Thursday, 12 April 2018

When public sector organisations - the police, NHS trusts, the BBC, councils - are fined, who pays?

Mark Wallace, the executive editor of the ConservativeHome website, raises an issue that has no doubt occasionally troubled most of us. To be clear, I'm perfectly happy...

...that Cliff Richard has received this money (I'm not going into details, because the singer is suing the BBC over its coverage of a police raid on his home, and the case started in the High Court today).  All organisations make mistakes, and members of the public who feel they've been wronged should be able to seek legal redress. But when we see headlines like this ...
...or this... does tend to make one's blood boil, because - as Mark Wallace points out - it's not at all clear that the people responsible for the mistakes in question will pay for their incompetence (or stupidity or arrogance), whereas it's a racing certainty that the punters who are "served" by the police forces, councils and NHS trusts in question will be punished for the organisation's sins - either through hikes in taxation, or by receiving a diminished service because funds have been redirected to pay the fines. 

When private companies err, have to pay compensation, and wind up charging more for their products or services or offer less for the same amount, customers who are irritated by these changes - or appalled by the company's original actions - can take their custom elsewhere. Ditto shareholders.  That's why capitalism (when sensibly regulated) encourages moral behaviour - and why we despise corrupt, crony or cartel capitalism, which effectively confers on private sector enterprises the same privileged status as public sector entities. (This is basically what happened after the crash of 2008, when financial institutions which should have been allowed to fail were kept alive by governments using our money to bail the useless, greedy bastards out.)

How are the people of South Yorkshire supposed to register their disapproval of the behaviour of the police force that they pay for? Refuse to pay their taxes? Good luck with that! Opt to be be protected by another police force? Similarly, given the prohibitive expense of private schooling and private health care, NHS and state school "clients" don't really have any choice but to glower and bear it. Councils and governments are a different matter, because disaffected voters can vote for another party next time round - but (as I've suggested before) that would only work if voting were to be restricted to those who aren't employed in the public sector (apart from members of the military, who risk, or have risked, their lives to defend their country), and those who, for whatever reason, are receiving more from the public purse than they've put in. Just think - no votes for civil servants, local government employees, BBC staff, or students = no more left-wing governments or councils! But let me not digress (or dream)...

I don't pretend to have the foggiest idea how this conundrum might be resolved. Convincing evidence that those who committed the initial error - and their bosses - had been severely punished (i.e. fired, demoted, and/or fined) would help, I suspect. Any ideas out there?


  1. No lawyer me but I think one avenue to explore is to bring charges of misfeasance in public office against miscreants.

    Joshua Rozenberg: "Misfeasance in public office is a tort - a civil claim that does not rely on the existence of a contract between the parties. It was not created by legislation: instead, it forms part of the common law, the distilled wisdom of judges through the ages".

    Duncan Fairgrieve: "Misfeasance in public office is the only specifically ‘public law’ tort, and provides a remedy for citizens who have suffered loss due to the abuse of power by a public officer acting in bad faith".

  2. Replies
    1. I am still indignating about the Parole Board; no need to explain why.

    2. Unlike cases of misfeasance in public office against say a doctor in the NHS or an employee on London Underground,banking and private capital is an extremely muddy field.
      First get a well meaning luvvie like Bill Clinton to urge banks to stop redlining neighborhoods - SDG once made the same comment. Then repackage the loans from hundreds of thousands of NINJA's and flog these Mortgage Backed Securities to other greedy bankers all over the world.
      Why did so few people with the exception of the likes of John Paulson see the resulting tsunami coming.
      We all know the results. Much worse than simply Lehmann Brothers going belly up.
      How many people lost their life savings in 2008. The Royal Bank of Scotland's shares reduced to tuppence.
      I can understand the 'too big to fail concept' and note that banks like HSBC have now been ringfenced against something similar happening again. Not so Barings reduced to one pound in 1995 by one rogue trader.

    3. Not just not a lawyer, I'm also not an economist, southern man, but I agree. Barings was small enough to fail. Other banks weren't.

      The problem of the profits being personal while the losses are socialised is huge.

      Clinton should have strengthened Glass-Steagall, not repealed it.

      We're getting back to a better balance, re-separating retail banking from investment banking and increasing capital adequacy requirements.

      Meanwhile, it would be good to see a couple of dozen test cases of misfeasance in public office being heard. It might turn the head of our power-without-responsibility public administration just a little.

    4. As that great man Thomas Sowell said: "It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong."

      Re Helen's comment, parole board members might be a good place to start.

    5. There's no sign of the misfeasance in public office idea taking off.

      Another idea I had that won't take off is putting government departments' jobs out for tender.

      I don't mean outsourcing or privatisation or PPP.

      I mean if you're fed up with the UK Home Office pay to get the Swiss interior ministry to do the job instead.

      It doesn't have to be the Swiss. Maybe New Zealand takes your fancy, get their officials to move into Marsham St and run the place.

      Until this week, I would have said that with their record our own current officials would be lucky to pick up the contract for a small West Indian island. As it is …