The 2024 U.S. election was to a large extent driven by voter frustrations with what seems to many to be a sluggish economy and dysfunctional government that no longer delivers for its citizens as it used to. But similar frustrations are felt in developed countries all around the world, and perhaps nowhere more acutely than in Great Britain. Its economy has stagnated for fifteen years, with the lowest rates of productivity registered over such a span since the beginning of the Industrial Revolution. Child poverty levels have risen to record levels, prisons are dangerously overcrowded, sewage spills increasingly pollute the country’s lakes and rivers, rail service is increasingly chaotic, and dissatisfaction with almost all public services is rife. Even Rishi Sunak, the former Conservative prime minister, complained while in office that “Politics doesn’t work the way it should. … [O]ur political system is too focused on short-term advantage, not long-term success. Politicians spend more time campaigning for change than actually delivering it.”
Sam Freedman, who writes the UK’s leading politics Substack with his father Lawrence, has a new book with the blunt title Failed State: Why Nothing Works and How We Fix It. Unusually for books of this type, his analysis spends little time on individual politicians or ideologies and looks at the underlying systemic factors responsible for Britain’s crisis. He draws inspiration from W. Edward Deming’s famous observation that “A bad system will beat a good person every time” and points to key critical changes over the past half-century that have made it nearly impossible even for competent, governing-minded prime ministers to do their jobs effectively.
A critical factor in this governance crisis has been the UK’s drive toward excessive centralization, which has led the government to attempt to do too much while working through institutions that lack the capacity to handle increasingly complex problems. In an attempt to compensate for this lack of capacity, the government increasingly has relied upon outsourcing what once were public services to a handful of powerful private companies, which continue to reap massive public contracts despite scandalous failures. Worse still, these developments have taken place against a backdrop of an accelerating media cycle. Decisions have to be taken faster and under greater pressure, which gives politicians destructive incentives and increasingly leads them to make disastrous decisions, which they then attempt to excuse away through public-relations spin.
In this podcast episode, Sam Freedman discusses how Britain’s combination of hypercentralization, executive dominance of an overly large and complex state, and a superfast media cycle have combined to produce toxic politics and something like national paralysis. He concludes that this governance crisis will end as other crises have before it: “Eventually the challenges of a given era get so bad that a dam breaks and a way of doing things that has become accepted as inevitable or too hard to change gets washed away.”
Transcript
Sam Freedman: That is one of the big problems with the way our state works. You’ve got this unbelievably powerful presidential figure who has very few resources, and this mismatch means that you get very bad policy development from the center of government.
Geoff Kabaservice: Hello! I’m Geoff Kabaservice from the Niskanen Center. Welcome to the Vital Center Podcast, where we try to sort through the problems of the muddled, moderate majority of Americans, drawing upon history, biography, and current events. Sometimes we look further afield for answers to those problems, which leads me to say that I’m delighted to be joined today by Sam Freedman. He is a senior fellow at the Institute for Government in London and also is a senior advisor to the education charity Ark. He previously was CEO of Education Partnerships Group, which assists governments in sub-Saharan Africa in developing education policy. He was the former executive director of programs at Teach First and a senior policy advisor for the British Department of Education between 2010 and 2013. He is co-author with his father, Lawrence Freedman, of Comment is Freed, which is Britain’s most popular politics Substack. And he’s also the author of what I think is an important new book, Failed State: Why Nothing Works and How We Fix It, which was published earlier this year by Macmillan in the UK, though not yet in the States. Welcome, Sam!
Sam Freedman: Hello. Very nice to be here.
Geoff Kabaservice: Great to have you here. You’re very kind to appear on my podcast, not least because a lot of what you write about British politics will require defining and explaining for an American audience that would be unnecessary in Britain. But I wanted to have you on because I really do think Failed State is one of the most insightful books on politics, full-stop, that I’ve ever come across. You write with a truly admirable combination of lucidity, nonpartisanship, and controlled outrage.
Sam Freedman: Thank you very much.
Geoff Kabaservice: By way of context, Sam, I should say that American audiences may be unaware that Britain has endured a decade and a half now of economic stagnation, with a combination of slow growth and economic inequality that has really, I think, damaged the country’s social unity as well as its shared prosperity. The slowdown in British productivity is not quite unprecedented, but you really have to go back to the beginning of the Industrial Revolution 250 years ago to find an historic parallel. Middle-income British citizens are now 20% poorer than their counterparts in Germany and 9% poorer than those in France. The gap is even wider for low-income households. Six in ten Britons think the country is headed in the wrong direction.
As you sum it up in Failed State, Sam, “absolutely nobody is happy with the current state of affairs. No ideological grouping feels like it is getting its way.” The UK Conservative Party, otherwise known as the Tories, had been in charge for most of this period of stagnation until they suffered a historic defeat in July. But Labour had helped set the stage by, among other things, increasing indebtedness, allowing housing prices to shoot up, and tolerating immigration of such levels that an inevitable populist backlash followed.
But even when the Tories were at their peak of power, they had seen their aspirations thwarted at every turn. They saw tax burdens rising to previously unseen levels, debt levels peaking, net migration breaking new records. And the center-left is no happier. As you add in the book. They have seen “public services weaken, in some cases to the point of collapse, and basic standards of government overturned. Child poverty is at record levels and homelessness is on the rise again. … The one thing everyone does seem to be able to agree on is that the system is broken.” Have you had a sense in promoting the book that most of your fellow citizens share this sense that “nothing works,” in the book’s subtitle? And what other symptoms might they point to?
Sam Freedman: I think what’s been interesting is, because I tried to write the book in a way that would appeal to different ideological groupings, it’s been pretty well-received across the spectrum. So I had a nice review in The Morning Star, which is our communist newspaper — which does not have a wide readership but still exists. But I also have had some nice comments in the Sunday Telegraph, which is a pretty right-wing newspaper, and everything in between. So I think the book has captured this frustration that everybody has regardless of where they sit on the political spectrum.
Now, of course the solutions won’t be the same in terms of policy for different parts of that spectrum. But in terms of thinking about what I’m interested in, which is institutions, there’s only quite a small group I’d say that is quite anti-institution. And most people want our institutions to function more effectively, whether that’s the Civil Service, whether that’s Parliament, or the courts. So I think there’s quite a wide spectrum of support for what I’m talking about, yes, and certainly a lot of frustration with where we are.
I think one of the challenges with talking about these more meta levels of governance in the UK and elsewhere is that. to the extent that members of the public engage with politics (which is limited anyway) their interest is in policies that directly affect them: What taxes are going to affect me? Does my hospital work properly? Does my school educate my kids well? It’s quite hard to see the connection with some of these more abstract issues like: Is Parliament functioning correctly and does the Civil Service work properly? Are we too centralized as a country?
So part of the reason why some of these issues have been left so long is politicians know that going on TV and talking about local government reform is not going to excite anybody, so they don’t. They talk about the direct policy issues. But in doing that, they’re missing the fact that you can’t actually fix any of these specific, direct policy problems without dealing with the institutional and governance questions that I try to write about in the book.
Geoff Kabaservice: I think there’s a sense among many Americans that things aren’t working here anymore in the way that they used to, which is part of why the recent elections turned out as they did. Something that has interested me about British politics is that although our systems are very different in many ways, there’s a sense in which developments that will impact the United States often show up first in Britain or sometimes vice versa. Margaret Thatcher’s election as prime minister in 1979, for example, prefigured Ronald Reagan’s election in the United States in the following year. Bill Clinton’s election as a kind of Third Way Democrat as president in 1992 prefigured the coming of Tony Blair as a Third Way prime minister with Labour five years later. Then the June 2016 Brexit referendum in the UK was a straw in the wind pointing toward Donald Trump’s first election as president here in the United States in that fall. So I wonder, first of all, how much firsthand contact you’ve had with American politics, and second whether you share my sense that there is this correspondence between our political systems?
Sam Freedman: I think your average British politico, of which I am one, knows a lot about American politics, just because it’s so consequential for us. We probably know far more than the average American politico would know about British politics because we are smaller and less important in the world. But your election is enormously consequential to our economy, to what happens in Ukraine, et cetera, et cetera, all of which affect us. So if you have a discussion with British politicos around the American election, you’ll get people talking about Maricopa County as if they live in Arizona, whereas you would probably not find people in Washington chatting about Gosport County Council in England. So yeah, I think we’re pretty engaged with American politics. Obviously we’ve been following your election very closely.
I think there are correspondences because the UK and America are often affected by the same cultural phenomena, the same economic waves. We both had an economic boom in the ‘90s. We’ve both struggled around the financial crisis. You’ve done a lot better than us recently, but we’ve both still had waves of inflation, and that seems to have done for incumbent governments everywhere. One thing I think is a big difference that’s become particularly stark over the last decade is American politics has become a lot more polarized. We polarized around Brexit, but that didn’t affect party identification in the way that we’ve seen in the States. And now that Brexit has died away little as an issue, you don’t have that kind of party identification. You saw the Conservatives lose almost half their support in the recent elections from the previous one. That just would never happen in America, where it’s always very close to 50/50 in a presidential election. So that feels very different.
The nature of your debate being so highly polarized… There’s no way people would defend some of the people Trump is putting up for office here. It just wouldn’t happen because there isn’t that sense of “We must defend our tribe at all costs.” I think that feels quite a shift in the political cultures of the two countries.
Geoff Kabaservice: I want to ask a fairly large question. You warn readers at the outset of your book against falling into a declinism trap. You write that “Modern British history is better thought of not as a story of decline but of a repeating cycle of crises that are eventually resolved, only for a new one to appear. … Eventually the challenges of a given era get so bad that a dam breaks and a way of doing things that has become accepted as inevitable or too hard to change gets washed away.” To me this view has some resonance with the idea that’s lately been posited by the American political historian Gary Gerstle that politics can be viewed not just in terms of which party has an advantage at any given moment, but in the sense that we go through political orders which last for three or four decades.
During this time, for all the surface disagreement between the parties and their leading personalities, and the kind of polarization that you’re talking about, they do share some basic assumptions and speak about political problems in a similar language. In these times, the opposition party is to some extent compelled to adopt large chunks of the dominant party’s platform. In the four-decade span of the neoliberal order, this meant that Democrat Bill Clinton had to acquiesce to Ronald Reagan’s view that the era of big government was over. Tony Blair in the UK had to adapt to Thatcherism in some ways.
And now it seems that that neoliberal order is coming to a close and we’re moving toward something new. That’s not quite the way you put it in your book, but you do say that “We can’t go on” and therefore something new has to happen in the UK. So I’m curious to know to what extent you feel that this idea of an era of an order coming to a close describes what you think is happening now in the UK.
Sam Freedman: I think the way I see it is that you get crises develop around a particularly serious issue within society. So I start the book in 1974, when both Britain and America were having some pretty serious economic troubles, but in Britain it was very serious. We had a three-day week where we had to limit the amount of electricity; people couldn’t use their televisions at night. It was pretty serious because we had very strong industrial action from unions and inflation was through the roof. A lot of people at that time thought that was it. They thought the democratic order was over, we were going to have a military coup, it was disastrous and irrecoverable.
Then we did recover, and we recovered because… I don’t think everything that Margaret Thatcher did was necessary or good, but she did a number of things that were important, as did the last years of the Labour government in the ‘70s, to turn around the economy and get us onto a more stable footing. Then, you’re right, Tony Blair had to accept a lot of that, and that’s become baked into our political settlement. Now I think you’ve got what I call a crisis of governance, which is our institutions have become completely gummed up. Our way of doing politics has got broken. And at some point things will get so bad that that will resolve in a different way.
We may have to make it worse before it gets better. We may have some pretty terrible governments before people realize that we need to fix some of these problems to get onto a better footing. But that does seem to be the pattern. I think it’s probably the pattern in the States as well. Every country has its own crisis cycle. Trump may represent the beginning of a very bad period, or he may represent the nadir of a particular way of doing politics that then resolves into a different way of doing things from other parties.
Geoff Kabaservice: So you do say that this is a crisis of governance, which is at the heart of the UK national failure. And the key trends that you identified that have been driving this national failure and the crisis of governance are hyper-centralization; executive dominance of a state that has grown too big and too complex to be effectively managed from the center; and a super-fast media cycle. I’m sure we’ll return to these, but can you just sketch out in broad outline what you have in mind by these three trends?
Sam Freedman: Yes. So two of these are quite different from your problems in the States, and then one of them is I think quite similar. So centralization… We are by far the most centralized country in the developed world now. Basically everything is done from London, from Whitehall, where our government is based. Local government is incredibly weak. We have nothing equivalent to the states in terms of being non-national bodies that are responsible for the delivery of public services. Our local authorities are much smaller, much weaker, with very little power and no revenue-raising power.
As a result of that, I argue, the center of government has got completely gummed up. The role of the prime minister has become massively overcomplicated and impossible for any individual to do. Our Treasury has taken on far too much control over micromanaging different policy areas. As a result, as I say, our whole system’s got gummed up, our politicians at the center have got overwhelmed, and we’ve lost the ability to integrate local needs into policy solutions. So centralization is a big one.
The power of the executive… We don’t have a codified constitution, we’ve never had a written constitution. We’re very unusual. I think there’s only four countries left in the world that don’t have one. That means in effect our executive, as long as it has a majority in Parliament (which it usually does because of our electoral system), can do pretty much anything they want. There’s no real restriction on them. There are conventions that restrict them, but in practice… It is pretty horrifying to think what Trump would do if he had had our system without any checks and balances really.
I argue as the state has become bigger, more complex, more centralized, the fact that Parliament is pretty weak (and has always been pretty weak) has become a bigger and bigger problem. Even the powers that it does have have been overridden by the executive, to the point where our legislation is just not being scrutinized to an adequate degree. So we’ve got very poor laws being passed. They’re now ending up in the courts because we have a confusion over the power of the courts versus Parliament, because we don’t have a written constitution. That is starting to cause real constitutional challenges for us. A lot of policy is now getting decided in the courts in increasingly controversial ways. All of this is bad. I think all of it stems from the fact that you’ve got this lack of scrutiny in Parliament and an increasing lack of scrutiny from what is supposed to be a nonpartisan civil service as well.
Then the final trend, which I think is the one that we definitely share, is around the super-fast media cycle, the fact that there’s no time to think for anyone anymore. There’s this vast amount of space to fill in the media cycle that gets filled up with attacks if you don’t fill it up with announcements. Because we have such a centralized system, the temptation is to just twiddle and tweak policy constantly all over the place to have something to say to the media, to fill all this space, all this time, to stop them attacking you. So our political culture has shifted from communications being about persuading people about the policy choices that you’ve made to policy being about meeting the needs of your communications grid. That creates very destructive incentives for bad policy as well. So you bring all of these together in the UK, you’ve got this incredibly highly centralized system where the executive has enormous power, nowhere near enough scrutiny, and really bad incentives. That’s how you get to, I think, where we are now.
Geoff Kabaservice: I should add that when we talk about the media, we really have to include social media now as well.
Sam Freedman: Absolutely, yeah.
Geoff Kabaservice: It’s very clear, for example, that in the most recent elections here in the United States, some of the Democratic Party’s bad decisions were driven by relatively small groups, but whose voice was amplified on social media. There was a real fear on the part of the Democrats of being seen to repudiate their progressive base. That was largely, like I said, something that would not have happened in the pre-social media era.
Sam Freedman: Yes, it’s really changed the incentives and the way that politics is covered, probably in ways that we haven’t quite processed yet entirely, both because people get scared of their base and being yelled at, but also because it just makes everything very shallow and trivial. I mean, that’s the nature of social media, as much as I use it as well. So, yes, I think it’s been pretty destructive to the incentives politicians have.
Geoff Kabaservice: So let me back up a moment and ask you something about yourself. Where did you grow up? Where were you educated? How did you come to your particular interests?
Sam Freedman: I grew up in London. I had a pretty privileged and elite education. I went to a private school here and then to Oxford. I did a history degree and ended up not really knowing what I wanted to do, and became an education policy researcher and developed expertise in education policy. I ended up in government, working for our minister in 2010. I got a close inside view of how government worked and was not particularly impressed, was pretty frustrated at my time there, so I left in 2013. And I’ve done lots of other jobs since then and so on, but have always wanted, I think, to write about why I think our government is ineffective.
Then in 2021, I quit my last proper job and became a freelancer and a writer, effectively. So most of what I do now is writing for my own Substack or for other periodicals, newspapers. And this book was a great opportunity because I did the book proposal in 2022, which was when we had our most chaotic political year: when Boris Johnson’s government collapsed and then we had Liz Truss who was prime minister for 49 days, famously outlived by a lettuce, and that was a disaster. So there was a good moment to pitch to a publisher: Let me write about why our government is so ineffective.
Then we’ve had our recent election, and our new government have come in with a big majority, but they’re also struggling. And I think they’re struggling for a lot of the reasons I talk about in the book as well. So it’s not a party-political thing, it’s something that affects everybody who tries to govern in this country.
Geoff Kabaservice: Which college were you at in Oxford?
Sam Freedman: Magdalen College.
Geoff Kabaservice: Did you take part in the Oxford Union?
Sam Freedman: No. I was a member, but I didn’t really, really participate. I wasn’t particularly political at university. Actually I did other things like drama and things like that. I mean, I was always interested in politics, but I wasn’t involved in student politics. It was only later that I really developed that.
Geoff Kabaservice: Britain has been and remains extraordinarily successful in exporting its culture around the world. In that sense, it exercises a kind of soft power comparable to that of the US. So what aspects of that culture were you into when you were coming of age?
Sam Freedman: British culture? That’s an interesting question. The thing is I was always quite interested in American culture. The TV series I grew up on were all American TV series like West Wing and Sopranos and Mad Men, and all of those big-box sets that I used to watch. I’ve always been fascinated with American politics and American culture, so I guess I sort of see them as almost interchangeable in the way that I engage with them.
But I think there’s something about British politics that historically was seen as very proper, and we did things the right way, and there was a gentlemanliness about it. That’s part of, I guess, the challenge of governance that I’m talking about. We have a famous constitutional historian called Peter Hennessy who always talks about the “good chaps” theory of government, where we didn’t have a constitution but everything worked because everything was run by “good chaps” who did the right thing when they needed to. If that ever existed — and that’s a controversial thesis — it certainly doesn’t exist anymore. There’s this question: If you can’t rely on your conventions anymore and you don’t have a constitution, does that historic model of Britain as doing everything properly really exist anymore?
Geoff Kabaservice: You also have a master’s degree from Birkbeck College, which is part of the University of London, I think I’m correct in saying.
Sam Freedman: Yes. I did that when I was working. Actually, it’s a college where basically people who have jobs can do part-time degrees. So I did that early in my career.
Geoff Kabaservice: Yes, night school has always been part of Birkbeck’s way of operating. I love the fact that its coat of arms features an owl with two lamps and its motto is “In nocte consilium,” advice comes at night.
Sam Freedman: Yes, it’s a great university. And it’s great because it allows people who can’t do conventional degrees to access higher education as well.
Geoff Kabaservice: I believe you also worked for some time for the think tank Policy Exchange.
Sam Freedman: Yes. So this was and still is a center-right think tank here. It was very influential when David Cameron was leader of the opposition, before he became prime minister in 2010. It was seen as his favorite think tank. So we were, as a group, pretty influential in preparing the Tory Manifesto for 2010.
Geoff Kabaservice: David Frum, who’s a well-known Canadian-American political commentator and now senior editor at The Atlantic, was on the board of directors of Policy Exchange, so there’s some sense in which the UK center-right was in dialogue with the American center-right in that time.
Sam Freedman: Yes, absolutely. It was quite an Atlanticist organization as well. Unusually for British think tanks it did quite a lot of foreign policy work. I think subsequently it’s moved a bit more to the right, arguably, and become a bit less influential. But yes, it was a really interesting place to work when I was there. And it got me effectively into government, because my boss at the Department for Education in 2010 was Michael Gove, who helped set up Policy Exchange and was a close comrade of David Cameron.
Geoff Kabaservice: So in your book you don’t really talk about personalities, but since Michael Gove is not that familiar a figure for American audiences, how would you describe him and his politics?
Sam Freedman: He’s one of, I think, the more interesting ministers that we’ve had over the last fifteen years. He was one of the people strongly behind Brexit. I didn’t support Brexit myself, but he was one of the leading politicians who did support Brexit. His politics is not straightforwardly economically liberal, if you like, in the way that I think a lot of the center right is or has been over the last fifteen years.
He was adopted himself as a child. He always felt that he was given an incredible opportunity in life by education. He has genuinely — and quite unusually, I think, for a center-right politician — really deeply cared about children from lower-income backgrounds getting a great education, which is why we got on very well together and why I felt quite comfortable being part of his team, even though I wasn’t actually a Conservative at the time and I’m not now. I think he still has that element.
In some ways he’s very right-wing; he supported Brexit on foreign policy. He is very right-wing, but when it comes to domestic and economic policy he has a social conscience that I think makes him quite unusual in the center right. His positioning within the Tory Party has always been very interesting. As a personality, he’s very entertaining, he’s very smart. He rubs a lot of people up the wrong way. He has a kind of aggressive politeness that I think winds a lot of people up. But he was definitely one of the more interesting ministers I could have worked for.
Geoff Kabaservice: I was at the National Conservatism Conference in London in May of 2023, and Michael Gove spoke there. It was quite apparent from the audience that quite a few of those members of the right wing of the British Conservative Party did not like Michael Gove at all, didn’t regard him as a true believer in national conservatism, regarded him as part of the establishment that needed to be overthrown. And yet as you say he’s also a devil figure to the left in the UK as well.
Sam Freedman: Yes, and I think this is because he’s got this odd mix of views. He’s very pro-Israel, for instance, very pro-Brexit, as I said, got in some aspects of the culture wars with very right-wing views about British history and so on. But then in other ways — when it comes to wanting to invest more in education or social housing and things like that — he will take views that are more associated with the left. So he doesn’t quite fit within anyone’s neat tribal package of ideological beliefs, which means he then gets disliked by everybody. But he’s popular with Westminster intellectuals who appreciate the intellectual flexibility, I guess.
Geoff Kabaservice: Am I right in thinking that Gove was important in the development of the program known as Levelling Up?
Sam Freedman: Yes. Both he and Boris Johnson were the two most important ministers, politicians to back Brexit. And they knew that a lot of the impetus for that vote for the Leave vote came from parts of the country that felt like they had been ignored while London had grown — similar to the ways the Rust Belt has moved right in America — and felt that they needed to do something for those areas to justify Brexit and to justify that vote. So Levelling Up was this idea of boosting those areas economically and socially.
It never really took off. There was never really enough support from the rest of the Conservative Party behind the idea. There was never enough definition as to what it meant, or money put behind it. And fights over Brexit and then COVID and then the falling-apart of the Boris Johnson government meant it never really got legs. You’d find it quite difficult to point to achievements that were had as a result of doing it. But I think that came from a genuine belief that these areas had backed Brexit and therefore deserved to see some benefit from it.
Geoff Kabaservice: But it’s also the fact that the British economy, geographically speaking, is enormously canted toward the Southeast.
Sam Freedman: Absolutely, and London specifically.
Geoff Kabaservice: This causes problems for the economy as a whole because the rest of the country is so much less productive than London.
Sam Freedman: Yes. This is one of the arguments I make about centralization. If you look at the more successful cities in the States, they have incredibly strong incentives to grow. So they’re massively increasing housing numbers — I know this doesn’t happen everywhere — but in the cities that have really grown in the last few years, you’ve seen this extraordinary development in infrastructure and housing and so on. We don’t really get that in England because there’s no incentive for anyone to grow — because government is so centralized that there’s no financial benefit to driving local growth.
Because we’re so centralized, the economy and politics is built around the interest and needs of London. So London’s pretty successful when it comes to productivity, but our bigger cities outside London — Manchester, Birmingham, Sheffield, Leeds — have so much unrealized potential. The problem with Levelling Up was it was focused not on our second cities — because those second cities all voted Remain and are all quite liberal. It focused on provincial towns and rural areas, which also have not been hugely productive, but that’s not really where the big gain is. The big gain is our second cities. We don’t have a Houston, we don’t have a Dallas, we don’t have places that are growing incredibly fast. That just doesn’t happen here. It’s all London.
Geoff Kabaservice: It did seem that a suspiciously large amount, proportionally speaking, of Levelling Up funds went to Richmondshire, which just so happened to be represented by Rishi Sunak.
Sam Freedman: Again, this is a problem of centralization. The funds were all distributed centrally by ministers to themselves and to the people whose seats they wanted to have. So there was a pork-barrel element of it as well. My model of decentralization is not handing out money from the center. It’s giving real power, including revenue-raising power, to local areas.
Geoff Kabaservice: You also worked with and perhaps for Dominic Cummings, who I think is somewhat better known in the States than Michael Gove. How would you describe him?
Sam Freedman: Elon Musk without the cash.
Geoff Kabaservice: Great description!
Sam Freedman: I worked with Dominic. Dominic worked for Michael as an advisor as well. He was a political advisor, I was a policy advisor, but we sat in the same office for a few years. He’s a fascinating character. In a way he does fit in with the current Trumpian world of American politics better than he fits with British politics. Because he’s got that same thing of not caring who he upsets, not caring about building relationships particularly, just having this will to power and whatever it takes to get what I want to happen.
He would agree with me on a lot of things are wrong in the UK. But his way of dealing with it would be just to smash through all the institutions and blow them all up so that him and his small group of people he likes could drive through change — which I think is a model that does appeal to a lot of Trump supporters as “You need this strong man approach to break through all of the nonsense.” Because that’s the alternative to my very institutional model of improvement. We would agree on a lot of those problems but disagree on the way of solving them.
Well after we worked together for Michael Gove, he ended up working for Boris Johnson. They fell out. He was then very involved in bringing Boris Johnson down and destroying that government. Now he seems to be — I don’t know him anymore, we don’t talk — but he seems to be now much more involved in US politics than UK politics, and has got very engaged in Elon Musk’s new venture.
Geoff Kabaservice: Yes, he has. So the seat of the British Prime Minister is 10 Downing Street in the heart of London. And Americans will mostly know this I think from watching The Crown. It’s portrayed as a place of glamour and history. What would visitors who actually walked into the real 10 Downing Street be surprised to find?
Sam Freedman: That it’s incredibly pokey. As I say in the book, it does have this incredible sense of history. You go to the Cabinet Room where the Cabinet meet and you see where Churchill sat during the Second World War. There’s an incredible sense of history in the building that you certainly wouldn’t want to lose. It’s the prime minister’s residence. We have lots of our receptions for foreign visitors there. That’s all great. It’s great to have a sense of history when you’re doing those things.
The problem is it’s also where you’re trying to run the center of government from, and it’s a house, it’s a Georgian house. You’ve got the most important people in the country, the prime minister’s top advisors, stuffed into rooms that were literally closets and waiting rooms. It’s ridiculous. It’s a ridiculous way to try and run a government. It’s not the most important thing, but I do say they should work in a proper office.
Geoff Kabaservice: Treasury looks much more like what people would imagine the seat of government should look like.
Sam Freedman: Yes, Treasury is very grand. It’s literally in a palace. It’s a rebuilt version of what used to be Whitehall Palace. It’s still a bit run-down because it hasn’t been repaired for a while, but you’ve got these grand big corridors and huge atrias and so on that looks much more like what government should look like. Because Downing Street, as I say, it’s literally just a house.
Geoff Kabaservice: Something else I think that would be surprising to people is that although the British prime minister has much more power really than an American president does, he or she will have a staff which is incredibly small — roughly comparable to the staff that the mayor of a German city might have.
Sam Freedman: Yes. Our model of prime minister has evolved as everything does in Britain because we have no written constitution, because everything happens by evolution and accident. The prime minister used to be considered the chair of the Cabinet, who wouldn’t really be making a lot of day-to-day decisions — absolutely on the big issues of war and grand strategy, but not on day-to-day, what was going on in departments. That would be handled by Cabinet ministers. It was seen as a job that was in some ways less busy than a Cabinet minister’s job.
That has changed over the last forty years very dramatically. Their role has become much more presidential. And yet the resources that they have to fulfil that role haven’t changed. They’re still in this little house with a small staff. That is one of the big problems with the way our state works. You’ve got this unbelievably powerful presidential figure who has very few resources, and this mismatch means that you get very bad policy development from the center of government, which is a constant problem.
Geoff Kabaservice: There’s a sense here as well in this country that government is at once too powerful and actually not capable enough. There’s a quote you have in your book… One of the great features of your book is you do a lot of interviews with former members of the government. And one of the government advisers told you, “Government doesn’t do anything. It’s a procurement agency that isn’t very good at procurement.” I wonder if you could tell me what he or she meant by that.
Sam Freedman: I think what they were getting at there is that when you think about delivery of services, people think governments do a lot of that — and they don’t. They get other people to do that. Now, in a lot of countries, they will get local government to do it. They’ll say, “We want local government to run schools, to run children’s homes, or social care homes for adults who need residential care.” That doesn’t really happen here. Instead we tend to get private companies to do a lot of the actual delivery of the state. That is, I argue, partly because we’ve destroyed local government capacity to do that, and because the center of government doesn’t know how to do delivery a lot, because in many cases it’s not their function.
So you end up with situations in which we have very large outsourcing firms that have ended up doing a lot of what people imagine is government’s job. They’re very good at winning contracts, and the government is very bad at procurement, but they do fail a lot. Their failure is then blamed on the government of the day, but they have very little actual control over what these companies are doing. This is one of the things I argue, is that there’s some things that private companies are very well set up to do, but there’s a lot that they’re not. We are asking them to do a lot of very inappropriate things, which they’re doing very badly. That is one of the reasons why there is so much failure around.
Geoff Kabaservice: This is another similarity between your system and ours. Americans tend not to realize this, but in terms of the number of full-time federal civil service employees, there are roughly two million of them, which is the same number that there was during the Dwight Eisenhower administration more than half a century ago. Of course what government does has expanded enormously by at least five times, but that difference has been made up by outsourcing those governmental responsibilities (or former governmental responsibilities) to private contractors of one kind or another.
Sam Freedman: Yes, and that’s exactly the same as here. Now we have the same number of civil servants we had in 1980, but in a vastly more complicated state that’s spending huge amounts more money than it did in 1980. The way they handle a lot of that is by, as you say, contracting out. They’re not very good at contracting out. A lot of the companies that get a lot of this money from contracting out aren’t really specialist in anything, they’re just good at winning contracts. And it doesn’t seem to matter how many times they mess up. They still get the next contract because there’s no one else to do it.
Geoff Kabaservice: The central part of your book is about the failures of many of these large contracting companies. If I’m recalling correctly, there’s basically four of the really huge ones — G4S, Serco, Capita, and Atos — that have really established themselves as presences across a wide range of outsourced sectors. The UK government, I think, is the second-largest spender on contracting next to only the United States. It’s enormous amount of money and something like I think a third of public sector spending. Yet there have been some enormously high-profile failures on the part of these contracting companies. I wonder if you could just discuss a few representative examples.
Sam Freedman: What I talk about a lot in the book is our probation service. I don’t know if you call it probation in the US, but essentially if you’re let out of prison early, you’ll be on probation and they’ll be trying to make sure you don’t commit any crimes and keeping an eye on your rehabilitation. This was run by the state. It was fairly decent. We had a minister who decided it needed to be privatized and contracted out. He did it. It was a complete disaster. It basically destroyed our probation service. A lot of the companies involved went broke. There were lots of scandals. The whole model of the contract and the funding model didn’t work. These organizations weren’t actually incentivized to do any rehabilitation properly because they didn’t get properly reimbursed for it. And it had to be renationalized, and it still hasn’t recovered at all from that process.
Another example, one of the more shocking examples I give, is that our children’s home sector is largely run by private companies. These are the most vulnerable children in society, children who’ve suffered abuse usually and incredible neglect, who need a huge amount of support. In almost every country, these are run by local government. Here it’s run by all sorts of odd companies. I give the example of a woman who set up a care home for children whose main experience had been as a reality TV star and on a pornography website. This is extraordinary that we would allow these people to run critical services. That’s an extreme example, but there’s a lot of inappropriate organizations running really quite sensitive services.
As I say, there are examples of where it’s entirely reasonable. If you want to buy a load of computers, you certainly don’t want to set up your own government computing company. It makes sense to do bulk purchasing from companies. If you want an organization to clean your offices, then it absolutely makes sense to get a private company to do that. It’s the thing private companies can do fine and you can measure very easily. But when you’re talking about incredibly sensitive, complex services, where you can’t measure performance in an easy, straightforward metric and where funding is always complex, it’s really tricky to outsource those things. There have been just repeated failures.
Geoff Kabaservice: The Institute for Government, where you’re a senior fellow, had a number of critical factors that they identified in a very good report a few years ago about what makes for successful outsourcing versus what makes for failure. I think their key finding was that there needs to be a competitive market of high-quality suppliers with experience in providing very similar services to the private sector. But in many of these outsourcing scandals we’re talking about, that simply does not apply.
Sam Freedman: Yes, I think that’s exactly right. It’s that government is trying to create markets out of nothing in areas where markets are not an appropriate way to deliver a solution. Serco, one of the companies you mentioned, are responsible for monitoring our nuclear weapons systems. That worries me a lot. That feels like something the state should be doing, a pretty core function of the state. And you can never have a market in that because you’re never going to have a whole range of companies who are able to provide that service. So yes, I think that’s exactly right.
Geoff Kabaservice: I actually spend a lot of time listening to “The Rest Is Politics,” a podcast with Alastair Campbell, formerly of the Blair government, and Rory Stewart, formerly of various conservative governments. One of the instances that Stewart pointed out was the attempted outsourcing of Birmingham Prison, which ended disastrously. It seems that there are some functions that are simply inherently governmental and cannot successfully be outsourced in this way.
Sam Freedman: Yes. I think that we do have a number of prisons that have been outsourced and have sort of worked. But then the problem is when they don’t work — and Birmingham is a good example of that; it was a disastrous outsourcing, and the prison was a complete wreck, and there were riots, nd it had to be taken back and nationalized again — the problem is you don’t actually get rid of any of the risk. The risk still ultimately sits with the state with something like that. It’s such a core service. We have to have prisons.
If you outsource it and it doesn’t work, you’re still stuck with the risk, and you’ve lost the capacity because you’ve outsourced, and you have to rebuild the capacity again. So it’s just not an efficient way of doing things. Whereas, again, where you’ve got a functioning market that exists anywhere in the private sector, that will often be more efficient than government doing that.
Geoff Kabaservice: One of the most notorious of the outsourcing scandals was one you didn’t write about much in your book. I wonder if that might be because it was still ongoing as you were writing. This is the scandal involving the Post Office and the Japanese corporation Fujitsu Services Limited and their Horizon IT system. Can you tell us something about that?
Sam Freedman: This was a situation in which the Post Office contracted out the development of a new IT system to Fujitsu. And it started showing that people running post offices (which is done on a franchise basis) were stealing money. That’s what it looked like in the system. Thousands of people were arrested and many were put in prison and they lost their livelihoods. It turned out that the computer system was glitching, and it was making mistakes, and this hadn’t happened, and a lot of these people were innocent. It has become a massive scandal because it took years and years and years and years for people to accept that the people who were running post offices were right, that this was a scandal. There was a TV series made about it earlier this year that brought the issue again back into public imagination. There’s a big inquiry going on at the moment.
It’s a really interesting example of how poor institutional scrutiny can lead to cover-ups for a long time. Again, this is something that does happen in the US as well, obviously. I don’t think that’s primarily a contracting-out issue. I think it was entirely reasonable for the Post Office to contract out a computing system to a private company. The issue was the refusal to accept scrutiny or a refusal to properly scrutinize their own behavior, and government’s refusal to do so either.
There’s quite a long string of inquiries that we’ve had recently that have all essentially been about that. We had a big scandal about infected blood in the 1980s and 1990s that was used on patients in the NHS. Again, our institutions were very good at covering up and not engaging and not allowing for scrutiny. I think that’s a slightly different but also very big problem.
Geoff Kabaservice: But there is a problem that runs through a lot of these outsourcing contracts and their issues, which is the principal-agent problem in the sense that the company will actually know a lot of information that it need not necessarily share with government. That puts it in a much more advantageous position to take advantage of the government.
Sam Freedman: Yes. This is where you get to the fact that also a lot of the time the people doing the procurement will have worked in the sector that they are procuring from, or want to work in the sector. You get this churn between the two which is not particularly healthy. And the companies can pay a lot more to the people who are bidding for the contracts than the government pays the people who are monitoring the contracts, which also leads to an imbalance. You can see this particularly in defense, with our defense procurement — and I know the US defense procurement is similar. There’s a huge amount of waste in defense procurement for precisely this reason that all the best people go and work for the big defense companies and not for the government.
Geoff Kabaservice: There simply isn’t the internal capability within the government to know whether a particular proposal represents value for money or just an absolute rip-off.
Sam Freedman: Yes. It’s just very hard to monitor, as you say, because you don’t necessarily have the information and companies are very good at hiding information they don’t want you to see.
Geoff Kabaservice: You wrote in your book that somewhat to your surprise you found that, when thinking about how to proceed forward, you found yourself coming to much more radical solutions than you’d originally thought you would?
Sam Freedman: Yes. I think my original idea was to explore a lot of these issues. But as I did that, I felt more angry and annoyed about the state we were in and felt that we needed to do, as you say, more radical things. So I proposed some very big and substantial decentralization of power to local cities, urban areas. I proposed a pretty radical transformation of Parliament, to give MPs a lot more power to engage in scrutiny over the executive. And quite a few other things. We talked about contracting-out quite a bit. I think we should take a very different approach to that. So I try and fill the book with a lot of solutions as well as just getting frustrated with all the problems.
Geoff Kabaservice: So what seemed to you the most actionable of your solutions?
Sam Freedman: The one I think that is happening, and the one where I’m pushing at an open door the most, is around decentralization. I don’t think the government is going as far as I would like, but we have a relatively new form of governance. They’re called mayoral combined authorities. Essentially it’s what in the US would be a city mayor, but it tends to be a bigger area than just the city. They are being given more power. I argue they should be given yet more power, but they’re being given more responsibility over delivery of services and local economic growth and some more resources to do that. I hope the government keeps pushing at that because I do think that’s a really key part of what I’m talking about.
Geoff Kabaservice: I find interesting that Andy Burnham, who I think is the mayor of Greater Manchester, is a national figure now in the UK in the way that previous people in that position would not have been.
Sam Freedman: Yes. As I say, our local government for the last few decades has been very weak. People who are running a local council would not be even local figures let alone national figures. But now we’ve got these mayors who are running substantially larger areas. Greater Manchester has a population of a couple of million people; it’s a substantial population. It gives him a more of a platform. Because you’re talking about a mayor, rather than a council, it’s an individual who’s got this power vested in them and can be more high profile. So in a way that some US governors have a national profile, we’ve now started to get a group of politicians who have that too. I think that changes the dynamic of national versus regional in a very positive way.
Geoff Kabaservice: In terms of what’s likely to happen in the UK, it does seem that the Tory Party, by choosing Kemi Badenoch as their new leader, is actually moving more toward the right, at least in cultural terms, while the Labour Party under Keir Starmer — it’s early days yet but it seems to be a bit flailing and without obvious direction. So what advice might you give to both of the two parties about how to proceed, since you are speaking from a relatively nonpartisan position?
Sam Freedman: I think with Labour, they came into power pretty undercooked. They weren’t expecting to win, when they lost the last election pretty heavily, and they thought they were going to have quite a long rebuilding period. And then suddenly the Conservative government imploded, and then they were going to win. They just didn’t get themselves ready in time. I think they’re doing a lot of the policy development that ideally would’ve been done in perhaps the last year of opposition. It is now being done in government, so it’s a bit delayed. But I think they are starting to put together an agenda with some interesting stuff in it. Whether it will be enough, particularly on the economy where they look like they are lacking in ideas, I think is yet to be seen. But I think they want to do government well, which is at least something, even if they’re not quite achieving it yet.
I think with Kemi Badenoch, who’s come in as the Conservative leader, it’s still very early days. She’s still a relatively new figure in British politics. She’s quite an interesting figure in that on one hand she made her name by taking quite right-wing positions on cultural war issues. But she’s also not particularly biddable, and she’s not gone along with what the right of the party would want on some other issues like immigration.
One of the big things here at the moment for the right of politics is small boats crossing the English Channel from France, with a lot of immigrants coming in. There’s a frustration that we are prevented from doing more to stop this by our membership of the European Human Rights Commission, even though we’ve left the EU. And there’s a big push in the Conservative Party to say we should leave that as well, the European Convention on Human Rights. She hasn’t gone along with that yet, whereas her opponent in the leadership race did go along with that. I think that’s quite interesting. She does think for herself. She’s not particularly biddable. But she has also got a reputation within the party as being quite rude and not particularly pleasant to work with.
So I think that could go one of either ways. Either she could just blow up quite quickly and end up being thrown out, or she could be one of those politicians that forges her own path. I think it’s early days and yet to be seen. But at the moment, the Conservative Party, they still… They haven’t really come to terms with what they did in power, how much they failed. They haven’t really said sorry or acknowledged any of that yet. I do think that she will need to do that at some point to earn them the right to become a government again in the future.
Geoff Kabaservice: So the policy you were referring to earlier is the exit from the Strasbourg human rights court, so “Strexit” is a term that I heard bandied about when I was last in the UK.
Sam Freedman: Yes. I do think it’s going to become an increasingly noisy theme because immigration, as it is across the developed world and the US and in other European countries, is becoming more and more of a difficult political issue.
Geoff Kabaservice: You also pinpointed an issue which extends across both governments, past and present, which is the increasing short-termism of governments in power and an inability to think about the long-term, which often is frankly driven by a desire to win news cycles. Is there anything that can be done to bring back more long-term thinking into the government?
Sam Freedman: I argue that they’ve ended up being quite trapped by this fixation with the news cycle. And you understand what happens, but it’s not particularly in their interest. I think a lot of politicians misunderstand what appears to be in their interest for something that isn’t. They’ve got very good at managing these short-term news cycles, but the cost is that nothing ever happens in the real world. You don’t get any real improvement in people’s day-to-day lives. So when it comes to an election, the fact that you might have had a load of great headlines doesn’t actually help you at all, because people still don’t feel any better off. They don’t feel their hospitals are any good, et cetera, et cetera. You lose the election. And trust in politics has gone through the floor in recent decades.
I argue that if you really want a legacy, if you actually want to win elections, don’t worry about the day-to-day news cycle. Worry about the argument you can make, when you get to the election, that you’ve actually changed people’s lives. In different ways, both in the UK and in the US, you’ve seen incumbents lose an election because they weren’t able to convincingly make that argument that “We’ve made your life better.” That’s got to be the focus, rather than “Great, we got a good headline in this newspaper.”
Geoff Kabaservice: Well, thank you so much for talking with me today, Sam Freedman. And congratulations again on your new book, Failed State: Why Nothing Works and How We Fix It.
Sam Freedman: Thank you very much for having me.
Geoff Kabaservice: And thank you all for listening to the Vital Center Podcast. Please subscribe and rate us on your preferred podcasting platform. And if you have any questions, comments, or other responses, please include them along with your rating, or send us an email at contact@niskanencenter.org. Thanks as always to our technical director, Kristie Eshelman, our sound engineer, Ray Ingenieri, and the Niskanen Center in Washington, D.C.