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The failures in the British government’s response to COVID-19 come down to a familiar organisational problem: whether to centralise or decentralise 

In common with most other European countries, funding for healthcare in the UK comes from the public purse. Less commonly, the vast majority of healthcare is also delivered by the state, through the National Health Service (NHS), which directly employs around 1.3 million people who deliver both hospital and some community healthcare. Public health – as is common around the world – is also government-funded and delivered.

The current organisation of these functions has been sorely tested during the coronavirus (COVID-19) pandemic and part of the reason for this, we would argue, is that key parts of this system are organised at the wrong level. Two examples are glaringly obvious and have had a serious impact on progress in getting the COVID-19 pandemic under control and limiting the number of lives lost.

Decentralisation: failures in procurement 

The first example is the organisation of procurement within the NHS. While the NHS often stresses that it is a single organisation, with common “NHS values” and a single pay structure that applies to all front-line clinical staff across the country, NHS care is delivered, and procurement done, at a local level.

This means the NHS misses out on the opportunity to use its bargaining power with respect to suppliers of key inputs: a point clearly stated in a recent high-profile review of efficiency in the NHS. It also means the purchase of personal protective equipment (PPE), vital to protecting clinicians treating patients in the NHS, is done at the local hospital level.

The most obvious outcome was a severe lack of PPE and unprotected staff. Less obvious was the fact that key clinicians often spent their time sourcing PPE for their own hospitals, diverting their time from providing patient care. This is clearly not only a waste of time and resources but also had devastating consequences for NHS front line staff.

Centralisation: test, track and trace 

The second example is the organisation of the public health response to COVID-19. In theory, public health – and dealing with infectious diseases – is a function which is overseen by a national body, Public Health England (an arm of the Department of Health & Social Care), but delivered in conjunction with local government.

But the British government’s response to monitor and control the COVID-19 pandemic has been heavily centralised. Testing, tracking and tracing is a key function in controlling pandemics. Rather than using a devolved system to do this, the British government has chosen to adopt a highly centralised national test, track and trace system, which has been implemented only slowly and has not harnessed local knowledge or actions.

In contrast, the “poster child” of populous European countries, Germany, has adopted a highly decentralised system of testing, tracking and tracing; this has been argued to be one of the key reasons the German fatality rate has been very low. In contrast, in the UK, even now when the British government is proposing local “lockdowns” to control outbreaks, local public health bodies do not have timely access to data on their local areas and rates of testing lag behind those of other countries.

Unavoidable tension

This is, of course, a well-known problem in management: centralisation vs decentralisation in organisations. As Henry Mintzberg said in his well-known book The Structuring of Organizations in 1979: “The words centralization and decentralization have been bandied about for as long as anyone has cared to write about organizations.” The tug-of-war is well known and the result of the trade-off between the competing advantages of the two modes of organising. It is also often a source of significant problems, stemming from a failure on the part of leaders to recognise the basic choice that they need to make and the consequences of getting it wrong.

Put simply, there is an unavoidable tension between the efficiency and reliability of centralisation and the responsiveness and flexibility of decentralisation. Ideally, of course, we all want organisations to be highly efficient, reliable, flexible and responsive, and many organisations swing from more centralised to more decentralised and back as they try to escape this trade-off. Many others find themselves repeatedly facing the problems created by their choice without recognising the choice they have made.

the NHS misses out on the opportunity to use its bargaining power

So, what does this mean for the NHS? Well, first, leaders must avoid solving the wrong problem. While firefighting is sometimes necessary in any organisation, NHS leaders need to ask why the fire started in the first place and keep asking why until they get to the root of the problem. When the root problem is one of centralisation versus decentralisation, they must decide what is most important in terms of the trade-off.

Returning to our examples, the real problem is not that that there is insufficient PPE, but rather a lack of the centralisation of purchasing when efficiency and reliability is the most important goal. Similarly, the real problem is not a lack of resources or expertise in track and trace, but an overly centralised system when local responsiveness and flexibility are required.

Solve the right problem – centralisation versus decentralisation – and the symptoms will disappear; fail to solve the right problem, and our ability to respond to the pandemic will continue to be limited. 

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Carol Propper

About Carol Propper

Chair in Economics
Professor Carol Propper is Chair in Economics and a member of the Centre for Health Economics & Policy Innovation. In 2010 she was awarded a CBE for her services to social science. She was elected as a Fellow of the British Academy in 2014, and made an International Fellow of the US National Academy of Medicine in 2018. In 2019, she was elected as President-Elect of the Royal Economic Society.
Nelson Phillips

About Nelson Phillips

Associate Dean of External Relations
Nelson Phillips is Professor of Innovation & Strategy, Co-Director of the Centre for Responsible Leadership, and the Associate Dean of External Relations at Imperial College Business School. Professor Phillips’ research interests cut across strategy, innovation and leadership, and he has published widely for both academics and practitioners. He is the co-editor of Innovation: Management and Organization, sits on the board of governors of the Academy of Management, and is on the advisory board of the Society for the Advancement of Management Studies. Professor Phillips teaches leadership, strategy and digital business on the MBA and EMBA programmes at Imperial, as well as delivering executive education for a wide range of corporate clients.

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