Sunday, May 24

How can we fix UOHS?



How can we fix UOHS?


"The CMA will take into account how markets affect not just average members of society but also the very poorest - on who, for instance, energy bills might have a disproportionate effect." Alex Chisholm, CEO, UK Competition and Markets Authority


"Regulators are like drains. If you notice them, there's a problem" David Currie, chairman, UK Competition and Markets Authority.


Well we certainly notice UOHS. Barely a week goes by before they are back in the news for one reason or another. For example Vodafone are dismayed that O2 and T-Mobile have agreed with each other to share infrastructure costs and exclude Vodafone. This is a matter of crucial importance to both the country's economy and a large number of citizens, including me. Nobody told me, when we accepted Vodafone's offer to switch from O2, that the price included significantly inferior coverage. It will now cost Vodafone far more than the other two to make any technical improvements, and they may well instead decide to leave the market. You'd think that this would put their complaint at the very top of Mr Rafaj's in-tray. Far from it, in fact. Vodafone are so frustrated with UOHS failure to make any progress that they have turned to Brussels for redress.


How on earth can it be that UOHS fails to tackle such an issue, while finding plenty of time to putting its best and brightest minds to work to seek out a misplaced Excel spreadsheet in an advertising agency's tender bid?


If we compare the UOHS structure with how the relevant UK office is organised, it is possible to conclude two possible reasons. One is that the world has changed rapidly since the mid 90s and no one has noticed the implications for UOHS. The relevant authorities in the UK have undergone three major structural changes in that time, the most recent enacted last year, after a public consultation which lasted 2.5 years. At the very least, that is evidence that a similar major public review of UOHS is necessary, because this drain is smelling quite bad after many years of neglect; and it would be sensible for such a review to seek advice from a country such as the UK, whose markets are considered generally healthy against EU benchmarks. I'm sure that EU funds would be available to pay for the costs of engaging relevant UK experts in such a review.


But there is a second possible conclusion to be drawn from the UK. UOHS proudly tell us that "The Office also supervises procedures of awarding public procurement and concessions, thus ensuring better transparency in public spending". No such role was described in the UK, in any of incarnations of the relevant Offices since the 90s. They do not take on such work, and this leaves them free to take on the big market issues. Vodafone would for sure have got somewhere had they made their complaint in the UK. Of course one reason for this is that in the UK tenders involving public funds are generally conducted fairly and competently, and the details are freely available. However the UK does have the National Audit Office , which, as its name implies, audits the deployment of public money. Perhaps something similar should be set up here, which concentrates solely on the correct transparent deployment of public funds.


Inspection of the make up of the senior team in the UK CMA brings us back to the issue I raised in the previous post. The biographies are publicly available, as was Mr Currie's salary, which I was not even searching for. Indeed there are plenty of lawyers( or people with a law degree or background) in the team but there is plenty of business experience to be found in their cvs too. In all cases they have experience of dealing with major competition issues before joining the authority. Now of course, Britain is a place where the opportunities to get that experience are much greater. But I would argue that this increases the strength of the argument for UOHS to lose a lot of its lawyers and bring in more people with proven business experience, as well as at least one director whose specific remit is to champion the cause of the ordinary citizen and consumer.


Of course, some will argue that the main issue is competition law, so you have to have lawyers. I feel compelled to write here that there is a big problem in the Czech Republic with lawyers in positions where they lead businesses or otherwise influence them; often they have no previous experience of ownership or management of significant businesses, before they are put in charge of a business. Take for example Robert Wolf, the director of ČKD Praha DIZ, a company involved in the laughable fiasco that is Tunel Blanka. Study his cv (summarized in the article) and ask yourself how his previous positions prepared and qualified him for the role he has now.  Maybe this is a naïve question but why would you appoint a lawyer to run an engineering company ?


If you have got this far with all three blogposts, then I thank you. I felt it necessary to describe my concerns in great detail, because I don't think many active citizens think much about UOHS. But I did also want to try not just to complain but to suggest how to make it better. I expect many will find my proposals naïve, perhaps simplistic. But we need to have this debate. We certainly cannot accept that Mr Rafaj will just be re-appointed for another six years. But the issue goes far beyond one politically - driven appointment . These are my recommendations


1.    Carry out a major review of the entire structure of the office, with reference to "best practice" in other EU countries.

2.    Remove responsibility for reviewin public tenders from UOHS and set up a separate National Audit Office for this purpose

3.    Make sure UOHS is staffed with people with significant business experience from big respected companies. Aim to reduce the "lawyer culture" of UOHS.


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