University failure is a case study in the need for governance reform

Common Weal has at times been almost alone in calling for major changes in the way Scotland's institutions are governed. This is strange since on multiple occasions our biggest national failures are failures rooted in poor governance practices. The report into the financial catastrophe at Dundee University is a case study of the problem.

The report into the failure was published yesterday and is damning. A University Principal with an "overbearing leadership style" who didn't like being questioned or people disagreeing with him; loose reallocation of resources on what were speculative or wrong-headed new initiatives which failed; lack of close financial management.

The senior team was constantly putting forward unrealistic income projections and failed to update forward budgets when evidence that these projections were unrealistic came to light. The Principal "tended to control the narrative to the court and elsewhere". No-one knew what was going on and simply trusted panglossian statements from the senior management team.

The overall conclusion is both damning and probably understates the extent to which this scandal was all-pervasive: “"The failure of the university's financial governance system was self-inflicted and experienced multiple times and at multiple levels … This led to a failure in identifying the worsening situation and not responding early enough."

What is wrong in this analysis is only that it appears to make these failures a function of a single individual and not a reflection on the fundamental problem with how we allow our public institutions to be governed. This reflects the ongoing belief that 'risk-taking, private sector-like small management teams moving fast and nimbly' is a good idea.

In fact this would be risky in a small business never mind a large national institution. What it translates to in plain language is 'a small group of people who believe themselves to be brilliant and to have a vision no-one else does working with a pliant group of overseers who think the same thing and don't ask questions, empowered to take big risks with public money and avoid scrutiny or transparency while aping what they think is done in large corporations'.

This has been a problem at almost every level of public life. From the rebalancing of power away from elected members towards chief executive's offices in local government to quangos ensuring the provision of ferries with no-one from island communities on the board and half of the board having never been at one of the ferry ports they govern, this is universal.

It is a result of the ideological belief in neoliberal free market economics that was so pervasive that senior figures in the public realm started to believe that they too should have the large rewards, low supervision, weak transparency and right to do what they want, when they want that marks behaviour in the worst of the private sector.

Common Weal has warned over and over precisely that the flow of information to the overseers of institutions like universities is wholly controlled by the management team they are meant to oversee, and indeed are generally recommended for post by that same management team, meaning they select and control the information available to their own overseers.

This failure at Dundee University is like watching our predictions come true, with the official report more or less echoing our decade of warnings line by line.

Public institutions are not, should never be, 'move fast and break things' institutions. They are multi-generational bodies which must continue to exist beyond any one regime. Success in public institutions is not that they 'grow' but that they are passed on to the next era in a strong, healthy state, fit for purpose now and in the future.

To achieve that these institutions must be governed by people who are vested in long term wellbeing of the institution and not its short term financial growth. That means they must be governed not by 'self-appointed brilliant leaders' but by the community which makes up the institution’s long-term users and partners.

Since devolution, almost every institution in Scotland has moved from collegiate governance to small teams of all-powerful managers and quango appointees running empires however they want. We can see the consequences everywhere. Public institutions need long-term, collegiate and democratic governance or these failures will continue indefinitely.