Wednesday, 3 October 2012

Who's accountable for this spreadsheet? Ministers, civil servants and mistakes

A junior civil servant makes a coding error on a complicated spreadsheet.  Unfortunately, this has direct implications for a hotly debated political issue.  When the error is discovered, the Secretary of State apologises and issues an embarrassing correction.  Not surprisingly, his opposition counterpart is outraged:
"This is an extraordinary development. It really does call into into question the competence of ministers and of the government as a whole"

This was the Department for Work and Pensions, 2007.  The Secretary of State was Peter Hain and his shadow was Chris Grayling, now Secretary of State for Justice. The incorrect classification of a number of Labour Force Survey variables meant that answers we'd given to Parliamentary Questions about the number of foreign nationals in employment - then as now a difficult political issue - were wrong.  I remember it well; I was the Chief Economist, and if the checking and quality control processes didn't work - and here, very exceptionally, they didn't - I had at least a share of the accountability.

One big difference between this episode and the West Coast Main Line saga (apart from the fact that by any measure it was by some orders of magnitude less important!) was that the error was not discovered because someone else spotted it, or a court case.  We discovered it internally, as a result of cross-checking the detail of our numbers with some ONS data, and fessed up immediately.    As soon as I and other senior managers were told, we decided immediately that a formal correction was required; the Secretary of State would have to write to Chris Grayling and put the correct figures on the record.

In my view, Peter Hain behaved admirably. He agreed that a formal correction and apology was required; and commendably - given that he knew that the result would be considerable personal and political embarrassment for something that was absolutely not his fault - showed absolutely no sign of anger or resentment at me or my senior colleagues, still less at the unfortunate junior official involved.  Nor did he at any time try to blame civil servants. His letter to the Speaker and his Opposition counterparts said simply:
"I apologise for having to make this revision."
In contrast, the Secretary of State for Transport has explicitly refused to apologise, either personally or on behalf of the government or his Ministerial predecessors:  
"I'm not going to apologise for the terrible mistake that has been made by the Department."
And apparently the Prime Minister thinks none of his Ministers have done anything wrong: 
"The prime minister believes that the errors were a serious technical blunder by civil servants and that transport ministers Justine Greening and Theresa Villiers could not have been expected to spot the mistakes amid pages of numbers."
Well, leaving out the standard political hypocrisy, and the less than graceful attempt to imply that it's all the civil servants' fault, there is considerable force to the basic argument here.  Secretaries of State shouldn't be checking spreadsheets.  If DFT civil servants got their modelling wrong, and internal checks failed to pick this up, then it is DFT senior management - not Ministers, or the junior staff who made the actual mistakes - who are directly responsible.  

But this doesn't mean Ministers didn't do anything wrong or have nothing to apologise for.  Ultimately, they took the decision to award the franchise to First Group.  This decision was hardly uncontroversial or low profile - even leaving aside Virgin's sour grapes, many informed commentators clearly thought that First Group's revenue projections were hopelessly optimistic.  

So Ministers had months in the run up to the franchise award in August, and two months since, to require DFT senior management to explain to them - not with pages of numbers, but with convincing analysis - why this view, now apparently vindicated, was wrong.  No remotely competent Minister would accept the explanation "That's what the model says" on an issue like this.   So either they didn't ask the right questions, or they were incapable of understanding that they were getting the wrong answers.  Neither interpretation reflects well. 

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