Scandalous maladministration

If you watch only one TV series in the next few months, make it Mr Bates vs The Post Office. On one level it is an engaging human story. On another it exemplifies much of what has gone wrong with public administration in Westminster-based liberal democracies in the past 45 years.

The saga began in 1999 and it is still going on.

In 1999, as part of the mania for privatisation, corporatisation, and self-regulation begun by the Thatcher-Reagan neo-liberal economists, the by-then corporatised British Post Office, began to hound the franchisees of post-office branches, the sub-postmasters.

The software they had provided was dud and produced cash shortfalls. The managers at the corporatised British Post office applied the full rigour of the contracts they had with the sub-postmasters.

If the software showed a shortfall, there was a shortfall, and the sub-postmasters were and must be responsible and be sued for the shortfall and prosecuted for fraud if the shortfalls were not made up.

The managers deemed that the sub-postmasters had been stealing the money. They never said where the money went – it was just added to Post Office profits.

Between 1999 and 2015, more than 900 sub-postmasters were convicted of theft, fraud and false accounting based on faulty data from the Horizon computer data.

The managers bullied people with threats of jail to plead guilty to lesser charges.

It was the equivalent of Australia’s Robodebt writ large. It worked on the premise that the managerial computer was right; that the little people were thieves; that corporatised management could do no wrong; that any assertion to the contrary would be met with bullying; misinformation; and outright damnable lies.

One of the lies was that management told each sub-postmaster that they were the only one having trouble with the solftware. So, each of the sub-postmasters caved in, thinking that it must be their fault.

Enter Mr Bates who did not cave in but found others in the same position as him. The grapevine blossomed and hundreds of sub-postmasters shared their stories of corporate bastardry. They took a class action. They won, but the lawyers and the litigation funders took 48 million pounds out of the 58-million-pound verdict. Absent legal aid, it was more corporate bastardry. 

Only after the Mr Bates documentary/drama aired was enough outrage caused for anything like proper compensation being paid, and that process is still going on a quarter of a century later.

This is not a David and Goliath story. All the Davids lost their livelihoods, some their liberty, many their friends and family, some their lives, and all their dignity. The stone just bounced off Goliath, as it so often does,

The fundamental error was the removal of honest, merit-selected, career public servants to oversee the provision of an essential public service: the post. And to put in their place foxes – foxes in charge of the chicken pen.

It may well be that Thatcher and Reagan and others honestly believed that if you could sweep away the inefficiencies and stultification of the overregulating public sector, business would boom, jobs would be plentiful and everyone would benefit.

We now know, of course, that Reagan’s slogan that “government is the problem not the solution” was a delusion. There was no privatisation dividend for all. The new privateers took whatever they could get away with, and too bad for employees, franchisees, and customers.

Far from there being a dividend to taxpayers, the privatisations and corporatisations have been a costly fiasco. The British Government has had to put aside $A2 billion to deal with it. 

With robodebt, the Australian Government has had to pay out $1.8 billion in compensation, and other costs run to at least $500 million. So much for an efficiency dividend from privatisation and corporatisation.

Again, the degrading of the public service allowed the fiasco. In Australia in the past 30 years or so, the Public Service has been emasculated. Instead of serving the public first and foremost, according to law, it became a mere arm of ministerial whim and majesty. Frank and fearless advice transmogrified into nodding Yes Ministerism.

With robodebt and the Post Office scandal, the right-wing managerial view of little people being obviously dishonest blinded a by-now belittled public service.

The public service in both Britain and Australia has become more a servant to Ministers and their political objectives rather than a servant to the law and the people. In both robodebt and the Post Office scandal authorities acted illegally yet no public servant felt that they could call that out because the respective Ministers had publicly said that all was well and there was nothing to see here.

There was no questioning that they might be wrong. And later there was excessive defensiveness; no accountability; and no apology, at least until it was way too late.

During the privatisation process, the public service in both countries was denuded of the expertise to exercise independent judgment with confidence when things looked like going awry.

It used to be a fundamental principle that public servants warn their political masters of the possibility or actual breach of the law, and do so widely enough that the breach could not be ignored.

It is taking a long time to unwind a lot of the misguided policies of the 1990s neo-cons – privatisation; outsourcing; public-sector depletion; self-regulation, and so on. Why did we ever imagine that a private sector – freed from the shackles of public-sector control – would behave ethically and for the public good?

Government now has to become the main solution. The authority and expertise of the public service has to be restored and the power of ministerial offices questioned more. It has to restore some of the regulation that reined in and stamped out malfeasance in the private and corporatised sectors.

As robodebt and the Post Office scandals show, bad public administration affects lives, or even ends them.

And of greater importance is the role of the media in exposing malfeasance when proper authorities and the right complaint channels fail so dismally.

Crispin Hull

This article first appeared in The Canberra Times and other Australian media on 26 March 2024.

2 thoughts on “Scandalous maladministration”

  1. Great article! It gives prime examples of what happens when a public utility is privatised. Just look at all the goings-on with electricity production in this country – higher costs to consumers, because of revenue wasted on advertising, bloated executive payments, unnecessary duplication of infrastructure, The so-called cost savings in privatisation are also offset by the additional cost ( to the taxpayer) of largely toothless regulatory authorities..
    It has been noted that the privatisation of water authorities in the UK.appears to have been such a disaster that they are now being returned to public ownership. (the railways there appear to be having similar problems). Eassential services should all be in public hands – do we next want to privatise the defence forces?

  2. Agree 100 per cent. Serious whistle blower protection is a priority wherever and should be welcomed by regulators!

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