Carillion may have gone bust, but outsourcing is a powerful public good

John McTernan in The Guardian


What has outsourcing ever done for me?

In a parody of the Monty Python skit from Life of Brian, that is what critics and commentators are asking about the collapse of Carillion – formerly one of the UK’s biggest companies.

The answer – the true answer – is that we should always be grateful that private companies have delivered better public service for less money. And therefore have done three important things for us all.

First and foremost, it has delivered vital public services – and delivered them well. Notice that in the fallout over the collapse of Carillion few questioned the quality of what it has been doing in the public realm. From the NHS to HS2 the company’s record of delivery is positive.

Second, the company has taken risk out of the public sector and absorbed it themselves. It is one of the oldest criticism of public private partnerships that the transfer of risks is never achieved properly – profits, we are told sanctimoniously, are privatised, while risk remains nationalised. In the case of Carillion we can see that is utterly and demonstrably false. How? In the simplest possible way – the company has gone bust. There can be no starker demonstration that risk has been fully transferred than to see it crystallise – which has just happened.

And last, but not least, we have had a bargain – we have paid substantially less for services than they cost to deliver. How can we be sure about that? Again, it is the collapse that is the proof. If the directors had driven exploitative bargains with the public sector then they would be driving round in Maseratis rather than polishing their CVs and wondering how to explain their catastrophic failure to future prospective employers. Saving money in the provision of public services is a good thing. On the one hand, there are always too many demands to answer. On the other, at a time when the public books still have a massive overhang of debt following the Great Recession, every little bit of efficiency helps.

The problem is that we are all a little squeamish. Companies going out of business is part and parcel of how capitalism works – it is essential that there is both creativity and destruction. For individual workers whose pay and pensions depend on the continued success of the company that is disruptive.

But where public services are being delivered, government is continuing to underwrite employment and contracts will be taken over by another provider – public or private. This is, remember, the tightest labour market since the mid-70s. There is no reserve army of labour to take over these jobs at a lower price. After some turbulence, things will settle down again. Shareholders will have lost a lot of money. And senior managers will have lost jobs. Forgive me for not weeping over either of those facts.

The alternative is worse. Far worse. It is that repeated failure is bailed out – and, in effect, rewarded rather than punished. What does that look like? The life of the average government department. Millions of people are being immiserated by the failures of universal credit (UC). And this is not because of flaws in the new system but because of features of the new benefit. UC is failing and the only people paying the price are hard-working families who can least afford it.

The same is true of the Home Office. If the same combination of malignity, incompetence and out-and-out racism was being demonstrated by any private company it would not only be in court repeatedly, it would be bust. As it should be. The lack of contestability and accountability in direct government provision of services is a huge problem. Having a small amount of it brought into the system by contracting out is a powerful public good.

The “Inefficient” State Mops up the Disasters caused by “Efficient” Private Companies.

George Monbiot in The Guardian


Again the “inefficient” state mops up the disasters caused by “efficient” private companies. Just as the army had to step in when G4S failed to provide security for the London 2012 Olympics, and the Treasury had to rescue the banks, the collapse of Carillion means that the fire service must stand by to deliver school meals.

Two hospitals, both urgently needed, that Carillion was supposed to be constructing, the Midland Metropolitan and the Royal Liverpool, are left in half-built limbo, awaiting state intervention. Another 450 contracts between Carillion and the state must be untangled, resolved and perhaps rescued by the government.

Fire services ready to deliver school meals after Carillion collapse


When you examine the claims made for the efficiency of the private sector, you soon discover that they boil down to the transfer of risk. Value for money hangs on the idea that companies shoulder risks the state would otherwise carry. But in cases like this, even when the company takes the first hit, the risk ultimately returns to the government. In these situations, the very notion of risk transfer is questionable.

Nowhere is it more dubious than when applied to the private finance initiative projects in which Carillion specialised. The PFI was invented by John Major’s Conservative government, but greatly expanded by Tony Blair and Gordon Brown. Private companies finance and deliver public services that governments would otherwise have provided.

The government claimed that the private sector, being more efficient, would provide services more cheaply than the private sector. PFI projects, Blair and Brown promised, would go ahead only if they proved to be cheaper than the “public sector comparator”.

But at the same time, the government told public bodies that state money was not an option: if they wanted new facilities, they would have to use the private finance initiative. In the words of the then health secretary, Alan Milburn: “It’s PFI or bust”. So, if you wanted a new hospital or bridge or classroomor army barracks, you had to demonstrate that PFI offered the best value for money. Otherwise, there would be no project. Public bodies immediately discovered a way to make the numbers add up: risk transfer.


Nurses might be laid off, but the walls will still be painted


The costing of risk is notoriously subjective. Because it involves the passage of a fiendishly complex contract through an unknowable future, you can make a case for almost any value. A study published in the British Medical Journal revealed that, before the risk was costed, every hospital scheme it investigated would have been built much more cheaply with public funds. But once the notional financial risks had been added, building them through PFI came out cheaper in every case, although sometimes by less than 0.1%.

Not only was this exercise (as some prominent civil servants warned) bogus, but the entire concept is negated by the fact that if collapse occurs, the risk ripples through the private sector and into the public. Companies like Carillion might not be too big to fail, but the services they deliver are. You cannot, in a nominal democracy, suddenly close a public hospital, let a bridge collapse, or fail to deliver school meals.

Partly for this reason, and partly because of the inordinate political power of corporations and the people who run them, governments seek to insulate these companies from the very risks they claim to have transferred to them. This could explain why Theresa May’s administration continued to award contracts to Carillion after it had issued a series of profit warnings. Was this an attempt to keep the company in business?

If so, it was one of a long list of measures designed to privatise profit and socialise risk. PFI contracts specify that if there is a conflict between paying the private provider and delivering public services, the payments must come first. However deep the crisis in the NHS becomes, however many people must have their cancer operations postponed or be left to rot on trolleys, the legal priority is still to pay the contractor. Money is officially more valuable than life.

If a PFI consortium is contracted to deliver maintenance and ancillary services, these non-clinical functions are ringfenced, while the clinical services delivered by the public sector must be cut to make room for them. This forces public bodies to respond perversely to a funding crisis: nurses might be laid off, but the walls will still be painted. Many of the contracts cannot be broken for 25 or 30 years, regardless of whether or not they still meet real needs: again, this insulates the private sector from hazard, leaving it with the public. The risk lands not only on the state but also on the people. Carillion leaves behind a series of scandals, such as the food hygiene failure at Swindon’s Great Western Hospital, and the failings at the Surgicentre clinic it ran in Hertfordshire, revealed in a horrifying report in the Observer. Similar crises have attended many other deals with private providers: operating theatres flooded with sewage, power cuts which have left nurses to ventilate patients on life support by hand, school buildings falling apart, useless services continuing to be delivered while essential services are cut.

None of this was unforeseen. Some of us warned again and again during the New Labour years that this programme would prove to be an expensive fiasco. Even the Banker magazine predicted, in 2002, that “eventually an Enron-style disaster will be rerun on a sovereign balance sheet”. But the government didn’t want to know. Nor did the Conservative opposition, whose idea it was in the first place. Nor did the other newspapers, now apparently scratching their heads and wondering how this happened. There is no joy in being proved right, just immense frustration.

Risk to a company is not the same as risk to those who own and run it. The executives keep their payoffs. The shareholders take a hit on part of their portfolios, but limited liability ensures they can walk away from any debts. The company might disappear, but ultimately it’s just a name and some paperwork. But the risks imposed on the people – including the company’s workers – are real. We pay for these risks twice: first, when they are nominally transferred to corporations; then again, when they are returned to us. The word used to describe this process is efficiency.

Economists have started to take morality seriously

Ben Chu in The Independent

“We don’t do God,” Tony Blair’s press secretary, Alistair Campbell, once famously remarked. Similarly, economists don’t “do” morality.

They are a breed concerned with economic efficiency not spiritual uplift; human choices and incentives, not human values. They believe questions of morality can be left to philosophers and theologians.

There’s an element of truth in that stereotype. Economists have indeed tended to leave aside issues of morality. In some cases that’s because they think, on ideological grounds, that it has no place in the discipline.

But even more thoughtful and less dogmatic economists have tended to shy away from the question on the grounds that moral values are tricky to pin down, much less quantify.

That’s not to say that their research agendas have not supported “moral” agendas. They often expose market failures which harm the less well-off. And they defend the right of governments to intervene in markets in ways that might reduce short-term economic efficiency, such as by fining polluters.

They argue for the responsibility of governments to provide public goods like education. And there are also plenty of mainstream economists who justify progressive taxation on the grounds that high inequality is socially undesirable.

Yet their theoretical models themselves have generally had no place for morality.

But things might be changing. Two economic Nobel laureates at a meeting on the German island of Lindau last week outlined a bold attempt to put morality into theoretical economical modelling.

Oliver Hart, a 2016 Nobel winner, presented a paper, co-authored with Luigi Zingales, in which he looked at how the personal morality of shareholders might affect the behaviour of the companies in which they invest, in particular whether those firms will behave in a way that will maximise profits or whether they sacrifice some profit for the sake of behaving in a socially responsible manner.

To give an example, it’s perfectly legal for the American supermarket giant Wal-Mart to sell automatic weapons. But its executives could, in theory, choose not to do so. So what determines the corporate decision?

The Hart model raises the possibility that the incentives in the system of stock-market listed companies – the psychology of shareholders and the pressures on managements – might be behind an “amoral drift” in corporate behaviour.

In a similar vein, Jean Tirole, who won the Nobel in 2014, outlined at Lindau a theoretical framework in which he, along with Armin Falk, tries to model behaviour taking into account how certain popular “narratives” can inhibit people from doing what they would normally consider the right thing. A good example of such a narrative in the British context might be popular opposition to the admittance of Syrian child refugees on the false belief, pushed hard by the right-wing media, that they are all really adults pretending to be children.

“Economics is fundamentally a moral and philosophical science, embedded in the larger social sciences,” Mr Tirole said, urging other economists in the audience to join in the project of trying radical new approaches.

It remains to be seen whether this particular research agenda gets anywhere. There are plenty of holes that one can pick in the very simple models presented by Hart and Tirole and the broad-brush assumptions they make about people’s decision-making processes – something they both readily acknowledged.

It may turn out that the particular value that economics adds does indeed lie more in analysing the behaviour of broadly self-interested individuals in markets (whether competitive or not) rather than trying to build models that factor in more complex human motivations.

Yet those who criticise the “dismal science” for assuming that we are all self-interested robots should at least acknowledge these efforts by some of the luminaries of the field.

And this work is also a useful rebuke to the charge that by analysing human behaviour as narrowly self-interested the economics profession is implicitly encouraging people to behave in that selfish way, that the axioms of classical economics have a “normative” impact on society. 

And in a sense this is a return to older ways of thinking. Seventeen years before he wrote The Wealth of Nations in 1776 Adam Smith produced The Theory of Moral Sentiments.

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it,” wrote the revered father of economics.

Some of Adam Smith’s successors, at least, are taking those insights seriously.

Our adoration is killing the NHS. It needs tough love

Simon Jenkins in The Guardian

Archaic demarcations between GPs, consultants and nurses are wasting billions. These have to go
 

Protestors demonstrate during a doctors strike in Oxford. ‘The sheer scale of past NHS mismanagement has been staggering.’ Photograph: Dylan Martinez/Reuters


John Reid, then the Labour government’s health secretary, in 2004 offered GPs a deal that ended weekend and home visits. They could hardly believe it. He also leveraged their average pay to £100,000 a year. People said it would send thousands rushing to accident and emergency. The British Medical Association called the deal “a bit of a laugh”, and the King’s Fund later calculated it added £30bn in costs to the NHS with no appreciable benefit. But no one blamed the NHS. Everyone loved the NHS.

The attempt by Jeremy Hunt, today’s health secretary, to remedy part of Reid’s disastrous reform enjoys no such popularity. There is two-thirds support for the junior hospital doctors in their strike against weekend restructuring.

People may dislike other public services. They see the police as dodgy, train drivers as bolshy, utilities as run by crooks. But the NHS “saved my mum’s life”. So leave the doctors and nurses alone. Just give them money. Give everyone money.

Nothing dents this love. Day after day, the headlines scream of NHS woe. Last month half of all doctors said they offered a worsening service. Eleven thousand heart patients “die because of poor care”. The NHS wastes £12bn on a computer system that “does not work”. One in four hospital staff feels “harassed and bullied”. Three-quarters of them tell care quality commissioners that “patient safety is now at risk”. If the NHS is to the British, as former chancellor Lord Lawson said, “not a service but a religion”, the religion must be juju.

The sheer scale of past NHS mismanagement – of private finance and of procurement – has been staggering. It makes the Ministry of Defence seem a paragon of efficiency. When David Cameron at the 2010 election promised “no more tiresome, meddling top-down restructuring” and then did just that, I realised the NHS was more powerful than him. The beast had to keep reorganising or, like a shark, it would die.

The NHS’s carapace of love has to be its biggest danger. On Wednesday it was revealed that, despite last year’s Francis report on whistleblowing, not a single sacked NHS whistleblower has been re-employed or manager reprimanded. Instead doctors are eulogised for the “daily miracle of saving lives”. This is despite the OECD reporting that they save fewer lives per head than insurance-based health services in Germany, Switzerland and the Netherlands. Britain’s record on tracing cancer is dreadful.

Doctors are in the business of saving lives. It is their job. Firefighters are not “miracle workers” for putting out fires, or teachers for getting pupils through exams. Healthcare may benefit from fear of death and disease, and we are rightly appreciative of those who relieve it. But when other professionals such as social workers or carers of the elderly fail, they are publicly excoriated. Why is the NHS immune?

I have intermittently experienced medicine at home and abroad, in public and private sectors. I admit I feel strangely secure in the familiar NHS surgery, with its tired magazines and admonitory notices. It has a wartime air, like a Dad’s Army set, rendering it unpatriotic to complain.

But this is no joke when a friend dies of MRSA, or when a mentally disturbed child is left untended, or when, in my own case, the labyrinthine “referral” system between GPs and hospitals leads to dangerously delayed cancer diagnosis. When I challenged the consultant, he said the opinion of my GP on a particular test was “of absolutely no concern to me”.

Lax professional practices are bad enough in the law, but in medicine they can be fatal. Simple blood tests and check-ups which, in the NHS, take three visits and a month of waiting for results, in the private sector take one visit and 24 hours. A heart scan can take half a day off work in the NHS (and goodness knows what fee to the commissioning practice), but £295 and half an hour at Lifescan.

In the age of the internet and computerised testing, archaic demarcations between GPs, consultants, nurses, pharmacists and technicians make no sense. This is not a matter of ideology, but of restrictive practice. It must cost billions.

Britons love to swap horror stories about the foreign health systems. American care for the uninsured was, at least before President Obama, dire. But the American best puts the NHS to shame, as does care across most of Europe’s insurance or pay-and-reclaim systems. Insurance is not always a cost-effective basis for care, but the private sector delivers so many services more efficiently than the NHS.

Doctors' strike turnout much lower than last time, says Jeremy Hunt



People love to defend the NHS – and attack private provision – through those deadly twins, prejudice and anecdote. The state’s anonymous hospitals and complex staffing systems can be glorious, but they are equally wasteful and demoralising. It is not just Hunt that is driving NHS staff at all levels into the arms of agency contractors, and costing the taxpayer a fortune.

I have never understood why so many self-inflicted “health needs”, such as sports injuries, drunkenness and overeating, should be charged to the state. Some fire brigades are charging for careless callouts. Mountain and lifeboat rescues often request “contributions”. Free at the point of delivery has long been a proud boast of the NHS. But that is policy, not papal doctrine.

The drug companies always made sure “free” did not apply to NHS prescriptions. With demand rising exponentially, supply of care must be rationed by something: if not by some form of payment and insurance, it will be by queueing and quality.Last year it emerged that more than 300,000 patients waited in ambulances for more than half an hour just to get into A&E.

Something is clearly snapping. One day, charging will assuredly come. The maddening thing at present is that it is unnecessary. It is not the NHS that needs reform but the concept of “seeing a doctor” or just getting care. The NHS may not be very good, but it is cheap to the nation. If it got tough with its labour practices and demarcations it could be even cheaper – and far better.

There is nothing wrong with loving the NHS, but it needs to be tough love.

To fight Britain’s privatisation dogma, Labour should look to the US military, Singapore, Taiwan...

State-owned enterprises can be successful, as some unlikely global examples prove

• 
• • Ha-Joon Chang
  • The Guardian, Thursday 31 July 2014 18.23 BST

A Honeywell computer under the control of Michael Caine In the 1967 film Billion Dollar Brain. It was used to connect to the Arpanet – developed by the US military as a precursor of the internet.. Photograph: Snap/Rex Features

Since Margaret Thatcher came to power in 1979 the UK has led the world in privatisation. The Conservative government sold off state-owned enterprises throughout the 1980s and the 1990s – electricity, oil, gas, rail, airline, airports, telecommunications, water, steel, coal, you name it. In the worldwide fever for selling off state assets that gripped those decades, the rest of the world looked up to Britain as the guiding example.

Privatisation was halted under Labour. However, the belief in the superiority of the private sector was such that, when it brought the rail infrastructure back under state control in 2002 following a series of rail disasters, Labour made sure it did not take the form of re-nationalisation – at least in legal terms. Network Rail, the owner and operator of the rail infrastructure, was set up as a private company, although on a not-for-profit basis and without shareholders.

When the coalition came to power in 2010, it resumed the privatisation drive with gusto. It privatised Royal Mail – the “crown jewels” that even Thatcher balked at selling. However, in recent months the tide has started to turn, albeit slowly.

Even while planning to sell off almost every remaining state-owned enterprise, from plasma supply to helicopter search and rescue, the coalition has had to make an embarrassing climbdown over its plan to privatise student loans. More importantly, in the past few months the Royal Mail sell-off has been fiercely criticised. Moya Greene, its chief executive, has questioned the viability of its universal service obligation. Abandoning this would mean that customers who live in less accessible or sparsely populated – and thus less profitable – areas wouldn’t get their letters delivered, or would have to pay more for them: the end of the postal service as we know it.

In the meantime, the Labour party has made the lack of competition and the suspected collusion in the privatised energy industry a key issue in its promise to “fix broken markets”, and has caught voters’ attention by announcing its intention to partially reverse rail privatisation. Although its fear of being branded anti-business has prevented it from proposing outright renationalisation of the railways – despite the support for such a move from most of the electorate – it has declared that if it wins the 2015 general election it will “reverse the presumption against the public sector”, and let state operators bid for rail franchises.

However, if it is really to overturn the privatisation dogma, Labour should do more than reverse the presumption against the public sector: it should tell people that the public sector is often more efficient than the private sector.

Even while there are many examples of inefficient state enterprises from all over the world, including the UK, there have been many successful such businesses throughout the history of capitalism. In the early days of their industrialisation, 19th-century Germany and Japan set up state-run “model factories” in order to kickstart new industries such as steel and shipbuilding, which the private sector considered too risky to invest in. For half a century after the second world war, several European countries used state businesses to develop technologically advanced industries: France is the best-known example, with household names like Thomson (now Thales), Alcatel, Renault and Saint-Gobain. Austria, Finland and Norway also had technologically dynamic state-run enterprises.

The most dramatic example, however, is Singapore. The country is usually known for its free trade policy and welcoming attitude towards foreign investments, but it has the most heavily state-owned economy, except for some oil states. State-owned enterprises produce 22% of Singapore’s national output, operating in a whole range of industries – not just the “usual suspects” of airline, telecommunications and electricity, but also semiconductors, engineering and shipping; and its housing and development board supplies 85% of the country’s homes. Taiwan, another east Asian “miracle” economy, also has a very large state-run sector, accounting for 16% of national output.

Posco, the state-owned steel company in my native South Korea, was initially set up against World Bank advice but is now one of the biggest steel companies in the world. (It was privatised in 2001, but for political reasons rather than poor performance.) In Brazil, Embraer – the third largest civilian aircraft manufacturer in the world – was initially developed under state control; and the country’s state-owned oil company, Petrobras, is the world leader in deep-sea drilling.

Arguably the most successful state enterprise in human history, however, is the United States military, which has almost single-handedly established the modern information economy. The development of the computer was initially funded by the US army; the country’s navy financed the research that created the semiconductor; and the US Defense Advanced Research Projects Agency developed the Arpanet, the precursor of the internet.

When people realise that the history of capitalism is full of highly successful state enterprises, the rush for ever more privatisation can be halted. If the Labour party puts forward this case, it will not only gain popularity in the run-up to next year’s general election – it would also be doing something of lasting benefit for Britain.

Why not... privatise the NHS

 By Brian Wheeler

Politics reporter, BBC News

A look at eye-catching policy ideas that are often talked about but never seem to feature in UK general election campaigns.

The background

The NHS was created by the post-war Labour government in 1948. For the first time, hospitals, doctors, nurses, pharmacists, dentists and opticians were brought together under one organisation to provide services free to the public at the point of delivery.

The central principle - that health services will be available to all and financed entirely from taxation - has been an article of faith in British politics ever since. David Cameron is the latest in a long succession of prime ministers to vow that the NHS is "safe" in his hands and would not be "privatised".

But privatisation is a slippery concept. Some see it in the opening up of NHS services to more private competition. Others argue that the word "privatisation" would only apply if Britain dismantled the NHS altogether and adopted a US-style private health insurance system instead - and that the NHS's status as "sacred cow" is blocking constructive debate about its future.

Thomas Cawston: The case for privatisation

Competition is a "bogey" word in the NHS.

Yet this hostility to competition and private providers is a uniquely British obsession.

Diverse providers of healthcare are common throughout Europe.

In Germany for example a third of hospitals are run by charities, a third by for-profit companies and a third by government. Sweden has invited private providers to provide GP clinics and hospital services. By contrast only 3% of the NHS budget is spent by private providers in England.

The reason for competition is that can drive real improvements in care.

To take one current example, patients with chronic back pain in Bedfordshire will soon enjoy a much better service. The local NHS has asked different organisations to suggest the best way to deliver all musculo-skeletal healthcare services for the next five years.

All qualified providers, including NHS hospitals, GP practices and private companies, are invited to submit bids to provide a world class service at the greatest value for money.

The winning bidder will be the one that gets the different parts of the NHS to work together successfully so that patients are treated as quickly as possible. The competition will deliver new thinking and NHS patients will benefit.

Competition also puts patients at the heart of the NHS.

Poll after poll shows patients value their right to choose which hospital to go to and what treatment they receive. Yet without competition patients would have to "like it or lump it" and choice remains the privilege of the rich who can afford to buy their way out of the system.

Opponents of competition argue that it will fragment NHS services.

In fact, those services are already fragmented, which is one cause of the current crisis in A&E admissions.

The Bedfordshire initiative shows that competition can join up NHS services, to the great benefit of patients.

Oliver Huitson: The case against privatisation

It is not clear where the evidence base for competitive, privatised health provision comes from.

This is perhaps why the Conservatives and the private health industry, including the "think tanks" they fund, rely on a handful of soundbites. Respectable economic theory and the evidence from real-life healthcare both disprove their case - competitive markets fit healthcare exceedingly poorly.

When markets are introduced into healthcare provision, providers chase income, costs soar, health outcomes suffer, fraud increases, and the system of universal care coverage collapses.

The public need only look at what's happening to out-of-hours care already - a stream of scandals, capped by an A&E crisis. Blaming this on NHS "fragmentation" is quite extraordinary. The privatised service, with less qualified staff to cut costs, has seen an increase of 50% in the rate of calls referred to A&E since 2010.

Sweden put "competition at the heart" of their NHS. "Choice" grew in affluent urban areas where privately-owned clinics pushing unnecessary care now abound. Of the 196 new clinics that opened in Sweden, all privately-owned, 195 were in wealthy areas.

The newly privatised Dutch system showed similar problems. The GP organisation tried to address it by asking newly qualified GPs to take positions in rural practices. For this "interference with the market" the national competition regulator fined the GP association 7.7m Euros!

Competition puts revenue, not patients, at the centre of care. It's a legal requirement for firms to maximise shareholder value - not patient wellbeing. This is why the public consistently oppose privatisation; it converts a public health service to a "fantastic business", in Cameron's words.

"Choice" is often a fantasy, as commissioners, patients and charities will soon learn; a warm buzzword used to mask the fact the NHS is being changed to a profit-led market without the public's consent.

This privatisation of the Royal Mail would be a national disaster

The Royal Mail must remain in British ownership and remodelled like Germany's Deutsche Post

• 
• • Will Hutton
  • The Observer, Sunday 14 July 2013

A great British institution: the Royal Mail. Photograph: Tim Graham/Getty Images

Britain is 159th in the world league table that ranks investment as a share of GDP. This is not new. Owners of British companies have long been permitted a feckless lack of responsibility. Smart countries, from the US to Germany, make sure that they insulate their companies as far as they can from the myopia and short-term greed of stock markets. Instead, the British approach to ownership exposes our companies to stock market thinking: shrivelling investment, cutting back on innovation, minimising training and hoarding cash to please their irresponsible, transactional owners.

It is a national disaster that another great British organisation, the Royal Mail, is to be cast into this maelstrom. (As I explain later, a more imaginative "protected" private model could work.) The directors of the Royal Mail will be under the same relentless hammer as those in every other British plc. They will put up prices as much as the regulator will allow, cut into universal provision and relentlessly contract out as much of the delivery to the lowest paid, least protected workers; none of this will be enough to satisfy their owners.

Eventually, the directors, vastly enriched with share options, incentive plans and 200% bonuses, will run up the white flag. Within a decade, the Royal Mail will be sold overseas, probably to another state-owned postal service, if not to a private equity fund based in a tax haven. Who knows? It could even be the Chinese communist party that ends up owning this great British institution.

You don't need to be a great seer to predict this future. It is exactly what has happened with our privatised water and energy companies. Economists will say the mail service is more efficient, rather as they discussed the way financial deregulation promoted banking efficiency up to the financial crash of 2008 without ever anticipating the costs of the crash that overwhelmed those gains. By one yardstick, this "efficiency" is guaranteed: the Royal Mail's 150,000 workforce will shrink.

But economists' definition of efficiency is pathetically narrow. It will take no account of the lost tax revenues when the Royal Mail is owned offshore, nor the cost of the state guarantees that will be necessary to support crucial investment. (See the demands from the privatised Thames Water and BT are seeking for their investment in, respectively, the super sewer and national broadband.) Neither will it measure the social impact of a diminished, expensive and fractured postal service, part of the glue that holds the country together, nor the need for state support if some unexpected event threatens. In short, any efficiency gains from privatisation have to be qualified by large costs, some of which only become obvious over decades.

Thus, although all the big six energy companies are more efficient in the sense they produce more power, with fewer employees, than they did a generation ago, any calculus of gains and losses must include the price guarantees the government offers to secure the investment Britain needs in renewable energy and nuclear. Centrica, withdrawing from its partnership with EDF Energy over building nuclear power stations, acknowledged its shareholders wanted higher returns over a shorter period than any deal the government might offer.

If energy provision in Britain were only to be delivered by British privately owned plcs pleasing their tourist stock market owners, they would all build gas-fired power stations, an energy mono-culture that would make the country reliant on one energy source. It would also be environmentally disastrous. The state cannot stand back.

We know all this, but somehow there is a political and cultural incapacity to face the reality. State ownership is seen as cumbersome, socialist, bureaucratic and hidebound. Private ownership is seen as none of those things and little mention is made of the acute depredations wreaked in the private sector. Try getting Ukip to promise that it would oppose the Royal Mail being owned by a Cayman Islands private equity fund, an Arab sovereign wealth fund or some plutocrat. There is silence. Ownership does not matter.

The Department for Business website talks loftily of ensuring that the Royal Mail has the necessary access to investment through privatisation, "untying its hands", as business minister Michael Fallon puts it. But this is the same Department for Business that was so concerned that privately owned plcs were short-termist and anti-investment that it commissioned John Kay to investigate. Even if his report shrank from any meaningful action, it at least dramatised the problem.

The model of privately owned postal companies competing in a regulated market is not a priori wrong: it seems to work in Germany with the privatised Deutsche Post. It is just that British private ownership structures maximise every adverse possibility and outcome. We are about to experience a boom in parcel deliveries as online shopping explodes. Universal parcel delivery is going to become an indispensable utility. Any government that consigns this crucial service to British-style private ownership – for a mere £3bn with 10% of shares given free to workers as a blatant bribe – is as short-termist as the stock market.

Instead, with ownership configured more imaginatively, the Royal Mail could become a de facto trust, a British postal and logistics group ready to exploit the coming boom. A creative government would transform it into a private trust with its own supervisory board on top of the management board, modelled along the lines of Deutsche Post that pro-privatisers like to cite but without ever doing any homework on the detail. For this model would be charged with ensuring managers protect and improve Britain's universal postal and parcel service, as well as seeking other commercial opportunities. The board would have public interest directors along with directors elected by the workers, enfranchised by the collective ownership of, say, a quarter of the shares in an employee ownership scheme. External investors could thus only buy into an organisation whose constitution, purpose and ownership were permanently shaped to deliver public good.

No such template has been floated. It is an opportunity Labour should seize as the embodiment of responsible capitalism. If Ed Miliband and Chuka Umunna were suitably adept, they could even create a parliamentary majority, with dissident Lib Dems and Tories, for it. Apart from ideologues, no one thinks privatisation as it has been practised works and everyone knows that in a decade the Royal Mail will probably be foreign owned. On this, the Communications Workers union and the Labour party are right. But supporting the status quo is insufficient to win the argument. What they need is an alternative prospectus. There is nothing to lose and everything to gain.

It’s time to switch off your mobile and set yourself free

Experts have found an effective new formula for happiness - ditching the smartphone

That's enough mobile phones: 'I found myself paying closer attention to the world around me, and having conversations that felt like real conversations' Photo: Bloomberg

By Max Davidson

8:56PM GMT 28 Jan 2013

16 Comments

Will miracles never cease? I learnt yesterday that there is a team of officials in the Cabinet Office known as the Nudge Unit, charged with suggesting “ways people can make small changes to improve their lives”. Naturally, this sent the taxpayer in me into a lather of indignation. No wonder the national debt is so mountainous if crackpot initiatives like this are given the green light in Whitehall.

But then, wonder of wonders, out of the Behavioural Insights Team, as it is formally known, emerged common sense so beautiful and bracing that it was like being nudged by Marilyn Monroe.

Suppose, asks Prof Paul Dolan of the London School of Economics, a former stalwart of the unit, a man who nudges for England, happiness is not owning the latest, smartest mobile phone, but is, in fact, having that phone switched off? Suppose silence truly is golden, a necessary antidote to a shrill, intrusive world?

The problem with smartphones, warns Dolan, an expert on happiness, is that they distract users’ attention from the people around them. “Turning your phone off and enjoying being with your friends is much better for you than constantly checking your phone and emails,” he told an audience at the Hay Festival in Cartagena, Colombia.

What? Enjoy the company of your friends when you could be reading tweets from Wayne Rooney or perusing the weather forecast in New York? The professor is flying so much in the face of fashionable opinion that, the next time he switches on his mobile, he may find he has been denounced as a fascist Luddite by the Twitterati. 

But he is hardly a lone voice. He is only articulating something that millions share: a vague sense that our super-connected world is also dangerously disconnected from things that matter.

Switching off your mobile can improve your emotional health – as I found from personal experience last year. I was travelling in the States, left my mobile phone at the hotel and, for the next two hours, felt anxious and disorientated. Suppose something happened to my loved ones? Suppose so-and-so needed to get hold of me? What was happening at the Oval? All the usual neuroses of the middle-aged male.

But then, as sanity returned, the feelings of anxiety abated. After four hours of being cut off from what I had come to regard as civilisation, I felt as relaxed as if I’d had a particularly good lunch. After six hours, I was in such a happy space that, when I finally got back to the hotel and was reunited with my phone, I felt not relief, but resentment. Did my life have to revolve around that little electronic tyrant? Couldn’t its biddings wait?

The next day, and for the following five days, I left my phone in the hotel and resolved to check my messages no more than once a day. If I was late receiving some genuinely urgent communication, so be it.

The result was as dramatic as it was heartening. Until you sever your links with the people you are in touch with 24/7, you don’t realise quite how stressful those links are; quite how much energy you expend fretting about the contents of emails you have or have not received; quite how many footling demands other people will make on your time, if you are stupid enough to let them.

Liberated from those demands, I found myself paying closer attention to the world around me: enjoying the sights and sounds of America, and having conversations that felt like real conversations, flowing easily and sweetly, at no risk of being interrupted by the beep of a phone. It felt like an epiphany, an unexpected reversion to a better, simpler lifestyle.

Prof Dolan, guru of contentment and distinguished graduate of the Nudge Unit, has clearly had similar epiphanies. His plea for reduced dependency on mobile phones throws down the gauntlet to a generation that, in its fascination with new technology, has got its priorities askew.

One of the defining images of the 21st century is rows of men in suits on aeroplanes switching on their phones within nanoseconds of their planes landing. They have mistaken ergonomic efficiency for coolness: they think they are demonstrating energy and dynamism. They cannot see how pathetic they look, clutching at the umbilical cord that links them to their bosses/girlfriends/bookmakers.

The next time they land at Heathrow, they should try waiting five minutes before switching on their mobiles. Then 10 minutes. Then 20. It could be the saving of them.

How do you play cricket without becoming a machine?

The challenge for most cricketers- and other sportsmen - is to retain their personality while getting better at the game

Ed Smith

September 26, 2012

Comments: 25 | Text size: A | A

	Afghanistan haven't yet had the joy ironed out of them by the cricket grind © Getty Images  Enlarge
Related Links Series/Tournaments: ICC World Twenty20 Teams: Afghanistan

"The challenge is to play cool without being cold." That was the assessment of the great jazz trumpeter Wynton Marsalis. What he said of playing jazz is also true of playing cricket. A sportsman cannot be at the mercy of his moods and emotions. And yet sport becomes dull and lifeless when it is drained of warmth and spontaneity. Sportsmen must search for the right emotional bandwidth: they want enough coolness to feel in control, and yet sufficient rawness and authenticity to feel excitement.

There is no doubt where the Afghan cricket team lies on that continuum. They are joyful, volatile, emotional, unpredictable and deeply expressive. That is why they are wonderful to watch and have lit up this T20 World Cup, even without winning a game. Their performance against India was deeply moving because you could see how much it mattered to the Afghan players. Every six was joyous, every fielding error was agony.

These were not the learnt, mannered responses of professional sportsmen playing to the gallery. The Afghan cricketers have not yet learned how to hide their feelings. In time, they will become more controlled and clinical. But hopefully not too much. Indeed, we can all learn something from the spirit and the naturalness of the Afghan cricketers. Joy - even vulnerability - has its practical uses, too.

There is a counter argument to my view, of course. Some argue that sport is not about self-expression or enjoyment at all, but rather resilience and reliability under pressure. I've never seen this view better expressed than by Chad Harbach in his excellent novel about baseball, The Art of Fielding. (I make no apology for quoting it at length):

The making of a ballplayer: the production of brute efficiency out of natural genius […] This formed the paradox at the heart of baseball, or football, or any other sport […] Baseball was an art, but to excel at it you had to become a machine. It didn't matter how beautifully you performed sometimes, what you did on your best day, how many spectacular plays you made. You weren't a painter or a writer - you didn't work in private and discard your mistakes, and it wasn't just your masterpieces that counted. What mattered, as for any machine, was repeatability. Moments of inspiration were nothing compared to elimination of error […] Can you perform on demand, like a car, a furnace, a gun? Can you make that throw one hundred times out of a hundred? If it can't be a hundred, it had better be ninety-nine.

It is a wonderful passage, full of insight. But while I agree with many of the steps, I cannot follow all the way to Harbach's final conclusion. Sport is not quite about the elimination of human individuality, or the progress - if that is the right word - towards machine-like efficiency. True, a good player cannot be too vulnerable, he cannot allow his human weaknesses to surface so often that they undermine his performance.

But nor do the best sportsmen, I believe, allow themselves to lose touch completely with their human dimension. We must think carefully before trying to turn ourselves into machines: we may find we lose more than we gain. There is a balance to be struck: between naturalness and pragmatism, between voice and efficiency, between joy and control. Crucially, that balance is different for every player (and every team).

Inevitably there are outliers on that continuum - some players are exceptionally self-denying where others are extraordinarily natural. Rafael Nadal's game is based on the fearless elimination of error, the repeatability of relentlessness. In contrast, Roger Federer's is freer and more intuitive. Federer has said how he cannot bear to "play the same point twice". He needs to be trying something new, at least to some extent, in order to fully engage his talents.

	There is a balance to be struck: between naturalness and pragmatism, between voice and efficiency, between joy and control

It is a myth that sportsmen can simply choose to adopt the best strands from the personalities of other players. Instead, they must search for the right balance that suits them. The natural, laconic David Gower would not have benefited from trying to become more like the dedicated professional Graham Gooch - nor vice versa. The quest for self-improvement must be tempered by the retention of authenticity.

The same balance applies to teams as well as individuals. Every team has an instinctive personality, a natural temperament. The challenge is to develop and strengthen that collective personality without losing what makes it unique. Over decades as a rugby fan, I have noticed that France play best when they keep their innate flair but harness it within collective discipline. They are much less successful when they rely too much on flair or when they travel too far in the direction of self-denial. To win, France must be France - they cannot pretend to be England.

This logic has consequences for the way we think about getting better at sport. Development - for both the individual and the team - is only partly about honing skills and perfecting techniques. Perhaps the bigger part of the story is learning how to be yourself. This can become harder, not easier, with experience, which explains why many players do not improve with age, but regress. The more they try to become machines, the worse they become. That is why the art of coaching - yes, the art, not the science - is at least as much about understanding people as it is about imparting technical knowledge. What kind of player might he become, what kind of person?

Where does all this leave Afghan cricket? Yes, they need to become more consistent. Yes, they will need to become better at controlling their emotions. Yes, their techniques will have to become more polished and reliable.

But all those things must be developed within a context of remaining true to themselves. They should not lose sight of the spirit and innocence that makes them such a compelling team to watch, and such a dangerous team to play against. In the lovely phrase of ESPNcricinfo writer Sharda Ugra, they "bring to a somewhat tired global community the fresh, bracing air of the mountains".

Afghanistan's cricketers are so refreshing because they aren't like everyone else. It would be a shame if they merely become part of the crowd.

How many inquiries do we need?

By Andrew Gilligan in The Telegraph

8:50PM BST 21 Jul 2011

After the past three extraordinary weeks, do you know how many inquiries have now been spawned by the hacking scandal? The answer – unless I have missed some – is 13. As well as the Leveson inquiry, in two separate parts, there are: two criminal inquiries, Elveden and Weeting; two parliamentary inquiries, one now concluded, by the home affairs and media select committees; inquiries by the Independent Police Complaints Commission and the Inspectorate of Constabulary; a probe by the former parliamentary watchdog Elizabeth Filkin into relationships between the police and the media; an inquiry by the Met’s directorate of professional standards; a News International internal inquiry; a Press Complaints Commission review; and, finally, my own personal favourite: an inquiry into how the Commons security authorities can best interdict future supplies of shaving foam. All British scandals tumble eventually into farce. What a tribute to the information age that this one is toying with it already.

On top of all this, there is talk of further action by the Metropolitan Police Authority, the London Assembly, the Serious Fraud Office and HM Revenue and Customs. And that is without the inquiries likely to begin in America. Soon, I predict, there will be more people investigating the News of the World than actually worked for it, and the only official bodies not scrutinising the despicable crimes of the rogue Murdoch regime will be the Drinking Water Inspectorate and the Care Council for Wales.

Yet as the scandal begins to cede the top slot on the news, I sense that more and more people are asking: has
this gone too far? Four days ago, as John Yates, the Met’s assistant commissioner, was forced to resign, even the crime correspondent of the Guardian, the paper whose admirable journalism and persistence opened the Augean stable doors, called the affair a “mad witch-hunt of a story” which had claimed “another decent copper”.

The danger of this extraordinary brood of inquiries is twofold. First, they crash against each other like dodgems in a rink. Witnesses are already refusing to answer questions because it might prejudice their case before other inquiries. Second, they will leave nobody in power or in the police with time to do their actual jobs – jobs that concern more important matters than phone hacking. John Yates ran Britain’s counter-terrorism effort, which has now been decapitated. Let us cross our fingers that no terror attack occurs while his successor is still learning the ropes.

Mr Yates, by his own admission, didn’t look carefully enough at the Guardian’s new allegations of hacking. But he did have the country to protect from al-Qaeda at the time. And as I watched him being attacked by that well-known pillar of virtue, Keith Vaz MP, as an “unconvincing” witness to Mr Vaz’s home affairs committee, I thought: I would rather have 50 John Yateses than one Keith Vaz.

Older readers may remember that while John Yates has been found guilty of nothing, Mr Vaz is the man who received one of the longest Commons suspensions on record – for actively obstructing, not just neglecting, an official investigation. On the day that Sir Paul Stephenson, Yates’s boss, resigned as Met commissioner after taking free stays at the Champneys health spa from a friend, Stephen Purdew, Mr Vaz appeared on television to praise Sir Paul for “accepting responsibility”. Mr Vaz neglected to mention that he, too, is a personal friend of Mr Purdew’s, attended his wedding, endorsed one of his other spas and has himself stayed at Champneys.

Throughout the crisis, too, a certain Alastair Campbell has been touring the television studios in his exciting new role as an apostle of truth and enemy of Rupert Murdoch. Mr Campbell has provided much amusement for politicians and journalists – but has the poor man not even an atom of self-awareness?

Last week, almost entirely unnoticed amid the Dresden-like firestorm, there emerged perhaps the most significant evidence yet about an earlier phase of Mr Campbell’s career. The Chilcot inquiry into the Iraq war published the testimony of a senior MI6 officer that “there were from the outset concerns” in the intelligence service about “the extent to which the intelligence could support some of the judgments that were being made” in Tony Blair’s famous WMD dossier. Note those words: from the outset.

What that shows us is not just that our worst fears over the dossier were correct. It also shows just how misplaced may be our hopes in the current slew of hacking inquiries. Over Iraq, there were a mere five inquiries – none, interestingly, operating under oath, though the hacking inquiry will. Clearly, the lies and misjudgments that caused the deaths of 150,000 people are not quite as serious a matter as journalists intercepting voicemails.

But the striking fact is that despite all those inquiries, last week’s potentially conclusive piece of evidence has only just come out – nine years after the dossier was published. We hoped that earlier inquiries would yield the truth about Iraq and punish those responsible. Broadly, they did not. They did reveal a great deal of valuable information but in their own findings, the inquiries glossed over that evidence, and held back from the conclusions it warranted.

Nor is that in any way unusual. Of course, some much-anticipated judicial inquiries do achieve what is widely accepted as justice. But many others have been, by consensus unsatisfactory – Lord Devlin’s 1950s inquiry into British massacres of the Mau Mau; Lord Denning on Profumo; Widgery into Bloody Sunday; Scott on arms-to-Iraq; and Hutton.

Still others, while less controversial at the time, have proved damaging: the last big inquiry into the police, Lord Macpherson’s into the death of Stephen Lawrence, wielded too broad a brush, painting the entire Met as institutionally racist. The destabilising effect of Macpherson’s judgment on force morale, and therefore on crime, was considerable. And inquiries can cost enormous amounts of money. The second inquiry into Bloody Sunday, by Lord Saville, lasted 12½ years and cost almost £200 million.

Inquiries do, of course, go down paths that can be deeply uncomfortable for everyone, government included. But broadly, each of these inquiries found more or less what the governments who set them up wanted them to find – that no one was wrongly killed on Bloody Sunday, that the Iraq intelligence had not been misrepresented, that the Met was insufficiently progressive and needed a kicking.

The various Iraq inquiries were additionally used by the Blair government, and its supporters, as ways of attacking its enemies. As a witness in them myself, and watching the grilling of my source, David Kelly, I developed a particularly low opinion of the partisan hectoring of the foreign affairs committee, under its Labour loyalist chairman Donald Anderson (a worthy predecessor of Keith Vaz).

It is quite clear what the Government wants this inquiry to find. Though press, police and politicians are almost equally at fault, Lord Leveson’s remit is simply to “inquire into the culture, practices, and ethics of the press”. Leveson has also been asked to investigate the “relationships between national newspapers and politicians”. But several anti-hacking campaigners and the lawyer for Milly Dowler’s family protest that there is no mention of officials and special advisers such as Andy Coulson and Alastair Campbell.

Leveson’s first task is to “make recommendations for a new, more effective policy and regulatory regime” on the press: in other words, how they should be forced to behave. As far as the police and politicians are concerned, however, he will only make recommendations for their “future conduct” – how they should merely be asked to behave.

Yet hacking was not a failure of press regulation. There already is a rather strong regulation against hacking people’s telephones – the law. And no future press regulator, however strong, could possibly have the power to kick down doors at newspapers, seize emails and question journalists under caution. Those are police powers – powers which the police had, but refused to exercise.

Over virtually every issue that judges have inquired into, it was the media that got more of the facts, more quickly, than any Lord Justice. Now, however, with regulation coming and the likes of Keith Vaz in the driving seat, getting the facts will be harder. Not for nothing is the phrase “judge-led inquiry” one of the scariest in the language.