Premier League, Government Finance and the Motivation to Innovate

This excellent article over on ESPN offers an explanation of the decline in performance of Premier League teams and a comparison to the downfall of Serie A 15 years ago.

Put simply, the story goes like this. Italy’s senior football league, ‘Serie A’, emerged as the strongest in Europe in the late 1980s and remained so through to the late 1990s. Because it was the strongest league, it attracted the strongest players, and was thus home to the richest owners, and also the richest TV deals, and so became without question the richest league. How on earth, therefore, could this ongoing spiral of signing ever better players with ever more money be brought to an end? When the clubs forgot to innovate, and other clubs in other countries did. Spurred on by better nutrition and better tactics, England’s ‘Premier League’ overhauled ‘Serie A’ as the richest and best league by the mid-2000s. The cycle has repeated itself, and the Premier League is now on the downward curve familiar to most Italian football fans.

Spain’s ‘La Liga’, with slightly less money, has already taken over from the Premier League as the leading league in terms of continental performance; Germany’s ‘Bundesliga’ will almost certainly also do so and move into second place this season, despite vastly fewer resources at its clubs’ disposal. How can this happen? Again, it is to do with innovation, and specifically the motivation to innovate.

When Italy’s clubs were the richest in Europe and attracted the world’s best players, they saw no further need to innovate. Nutritionally and tactically they fell behind teams from comparably sized countries. Initially, they were able to stay ahead through pure spending, but soon that did not work either. The key point is this: not only did teams from England, Spain and Germany have reason to innovate, teams from Italy didn’t – they (the players, the agents, the owners etc) were guaranteed big bucks anyway. Guaranteed, that is, in the short term – but in the longer term, hamstrung by spending too much money on ageing players or ‘big names’ long past their sell-by date, Italy’s clubs began to collapse in on themselves amid scandal and corruption, and soon fell behind the other three big leagues. Now we find the precise same thing with the Premier League, whose clubs spent more than any other league’s this summer (excluding the madly exceptional ‘Clasico’ clubs in Spain), yet have mustered only five wins out of 16 in Europe’s senior competition. They are spending, but they have lost the motivation to innovate which is leaving them clearly behind their Continental rivals.

So it is with Government. In a recent interview with the Welsh Health Minister, a BBC correspondent spent the entire duration of the discussion talking solely in terms of the amount of money being spent on the Welsh NHS. There was absolutely no discussion about how that money was being spent, or if it could be spent better (or worse, for that matter). The way we talk about politics and government finance, it is as if ‘more spending’ automatically means ‘better service’. In fact, it can mean the precise opposite – if the ‘big spending’ removes the motivation to innovate.

Northern Ireland, unfortunately, is a classic example. Faced with rises in Health spending which are below the requirement to keep up in percentage terms with increasing demand, the Service’s first act was to close an Multiple Sclerosis respite unit. This was a callous and outrageous act, from a Service which has, per capita, 42% more administrators than is the case in England. The first act should have been to cut the administrators, not the vital services.

Unfortunately, Northern Ireland’s public service has, by and large, lost the motivation to innovate, guaranteed (as it has been since 1998) ever increasing resources simply to keep doing the same thing. As a result, with some exceptions (e.g. in primary education), management techniques, government structures, bureaucratic systems and everything else are now decades out of date. Other countries are able to achieve the same or more with far fewer resources, because they have improved management, streamlined structures and reformed systems.

That we have a bloated political culture with no motivation to innovate either doesn’t help, of course. The latest farce was the failure to agree to put through the Housing & Regeneration Bill in time to transfer functions to local Councils when the new Councils come into being – a political mess which came about despite civil servants working hard to ensure the timescale was met. We also have the nonsense of moving a Department to Ballykelly for no particular reason; the failure to deliver a proper Education & Skills Authority; the outrageous waste of millions on a road (the A5) which was never, ever going to be built; as well as the planning nonsense at the Maze and Sprucefield. A proper, evidence-based set of priorities both at political and governance level with learning and information shared properly across all departments – which would have required innovative methods of collecting, assessing and distributing that evidence – would have seen none of these shambles taking place.

We are not alone. France and Italy offer two further examples of the classic ‘bloated bureaucracy’ unwilling to contemplate change because, for too long, money has been guaranteed regardless of the fact is has removed the vital motivation to innovate.

Public spending in Northern Ireland will now be reduced, fairly sharply. Again, a truly innovative public sector would already have prepared for this (and would already have innovated in anticipation of having to do more with less). In the short term, there will be outright cuts in services (which, note well, there absolutely wouldn’t need to be if there had been proper preparation for them) and these will have ghastly knock-on effects – not just on service users but on small businesses and even individual households.

We can only hope that, in the long term, cutbacks and reductions in the public sector will see some motivation to innovate appear within government, just as it did in those leagues with had to catch up with the Italians despite far more limited resources. Football fans, like the electorate, always just demand ‘more spending’ – and, like the electorate, they’re ignoring the fact that ‘more spending’ is no substitute for proper innovation and simply doing things better than the opposition within the resources you already have!

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