It’s about more than money

Money, a great deal of money, lies at the heart of James
Strachan’s story. Once an investment banker in the major league
with the likes of Chase Manhattan and Merrill Lynch, he is now
chairperson of the Audit Commission tasked with ensuring that the
billions of pounds of public money consumed every year by local
government and the health service are well spent.

But it isn’t just about money. Strachan’s career, like that of the
Audit Commission under his leadership, has broadened as it has
flowed from its source. For five years he was chief executive of
the Royal National Institute for Deaf People, moving to the Audit
Commission just over a year ago where he was asked by the job
interviewer whether he thought his own profound deafness would be a
problem. “Absolutely not,” I said. “I told him that it probably
made me 20 times more determined than he would ever be.”

This restless energy has driven him through a dizzying variety of
occupations, which have also included glass wholesaler, book
photographer, Sunday Times journalist and member or
trustee of any number of ministerial and charity groupings. “Drive
for improvement” is a phrase he uses often when he talks about the
work of the Audit Commission, which is moving away from its
preoccupation with how public money is spent as it gives more
attention to the quality of services.

The phrase was on his lips when the second round of comprehensive
performance assessments (CPAs) was published just before Christmas.
Underlying it is the commission’s new commitment to strategic
regulation, the philosophy of which was set out two months ago in
what, despite its ponderous title, is likely to be a landmark
document in the commission’s history. Strategic Regulation:
Minimising the Burden, Maximising the Impact promotes a vision
that goes beyond a bland assurance that taxpayers’ money has been
safeguarded, to a more inclusive policy of asking the recipients of
services whether they have been well served. He thinks social
services departments are better at listening and responding to
service users than other parts of the public sector.

“The object of public sector regulation, surely, is about improving
public services, not merely providing assurance about public
services,” Strachan says. “If you are a first-class social worker
your desire is to find out from the client as much as possible
about their needs to respond to those needs holistically. Good
social workers are good at understanding people and their needs –
that’s presumably in part why they came into the profession.”

The views of service users have been a core part of the Joint
Reviews carried out with the Social Services Inspectorate. The
reviews have sometimes been the champion, sometimes the scourge of
social services departments. Users’ views are also a prominent
factor in the CPA results, where social care services for adults
showed “significant improvement” over the previous year while
services for children also improved, though at a slower rate. With
nearly three times as many local authorities moving up the
performance league as falling, more than half of councils are now
classed as good or excellent and qualify for significantly lighter
inspection regimes.

Surprisingly for an arch-regulator – and even more so in the light
of his links to New Labour – Strachan is a keen advocate of
deregulation. “There are far too many public sector regulators,” he
says, calling for a joined-up approach among regulators such as his
own and the Commission for Social Care Inspection. Should there be
a formal system to bring regulators together more often? “It’s
early days on that, but I do think we need to have a much deeper
debate about it.”

As the partner of then government minister Baroness Blackstone, he
had to put up with much mischief-making about cronyism when he was
appointed to the post, but there is something New Labour in his
fondness for drawing parallels between the public and private
sectors.

“In the private sector, you’ve got two forms of pressure: one is
the consumer, who can just walk away, and the other is the
shareholder who can pull the financial rug out,” he says. “Now the
problem in a public sector monopoly is that neither of those
pressures is there. So, for me, the $64,000 question is how you
introduce a form of external challenge which is on the one hand
highly positive and maximises our impact on driving improvement,
but on the other minimises the burden of regulation and
bureaucracy?”

He makes the point with his well rehearsed gardening analogy. “If
you’ve got a beautiful flowering plant, why would you pull it up by
the roots every day just to check on its progress when over here
there are some plants that are on the verge of death and in need of
attention? Why wouldn’t you, in terms of your total resource,
devote far more to those poor and weak plants?

“That is the principle CPA is based on – leave the excellent and
the good relatively alone. Of course, don’t forget about them
because there are large sums of public money involved and, perhaps
more importantly, they have some significant lessons from which
other people could learn. But constant inspection when things are
going extremely well is a waste of public money.”

The net effect over the next two years will be efficiency savings
at the Audit Commission worth £24m, though Strachan says he
would be delighted if service providers themselves could identify a
further £5m in savings where they thought the commission’s
work was failing to make an impact. He would like more emphasis on
voluntary rather than the usual mandatory inspections, in which
service managers invite the commission to examine what they are
doing and make recommendations.

His passion for deregulation is allied to a healthy suspicion of
targets, at least when they acquire a totemic status that distorts
priorities and diverts resources away from what matters. Are
hospital waiting time targets what really matter to the public?
Well, yes and no – it all depends what you ask and when. Pop the
question before they go into hospital, 38 per cent say yes. Ask the
question afterwards and only 11 per cent say yes, compared with 67
per cent who cite quality of care and 48 per cent the quality of
information and explanation given by professionals.

“That’s not rocket science – you’ve got into hospital and gone
through, so obviously waiting times become less significant. They
are very important, but be careful if they start to distort the use
of resources merely to hit the targets.”

He believes central government should be less prescriptive about
targets, especially as the vagaries of the electoral cycle
discourage a long-term view of what is good for services. Dislike
of the postcode lottery in services should not be an excuse for
imposing a foolish consistency. “Unless you devolve
decision-making, ownership and creation of targets more to the
front line, you will not have the necessary variation around the
country between different departments serving different
communities. This is the endless tension between the centre and the
locality.”

The natural desire of politicians to show the electorate that they
are doing something also explains their zeal for structural change
in social care, he argues. Not that structural change is “all bad”,
Strachan says, but it can take an organisation’s eye off the ball,
increase stress levels and “procrastinate the real change”.
Children’s trusts as mooted in the green paper Every Child Matters
are a case in point. “A lot of people have said that before we rush
headlong into children’s trusts, should we not feel comfortable
that they work? I agree. The fundamental thing is about behaviour
change; what will really change the world for people using services
are things like strong leadership, motivated, empowered and capable
staff and the ability to work in partnership.”

Strachan praises the “phenomenal passion and commitment” of social
care workers and, more often than not, the difference in poorer
performing social services departments is that they simply fail to
manage and harness these qualities. “Where you get that fusion of
passion and commitment and good performance management, frankly it
knocks the socks off what the private sector could achieve.”

Organisational change for its own sake could put these achievements
at risk. That’s why he sees a future for social services
departments, despite former health secretary Alan Milburn’s
prediction of their demise. There are three-star traditional social
services departments providing first-class children’s services, so
why throw that away? Social care as a profession has an ethos which
is of great value, he says, yet tinkering unnecessarily with
structures could split it in two. “That’s infinitely more important
than the new flavour of the month, the new structural way of doing
things,” he adds.

Curriculum Vitae

Currently:

Chairman, Audit Commission

Chairman, Royal National Institute for Deaf People

Committee member, Ofgem (gas and electricity regulator)

Leadership patron, National College for School Leadership

Previously:

Chief executive, RNID (1997-2002)

Board member, Community Fund (2001-3)

Trustee, Save the Children (1999-2002)

Member, Ministerial Disability Rights Task Force (1997-9)

Illustrated book photographer and Sunday Times and Financial
Times journalist (1989-96)

Investor and small business owner (1989-96)

Investment and commercial banker, Chase Manhattan and Merrill
Lynch (1976-89)