Steer for the deep waters only

Robert Day's thoughts on his photography, his writing and his business

Something rotten in this state

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I don’t normally do politics in this blog; but its function has changed since I went back into full-time employment. It no longer really has any function in promoting my photography work (though having decided last year that I would wind down my photography and writing work for money, I have since had indications that I might start being offered more along those lines in future), so I decided that I would restrict future posts to the online equivalents of What I Did On My Holidays. And then I read something that so upset me, in its way, that I felt I had to write about it here.

A friend of mine passes his old copies of Private Eye on to me. (Note for overseas readers: Private Eye is a satirical magazine which takers delight in exposing the follies of the rich and powerful. This has ended them up in court on a number of occasions; quite often, they win. It holds no remit for any political party, though the party of Government always makes for the juicier target.) It was with no pleasure that I read in Eye 1397 an account of some of the various manoeuvrings over the Thames Tideway, a highly-expensive capital project of Thames Water’s, to build a major interceptor sewer in the London area to prevent raw or partially-treated sewage from being discharged into the Thames Estuary.

In amongst the exposing of various business interests of various people who should otherwise be assumed to be independent, the Eye turned its attention onto my former employer, the UK water economic regulator Ofwat.

It reported on the current Ofwat Chairman, Jonson Cox, and his bonus whilst he was CEO at Anglian Water; the former project director of Thames Water now acting as a consultant for Ofwat; and the accountants Price Waterhouse Coopers (PwC) acting as both auditor and “delivery partner” to both Ofwat and nine out of 19 water companies, as well as directly advising Macquarie Group, overall owner of Thames Water, on corporate tax matters, especially those involving Luxembourg. Now, I’m fairly well aware that accountancy firms will say that they have in place “Chinese Walls” to prevent one part of the business having any contact with other parts of the business where a conflict of interest might occur; but surely as staff move around from one contract to another, that arrangement can only deliver isolation of business decisions for so long. And the public perception of all this can be doing no-one any favours.

I was very saddened to read this, because when I worked for Ofwat I was proud of what I did and what the organisation did. I joined Ofwat in 1989 when the organisation was only 60 days old; and I joined on level transfer from the (then) Department of Health & Social Security as a Clerical Officer. After 18 months at Ofwat, I was promoted to Executive Officer (EO), and there I stayed until I left in 2010. For those unfamiliar with British Civil Service grades, I was pretty much at the bottom of the food chain; my promotion put me on the first rung of the management ladder, and there I stayed pretty much. Moreover, whilst in executive arms of Government, EOs are called upon to exercise direct managerial authority over 5-10 staff and authorise expenditure within fairly strictly defined limits, in policy branches EOs are still in a very lowly position and basically do number crunching, responding to correspondence, research and general gophering.

This was the case in Ofwat, but there were things that alleviated that condition to an extent. Firstly, Ofwat was a small organisation – at its height, with a range of ten regional offices to handle customer service enquiries, the total staff only came to 250 – so everyone knew everyone else pretty much and you would rub shoulders with the Great and the Good on a daily basis. Secondly, as one of the first tranche of staff to join the organisation, I was called upon from time to time to do things that were above my pay grade. This was also because I was placed early on in a senior executive support role; I was effectively personal assistant to the Director General’s Personal Assistant (or as I said, quoting Flanders & Swann, ‘chief assistant to the assistant chief’). So early on, I prepared briefing for a visit by the DG to France to meet the boards of various French water companies (who in the years immediately before and after privatisation invested fairly heavily in the UK water industry); and later, I went to Parliament fairly regularly to report back on the progress of the EU Waste Water Treatment Directive in its transition into UK law. (My French briefing did cause me to get an apology from someone who later became Rail Regulator and Chairman of Centrica, as he had queried the validity of that briefing and insisted that they get someone in who Knew Their Stuff; and after a day’s briefing by this expensive consultant, had to admit that he’d told them nothing that I hadn’t.)

I later went on to work in the Press Office, and indeed for a while any Ofwat story that was run in a national newspaper and attributed to “an Ofwat spokesman” actually came from me, as I wasn’t formally a press officer but the years of explaining benefits to people on the front line in the DHSS meant that my immediate bosses were reasonably happy with my talking to the press as long as they generated a line to take on whatever was the burning issue of the day.

I suppose that my years in science fiction fandom had exposed me to being relaxed at talking to people – authors and editors – who had a lot of status, at least within their own particular community, so I was not afraid to speak out, albeit in that respectful yet critical way that the British seem to excel in, of the non-commissioned officer to the senior, where a statement prefaced with the words “with respect” actually means the exact opposite.

The final thing that made my position a bit different was my position as a trade union representative. I’d done some low-level representation at the DHSS regional office where I worked, and done the training to become a union health and safety representative, a role which actually still carries – at least on paper – some legal powers. But as a representative for an entire Government department – albeit a small one –I was not just a local official but actually had a role within the union at national level, where my peers were representing major Departments of State such as the Inland Revenue, the MoD or the Land Registry, with membership numbers in the tens of thousands. This gave me access to senior people in the union, up to and including the President and General Secretary; and although our first DG, Ian (now Sir Ian) Byatt, was not particularly keen on trade unions, his was also a bit of a snob and if he was going to have active trade unionists in “his” Department, at least he could say that “his” trade unionists were operating at the highest level open to them, and he at least had respect for any organisation with a clear hierarchy and for the people at the top of that hierarchy.

In looking at the article in Private Eye, I was struck by the contrast between then and now in terms of the personalities appointed to run what is supposed to be an independent regulator. The first Director General, Ian Byatt, was a Senior Treasury economist who had (literally) written the book on the theory of the economic regulation of utilities. He had lectured on this subject at the London School of Economics, and was a respected authority on these matters. He was also the ex-husband of the novelist A.S. Byatt, and generally embodied many of the best features of the traditional British civil servant – advancement by merit, a particular level of civility in dealings (most of the time), and above all a particular emphasis on status being expressed in achievement and position rather than direct financial reward. A good dinner with the right people and an honour – preferably a knighthood, a ‘K’ – on retirement was more important than just getting a big fat salary cheque. That’s not to say that the Service ran its top-level people on a shoestring, at least not compared with the comparatively low pay of people at my level; but in Sir Ian’s day the Service still operated pay grade scales for everyone up to and including the Head of the Home Civil Service, which were published and which only touched on the rarefied levels of six-figure salaries at a time when that was considered starting pay for senior corporates and board members.

Sir Ian Byatt was one of the most intelligent people I have ever met or worked with, which considering some of the people I’ve met in the science fiction field puts him in the same league as nuclear physicists and astronomers, which is saying quite a bit.

Sir Ian’s successor as DG was Philip Fletcher, who was an equally senior civil servant but not one with the same academic pedigree. He came up through the policy field in a number of departments, most notably the Department of the Environment, but came to Ofwat on Sir Ian’s retirement from the post of Receiver of the Metropolitan Police. The term ‘receiver’ did not mean that the Met was insolvent; rather it was an extremely old job title, going back to the formation of the force, and it basically referred to the civilian head of the Met’s establishment, with responsibility for back office and civilian clerical and support staff. In the UK, whilst most police forces are responsible for their own clerical and back office functions, the Metropolitan Police, which is responsible for policing the capital (apart from the City of Westminster, which has its own force) has all its support functions provided by the Civil Service in recognition of the unique situation of policing the capital. Philip Fletcher was more of an administrator than an expert on utility regulation and economics; whereas Ian Byatt had been rather hands-on with the decisions to be taken in terms of policy formulation and direction, Philip Fletcher took the more traditional Civil Service view that he had a troupe of senior advisors to do that for him.

Up to 2006, he continued the job as Director General with sole responsibility for the work of the office. However, the Blair Government had decided that Ofwat needed a makeover in terms of its corporate structures, as one of the criticisms levelled at Ofwat over the years was that it was too personality-driven, and that decisions were far too much based on what one figurehead regulator thought. This had certainly been the way with the other two major sectorial regulators created during the Conservative government of 1979-97, Offer (for electricity) lead by Stephen Littechild and Ofgas (for gas, surprisingly), headed by Claire Spottiswoode. These two individuals were far more in the vein of corporate governance (although Littlechild was originally another academic like Ian Byatt), and indeed when the Blair Labour administration came to power in 1997 they only lasted a few weeks before tendering their resignations because they identified far more with the political agenda of the previous administration. This was not the way of either Sir Ian or of Philip Fletcher, who were traditional Civil Servants with the ethos of loyally serving the government of the day, irrespective of their own political views. Ian Byatt, in particular, whilst considered by many of his peers to be something of a Labour supporter (though in terms of politics, these things are often based on relative assessments!) had no problem in dealing with the first Labour Secretary of State for the Environment, John Prescott, even though he was a person whom Sir Ian personally disliked. (Something that was common to many of Prescott’s colleagues, one gathers.)

So, from 2006 legislative changes took place that changed the corporate structure of Ofwat. The post of Director General was abolished, and instead a Board structure was put in place, with a Chairman and Chief Executive. Philip Fletcher became the first Chairman, and he was supported by a new appointment from outside the Westminster bubble as CEO, Regina Finn. She came to Ofwat from having been economic regulator of the water industry on Guernsey, following a career in utility economics in her native Ireland. And we began to see a change in Ofwat management style to a more corporatist model.

The political independence of the Civil Service was something that was a key strength that many politicians saw as a weakness. There was a perception that the Service followed its own agenda and acted against change in British society; and that it was a key part of the Establishment, dedicated to preserving power at the top irrespective of the political colour of government that had been elected to Parliament. Harold Wilson’s Labour government that came to power in 1964 had attempted to change that, but the rate of change was too slow for many politicians. It was only when Margaret Thatcher came to power in 1979 that this began to change; Thatcher was a radical Prime Minister in many ways, not afraid to overthrow old ideas if they got in her way. She famously asked of one senior Civil Servant “Is he One of Us?”, and she started the process of politicising the senior – and not-so-senior – Civil Service to try to ensure that her new policy initiatives weren’t subject to blockage through inertia and administrative manoeuvring by senior officials. This was achieved through a process of splitting the Civil Service into smaller organisations, either Executive Agencies for carrying out everyday functions such as delivering pensions and benefits, or “quangos” (Quasi-Autonomous Non-Government Organisations) to carry out a number of similar roles. Ofwat was neither of these, but a rather rarer bird, a “non-Ministerial government department”, whose roles and duties were defined by statute but whose senior officer was responsible directly to Parliament rather than to a Minister.

And then there was privatisation, which was ostensibly about reducing the size of the state and taking expensive operations out of the public finances, but which was as much about removing democratic accountability and corporatizing decision-making and policy.

By 1997, a large majority of the population as a whole was fed up with the Conservative government, mainly because it had made a laughing stock of itself by becoming severely split over the question of Europe and by various moral shortcomings amongst its members, made worse by the way in which it tried to claim the moral high ground on a number of issues, many of which were almost immediately undermined by major public embarrassments and scandals. At the same time, the Labour party had come under the sway of a reformist sector of the party which looked at its 18 years out of power and concluded that it had to move to the political right to stand a chance of re-election. This was a misjudgement. By 1997, the Labour Party would have been electable if it had put up V.I. Lenin himself because of the level of disillusionment with the Conservatives. But the “New Labour” project, as it was called, concluded that the move to the Right had to be accompanied by the continuance of many Conservative economic policies, including reining in public sector expenditure, opening up the public sector to more competition, private provision of public services, and something called PFI – the “Public Finance Initiative” – which basically allowed the private sector to build, own and operate public infrastructure such as schools, hospitals and even the odd toll road, in exchange for long-term financial interest and large, on-going running costs payments. New Labour, under Tony Blair, cosied up to the City and industry, and the traditional supporters of the party on the Left, the trade unions and party activists, were increasingly marginalised. This was the period that saw the growth of what I have dubbed “the CEOcracy”; government by senior managers with generous contracts, supported by a new class of young apparatchiks with MBAs and little experience of real work in real industries. (Many of these senior managers were parachuted into senior positions in the Civil Service, only to start cutting corners to save costs that had major impacts on matters of public probity such as security of personal data, democratic control and oversight, political neutrality and accountability generally.)

Thus it was at Ofwat. In the six months prior to a General Election, Government departments are allowed to start discussions with the leaders of each of the political parties’ front bench teams to find out the plans for each policy area so that on Day One, new Ministers can be presented with plans to implement their manifesto commitments. Many of us were shocked when Regina Finn came back from her meeting with the opposition Conservative policy teams at the end of 2009 and basically said “We’ll be fine when that nice Mr Cameron gets into power.” That was a level of partisanship which many of us old-timers found unacceptable, irrespective of our own political beliefs. When the Coalition government came to power in 2010 and imposed the austerity programme, which many saw as a fairly naked attempt by a Conservative-led coalition to impose sweeping changes to British society without a solid mandate from the electorate under the cover of “balancing the books” (something it has actually failed to do then or since), Regina Finn signed Ofwat up to austerity measures and cuts despite that fact that Ofwat was not funded from the public purse. There was also the growth of something that Ofwat had never seen before, crony management. Whilst there had always been golden boys and girls in Ofwat who got all the advancement, kudos and plum jobs, this had never been driven by personal allegiance. That changed under the new regime from 2006 onwards. I had to deal with a personal case which was basically down a member of staff being sacked for being a piece of grit in the machinery, asking difficult questions; and that was in an area under the control of one particular senior manager that was generating most of my caseload for complaints from members.

I decided that Ofwat had nothing more to offer me in about 2008, when I was passed over for a particular promotion that I had dedicated myself to get as soon as I knew the job was on the cards. In the end, I was passed over for a Bright Young Thing brought in from outside Ofwat. Twenty years’ loyalty to the organisation was rewarded with my being told that I should confine myself to the job I was doing. The prospect of working under the austerity programme, with the imposition of a five-year pay freeze on top of the one that had covertly been in place for the last three years of the Labour administration (overall paybill increases were restricted to less than the rate of inflation in the years leading up to the election, with a 0% paybill increase expectation in 2009-10, something the Brown administration flatly denied was a pay freeze policy or even existed – but as a union negotiator, I saw the Treasury pay guidance and I knew differently), meant that I could see no prospect of my doing any better under the new regime, and so I engineered my exit in December 2010.

The replacement of Regina Finn by Catherine Ross in 2013 was precipitated, as far as I have established, by some internal corporate scandal. Catherine Ross had been a senior executive in Ofwat in my time, but had departed the organisation before I left. From what I heard, there were elements of cronyism in her appointment as CEO, and the replacement of Philip Fletcher as Chairman by Jonson Cox, CEO of British Coal and player with a finger in a number of corporate pies according to Private Eye only serves to reinforce that view. Ofwat staff numbers were winnowed in 2011 and 2012, with many people who were liable to be labelled as part of the “awkward squad” or who just were from the old regime and therefore not expected to be onside with the new thinking being conveniently made redundant. Corporate structures were changed so that people in Ofwat became “associates” (whatever that means), and Ofwat’s position as part of the Civil Service, with all that implied, was brushed under the carpet. In at least one instance, that meant that Ofwat ignored a national level agreement with the trade unions that it either didn’t understand or couldn’t be bothered try to comply with. At the same time, one of the major UK accountancy firms, PriceWaterhouseCoopers (PWC) took a major role in policy development when previously they had been kept at arms’ length as retained accountants to a number of water companies and only really had any role in Ofwat policy development in quite constrained and controlled project work. “Conflict of interest” was by now just three meaningless words.

The Private Eye story paints a picture of Ofwat, an organisation I used to be proud to work for – as I believed in its role as acting as a substitute for competition and being an source of collected expertise in the industry – now being a full player in Corporate Britain, with all the insider self-interest that the CEOocracy seems to think of as normal and acceptable and a just reward for the Great and the Good, and the little people can go to the wall because it must be their own fault after all for not fighting their way to the top of the greasy pole.

But this world-view is increasingly being challenged, not least by the rise of maverick politicians in both the USA and the UK. Donald Trump and Bernie Saunders in the States, and Nigel Farage and Jeremy Corbyn in Britain, are all expressions of dissatisfaction with the status quo. The problem is that Trump and Farage, whilst suggesting that they are “men of the people” and expressing what “a majority” of people are saying, are merely allowing their views to be reflected back to them through their status and power (for all his attempts to come over as “an ordinary bloke” Nigel Farage is, after all, a former stockbroker and so hardly familiar with the coal face of modern Britain; and his anti-EU rhetoric finds favour with a number of newspaper proprietors who see wrapping themselves in the flag as being an asset to sales).

The Private Eye article merely shows one manifestation of modern corporate Britain in an area which I have knowledge of. I cannot think that similar wrongdoings – for wrongdoings I consider them to be – are not happening in other areas of government and public life. I personally consider much of this to be nothing more or less than corruption. Any politician who makes policy that benefits them directly, that places their family, their friends and their business partners in advantageous positions, I consider to be corrupt – in whatever way you care to define that word – and deserving of a place, not in Parliament, but in prison.

I have seen for myself what I consider to be moral decay in the exercise of corporate power ostensibly in the service of the public, and it appals me. I hope that the coming years will see a move back to probity, accountability and above all honesty in public life; and I will support any politician who puts those things at the core of their programmes.

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Written by robertday154

October 12, 2015 at 11:45 pm

Posted in Uncategorized

One Response

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  1. Well, I think it’s about time that some of that was exposed … thank you Private Eye and Robert. As a member of the “awkward squad” that got kicked out on the first round of redundancies, I also saw first hand a lot of the “successful pole climbers” (or arse lickers as I prefer to call them) progress (some, I heard, also used other methods of “getting up the pole”). There is a vast difference between US (the “Doers”) and THEM (the money grabbing, pension grabbing, status grabbing “Saints”). A recent quote (3rd hand so apologies if not totally accurate) from the current CEO was “You’re either in with us or on the bench …. and it’s lonely on the bench” ……………………. the world is a better place “on the bench”

    Terrifc blog and welcome back Robert.

    NCM

    October 16, 2015 at 9:05 am


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