Efficiency or resilience?

Robin McAlpine - 30th September 2021

An economist would approve of a cost-saving proposal first to appear in Viz magazine. Buying expensive wall-to-wall carpet is inefficient when you're only standing on a very small proportion of the carpet at any one time. Instead buy two high-quality carpet tiles, strap them to your feet and you'll have luxury carpet wherever you go.

An economist could convert this into a mathematical formula which proved conclusively that, yes, carpet is highly inefficient and yes, person-centred individualised carpet solutions increase the efficiency enormously. And this in a nutshell is a key reason everything is going wrong just now.

Our hospitals are at breaking point because we've handed them over to financial management regimes which use exactly the kind of formulaic analysis of 'cost centres' to seek to drive any inefficiency out of the system to achieve 'maximum impact from public investment'. By default, this makes the goal of hospital administrators to run hospitals at 100 per cent capacity all the time.

Other European national health services would consider this a crazy policy. What about staff burnout? What about differing capacity demand at different times? What about the unexpected?

If an event like the pandemic comes along and you are operating at 100 per cent efficiency, there is absolutely no give in the system. Under this administration there has been a substantial reduction in hospital beds in the pursuit of that kind of efficiency target and we are now seeing the consequences. Occupancy has risen from 84 to 87 per cent in ten years.

Similarly with the global problem of shortages. The drive towards 'just in time' stock management where, rather than holding a 'buffer' amount of whatever a shop sells, it holds the least amount it can which it replaces constantly means there is no leeway if there is a problem anywhere along the supply chain.

Similarly with public procurement where 'efficiency' demands that the money spent on the things government purchases must always be cut in any way possible, even if the way the money is spent actually works against the public interest (for example by cutting out small, local suppliers in favour of big corporations).

Since the adoption of 'New Public Management' in the Thatcher years, almost all government across the UK has been driven by the setting and subsequent pursuit of 'performance indicators', the translation of policy objectives into simple numerical measures of progress. Assumptions about 'efficiency' are built into all of these and so are pursued in and of themselves.

But we do not live in an economist's formula – the only thing unexpected about the unexpected is its form, not whether unexpected things will happen (they definitely will). A public sector (or private sector for that matter) without 'inefficiency' will be unable to cope with the unexpected.

Inefficiency has an even more critical role in the delivery of public services than being ready for big, unexpected events. They must also meet the needs of all those small, individual unexpected events which make up our lives.

If you have a small, local minor injuries clinic, you want it to be open when your child needs it. Perhaps it was only operating at 60 per cent yesterday, 75 per cent tomorrow. So what? You need those few percentage points of 'inefficiency' today.

If you want to get from one place to another outside peak hours, you want the bus or the train to be there anyway, even if it is running 'inefficiently' at half capacity. If you phone the police you want someone to answer, whether you are calling at a time which falls within their statistical models or not.

The spreadsheets might predict that you can run a responsive service or that you can always have stocked shelves in shops or that you can get an atypical problem solved while at the same time running everything to maximum capacity in an uncertain world – but the spreadsheets are wrong.

That is why Common Weal developed the concept of 'resilience' as soon as the pandemic hit. It gave a name to a concept we've had built into policy for a while now. An efficient system may theoretically be the best use of resources, but a resilient system is one that can still deliver even when the unexpected happens, to you, to your community or to your country.

A resilient Scotland makes more of what it consumes, so we can all sleep better at night knowing we're not wholly reliant on delicate supply chains. A resilient Scotland generates and manages its own energy, so the lights stay on. A resilient Scotland demands higher quality of products so they don't keep failing, leaving you to replace them again.

A resilient Scotland doesn't boast about its natural assets, it uses them to increase its self-reliance. But equally a resilient Scotland manages all aspects of its environment with the expectation that it may take a little more effort, be a little less efficient, to use them in a way that also looks after them, but that means they'll still be there next year and the year after.

Efficiency has meant 'maximum exploitation of everything' and it has done a lot of damage. A substantial proportion of the degradation of the world's environment can be traced back to 'slightly more efficient' ways of doing things, like letting trawlers dredge the sea floor, destroying entire environments for the sake of 'efficiency'.

Nor does efficient in any way mean better. Efficient food is cheaper and lasts longer but tastes worse, is much worse for our health and involves very large volumes of plastic waste.

And efficiency has also played an important part in the transfer of wealth to the wealthiest. Efficiency sees wages as a problem and monopolisation as the solution. But that's only efficient if the state then makes up for the impacts of the low pay through public services and social security.

The goal of resilience is to deliver the opposite of these phenomena. Things get better, taste better, work better, last longer. The economy shares wealth better, creates jobs here, supports diversity, gives people security. The environment is protected, regenerated, supported and respected.

And public services are reliable, flexible, high-quality and prepared for the inevitability of the unexpected. Yes we pay a bit more to get these outcomes, but it also means we earn more. And we get so much more than we pay for in a resilient world.

So unless you're tramping around your house with carpet tiles strapped to your feet, celebrate the benefits of a little inefficiency in your life. You'll be grateful in the long term.