Wednesday, 14 October 2009

Aiming at the right target

Some of the expense claims made by staff within IBW are truly headline-grabbing. And blaming the man who happens to be at the top when the news comes out makes an easy press release for lazy opposition politicians. But it seems to me that both these approaches are missing the point.

I wouldn't seek to defend the expenses claims made by the staff involved; but I'd be a great deal happier to take a relaxed view if they'd actually been delivering. If I were to rank the elements of scandal in order of importance, then top of my list was not the front page reports of strange expenses claims - it was the detail relegated to the business pages about how the organisation was targeting the wrong companies in the wrong market place, and was delivering poor value for money. And second on my list is how on earth this was allowed to go on for so long under a succession of ministers.

It's not just in the big things that they appear to have been getting it wrong. For a government agency in a bilingual nation to have appointed a non-German speaker to run the office in Munich is something I find hard to believe given the lack of understanding it shows of the need to respect local culture.

It's easy for opposition politicians to have a pop at Ieuan Wyn given that it's come to light on his watch – although it was he who commissioned the report which has identified most of the failings as I understand it. But the issues were obviously missed by his predecessors as well. I'm not sure how valuable it is to play the 'blame' game, even though it's often a lot easier that debating the real issues.

Many years ago, when I was leading an IT project team, I appointed one of the team members as 'team scapegoat'. The idea was that once we'd all decided who was to blame, we could get on in earnest with the real issue of analysing and resolving the problem, rather than everyone being afraid to speak openly about what had happened. A bit of a corny idea, I know; but it was a genuine attempt to get out of a blame culture and into a problem-solving one.

I doubt that some opposition politicians will be in any hurry to move on from blame; but that's surely what we need most now. Recognising that we've been doing the wrong thing - and not even doing it terribly well - is a hard thing to do; but the One Wales government has done that. In doing so, it has established a basis for setting an alternative direction for the future - one based more on expanding and encouraging indigenous businesses than attracting 'footloose' major employers.

I think that's the right way forward. And if we start to re-localise our economy in the process, then we'll be moving much more in the direction of the government's aspirations for a green economy than we have done to date.


Anonymous said...

I agree with these comments John.

As you suggest, the only real measure of 'value for money' is to measure expenditure against resulting benefits. It is easy to publish the hotel receipt as a headline, which can appear extravagant. It does not, however, tell the full story. A corporate investor will measure value for money by results, and the checks and balances are obtained through internal audit. Such overhead costs are matched against revenues apportioned over the lifetime of the investment, which is almost always a product of the investment in hand.

That measure does not currently exist on the public sector side, most notably in Whitehall civil service "codes of practice", which are often found wanting. It is, however, much easier to hide in the London fog of telephone number expenses. Such luxury Wales does not have.

Some process of checks and balance needs to be devised on the public sector side and it has to be a 'one message' document. You need to decide who is in charge and get a political remit for that rule book. Those rules may not need to be financially specific but they do need to be measured against a scale of expected return.

The risk to a government minister is political embarrassment, which is a transitory issue in the political world. On the investor side of such arrangements, both the professional staff and directors are open to ethical uncertainty. In the extreme a risk of prosecution for corruption and fraud. This amplifies investment risk. Business also needs to know the rules. The events in IBW may have resulted in publication of a few unwarranted expense claims, but has also exposed an immature constitutional arrangement in Wales. Other nations in the EU vary by culture, but all can provide business with a robust expectation.

Final point. You send the HMRC inspector to the chip shop for lunch (it appears compulsory for VAT returns) but that might not be suitable when the IBW rep needs to meet with the law firm you are flying in, and paying by the hour. If a civil servant does not know what flight he can book to attend, what confidence and authority can he/she bring into the boardroom of an investor ? If the Irish donate the best hotel in Dublin to secure a deal, do you expect the Welsh competitor to turn up with a bag of sandwiches and a flask of tea ?

Anonymous said...

Good post John. This business has been going on for years and at last, the Government is taking a more honest and facts-based approach to this whole area of economic regeneration. I'm also impressed by IWJ because every AM (and MP and councillor) likes to see their picture opening a new factory which employs 200 staff. IWJ has effectively said that he won't do this, or rather it's less likely to happen as the whole focus of economic development is shifting. Yes, politician turns down chance for photo op shock! What IWJ wants to see is hundreds of SMEs and sole traders employing one or two more members of staff ... and that won't get him pictures in papers.

The case of the non-German speaking staff is amazing. It's almost Monty Python. Though, of hearing and experiencing the Britisher attitude of so many in the WAG civil service it doesn't surprise me either ... I mean, all these people, Welshies, Germans, foreigners can speak English, right?

At last Plaid are moving to deliver on their long-term economic objectives which is to have the government defend, support and nurture businesses already in Wales. If that means one day of mildly bad press, then so be it. Welsh business, large and especially, small, will be at their advantage in the long term.