Public Sector Reform : Parallels Between the Regulation of the Railways and the Inspection of the Police

The Beesley Lectures 2013

Public sector reform : Parallels between the regulation of the railways and the inspection of the police

Thomas P Winsor Her Majesty’s Chief Inspector of Constabulary, 2012 - Rail Regulator and International Rail Regulator, 1999-2004

24 October 2013

1. This is the eighth time I have had the honour of speaking in the series of lectures held in commemoration of the late Michael Beesley. On the first five of those occasions, I was Rail Regulator, responding to a lecture given by a learned commentator or observer. On the sixth and seventh occasions, I was talking about railways and their regulation.

2. On this occasion, things are rather different. This lecture is about public sector reform in the context of the contrasts between economic regulation of the railway industry, and the public interest inspection of the police.

3. By way of introduction, I shall explain how a private practice lawyer ended up regulating the railways and then inspecting the police.

4. The first thing that might be said is that lawyers should of course be in charge of everything, since we are the only people who can think sufficiently rationally and clearly! But then I thought that in the presence of so many distinguished professionals from other disciplines, I ought perhaps keep that point to myself.

5. Then there is the point about Scotland's most precious asset, its people, and how generously that small northern nation has shared its richest gifts with the other countries of the world, especially in its quest to bring sophistication and civilization to its immediate southern neighbour. We have only to think of Adam Smith, James Watt, John Logie Baird, Andrew

1 Carnegie, James Clerk Maxwell, John McAdam, James Boswell, Alexander Graham Bell, Alexander Fleming, David Hume, Charles Mackintosh, Joseph Lister and Sir Alex Ferguson. Indeed it is often remarked in the circles in which I move that with every Scotsman who moves south of the border to England, the average intelligence in both countries rises immediately. But I decided not to make that point either.

6. As the very familiar faces in this audience already know, between 1999 and 2004 I held public office as the Rail Regulator. Those were the most turbulent years the railway industry had been through. In those five years, we had four multi-fatality passenger rail crashes, the destructive stewardship of the national network in the hands of Railtrack, the substantial disintegration of the operational integrity of the network after the Hatfield rail crash, the political and illegal assassination of a FTSE 100 company, an unconstitutional threat to the independence of economic regulation which also imperilled the independence of the other economic regulators, and the restructuring of the industry on entirely unforeseeable grounds with the creation of Network Rail, the need for urgent corrections to the accountability model in the light of that, two quinquennial reviews of the level and structure of access charges in the space of four years, the virtually complete redesign of a flawed privatisation inheritance in the reform of the contractual and regulatory matrix, the creation and then defenestration of a severe political mistake, namely the Strategic Rail Authority, and sustained assaults by the artillery of the media. Despite all that, with a hugely controversial higher financial settlement, the railway industry was able to recover and to attain levels of network performance which were unthinkable on such a crowded network for almost the entire 200 years of its existence.

7. That was quite enough for those five years, and in July 2004 I left office, to return to the private practice of law in the City of London. That welcome period of obscurity was interrupted a year later when I was required to give evidence in the High Court on the side of the claimants in the largest class- action in English legal history. That was the unsuccessful claim brought by 49,000 shareholders of Railtrack against the Secretary of State for Transport for misfeasance in public office allegedly committed in the actions taken to put Railtrack into administration in October 2001.

8. Four months after the 2010 general election, I received a telephone call from Theresa May. She had been Shadow Secretary of State for Transport at the time of the collapse of Railtrack, and had ferociously attacked the then government for the way in which it had plotted, planned and implemented the confiscation of Railtrack's assets. When she became aware of the entirely improper threats which had been made to me, as independent economic regulator of the railways, she vigorously condemned them and strongly supported my defence of my independence. So she knew about regulatory independence, and that’s significant for what happened nine years later.

9. By September 2010, there had been a change of government and Mrs May had become Home Secretary. She was looking for someone to carry out the most comprehensive review of the terms and conditions of service, including pay, of the police in England and Wales for more than 30 years. She told me that my record as Rail Regulator had, in her mind, established my credentials for this complex and controversial work, which she wished to be carried out independently of the Home Office.

10. My report on police pay and conditions was published in two parts. The first part appeared in March 2011 and was concerned with reforms to pay and conditions of service for the following three years. The second part was published in March 2012, and was concerned with longer-term reforms which, if implemented, would stretch for at least 30 years, and possibly more. The fundamentals of those reforms were a move away from time- service pay increments to skills-based pay, and a system of direct entry to the police service at higher ranks. There were many other things in the review, but these are the principal ones.

11. Having completed that work, it was my expectation that I would return to private legal practice, having had a greatly fascinating insight into the world of policing.

12. Shortly after that, Her Majesty's Chief Inspector of Constabulary, Sir Denis O'Connor, intimated his imminent retirement from that office, and I was

3 approached and asked whether I would be interested in the job. After a conspicuously unsuccessful campaign on the part of the Police Federation to frustrate my application, I received my Royal Warrant of appointment, and took office on 1 October 2012.

13. My appointment to this office was itself highly controversial because for the first time since the establishment of the Inspectorate in 1856, HM Chief Inspector of Constabulary was a person who had never served as a police officer. By making the appointment, I believe that the Home Secretary has conspicuously indicated to the police service, and the public, that the independence of Her Majesty's Inspectorate of Constabulary from the police service, as well as from the political establishment, was to be increased and intensified. The Home Secretary really was and is serious about police reform.

14. So that is the journey which has taken me from the economic regulation of the railway to the inspection of the police. If nothing else, it shows that life presents you with the most extraordinary opportunities, beyond any possibility of rational prediction.

15. The common threads of the economic regulation of the railways and the inspection of the police may not be immediately apparent, but I intend to show that they are thicker, stronger and more important than might at first appear.

16. When I was thinking about what I would say in this lecture, I discussed it with a few people, some of whom were kind enough to offer helpful suggestions. My former colleagues in the world of economic regulation were very creative and insightful, and they enabled me to think about this much more clearly. Equal in his desire to assist was the Commissioner of the Metropolitan Police, who generously pointed out that both the railways and the police have stations.

17. There is a fundamental difference between regulation and inspection, and the two must not be confused, as they sometimes are.

4 18. A regulator has power of coercion and direction; an inspectorate does not. It is the difference between hard power and soft power. The hard power of the regulator includes the power to issue, withhold, enforce, modify and withdraw licences to operate. It includes the power to establish, modify and replace industry-wide codes, and to act, sometimes, as the appellate authority under those codes, or in respect of mandatory performance and safety standards. In the case of the railways, it also includes the power to control the consumption of capacity of essential facilities. When I was rail regulator, it also included the power to determine the size, condition and quality of the network, and, crucially, to determine how much public money will be made available to the network operator (a power available to me by default because the government was unwilling to make these decisions itself; that power was subsequently statutorily removed, and a legal obligation placed on the Secretary of State for Transport to make these decisions). The power of enforcement included the power to levy fines. There was also a power to direct the enhancement or replacement of essential railway facilities. As is immediately apparent, these were very considerable directive and coercive powers. They were all hard power.

19. Inspectorates do not do these things. They are required by Parliament to inspect and report. Their principal power is soft power - the power of their voice and the authority with which they use that voice. Having carried out an inspection, analysed the facts and come to a judgment, usually accompanied with hard-edged recommendations based on the evidence, it is for others to act. In the case of the police, it is principally for the chief constable in question to do the things which the Inspectorate has said are necessary. And it would be an extremely unwise Chief Constable who ignored or disregarded what the Inspectorate has said. However, under the Police Reform and Social Responsibility Act 2011, Parliament has created a new breed of public authority which is charged with holding the chief constable to account, namely the elected police and crime commissioner.

20. Of course in both cases, the public sector provider - the railway company or the chief constable - is susceptible to other pressures. These pressures come from public opinion, as informed by commentators and the media, both local and national, and by elected representatives on local authorities

5 and in Parliament. Anyone who witnessed yesterday's hearings before the House of Commons Select Committee on Home Affairs will realise that it can be an extremely uncomfortable experience.

21. And of course there is always accountability to the law. Both are susceptible to judicial review.

22. When I was Rail Regulator, the chief executive of Railtrack repeatedly insisted that the ways in which I was using the powers granted to me by Parliament amounted to my usurping the powers of the board of the company to run it on a day-to-day basis. That was, of course, a gross exaggeration, but it is how he felt. No such power could possibly be alleged to exist in the hands of the inspectorate, because the inspectors cannot take financial or operational decisions which Parliament has placed in the hands of others, namely other statutory bodies and chief constables.

23. Having said all that, and now one year into my term of office, I can tell you that even though the executive powers which I now possess are considerably less than those I held as regulator of the railways, the responsibilities of this job weigh much more heavily on my shoulders for two reasons. The first is because policing affects everyone, and the second is that everything on my desk has risk attached to it. That risk is not that trains will be late or large corporations will suffer some financial disadvantage. They are the risks that a victim will be created or have his or her suffering increased, whether through the loss of the precious possessions of an elderly person, the terror, pain and loss of violent behaviour, or the murder of a child. There is no end to the suffering which crime can bestow.

24. So that is the principal difference between a regulator and an inspectorate.

25. I now turn to a short history of these two public services. They have some interesting similarities, which affect how they are today overseen and regulated.

26. The first thing to notice is that they both came about in their recognizably

6 modern form in the early part of the 19th century, and the model for each devised by the Victorians survived for a very long time, and shapes the services as they are today.

27. And they have a common father figure in Sir Robert Peel, at least in some material respects.

28. When he was Home Secretary, in 1829 Sir Robert Peel championed the cause of the establishment of a full-time uniformed police force for London, and he set it up. It is after him that police officers have since that time been referred to as Peelers or Bobbies. The Peelian principles of policing are as valid today as they were 184 years ago.

29. Peel was also a great supporter of railways, correctly seeing them as a major engine of the industrial revolution. He did not share the view of his long-time political ally, the Duke of Wellington, who, when prime minister, expressed opposition to the wholesale expansion of passenger railways, arguing that it would be detrimental to civil society as it would allow the lower classes to move about.

30. In 1844, during Peel's term of office as prime minister, the Regulation of Railways Act 1844 was passed just at the time of railway mania which swept the nation, causing thousands of people to sink their life savings into railway companies, many of which failed. But before they failed, a significant number had paid for the establishment of the precious system of narrow land corridors which form the railway system of today. The 1844 Act was the first of several statutes concerning the regulation and public interest supervision of railways, and parts of it remain in force today.

31. The history of railways is one of wasteful and highly inefficient fragmentation in the 19th century and early 20th century, leading to the amalgamations of the 1920s, their consolidation when nationalised in 1946, chronic waste and inefficiency over several decades, including neglect of assets, leading to the reorganisations of the 1960s, 1970s and 1980s (Serpell), constant capital starvation, deferred maintenance and operation on a shoestring, severe problems with labour unions, strikes, catastrophic

7 loss of life in major rail crashes (almost all of them the fault of the railway), growing political impatience and intolerance, ill-directed and hugely costly interventions, leading to significant industry reorganisation, with many severe flaws in the initial design leading to very expensive failures, and the need for the retrofitting of major corrections to the system.

32. When the railways were reorganised in 1993 to 1995, the government had the advantage of having a single, largely monolithic corporate entity to be restructured, divided into separate parts and transferred into the hands of others, all according to the decisions of the executive government. Ministers had complete legal power to carry this out, conferred upon them in a tailor-made specific statute to that effect.

33. Of course, the resistance of the British Railways Board and the labour unions presented appreciable difficulties, but the government was able to overcome them, and did so. Ministers had complete control of the design of the system under which the newly-separated entities would be required to work together, through the licensing regime, the regulatory control of access contracts and network codes for essential railway facilities, and the franchising process. It was able to secure efficient operation through the decisions of the independent economic regulator who had the power to make judgments as to the efficiencies and outputs which the privatised railway companies had to attain, and to withhold money which the regulator determined would represent inefficiency. Crucially, interoperability could be attained across the whole industry.

34. As we all know, that's not to say all was well from the outset. The design mistakes made in the early 1990s and the weaknesses built into the system were severe, and cost a great deal in time, effort and money to put right later. But now the trains run on time, most of the time.

35. The story of policing is materially different. To begin with, there was very little enthusiasm for having a full-time professional police force in the first place. Many citizens and parliamentarians were deeply sceptical and even afraid. The early attempts failed, principally because Englishmen looked across the channel and saw what had happened in France in the revolution

8 and the Terror. Although at the next attempt, in 1829, Sir Robert Peel, then Home Secretary, was able relatively easily to establish the Metropolitan Police in London, local authorities in the rest of the country had to be pressurised into establishing police forces, eventually by the use of legislation. Even then, some of them took the line of irreducible minimalism. Moreover, in order to encourage the establishment of proper, full-time adequate police resources, central government provided grants to local authorities to meet half the costs, in much the same way as the Department for Transport now subsidises passenger rail services and the provision of network infrastructure.

36. In 1856, legislation was passed to establish the Inspectors of Constabulary, and it provided that a central government grant would only be available if the Inspectors of Constabulary certified the force as efficient. If a certificate of efficiency were withheld, the entire costs of the police force would fall on the local authority, thus providing a strong incentive towards efficient operation. The parallel with the modern privatised railway is clear here, too.

37. I will refrain from mentioning that it was Glasgow Corporation that established the very first mainland police force, in 1800, 29 years before Peel set up the Met. These Scottish supremacy points do not need to be made.

38. As time went by, over 600 small police forces were established, all of them home-grown, with their roots in the community, and with no national plan. There was no national or even regional network. At the time, none was needed. For very many years, local autonomy of police forces, including autonomy as to operations and operating practices, was almost universal. When especially complex crimes had to be investigated, the greater resources and expertise of the Metropolitan police would be called upon to help out the locals.

39. Although criminals have never respected or paid much attention to the geographical boundaries of police force areas, the means of transportation and communication were sufficiently rudimentary as to enable the police to keep up. A police officer could make a phone call just as fast as anyone

9 else. But over the last 50 or 60 years, the need for a more cohesive national approach to policing has become ever greater, exponentially in the last 10 years with the colossal growth of use of the internet. That is why forces have required to establish regional and national bodies, such as regional crime squads and their successors, force collaborations and now the new College of Policing, and the National Crime Agency.

40. The contrast here is a stark one. In the case of the railways, we had wasteful fragmentation, amalgamation, nationalization and then, in modern times, further fragmentation. In the case of the police, we have never had national bodies until relatively recently, and the localism has been predominant, with national bodies created and grafted onto the top in an as yet untested way.

41. That is not to say either system has worked perfectly. Unco-ordinated fragmentation without a national plan of course leads to a loss – or rather an absence – of essential interoperability. It is well known that Isambard Kingdom Brunel was certain that the Great Western Railway should be built with a broad gauge of 7 feet and a quarter inch (2140 mm), rather than the standard gauge of all the other Victorian railways of 4 feet 8 and a half inches (1435 mm), thus achieving no interoperability with the other networks. That of course had to be changed later (in 1846) to ensure connectivity. Indeed the Victorians built a highly non-interoperable railway which is with us today, with structure gauges quite different in different parts of the country, necessitating the construction of rolling stock which in some cases cannot go everywhere

42. And then there is interoperability in day-to-day operations. Even in the days of the nationalised railway, interoperability was far from universal. In the railway of the 1950s to the 1980s, grand regional baronies existed with very high degrees of autonomy on the general managers of the railway regions. There was the York way of doing things, which was different from London; operating practices in Birmingham differed from those prevailing in Bristol; and Scotland was, in these and in other respects, an entirely separate country. This was a major problem when privatization came along, and it had to be extinguished. That took a great deal of time, as it concerned

10 attitude and behaviours which were ingrained, insular and hugely defensive.

43. In too many respects, this kind of mentality operates today in the police service, with some chief constables operating, or at least thinking, in much the same way. Police culture itself has a degree of local and regional insularity and institutional resistance to change which needs to be dissolved, just as it was with the railways. And as we all know, changing the culture of an organization is the hardest thing to do in management.

44. But in the railway we do now have a very high degree of interoperability, especially of course in signaling and other communications technology.

45. Interoperability in policing is not such a happy story. It has never been a national network, and in many respects it isn’t even a network of networks, although huge efforts are being made to establish them. The biggest problem is in the field of information and communications technology.

46. As we all know, very great advances have been made in the field of information and communication technology in recent years, to the point where the technology of only three or four years ago appears almost ancient.

47. Because of local roots, local accountability and local autonomy, police forces have in the recent past specified and acquired technology separately or in collaboration with a few - but usually very few - others. Things are changing in this respect, but in places it is slow and patchy. In a world where multiple operational interfaces perpetuate - and may even intensify - complexity and lack of interoperability, it is essential that these difficulties – which are abundantly apparent – are kept to the irreducible minimum. However big a force may be, it has neighbours. Interoperability and the absolute minimum of interfaces are essential to efficiency and effectiveness, and a police force which takes an isolationist view is not operating efficiently. Through efficient and effective joint working and the sharing of intelligence at local and national level, the operational boundaries of policing should be dissolved to the greatest extent reasonably practicable, even though the democratic accountability boundaries are

11 intact and secure.

48. The citizens of this country need and deserve a seamlessly efficient and effective police service – what in other public services is called a network and the network effect. And in this respect, it is worth having regard to how other public services have been reorganised so as to preserve and protect the network effect when there are a multiplicity of interconnected and interdependent actors. When the safety-critical, essential public services of energy and transport were being restructured, it was necessary first to design and establish for each a network code, which specified common standards and operating procedures for things which had to be consistent and work as one, so as to ensure quality and continuity of service to the public at a fair and affordable cost.

49. So far, I have spoken of the police service as operating as a set of poorly connected networks. But there is a much larger network or system of which they must all be integral and fully interoperational parts. That network is the criminal justice system, comprising the police, prosecution, courts, prisons and probation.

50. When I think of the criminal justice system, I recall the agonized observation of the chairman of the Federal Trade Commission, Mr Kovacic, when he spoke of the anti-trust landscape in the United States. He said: "We have an archipelago of policymakers with a very inadequate ferry service between the islands. In too many instances, when you go to visit these islands the inhabitants come out with sticks and torches and try to chase you away."

51. If the constituent parts of the system operate according to differing criteria, with different resources and different incentives, it is not hard to see where the trouble will come. For example, when the Crown Prosecution Service cites a police officer to appear in court to give evidence, it has no financial responsibility for the costs of that officer, and no direct interest in how that officer's time is used that day. As far as the CPS is concerned, police time for these purposes is a free good. Is it any surprise, then, that so many police officers spend days hanging around waiting in court buildings to be

12 called to give evidence, only to be told on Friday afternoon that they're not needed after all?

52. The criminal justice system should operate as a single network; at present, it operates as a set of separate networks with, in many cases, poorly designed and malfunctioning operating interfaces. And it is worse than that. Whilst the courts and tribunals service is a single network, and the same can be said of the Crown Prosecution Service, it is manifestly not the case with the police. Many police forces have very poor interoperability as between themselves, or even within a single force.

53. The criminal justice system must be assessed in its much wider context and operation. Other public sector agencies, as well as charitable organisations and private sector organisations, are involved both in the conditions in which crime is fertilized and in which it may be suppressed. The public sector agencies include those concerned with education, health, housing and social services, all of which have a material effect on the demand for policing services, and also a significant part to play in designing the most appropriate treatment of offenders.

54. When the constituent parts of a system are well-designed, with aligned and consistent incentives, operating co-operatively and according to sound procedures and practices, that system has the greatest chance of success. Aligning all of the agencies and institutions which can have an effect on people's behaviour, and either lead them towards or away from criminality, is a very tough thing to do. But it needs to be done, because the failure of the system to work as it should costs money, time, agony and lives.

55. The design of complex networks and their operation is always at risk of the creation of perverse incentives, especially when interoperability is patchy or absent. It is also necessary for every part of the system not only to be directed at the clear, single and simple end-purpose, but also to be measured and rewarded in ways which facilitate the efficient achievement of that purpose. The most obvious case of this breaking down in the case of the railway was the misalignment of economic incentives on the network operator, in relation to delays, and on the passenger franchised companies.

13 As Rail Regulator, I found it startling that when the incentives in the franchise contracts were being designed, little or no regard was being paid to the established corresponding incentives on the network operator.

56. In the same way, when police officers are measured only according to arrests or sanctioned detections, without appropriate regard being had to the overall needs for proportionate and sensible outcomes, otherwise known as justice, they will go for the outcomes which give them the highest hit rate. For example, when the rules in relation to the measurement of performance value the arrest of a shoplifter as equal in value to the arrest of a serial burglar, and where shoplifting is far quicker to detect and easier to prove, some police officers will go for the easier option. It is not in the interests of justice, or public protection, for more serious crimes to be neglected in favour of those which are easier to clear up.

57. The establishment of targets in relation to the operation of a transport system is much simpler than it is in policing. Whilst of course I have no intention of asserting that the operation of railways is a simple matter, and plainly it is not, policing is a significantly more complex one, materially because measuring a unit of police productivity is a great deal more difficult than measuring passenger performance.

58. And yet, as we all know, understanding performance is critical to ensuring that efficiency and effectiveness are the best they can be made to be. A great deal of work is going on now to ensure that we are measuring the right things in policing, and ensuring that police forces – especially the constables and sergeants who do most of the policing – are correctly and consistently directed to doing the things which matter most to prevent crime, keep people safe and catch criminals.

59. Policing is a safety-critical, asset-intensive, monopoly essential public service. In these essential respects, in principle it is not different from other public services which share these characteristics, including railways.

60. All such services need to have a sound understanding of the condition, capacity, capability, serviceability, performance and security of supply of

14 their assets. In policing, the assets in question are, predominantly, the most complex kind of asset of all, namely people. It is also important to recognise that, in the case of policing, an appreciable proportion of the environment in which those assets are required to operate is hostile and determined to frustrate their purpose. The police deal with dishonesty on an industrial scale, and also with human frailty and weakness. Given all that, it is especially important that police officers and staff – who account for 80% of the £14 billion which is spent on policing in England and Wales every year – are nurtured, protected and developed with sensitivity, skill and efficiency, so as to realise their greatest potential, which is in their selfless commitment and dedication to public service.

61. That is not easy, because people are the most complex assets of all. Soon we will have fitness testing for all officers, honest appraisals of their performance, fair promotion systems and a constant evaluation of what the public needs and what it takes to ensure that the public gets it. For a long time, that was not done in policing. It's happening now.

62. When I was Rail Regulator, I often criticised Railtrack for having a policy of neglecting its assets and being hostile to its customers. I believe I was proved correct in that assessment. In policing, it is just as important to look after the assets, and to remember that the only customers to whom you should be hostile are persistent and prolific offenders, paedophiles, drug dealers, serial killers, rapists and the like. And the police should remember also that many offenders are also victims. The principal customers of the police are of course the public, and with them the police must be unfailingly courteous, honest, supportive and protective.

63. It is also necessary for the providers of these public services to have a sound appreciation of the demands which are likely to be made on the system, and to have adequate plans for meeting those demands. In the case of transport services, that isn't very difficult. Broadly reliable predictions can be made having regard to the economic cycle, patterns of employment, movements of population and other macro-economic factors. In the case of police, it is more complex, but it is not impossible. Demand is a function of a greater variety of factors, including the traditional and

15 modern causes of crime such as greed, lust, substance misuse, mental health, education, poverty (housing, overcrowding), a sense of powerlessness, envy, a desire for easy money, loss of respect for authority, aimlessness and hopelessness, a failure to understand or care about the difference between right and wrong, and low or absent empathy and respect for neighbours. Organised crime has a material effect on the wellbeing of citizens and the demand for the services of the police, as drug dealers turn young men into thieves and young women into prostitutes. And then there is the changing nature and pattern of crime, including internet-enabled crime (such as child sexual exploitation and online victimization) and fraud.

64. Understanding demand and planning properly to meet it is the reason that in Part 2 of my review of police pay and conditions of service, I recommended that HMIC should devise and require the use by every police force of a network statement modeled on those which are now commonplace in the network industries of Europe. It would require each police force to assess and report on the condition, capacity, capability, serviceability, performance and security of supply of its assets, its financial and other resources and, crucially, the demand which it projects for its services over the next 5 to 10 years. These network statements - which will probably be called force management statements - will be published annually (with appropriate redactions on security grounds), and used by police and crime commissioners as they make their police and crime plans and hold chief constables to account.

65. Another parallel between policing and other safety-critical essential public services is the extent to which those charged with the management of them complain about the burden of accountability and regulation. Just as we found when the utilities were being prepared for privatisation and afterwards, the data quality in policing is of a highly variable standard, and very great improvement is necessary. And when they complain about the burden of information requests from the regulatory or inspectorate bodies, they often ignore the fact that what is being sought is information which they already ought to have.

16 66. Now no-one who has ever attended a Beesley in which I have been involved would ever expect to get out without my talking for a little while about independence.

67. The economic regulation of the railways – and of the other utilities – is and must remain independent. As many of you here know, the battles I fought in 2001-2004 to protect the independence of rail regulation were fierce and bloody, and the reputational damage which the Government of the day sustained was severe. As I have said, the Home Secretary knows well how intense were those confrontations because she was in the thick of them.

68. The inspection of the police must also be independent, and it is. If it were not so, we would have a model very similar to those operating in other countries, where the efficiency and effectiveness of the police are assessed by the Ministry of the Interior, which also sets the budget for the police and so would be reluctant, to say the least, to criticise itself in public. The roots of British policing are important here. We do not have – and in modern times have never had – a system under which the police are the coercive arm of the executive government. That is not our model, and it never will be. The police have an independence of political control of operations which is precious. In terms of their operational decisions, the police are accountable to the law, not to politicians. Parliament and the courts make the law, not Ministers or police and crime commissioners. The police protect people, keep them safe, and catch criminals under a jurisdiction given to them by the community, latterly through Parliament, overseen by a system of law and legal principles which is not subject to interference or tampering by any part of the executive government, national or local.

69. It would therefore be entirely inconsistent if the inspection of the police were to be on a politically-controlled or responsive basis. Impartiality and objectivity are essential. If the politicians do not like what we find, our analysis and our judgments, that is not our concern. There are no political considerations in the statutory criteria which we have been given, and so it would, in administrative law terms, be improper and illegal for us to factor them into our work.

17 70. That was a major point of tension and outright conflict in the regulation of the railways in my time, because of the impatience and intolerance of the politicians with the railway network operator. They just wouldn’t accept that the jurisdiction of the economic regulator, operating as Parliament intended, working in lockstep with the contracts of indemnity which Ministers had signed with the private sector, was such that the decision over the size, condition, quality and costs of the network was in the hands of the independent economic regulator rather than Ministers. And as we know, in 2005 the law was changed to ensure that could never happen again. But we got the financial rescue of the railway done before they could bring that in.

71. Although the operation of these networks should not be interfered with by politicians, and the judgments which are made about their condition, potential and cost should always be objective and evidence-based, it is impossible, and indeed unsustainable, to suggest that politics must be kept out of them. As I have said, these are asset-intensive, safety-critical monopoly essential public services, and it is important that they are operated under a framework according to overt and clearly specified public interest principles established by Parliament.

72. Those providing those services must be accountable. This is especially the case when such large amounts of public money are being spent, and when the quality and price of the service is so critical to public safety and economic well-being.

73. So any institutional resistance to accountability has to be extinguished.

74. It also has to be recognised that when things go wrong, the politics will be fierce, high-octane and potentially devastating. There will be stormy controversies, and when there are collisions between those who have to make objective judgments according to the facts, and elected representatives who are properly concerned about the restoration of equilibrium in normal operation, good and respectful communication between them, as well as intestinal fortitude, will be necessary.

18 75. By way of final observation, I might say that those who work in these public services usually take great pride in what they do, and try very hard to do their best. There are many great strengths in their cultures, and these should neither be under-appreciated nor abused. The courage, commitment and sacrifices which are made by men and women on the front line is immense and deserves high praise.

76. It is also clear that design mistakes, whether at the beginning or when a system is being reformed, can be extremely expensive. And a failure to reform a system which is crying out for it is every bit as bad as the intervention of the malign or inexpert hand.

77. If a system goes unreformed for many years, the process of reform, when it comes, will be painful as well as hugely controversial, and will excite great resistance. In these circumstances, it is necessary for the reformers to hold their nerve, because the battering they will get will always be severe. In those circumstances, when the reform is correctly formulated, there is no place for timidity or retreat. That too would be a culpable failure, unworthy of the public trust which is necessary in all these cases.