Wednesday, 3 December 2008

Let's stop managing the managers

I know very little about how bureaucracy works because in my working life as a barrister I encountered very little of it. At the time I retired I was a member of a small set of chambers specialising in commercial and property law. If my memory is correct we eighteen barristers, a senior clerk and a first junior clerk who organised the work, another clerk to get in our exorbitant fees, a very junior clerk to run errands and get some experience, a lady who did the books and made sure the bills were paid and a receptionist. It was a skeleton staff, no more but no less than we needed to run the building and give the administrative support we all needed to be able to continue our practices. That is not to say they were cheap, we paid good salaries to ensure we had good people. But we had no fat, no employees who were not absolutely necessary.

What would happen, I wonder, if the public sector operated in the same way? How many layers of administration would be removed because, on close examination, it was seen that they simple were not necessary to the effective delivery of services to the public? The answer, of course, is that I have no idea, but I can have a pretty good guess. One reason I can have a pretty good guess is that the way my place of work was organised is the way every efficient private sector service industry is organised. Actually I have to qualify that statement because some private sector businesses get too big to be run to maximum efficiency. It is commonplace to hear people call for expansion so that "economies of scale" can come into effect but I have grave doubts whether most service industries benefit from economies of scale. I can illustrate this point by looking at my former place of work and asking what support staff would be needed if there were eighty-eight barristers rather than eighteen.

A senior clerk can handle roughly twenty to twenty five busy practices. Instead of one senior clerk you would need four, each would need a first junior clerk; no real change there. You could save some money by having three or even two fees clerks rather than four and have less of their time dedicated to each barrister's outstanding fees and you might only need two office juniors, two receptionists and two office administrators. But the very size of the operation requires a further level of management. Where there is one senior clerk looking after all the barristers he knows what is happening in everyone's practice, all questions and complaints are handled by one person because he knows all the relevant information. When you have four senior clerks and a barrister is concerned that his practice is not developing as it should it is necessary to examine his situation by comparison with everyone else in the chambers, so you need a committee bringing all the senior clerks together or you need a supervisory senior clerk above all four. Either way you create work and expense which is not needed in a smaller operation.

I saw exactly this happen in the 1990s when the fashion was for barristers to practice in very large sets of chambers. Each of these mega-sets of between eighty and a hundred barristers (in rare instances even more) had additional employees at the highest pay scale to ensure a knowledgeable overview of the whole operation. Good senior clerks are in very short supply, it's an extremely demanding job and few are able to do it well. Today you would not expect to get a senior clerk who is a real asset for less than £100,000 (plus BUPA and pension); someone supervising senior clerks will demand more. And because there is then a supervisory layer of management so there is additional paperwork; add a secretary to the budget. When decisions have to be taken that affect everyone you can't just gather in the clerks' room over a glass of warm Chablis because there isn't enough space, you have to hire a suitable venue and it turns into a half-day event at a weekend. The venue costs, the bottled water provided at the venue costs even more and your junior staff get a bit peeved if they don't receive a little extra at the end of the month for having given up part of a weekend. Before you know it any economies of scale by being able to have one post boy for eighty-eight rather than one for eighteen are dwarfed by additional salaries, overtime payments and external costs.

You see the same thing in big firms of solicitors, accountants, architects, advertisers and all the rest. Bureaucracy grows and is a diseconomy of scale (Blogger's spellchecker doesn't like "diseconomy" but I think it is the correct term).

I have no direct knowledge, but I cannot believe the same thing does not happen in the public sector. As the size of the unit responsible for providing services grows so the bureaucracy and associated incidental costs grow even faster. Of course I am approaching this in a highly parochial way but I do so for good reason. Twenty years ago I would have said barristers can provide their services more efficiently and with lower overheads if they gathered together in large groups, the truth appears to be very different. The most efficient arrangement is one that is of a size that uses all employees fully without requiring unnecessary further staff to be taken on to cope with difficulties caused by excessive expansion.

There are many more problems with overmanning in the public sector and it is unrealistic to expect them all to be solved at once. I would like to see a start being made by addressing the optimum size of each unit of "front-line" staff so that they are supported only by essential administrators. If that means having ten groups of twenty social workers, each group operating over one tenth of a local authority's area, then that is what should be done. They can get together from time to time just as professionals in the private sector have conferences in their own time and at their own expense to learn from colleagues' experiences and discuss possible changes in practice. Such meetings are part of the responsibility of professional people to keep up to date and share their knowledge with others. They are a standard responsibility of professional people by reason of their profession, not a matter for their employers to pay for. By keeping units small we would cut out a huge amount of administration and supervisory management which currently exists only because everyone is lumped together in a big department.

Much more needs to be done to cut out the huge costs of inefficiency in the public sector. I suggest this would be a good start.


Mark Wadsworth said...

"A senior clerk can handle roughly twenty to twenty five busy practices"?

Shouldn't that read "twenty to twenty five busy barristers"

And yes, a study of bureacracy suggests that if the population doubles in size, the bureacracy goes up four-fold (or some such rule of thumb).

Ergo, the least-bad form of government is local government, every layer above that (county council, regional assembly, Scottish and Welsh Assemblies, London Assembly, Westminster and, Heaven forbid, EU) is all just duplication.

TheFatBigot said...

Mr Wadsworth, if you ever met my old clerk you would know why I prefer to think of him handling my practice rather than me.