Burnham must remember: more regulation is not the best way to improve public services | Phillip Inman

In the NHS as in the private sector, success should be measured by customer satisfaction, not simply by meeting bureaucratic requirements. Former Health Secretary Andy Burnham expressed a desire to "rewire" the economy, but then abruptly halted most reforms, pushing them to 2030. Local government restructuring and significant welfare reforms are on hold, awaiting the next government's attention.

While these delays are understandable given the complexity of the issues, they are unnecessary when the necessary steps are already known to improve public services and restore trust by 2029. To achieve this, success must be defined by customer satisfaction. Without this focus, the chances of reform are lost. Sir John Kay, a prominent economist and former head of the Institute for Fiscal Studies, advocates for organizations that prioritize customer satisfaction as their primary goal.

Companies that focus on shareholder value as their main aim, like many that have since failed, fail to achieve long-term success. Conversely, those that aim to create the best product secure enduring success. In the NHS, satisfaction levels among patients for GP and hospital visits are increasing, thanks to a newly implemented appointment booking system.

Despite its flaws, the system has allowed patients to access doctors more quickly, particularly for general practitioner and outpatient appointments. Failure can be seen in the NHS, such as when maternity unit managers cover up rising mortality rates. Neither success nor failure can be attributed to regulation in the public sector, which is often an additional cost that hampers productivity, either by allowing private providers to manipulate the system or by stifling innovation.

Another example lies with two unrelated government agencies. The Environment Agency pledged to plant half a million trees, distributing funds to councils and municipalities for the task. While this appears beneficial, National Highways, the primary road builder in England, planted 850,000 saplings along a widened section of the A14 north of Cambridge in 2020.

However, a year later, an internal review revealed that three-quarters of the saplings had died. These failures highlight the impact of regulation, which often creates a culture of tick-box compliance that asks only whether protocols were followed. Eminent figures within Whitehall, including former mandarin and Bank of England deputy governor Sir Jon Cunliffe, and the House of Lords industry and regulators committee, believe that more intensive oversight is needed.

Kay provides numerous examples of companies that expanded successfully because their boards prioritized delivering the best service or product over maximizing shareholder returns. Profits and improvements in market share were not the dominant metrics in these companies. The aircraft manufacturer Boeing thrived before it lost its way by chasing quarterly profit targets.

ICI, once the UK's largest industrial company, was broken up and eventually faded away after the primary focus shifted to higher stock market values. John Seddon, a management consultant and founder of Vanguard consulting firm, supports Kay's analysis of what makes a successful organization. Seddon's practical systems approach, tested through initiatives like Portsmouth city council's housing department's repairs service, has won international awards.

Seddon is not in favor of eliminating regulation entirely, but he believes regulation should be based on how effectively an organization achieves its purpose. This approach would prevent regulation from lagging behind events and ensure that regulators can impose sanctions promptly when an organization undermines its assigned purpose.

Seddon emphasizes that having a clear statement of purpose will enable regulators to take immediate action against organizations that fail to meet their assigned purpose. It's time for public servants to liberate themselves from the prison of suspicion and distrust that current regulation imposes, which demeans their professionalism and casts them as part of the problem rather than active solution creators.

Burnham's staff should avoid letting the debate about ownership dominate and ignore the maxim "private bad, public good." Instead, they should work collaboratively to improve public sector organizations' outcomes. The evidence is readily available, and they do not need to look far.