The Floods? Our centralised system of government is to blame

When public officials blame the weather, you know there’s something wrong. When Tory MPs are angry at the inaction of public institutions, you know there’s a crisis. The poor response to the floods was caused by a system of government that is unaccountable to real life, where ‘performance’ is measured by a madly narrow set of criteria. Now the water is starting to recede, the crisis offers clues to the way Labour needs to the reform the way our government works.

In the last month, every possible view has been expressed about the reasons for the flooding in the West of England, from the failure to dredge rivers, to a refusal to build in an environmentally sustainable way. I don’t know what the right answers are. But, lots of people who think they do feel silenced and ignored. Whether it’s local farmers or environmentalists, people who could help have been shut out of the conversation.

Three things keep cropping up in criticisms to the response. First, the floods were tackled by big, national organisations, most importantly the Environment Agency, which haven’t been able to respond quickly to local problems. Second, short-term limits set by the Treasury seem limited the money agencies had to prevent a crisis before it occurred. The Environment Agency thought dredging was needed in 2012, but was only allowed to spend £400,000, an inadequate sum. Thirdly (again it’s the Treasury to blame) national accounting rules meant every £1 spent needed to calculate an £8 return on ‘investment’.

Our system of national agencies and tight, national financial management was built in the 1980s and 1990s to ensure the action of government was accountable to the public. It was a response to the idea that public institutions weren’t effective and business-like and were insufficiently concerned to ensure value for money and efficient ‘delivery’ of outcomes. The problem was that accountability was concentrated with a tiny group of people, who are never able to understand what’s going on in every part of the country. As the floods showed, it is a system that can control expenditure in the short-term at the expense of preventing far bigger catastrophes.

It’s a system that began with Margaret Thatcher’s introduction of business minds into the bureaucracy. After men from ICI and Marks and Spencer were brought into Whitehall, the Conservatives created new executive bodies that were to act like businesses in being responsible for clearly defined targets, and have a simple command structure with a chief executive answerable to a minister. Most importantly, they needed to manage costs. The Environment Agency was created in 1996. Labour in power merely tightened this structure. It didn’t challenge the philosophy of government that created it.

What this system forgot was that businesses are different from public institutions. Ultimately, businesses are interested in profit. They succeed or fail if they raise revenue by meeting consumer demand. It is, in other words, possible to tell whether a business is doing well or badly from a single set of numbers. Public institutions are concerned with the much less tangible purpose of public well-being. That depends on what people think and feel in the places they live, and can never be reduced to a single set of calculations.

Yet we – Labour included – wrongly imagined that everything that mattered could be measured by a small group of officials in Whitehall. In order to make ministers accountable, we reduced everything to numbers which made sense . The result was short-term control but long-term bankruptcy. We forgot about the conditions which create prosperity and the good life in the long-term: whether dredging the Somerset levels, or investing in the skills of school-leavers.

If Labour is serious about redistributing power, we need to tackle this over-centralised system of government. With less money, we need to tighten the financial accountability of public institutions. Our way of controlling costs can’t be learnt from big business. It needs a new, more confident style of public management, capable of listening to and negotiating between the interests of people who have a stake in the places they live. Control cannot come from a tiny number of accountants in Whitehall. It needs to be diffused with people who know what they’re talking about, throughout the counties and cities of Britain.

So if authority and money for flood prevention lay with authorities in Somerset, or along the Thames, we might have seen a conversation between people who had a real interest in a crisis. Perhaps the floods would not have been prevented. But we would have avoided the silly blame game we have now, where distant authorities compete in claiming it isn’t their fault. At least, if local authorities in flood-hit areas failed to act, they would be accountable at the ballot box for their failure, and their successors forced to do better next time.