To the public The Audit Commission and the National Audit Office must seem to do vary similar things. Branches overlapping.

When cutting back is required and there is apparent overlaps in a system, they gets pruned. In this case The Audit Commission was pruned. That is the simplistic way of looking at it; the National Audit Office and The Audit Commission are not the same. But both are about public confidence and assurance and easy assumptions meant they were treated as if they were.

Third party assurance would be duplicating the National Audit Office in the public’s eyes: “what a waste of money and to give it to profit making enterprise, horror!”

The public sector works how the public sector works. There have been some very good reasons for that: checks and balances for every action, and a clear delegation of responsibility for money and other resources.

Yes, that control has led to inefficiencies as it would in any organisation.
Yes, with a lack of pruning of old to make way for new growth, there are tangles of red tape.
Yes, the compartmentalisation has meant that the big picture is lost in the small actions of a department’s “business as usual” and the wheel gets reinvented because information is not shared.
Yes, it costs as much to get the order for stationery approved as the stationery itself.

Over the last few years, some parts of the public sector has tried to improve its efficiency (shared services and group purchasing) and sharing of practice (Civil Service Live being an example of one big event). It hasn’t always worked but it has got people thinking about how to make the cuts needed today.

However, the biggest problem with both the proposed cuts and the public sector is that they are not viewed holistically as a system. A spending decision or cut will impact not just the case in hand but the whole service. For example, potted plants have been shown to help the air quality in an office: would you rather plants or a higher sickness rate (over-staffing to reduce backlogs) and the need to buy humidifiers? Not upgrading PCs can make workers slower. Not training people can add to waste through error. Not developing talent means a leaderless team in the future. Less control on planning for houses means more transport problems.

I may well be time to reform AC, NAO and OGC (Office of Government Commerce) who all worked on assurance and confidence in different areas. Refocus the argument and start from scratch: what are the objectives of what the public sector does and what controls do we need so it does it effectively and efficiently. Now build that from the public sector we have by pruning and grafting the rich stock of plants we have in that garden.

All manufacturing and paid-for-service processes are about adding value. Whether the process input is an ingot of forging steel or a cash deposit the additional value created (in the customer’s eyes) is a measure of the process effectiveness. The cost in terms of cash, people and time in generating the added value are all measures of process efficiency. So in an ideal world if we could choose our economy we would cherry pick those industries where the added value is highest and our costs are lowest. But here’s the rub – everybody else wants to do that – and that brings me back to quality.
If you have the right product in the right market you will continue to make money but to do so there are a huge range of skills that need to be continually developed including marketing, design, manufacturing, logistics. Get any one of these wrong and you will lose your market in the short or long term. I call it the Austin Allegro effect. In fact the car industry is a classic example of where organizations succeed despite a high cost base with continued high quality production in all the high wage economies of the western world.

By the way … substitute ‘service delivery’ for ‘manufacturing’ in the first sentence of the paragraph above and you have the secret to high quality service provision.

The Sheffield Forgemasters example is an interesting one that is probably only clear if you have definite political persuasion. In my mind the background of political lobbying and questions over the validity of the loan under EU rules make it too complicated for me to judge without further facts. I do subscribe to the view that governments should target loans to develop capability, though.

Who wants to be good at quality and bad at business?

Let’s also be clear before we start representing the quality message to government that we know what we are going to tell them because as the old cliché goes: ‘You don’t get a second chance to make a good first impression.’

For once I agree with Tony Brown that a third party assessment regime is not the answer – but for very different reasons. To all intents and purposes we have a third party inspection / audit system in place with the Audit Commission. To ‘privatize’ the same system using UKAS or an accredited conformity assessment body might gain improvements and save money in the short and / or long term – I wouldn’t want to place a bet either way.

Similarly the blog supports the coalition Government’s move away from target setting as an approach to improving performance. Again we have to be clear here. The ‘quality’ issue is not about objective and target setting as a means of aligning activity with organizational strategy but the fact that organizations and individuals have lost sight of long term objectives, like improved health, by being forced to achieve meaningless targets for waiting times – i.e. targets are not aligned with the overall goals.

I tend to agree with Shaun that the issue is with institutionalized inefficiency that no amount of inspection or audit will solve. When the CQI goes to Government it should be with an agenda to design efficient processes including process measures that give an accurate picture of performance.

Confidence and Assurance is a very crowded market place at the moment – just have a look at these few straplines:

http://www.ukas.com/ – Delivering confidence
http://www.bsigroup.com/en/ – We’re raising standards in over 120 countries worldwide
http://www.uk.sgs.com/ – When you need to be sure

For CQI to have a distinct place in this market we need to have a USP. I’m not convinced the profession knows what it is yet.

Systems continue to be inefficient for one reason only, because they can be. As soon as the option of inefficiency is removed, surprise surprise, things change pretty quickly. This generally involves upsetting a number of people with a vested interest in the status quo which, if these people are numerous and/or influential, is easier said than done. Thankfully I suspect the time that we can spend tip-toeing around these elephants in rooms is coming to an end. Its a governance issue, not a quality or knowledge issue, and I speak as a 15 year veteran of these highly political systems. I am not speculating

http://blog.capablepeople.co.uk/2009/04/corporate-governance/

The IIA has little or no interest in the 3rd party certification industry, but if we are talking about a more general concern and potential to lobby credibly about governance and the management of corporate risk, then I’d suggest there’s scope for dialogue between the IRCA an IIA

The answer is not all pure “quality” of course (sorry, but its not), because a sustainable business model is built at least as much on the ability to achieve the right balance between earnings and investment. Speaking as someone who had the misfortune to start a business six months before the start of economic meltdown, I feel strangely fortunate to have learned these disciplines for free. They’ll serve me well going forward I’m sure. I just hope that as time goes on and times may get better, I remember that sometimes bad things do happen, and continue to make appropriate provision for it

Why can’t we do the same today?