent Cast from Clay’s view.