24 June 2020

Three cheers for the failed NHS coronavirus app


With the failure of the NHSX coronavirus tracking app come the usual calls for heads to roll.

Instead, we should celebrate this admission of error, laud the screeching u-turn and the waste of £11.4 million and, as is traditional, promise that lessons will be learned. Then fire people.

In the absence of markets, the most difficult problem is to get people to stop doing something, especially when that thing has already cost taxpayers an ungodly sum of money. Markets, of course, have an inbuilt exctinction mechanism – when the money coming in is less than that going out, the business fails.

The lack of such a mechanism is one of the biggest problems with government projects of all stripes. That’s why failure is normally greeted with a demand for yet more resources to spiral down the public sector plughole, where what we need is exactly the opposite.

When mistakes are made in most walks of life, the best reaction is to stop and try something else. Making mistakes in the first place is no great shame – indeed, mistakes are actually desirable, as it’s only through trial and error that we find out what works well and what doesn’t.

So, the NHS app has not worked and the project has been canned. Excellent. The mistake has been stopped – even better. Now the question should be how to encourage this behaviour in future?

After all, it’s been a decade since it was worked out that HS2 is a horrendous waste of money. Why is that project still operating? It most certainly wouldn’t in any automatic extinction system like a free market. California is having exactly the same problem with its high speed rail project.   

One way to do this is to create a market where failure is possible. One advantage of – perhaps the point – of charter schools, free schools and academies, is that they are freed to make mistakes and also to go bust. That some do is a hallmark of a system that is working properly, allowing experimentation and, with it, some failures. It is also the point of outsourcing of the building, even the running, of varied government projects. When Carillion, or some other such outsourcing company, goes bust then that market clearout system is working – in a manner that direct management through bureaucracy would not.

Quite how to implement this is difficult. Of course, some things are so ludicrously silly – the Swansea Bay Tidal Lagoon say – that even politicians won’t support it. It might be worth taking a leaf out of the Swedes’ book here. When it turned out that no one wanted to buy Saab, the government shrugged, insisted that if no one wanted it then, by definition, it had no value so what does it matter if it closes?

Error is a vital part of figuring out how the world works. Markets have their own built-in method of displaying what is an error, while government and bureaucracy does not. So, let us celebrate that error and more importantly its recognition. For only by congratulating them on stopping will they be encouraged to do so again. After all, don’t forget, a decade back they spent 1,000 times as much, over £11 billion, on an NHS IT scheme and gained nothing, not even one line of code. We’d be happier and richer if they’d been willing to admit error a little earlier. 

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Tim Worstall works for the Continental Telegraph and the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.