Why culture can trump money in public services

Blood pressure

Can former M&S boss Sir Stuart Rose help create a new management culture in hospitals? Will this help the almighty squeeze on budgets coming in the next couple of years? Andrew Laird and David Fairhurst give their prognosis.

Following last week’s Budget, the percentage to be cut from public expenditure in the UK between 2010-11 and 2018-19 has remained at about 20%. A few commentators have observed that the real pain in terms of achieving this is being reserved for the period 2015-2020.

This period will see an almighty squeeze on budgets for public services. If we take the NHS, for example – its budget has thus far been largely protected in real terms. However, if this protection continues during the 2015-2020 squeeze, health spending will jump from 29% of total departmental spending to a whopping 45%!

The impact on other services would be enormous and it’s not certain that the government of the day could allow this to happen. This is setting aside the fact that many are arguing that even with budget protection, NHS funding is inadequate to meet rising demand.

Whatever way you look at the situation, the simple fact is that the NHS will have to rapidly find new ways to do (a lot!) more for less.

Some positive moves have been made in this regard. The news that former M&S boss Sir Stuart Rose has been appointed to an advisory role in the NHS has been greeted with a mixed reaction. Those who argue that this is just another example of private sector influence over the NHS are missing the point. At M&S he was credited with improving relations between managers and staff and in turn improving the performance of the company. He has a track record and invaluable experience that many large organisations including the NHS could benefit from. He is being brought in to help with the culture in hospitals and not as the cynics believe to encourage privatisation.

This move should not be a surprise. It closely follows the recommendations made within the Francis report, the most striking of which were around culture, primarily about the need to be more open and transparent. The ambition is to get away from the position where mistakes and failures are hidden or covered up to one where staff are respected and empowered. A culture where staff are permitted to learn from mistakes rather than be forced to pretend they never happened.

Despite these recommendations there seems to be reluctance by some to engage in a genuine debate about culture. It seems every opportunity is taken to turn the debate into one about process, money and resources. The responses to the original Francis report from the Royal College of Nursing, Unison and Unite focused on resources, especially staff numbers. For sure this is important. Rising pressure on services from a combination of more people living longer, rising rates of long-term conditions and technological advances are all making healthcare more expensive. As a result of this and the current squeeze on public finances, the Institute for Fiscal Studies has reported that health spending per person will fall by 9% over the next eight years.

All public services are feeling the squeeze yet some are managing to maintain service quality and even thrive in this environment. How are they doing this? In an organisation with a positive and enabling culture, less money will be a problem, but it's the response to that problem which makes all the difference.

There is no doubt that in a culture of fear and bullying, less money will further engrain an already bad culture and undoubtedly lead to unhappy staff who are always going to struggle to deliver first rate customer service.

Put simply – it’s about creating an environment where staff are happy. Henry Stewart hits the nail on the head in his “Happy Manifesto”. It’s about trusting and empowering staff. These aren’t incompetents who need micro-managed. These are highly qualified people who in the vast majority of cases don’t need their work “improved” by an interfering manager. There is plenty of evidence that this can lead to both vastly improved customer service levels (as staff are happier in their work) and also savings (as they take more responsibility for how resources are used).

This argument can be supported by looking at examples of organisations  which deliver NHS services where staff are trusted and empowered. Spiral Healthcare CIC (an intermediate nursing service in Blackpool) and Social adVentures (a public health service in Salford) are experiencing the same budget pressures as the rest of the have managed to maintain service quality and genuinely feel like happy and friendly places to be. This is totally driven by the attitude of managers towards the staff. They are trusted and respected.

Staff culture, starting with the relationship between managers and staff, should be a central part of the debate, which is why Stuart Rose’s appointment is a positive thing. Despite the financial pressures the NHS is under, the focus has been too much on resources.

Let’s not forget that Robert Francis himself says that effective care delivered with dignity should cost less not more! Delivering care with dignity requires happy staff.

In that situation culture can trump money.


Andrew Laird and David Fairhurst are Directors of Mutual Ventures. Mutual ventures works with local authorities, NHS organisations and other public bodies to help them explore innovative delivery models to achieve more from their services.


Photo credit: Liviana