Tag Archives: economics

Goldilocks Government

A few lifetimes ago, as a young woman, I worked in a quango which was mostly staffed at the time by people who had been Civil Servants for most of their working lives.

I learned two things from them almost immediately.

  • Number 1: always carry a file or papers with you when you want to wander around and chat to people. If your manager catches you chatting, you had only just bumped into those people whilst engaged in the productive task of doing some photocopying, fetching the file, or going to ask a senior colleague for advice on a case.
  • Number 2: when seeking approval for a project from senior management, Commissioners and the like, offer them no less than 3 options:

Option 1 should be plainly useless in outcome.

Option 3 should be desirable but you know it will be considered too much for one project.

Option 2 should deliver great outcomes for what seems to be a very reasonable cost.

Just to vary it so it does not look too formulaic, every now and then one should add in an extra option in the middle, or maybe at the end. The psychology is basic:

  1. give choice, but too much;
  2. make the middle option look better value-for-money than the ‘luxury’ option, butmore exciting and productive than the ‘basic’ option.

i drafted many a project proposal using these guidelines and have rarely failed to get the approval or funding required. It seems rather extraordinary that such a simple plan works. Of course, I was arguing the case for very good, well-planned projects that were excellent value.

This Goldilocks method also works for unpleasant things when managing change. One sets out three options for what happens when one does:

nothing or little;

something substantial;

so much that a substantial restructuring is required.

Option 3 makes option 1 appear too ineffectual to be worth the bother, and option 2 look very reasonable and less scary.

A few months ago, rumours were circulating in the air that cultural institutions might need to cut back by 30%. These rumours revived during the past few weeks. I suspect that such rumours are encouraged to circulate so that people are prepared for bad things. Releasing information to the media (a BBC page summarises the topic in the Sunday newspapers) that Departments are being asked to consider what would happen if the Government chopped their budgets by 40% is a considered release.

This kind of calculating has always happened behind the scenes. What is really interesting is not the cuts (they would have happened whichever political party were in power – it is just the fine detail that might differ), it is the way in which the Government is trying to manage expectations, reactions and consequences of their actions.

Cuts of 40% should be very clearly unfeasible for any Government Department, never mind ‘unsustainable.’ Suggesting that civil servants spend time thinking about what might happen if funding were almost halved seems designed to make them then feel grateful that cuts of only 25% (maybe up to 30%) are implemented. 25% will seem like the “just right” option after a figure of 40% has been floated.

I look forward with great interest to see how the Government proposes that work should be done, and how jobs will be created magically simply by freeing all those public servants into a wilderness of the Welfare State, 2010-style.

Did I mention that, once upon a time, I worked with a colleague on a report looking at the financial consequences of privatising part of a public organisation? Forgive me if I have. I was asked to work upon it because I was the only one who had worked out a way of recording the expenditure accurately enough for such analysis. The report vanished into a black hole. Our findings were not politically convenient.

Also all those years ago, I had also put forward an alternative idea to privatisation. Senior colleagues at the time thought that it made sense. The basic idea would still work better in the medium to long-term, but it remains politically inconvenient.

Ho hum. Plus ça change – and all that.