The coronavirus crisis

This blog has been sadly neglected in recent years, as all my blogging time and energy have been taken up with my Brexit Blog. But the current coronavirus crisis prompts me to return to it, because so much of what is happening in this crisis has an organizational dimension, and some of it relates directly to the themes of the book which this blog accompanies. In this post, I’ll discuss some of them, with the focus on what is happening in the UK but no doubt at least some of it has a wider relevance.

Overall, it’s possible to see many of the chickens of contemporary organization coming home to roost. This is most obvious in the National Health Service where spending as a percentage of GDP effectively flatlined between 2011 and 2019, and per capita is well below that of most other highly developed countries (e.g. France, Germany, Japan, Australia). Crucially, this is against the background of a rapidly ageing population and – as has also been laid bare by the coronavirus pandemic – a social care system that was already in crisis and has been for at least half a decade (as discussed on this blog in May 2016).

The issues here go well beyond those of funding, though. They also relate to managerial apprehensions of the ‘efficient’ use of that funding. In the book (p. 142) I use the specific example of the NHS to discuss this, writing that “one way this has been done is to reduce spare capacity in the system. This in turn has the effect that unusual peaks in demand, such as a major incident or a flu epidemic, swamp the system … the question still remains: efficient for whom? Is spare capacity inefficient from the point of a view of a patient caught up in a demand peak?”

This seems almost prophetic now, as the NHS faces a desperate struggle to obtain the machinery and protective equipment needed to deal with coronavirus, whilst old people dying in care homes are not even included in the official coronavirus mortality statistics. Of course, it would be absurd to argue that any health system could permanently maintain all of the spare capacity needed to deal with so unprecedented crisis. But running a system for years without any spare capacity at all was always bound to lead to disaster.

Similarly, we are now seeing the consequences of the endless restructurings and in particular the dynamic of centralization-localization as the supposedly inefficient bureaucracy of the NHS is subjected to almost yearly reforms. It was such an analysis which led to the fragmentation of the NHS into Clinical Commissioning Groups (CCGs), to break down the ‘monolith’ of the NHS. This was happening even as it was being reported that the problem with NHS procurement was lack of centralization, but under the dogma of ‘post-bureaucracy’ this was ignored (discussed on p. 87 of the book). Fast-forward to the coronavirus crisis and what do we fine? That very quietly the government has taken back central control of procurement from the CCGs to deal with it.

Nor is it only in health care that we see the consequences of the ill-judged managerial reforms and budget cuts of the last decade or more. I wrote on this blog in October 2016 about the crisis that was already underway in prisons. No surprise, then, that coronavirus is sweeping through them now, and there are calls for the early release of at least low-risk offenders and prisoners on remand.

Beyond public service issues, the coronavirus crisis has laid bare the inequalities and insecurities associated with the new capitalism and its associated ‘precariat’ (discussed on p. 118-120 of my book). The supposedly self-employed ‘entrepreneurs’ and zero hours workers of Uberfied business models are by the far the most economically vulnerable to the lockdown of the economy. The gap between this precariat and the salariat (like me) who have continued security as they work from home is more obvious than ever. It falls to government, at least partially, to bear the costs of this – in effect bailing out the employers who have for years benefitted from this ‘flexible’ workforce. As with the financial crisis, what we see is a privatization of profits and a socialization of costs and risks.

Meanwhile, hundreds of thousands who had never expected to now turn to the welfare system and find that it is very far from the generous safety net they had imagined, let alone the scroungers’ paradise that the tabloid press had led them to believe (see also p.120 of book). This is not just a matter of a one-off crisis. Rather, it comes against the background of the middle-calls insecurity which has been underway for some time, and is intimately linked to the demise of middle management and the white-collar underclass that has characterized the new capitalist model (p.123 of book; see also this blog post from February 2015).

Intimately linked to precarious employment is the use of foodbanks (blog post from September 2016) and here, too, coronavirus has had an impact. On the one hand, they face mounting demand as people’s incomes dry up. On the other, staffing and donations are both impacted by the illness, and some foodbanks are having to close down just as they are most needed.

No doubt there are many more examples of how coronavirus is exposing underlying issues within the organization of public services, of work, and of society more generally. The key words are ‘exposing’ and ‘underlying’. In this post I have made frequent reference to what I wrote in my book or on this, accompanying, blog. The message is not meant to be a self-congratulatory ‘I told you so’. Rather, it is intended to show how so much of what is happening grows directly out of things we already knew, or which were already happening.

This is absolutely crucial for otherwise they would just be regarded as ‘crisis’ events and, as such, unusual or short-lived. This in turn would support the idea that once the crisis is over we can and should return to ‘business as usual’. To an extent, this is what happened after the financial crisis. Although many expected that it would lead to a wholesale re-evaluation of how – at the most generic level – we organize, that didn’t really happen. Instead, we saw what Colin Crouch aptly dubbed the strange non-death of neo-liberalism.

Perhaps this time things will be different. The neo-liberal or new capitalist model has been much more challenged by the coronavirus in that it has led to the mobilization of state resources in a way not seen since the Second World War. That ought, at least for a while, to put paid to the innumerable paeans to the superiority of the market for any and every political and economic question. It feels, at least at the moment, as if something quite fundamental has ruptured – although one should be wary in assuming that any such rupture will have predictable, let alone positive, effects. And even should they be positive, it is a tragedy that it will have taken the deaths of so many to demonstrate what was, in so many ways, already obvious.

Work and food

There has been a huge – 20% - rise in the number of workers in the UK on Zero Hours Contracts (ZHCs) in the last year, bringing the total to about 900,000. It’s telling that in the third edition of my book, published in 2012 but mainly written in 2011 I did not mention ZHCs, which at that time were much less common and there were perhaps only 200,000 workers on them in the UK. That is remedied in the fourth edition that will be out later this year, of course, but even that will not take account of this latest surge.

Lauded as offering ‘flexibility’ for individuals, ZHCs are all about flexibility for organizations: there are no guaranteed hours, it is labour on demand. And although in the public mind they are associated with low-skill jobs like cleaning and catering, they are also common in professional occupations such as teaching and airline pilots.

It’s become obligatory to say that ZHCs suit some people, but to foreground that is to de-emphasise that in most cases they do not, and are a source of miserable insecurity (for some experiences see here and here). But recently published research shows that they are also bad from a business point of view, in terms of contributing to the long-term productivity problem of UK business (Rubery, Keizer & Grimshaw, 2016).

The worst kinds of ZHCs – so-called exclusive ZHCs, which prevent workers taking employment with other employers – have been banned in the UK. And, under great political pressure, retailer Sports Direct (where over 90% of staff are on ZHCs) has announced this week that it will give its employees (but not agency staff) a choice between a ZHC and a guaranteed hours contract. But ZHCs are illegal in New Zealand and (with some complexity of definition) in many European countries.

Whilst ZHCs have received a lot of media and political attention, what is perhaps even more significant is the rise in self-employment. This connotes an image of small entrepreneurs and sturdy self-reliance of the sort lauded by free market ideologues. In fact, it is largely to do with companies employing people as independent contractors – often, people who were hitherto employees of the same companies they now contact to – and the rise of the gig, or uber, economy. There are perhaps 5 million people in the UK who are self-employed.

I know from personal experience what the insecurity of self-employment means because my father, after he left the army, was a self-employed driving instructor during my childhood. That encompassed periods when anything from illness to a heavy snowfall to the petrol shortages during the 1973 oil crisis, and in those periods he had no income and no savings and the consequence was that our family had – almost literally - no food. But what I remember more from those times than the lack of food is the pervasive worry that tomorrow there would be no food at all. Nowadays, I’m insulated from such insecurity but when I contribute to the local foodbank it’s because I remember what it means. In the UK currently there are a million people a year who use foodbanks, although this is probably an underestimate. One of the key drivers is reported to be ‘insecure work arrangements’ including ZHCs.