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Public Sector Failures Need Private Sector Responses

Public spending is at record levels, and yet public sector failure is the norm. The gravity and frequency of the failures is so breathtaking, our media can barely keep up with the pace. Lucy Letby, Asian grooming gangs, Shropshire maternity, government lawyers encouraging asylum seekers to lie, Baby P, Baby Arthur, HS2, personal data breaches, local authorities going bust, and the billions squandered, defrauded or handed out to those working against the government. And that’s before we even start on HMRC, the BBC and the Bank of England, who literally roll between crises.

This is not about someone having an off-day. These failures are systemic. They cost lives, destroy livelihoods, waste billions, and obliterate trust in our leaders, our institutions and in democracy itself.

Public sector managers and civil servants operate from positions of enormous privilege and power. As the saying goes; “With great power comes great responsibility.” Responsibility means accountability with consequences. Private sector enterprises know all about this. When they come up short, their owners lose their wealth, their workers lose their jobs, and their directors end up, at best with their reputation in tatters, and at worst in jail.

By contrast, the worst-case scenario for a catastrophically incompetent public sector manager is a sideways promotion to some backwater department or obscure Quango; where they can keep clocking up their pension, safe in the knowledge that their new role is so pointless no-one will ever notice how useless they are.

It is not just private sector managers who should feel aggrieved. Our politicians should be particularly bitter about how unelected public sector workers get off scot-free again and again and again; while they face constant scrutiny and national humiliation when they come up short. In fact, it has become clear that many senior civil servants devote their entire careers to undermining our elected leaders, destroying their reputations and gas-lighting them with impunity.

Public sector dysfunction has become so endemic that we now face an unprecedented electoral wipe-out for the Conservative party. This is not because opposition parties have better or more popular ideas, but because the government simply cannot deliver basic services or any of its manifesto promises. How can a government win a mandate if voters no longer believe any of its policies will happen?

This is unconscionable and undermines the spirit of democracy. MPs must act, if for no other reason than to preserve their own future. Fortunately, the cure for public sector failures can already be found in the legal responsibilities private sector managers already face.

For a start, Corporate Manslaughter legislation should be explicitly extended to public sector entities, and not just companies. Moreover, those managers held responsible should be jointly and severally liable, and face the full weight of the criminal law where their gross negligence leads to someone’s death. This seems intuitive: Public Sector staff owe us a duty of care that goes above and beyond what we expect of private companies.

Additionally, all public sector workers should have a duty to actively prevent and report fraud and corruption. The scandals around Covid contracts and Covid fraud losses (estimated at over £21bn) illustrate the eye-watering scale of public sector corruption. Part of the reason we cannot fix our broken housing and planning systems is that they are endemically corrupt. Moreover, that obligation should include immigration and benefits fraud. Systemic fraud and corruption are rapidly destroying trust in government, democracy and free markets. Recent legislation (such as the Bribery Act 2010) has clamped down hard on private sector corruption by putting the onus on company staff to act on their suspicions rather than turning a blind eye. It is time for public sector workers to step up and face the same standards.

That duty to prevent fraud and corruption could be legislated for as a Fiduciary Duty on all public sector managers. Fiduciary Duties are legal obligations that apply to a person or organization that is acting on behalf of another; for example the guardian of a child, a wealth manager looking after clients money, or a director managing a company on behalf of its shareholders. In all these cases fiduciaries must put their beneficiaries’ interests ahead of their own.

Fiduciary duties are a powerful legal tool, backed by centuries of common law. Our courts have a long record of strictly enforcing the legal obligations of fiduciaries to act in their beneficiaries’ interests, over and above their own interests or motives. Moreover, the application of fiduciary duties transforms a culture and mindset to one of care, duty and sacrifice. For fiduciaries, work is more than just a job.

It is high time Fiduciary obligations were applied to those who serve us in the public sector. Public sector managers are in positions of enormous trust. It is imperative they use their powers and our resources in the best interest of those that entrust them.

Thus, all public sector managers should face legally binding fiduciary duties towards the British people, with serious sanctions where they come up short. Top of that list should be the consistent delivery of their core public service duties in good faith and to a reasonable standard. In addition, fiduciary duties should include: Preventing fraud and corruption, promoting the Union, protecting national security, upholding free speech and democracy, implementing and not undermining the agendas of elected ministers, and getting value for money.

As well as duties, we can also borrow sanctions from corporate law. Just as Directors get struck off when they seriously breach their fiduciary duties, we should apply Striking Off to public sector staff as well. That would mean they could never work in the public sector again.

In addition, directors and executives of listed companies now invariably have malus and clawback’ provisions written into their contracts. This means they can be forced to hand back deferred compensation as well as past remuneration in the case of serious breaches of their duties. While bonuses of public sector staff may be more modest, their eye-watering pension pots should be treated in the same way.

To be clear, these are serious sanctions, and should only be applied in cases of serious abuse or failure. But in those instances - which have become all too common - Ministers and locally elected politicians should have the power to name and shame, to strike off and to claw back money from those who egregiously abuse their powers or fail in their duties.

Moreover, these powers should apply under the common law doctrine of Res Ipsa Loquitur. Res Ipsa Loquitur literally means “The facts speak for themselves.” Thus, when a catastrophe happens that is so far removed from what is supposed to happen, you do not need to show exactly what went wrong to imply negligence. If someone is doing their job properly some things should never happen. And if they do, then management speak, lengthy inquiries and obfuscation won’t cut it. The person or people in charge take the hit. If inflation should be 2% and its 11%, res ipsa loquitur; if dozens of babies die unnecessarily, res ipsa loquitur; if £128m of taxpayers’ money earmarked for Scottish ferries goes completely missing, res ipsa loquitur; if a train track is 10 years late and 10 times over budget, res ipsa loquitur...

Simple and proven measures like these would weed out entitled, underperforming public sector managers, while encouraging the rest to do their jobs properly or face the same consequences as anybody else. At last, we could pin responsibility onto the specific people who are paid to serve us, rather than it being swallowed up by an unaccountable blob. Moreover, measures like these would go a long way to assuaging the righteous indignation of hardworking taxpayers and frontline staff. There is nothing the British public hate more than the injustice of unearned privilege.

The private sector and the English common law already have the tools to fix unacceptable failure and hold managers accountable. It is time to raid the tool box.

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