When I grow Up…

Robin McAlpine – 31st March 2022

“So tell me, what is it you’d like to be when you grow up?”
“I’d really like to be a non-executive director with a number of lucrative board position on a rotating list of Scottish public bodies. Or an astronaut.”

Well hold out for a comfortable life raking in public money for helping to steer Scottish public bodies because it pays better, you face zero risk and there are a lot more opportunities. The only downside is you need to know the right people to get a start in that business.

The kind of people you want to know are very senior civil servants who generally prepare the shortlists for board members of these bodies. So people like Sir Muir Russell (former Permanent Secretary), Sir Peter Houseden (former Permanent Secretary) or Philip Ryecroft (former Director General for Education in Scotland).

But once you’re ‘on the circuit’ you’re good to go. Information released by Scottish Labour this week showed that there are nearly 100 people who sit on multiple boards of Scottish public bodies at the same time. This 100 people share out £2 million between them.

In fact there appear to be 34 people who are truly living the dream, sitting on enough Boards that the income from this alone becomes their only income (and it is a generous income). You really can be a professional board member in Scotland.

This is almost an open scam. Look at Strathclyde University’s Centre for Board and Director Development. You can buy yourself into a course which gives you a qualification to improve your chances of a career lingering around boards making money. In fact there are a full 774 positions on public boards in Scotland, most of them paid.

And just shy of one in three of these places has been created by the current Scottish Government since it came to power. Board places go to reliable people who do as they’re told, powerful people with good connections and to councillors or others who are ‘due a bit back’. 

Because once you are in the system, everyone looks after each other. Board membership doesn’t only pay but gives serious access to influence and power, so lots of senior business figures get places to shape public policy. It may be a coincidence that the people who arrange these shortlists then go on to get their own Board places in the private sector after retiral – you can decide for yourself.

Sir Muir Russell is now (among many other things) a Non-Executive Director of the National House-Building Council, Philip Rycroft is Chairman of the Portman Group and Sir Peter Houseden is Chairman of the exclusive Civil Service Club.

No-one is saying that these people don’t have skills to offer after their retirement, but they appoint people to public boards granting them power and then later they themselves get appointed to boards by the kind of people they appointed, but this time for a lucrative pay-out. The whole system has a built-in oligarchy.

Oh, and would it surprise you to know that the civil service itself has a Board of Non-Executive Directors who are drawn from the same pool of people? A surprisingly large proportion of what we consider ‘public’ in Scotland isn’t really run by public servants and isn’t really guided by democratically-elected politicians. They have ultimate power but basically grant it to the non-execs.

When this is paired with the very-much less-than-sparkling recent track record of the Scottish civil service or its public agencies it is hard not to see why there is so much cynicism. An elite group do well out of a system which is failing too many of the people it is there to serve. 

And once you have ‘non-exec director’ on your LinkedIn profile and perhaps a qualification in non-execery from Strathclyde, you could well be set for life. Almost no-one is ever held to account for any failures that occur under the stewardship of the non-execs. Look at the way public agencies protect government when things go wrong and the way government protects the agencies the rest of the time.

It isn’t that these people are necessarily grifters and chancers – many will genuinely want to give something back if they themselves have been successful. Nor is the model of non-executive governance something we should dismiss, since self-governance by managers can be even worse. But it really does reek of self-serving clientelism.

It doesn’t need to be like this. Scotland doesn’t need to be run by a closed shop of establishment figures appointing each other to positions of power forever like some kind of neo-aristocracy. For the sake of a simple analogy let’s think about governance as if it was a ‘market’.

In market theory, markets always work well because they inherently reward good things and punish bad things. This isn’t even nearly true because big business does everything to distort markets (monopolies, advertising, supply chain control) so they don’t work in this way. But at heart it is true that the power of a lot of people making small decisions has the potential to make better decisions than a small group of people alone.

So let’s take a ‘market’ approach to public governance. To extend the metaphor, once you identify a ‘provider’ of a public service, try and work out who the ‘customers’ are. Then let the ‘customers’ define the nature of the governance. And let them ‘correct’ the governance where they’re not happy.

Let’s take an example, say a health board. It oversees the delivery of NHS services and so it’s ‘customers’ are basically patients, NHS staff and government (in a private sector context employees are not usually considered ‘customers’ as the ‘market’ for them is to apply for another job, but the NHS is a monopoly provider).

So let them decide the ‘governance market’, let them decide whether the way a service is run (with their tax money for their benefit) is good enough. Let them choose the governors of public institutions. The members of a health board would then be subject to the choices made by those vested in all aspects of the service. It could be a mutual model – a third elected by patients, a third by staff and a third appointed by government.

If patients feel they are not getting the service they expect or that the health board isn’t standing up for their interests then they can change who they chose. Patient’s organisations might hold open selections for their board representatives, NHS staff would select theirs and government would choose theirs as they currently do.

Not only does this make the governance much more balanced, it makes it much more responsive and it brings a wider range of knowledge into how strategic decisions are made. There is so much academic evidence on how balanced groups make better decisions that it is remarkable that public governance is still a closed shop.

Of course, what this describes is not a market system at all, it is ‘democracy’. It’s just that democracy is so associated with a public realm which seems to be serially failing everywhere that it has been devalued. But just as markets (when not heavily distorted) are still the best way to govern the distribution of most goods, democracy is still the best way to govern the public realm.

None of this is actually that hard to do if a government wanted to do it. More importantly, it would not be difficult if those with the vested interests in the system as it is are not also responsible for managing its running and reform. 

The non-exec classes definitely don’t think they need reform and so on the one occasion it was tried (for health boards in 2013) it was weakly implemented and frankly undermined from the start, providing ‘evidence’ that electing boards doesn’t work (it was scrapped completely a year later).

Reforming governance is technically easy – you just do it. But it is practically hard because the people who can reform governance are governors or the system that facilitates them. It would take one committed government or local authority to shift from our current semi-feudal system of public governance to one fit for the 21^st century – and the impact could be enormous.

We don’t seem to have that government or enough of those local authorities. But as you shrug at news stories about the quango class and conclude ‘something seems a bit wrong in Scotland’, don’t stop there. Follow through with ‘and we could put it right any time we wanted with just a bit of modern governance reform’.