Lord Flight is Chairman of Flight & Partners Recovery Fund and is a former Shadow Chief Secretary to the Treasury.
An old friend of mine sent me a very interesting article on Parkinson’s Law Today. The theoretical law of the 1950s has changed to a mathematical equation describing the rate at which bureaucracies expand over time. Two different case studies of our times are financial regulators and the NHS. The numbers employed in both territories continue to grow way beyond any practical justification.
There are some fascinating facts supporting the arguments. At a time when the British Empire was in decline, the Colonial Office had its greatest number of staff who were folded into the Foreign Office, due to a lack of colonies to administer! Such contrarian growth is explained by two key factors – officials want to multiply subordinates, not rivals; and officials make work for each other. The number of people employed in a bureaucracy tends to rise by between five and seven per cent a year. That was irrespective of any variation in the amount of work – if any – to be done.
Parkinson also proposed a rule about the efficiency of Administrative Council. He defined a coefficient of inefficiency with the number of members as the main determining variable. This is an attempt to define the size at which a committee or other decision-making Body will become wholly inefficient, if not useless. In Parkinson’s Law, “The Pursuit of Progress”, a chapter is devoted to the basic question of what Parkinson called Comitology – how committees, government candidates, and other such Bodies are created and eventually grow irrelevant, if they are not initially designated as such. Interestingly the world Comitology has recently been invented independently by the EU for a different non-humorous meaning. Empirical evidence is extracted from historical and contemporary government candidates. Most frequently the minimal size of a States’ most powerful and prestigious Body is five members.
From English history, Parkinson notes a number of bodys that lost power as they grew.
The First Cabinet was the Council of the Crown, now the House of Lords which grew from a handful to 29, and then to 50 by 1600 by which time it had lost most of its power. A new Body in 1257 numbering fewer than 10; it grew to 172 members and ceased to meet. The third incarnation was the Privy Council, initially numbering less than 10 members but rising to 47 in 1679. In 1715 the Privy Council lost power to the Cabinet Council with eight members, rising to 20 by 1725. Around 1740 the Cabinet Council was superseded by an inner group called the Cabinet, initially with five members. In the 1950s the Cabinet was still the official governing Body. From 1939 until the 1950’s there was an effort to save the Cabinet as an institution. Membership had been fluctuating from a high of 23 down to 18 in 1954.
Parkinson proposed a detailed mathematical expression for the coefficient of inefficiency, featuring many possible influences. In 2008 an attempt was made to verify empirically the proposed model. Parkinson thought that membership exceeding around 20 makes a committee manifestly inefficient. Less certain is the optimal number of members which is somewhere between three and 20. For a group of 20, individual discussions may dilute the power of the leader. Common sense suggests eight may be the optimum number, but this is not supported by observations. No contemporary Government in Parkinson’s data set had eight members and only the unfortunate Charles 1st had a committee of State of that size.
This territory should merit regular measurement, reviews, and analysis. It is painfully clear to citizens that when organisations become too big, they also become inefficient and vulnerable.
Increases in NHS staff have accounted for nearly all the increase in public sector jobs – numbers now stand at 1.75 million, 32 per cent of all public sector jobs and five per cent of all jobs in the UK. It is surely self-evident to conclude that a monolithic approach to providing and managing healthcare makes no sense and invites bad experience and outturn. Logically the unit size should be broken down to leadership teams of under 20 with sufficient staff numbers to operate the range of services provided by each particular hospital. Staff could be lent to and borrowed by particular hospitals as and when required. Accountability should probably be to the relevant local authority, Cabinet or constituency MPs.
Civil Service jobs hit a record low in 2016 but have been increasing again recently. Currently, they stand at 460,000. There are nearly four times as many people working in the NHS as there are in the Civil Service.
This is the territory which the Chancellor needs to research and examine in detail. It is probable that Civil Service numbers could be reduced by 60,000 to 400,000 with anybody scarcely noticing. This should save of the order £500 million a year. The NHS is a more difficult proposition as a result of the support it has achieved for dealing honourably with COVID-19 patients. My view is that restructuring into manageable sized units is the key to better and greater efficiency and that in time it too could effect cost savings of £50m pa.