Episode 34: Why do regulators get blamed? And what can they do about it?

Are regulators lightning rods for blame? This month's podcast talks to Matthew Flinders, a professor of politics at the University of Sheffield, and former regulator CEO Martin Stanley about the way politicians sometimes deflect criticism by blaming regulators. They discuss how easy it is for regulators to be blamed, whether by politicians, the media, or those they regulate, and how difficult it can be for regulatory leaders to deal with blame, perhaps especially if the regulatory leader has come from outside the political world. The threat of blame can be pernicious and, at worst, influence regulatory decisions and compromise independence, as well as put off good people from working in regulation or taking up senior roles. The speakers on the podcast discuss solutions - including having good, trusting relationships with ministers and civil servants, as well as being able to tell a clear, persuasive narrative to the media, the public, and opposition politicians about the regulator's work. Support networks are important too, including those set up by the Institute of Regulation to help Chairs, CEOs and regulatory staff to navigate these tricky areas and share advice and good practice. Finally, the speakers advise that regulators sometimes need to stand their ground when others blame them wrongly. And that's why good relationships with Whitehall are necessary. Regulators may be able to stand their ground with Ministers in private. But it's never good for a regulator, if blamed by a politician, simply to blame them back in public. You can listen to the podcast here.

Keywords: Regulators, blame, accountability, regulatory leadership, public trust, support networks, Institute of Regulation, regulation challenges

Transcript

02:08.66
Marcial
Welcome to the regulation podcast from the Institute of Regulation. My name is Marciel Boo, chair of the Institute and regulator myself. This month's podcast is about blame and particularly about how and why regulators get blamed, whether unfairly or not, and what regulators can do to mitigate the risk of being blamed or to respond appropriately when blame comes their way. And to help us answer this question, I'm delighted to welcome an expert political scientist and an experienced regulator.

02:41.69
Marcial
Matthew Flinders is Professor of Politics and the Founding Director of the Sir Bernard Crick Centre at the University of Sheffield. He's also Vice President of the Political Studies Association and Chair of the University's Policy Engagement Network. Matthew has authored or edited 14 books and over 200 articles on topics ranging from parliamentary scrutiny of the executive to the politics of patronage, as well as on blame-giving and blame-seeking behaviour by politicians.

03:11.03
Marcial
Welcome, Matthew.

03:12.47
Matt Flinders
Yep, great to be here.

03:14.04
Marcial
Thanks very much. And also with us is Martin Stanley. Now retired, Martin was the director of what's now the Better Regulation Executive and then chief executive of the Postal Regulator, now part of Ofcom, and the Competition Commission, now part of the Competition and Markets Authority. So in addition to his widely read book, How to Be a Civil Servant, Martin no doubt has his own experience of blame being thrown at him in his regulatory roles. Welcome, Martin.

03:41.04
Martin
Thank you.

03:42.36
Marcial
Good. Right. Introduction's over. Now, thanks again. Matthew, I'll start with you. Help us, first of all, with a theory. Last year, you edited a book on the politics and governance of blame. And before we move specifically to the role of regulators in this, can you summarise why blame as a concept is important in political theory?

04:03.29
Matt Flinders
Yeah, blame matters because it comes with a lot of negative associations. It's linked with guilt, shame, culpability, um even sacrificial responsibility.

04:14.58
Matt Flinders
And it matters because we live in a society which is increasingly... ah Low trust, high blame. And that matters massively for politicians. It matters for public servants. And often it means that it's regulators that exist in the grey zone in between politics and public service and will often become lightning rods for blame.

04:39.06
Marcial
Lightning rods for blame. um I think that was going to start resonating immediately with with regulators.

04:42.96
Martin
Thank you.

04:43.82
Marcial
So so ah before we move move to you, Martin, to think about this in the context of regulators, Matthew, just give us some examples of the way that ah politicians might interact with blame and and and who they blame or how they avoid blame.

05:01.66
Matt Flinders
Well, politicians are well known for adopting a whole range of blame avoidance strategies. Some of them might be institutional by creating arms length bodies. Some of them might be policy based by seeking to limit their own levels of discretion.

05:18.20
Matt Flinders
Some of them might be more interesting and overlapping in a sense of discursive in that they try to narrate a story which puts certain issues beyond the direct responsibility of politicians. And in many ways, what's interesting about the whole topic, even when it comes to regulators, is that blame is a contested dimension of political life. It's not often a clear fact, but it's almost part of the battleground. There's very little credit claiming goes on, but a lot of blame games and the distribution of blame. And it's really important to know that also blaming comes with risks.

05:57.94
Matt Flinders
And it does sometimes, I'm sure we'll talk about this, it can bounce back on ministers, regulators and other blame recipients are not passive actors.

06:10.16
Marcial
Goodness. Well, there's a lot in what you've just said. And we're talking in the week after the budget, where the OBR um put out some information, obviously, about the budget and the chances of responding to it. So, you know, this is ah this is this contested space that you talk about with Blame is very live as we speak.

06:29.78
Marcial
um So you mentioned in that um about institutions, arm's length bodies, like regulators. So, so um um Martin, coming to you, um we've heard already about some of this context, about institutions being blamed, the way the politicians want to limit their discretion, narrate stories, to tell stories um that help them to avoid blame. So in in your in your context, Martin, um having been a senior regulator and a senior civil servant, observing politics and public administration, writing about it,

07:05.85
Marcial
What have you heard in what Matthew just said that resonates with your experience?

07:09.75
Martin
Yes. Well, there was one sentence in particular that resonated very, very strongly when ah Matt said that blame doesn't necessarily happen as a fact.

07:21.41
Martin
It's, I think you said something about it being part of the background. And i I have found it quite difficult preparing for this podcast ah to think of very overt examples of ministers just turning on regulators.

07:37.11
Martin
But there's absolutely no doubt that regulators are very conscious of the need to um appear sensible to politicians.

07:50.62
Martin
And they're very conscious of what can go wrong if politicians don't like what the regulator is doing. And politicians can be very powerful sort of behind the scenes. They they control future appointments, ah they control budgets, um and they can make their feelings known ah through the media.

08:12.76
Martin
and that and And then you and you get, if you like, ah ah attacks on behalf of politicians through the newspapers and through through other media. So yes, the the blame game is is is there, but it's, I think, quite often quite hidden.

08:31.83
Marcial
Yes. So, Matt, coming back to you, um it sounds a little bit like there are two different games being played here. You know, there's the political game where there's a narrative that can be set out in public. But regulators, um basing on facts, being credible, sensible, all of these kinds of things, Martin, that you said, are not able to play the same game in the same way.

08:54.04
Marcial
Is that the case?

08:55.38
Matt Flinders
I mean, in fact, what happens is there are games within games within games going on. And one of the challenges for regulators, particularly those that are appointed from beyond public life and maybe come in from ah a business background, is that that can be quite shocking that you need a lot of tacit knowledge and understanding of the cultural dynamics of politics. to know what your role is as a regulator and where the boundaries are. What's really interesting about what Martin just said is this notion of of regulators are often held up and framed publicly as independent.

09:31.16
Matt Flinders
Now, one thing most people with experience in a regulator will know, that they're not fully independent. But as Martin just said, ministers have a large number of indirect control mechanisms over those regulatory bodies. But when things go wrong, ministers will quickly step back and hide behind this blame buffer of independents.

09:56.76
Marcial
Yes. So um it's both ah independence and accountability.

09:57.60
Martin
Yes.

10:01.31
Marcial
Obviously, regulators need to be accountable politically. um But ah at times you're saying that it's convenient for the politician to say that the regulator is independent so that they can take responsibility for a decision that's not liked.

10:16.22
Matt Flinders
Of course, I mean, it what's really interesting is there is a massive difference very often between good politics and good policy. And the benefit of regulators is that sometimes they allow good policy to triumph, where politicians would have been very hard pushed to do something because of the often irrational incentives framework within which they exist. Also, it's really interesting think about regulators coming into that role,

10:42.23
Matt Flinders
You've to remember, most ministers haven't very often have very little knowledge about their specialist area. So regulators often bring a huge amount of vital expertise to political life.

10:55.29
Matt Flinders
And that is great for ministers, but it can often be seen sometimes, I think, as quite threatening for ministers that the information asymmetries really are weighted towards the regulator rather than particularly the new minister.

11:09.78
Marcial
Yeah, Martin.

11:11.27
Martin
I want to pick up one thing that Matt said and and basically agree with it, um that there's ah a big difference between regulators who have a background in Whitehall, no politics and no politicians, and regulators that come in from outside.

11:26.01
Martin
As Matt says, that the the latter foreshadowing. often find it very difficult to navigate this space. The former, fear, um tend to ah bow too quickly to what they think might be political imperatives.

11:40.63
Martin
and ah was sort One because of classic example, I think, would be a good time ago now, but before the 2008 financial crisis, um ministers and indeed opposite opposition politicians went on at some length about how they wanted light-touch financial regulation.

11:59.27
Martin
And the regulator responded by saying, yep, we're dead keen on light touch, we're as light touch as we possibly can be. And it was ah only a matter of weeks or months later that the whole the whole thing collapsed. So um political influence, political the the threat of political blame has a sort of secondary effect, not a direct effect, a secondary effect. And it really can be quite pernicious in the regulators trying to think too hard about what politicians want rather than making the right decisions.

12:31.64
Marcial
Yes, and this is um this is very interesting territory because um the the distinction that you draw that you drew earlier there, Matt, between what's good policy and what's good politics, I think is something that plays out in different regulatory domains. And and Martin, you've just given one example of that. So um obviously trying to avoid blame by saying, going with the wind of the politics ah may not be good policy. And and then obviously, if you if you stick to your guns on the policy, then you may incur the wrath, the blame of the of the politician. So it's the kind of lose-lose, isn't it, Matt?

13:07.67
Matt Flinders
Well, it is a, it is a, uh, in a sense, we don't want to be too pessimistic here. I mean, I think what it actually focuses attention on is the one key dimension of regulatory life at the top is about relationships.

13:21.69
Matt Flinders
And if you don't have a high trust, low blame, open relationship with your minister as a regulator, then the the times are going to be fairly tough.

13:33.67
Matt Flinders
So that is the real apex relationship is between the minister and the regulator. And can that regulator, when they need to, he or she, get their minister on the phone or across the desk for a quick, open, honest chat so that the no surprises rule holds fast?

13:51.06
Marcial
Yeah, that's absolutely essential. And I can see, Martin, you're agreeing with that. um it's It's about personal relationships um between people at the top of the organisation. So, um Martin, you will have seen all of that stuff in practice yourself, wouldn't you?

14:07.48
Martin
Absolutely. um it's The no surprises approach is, is and but we all we all talk about and it, and it can be very effective.

14:22.04
Martin
It can backfire, of course, if you if you try too hard to um tell politicians well in advance of what you're minded to do and they don't like it, you can you can get pushback.

14:33.94
Martin
um And we might I think we might return later to... um ah how to avoid blame when you're when you're approaching a particular decision. But in general, yes, ah you need to have good, open, ah equal relationships between the senior regulators and senior officials and ministers. i would i would I would throw officials in there as well because ministers' time is fairly limited. And if the officials are broadly content or understand what you're doing, that takes you a long way.

15:06.36
Marcial
Okay, so Matt, back to you.

15:08.98
Matt Flinders
Yeah, so one of the interesting things there, you know, Martin, and again, absolutely right. We've not set this up as a double act, but it's ah emerging in this way, is that one of the great challenges here is often churn, that regulators will build up a good relationship with a senior, either official team or a ministerial team, And then before they know it, those people have moved on and you've got to start all over again explaining exactly what you do, why you do it, how you do it, and what the pros and cons are of different changes to that regulatory regime.

15:14.90
Martin
yeah

15:37.24
Matt Flinders
So churn is a real challenge. And of course, churn really matters if the minister changes with a change in government. Because when problems often do occur, it's when ministers inherit a ah a set of senior regulators, none of whom they actually appointed, and are fearful that in some small degree, or maybe strong degree, they are the appointees of the previous government.

16:06.17
Matt Flinders
Now, that might be more of a suspicion and part of the paranoia of modern politics. But I think that's when some regulators can get left somewhat in the lurch, is when they were appointed by the previous government and are now expected to move on under a completely different regime.

16:23.03
Marcial
Okay, this is fantastic. We've got a lot of stuff here. I'm just going to take stock for a moment. We've got the importance of relationships, um particularly between the principal of the regulator and the minister, but also with the civil servants. There are sponsor teams in most departments who regulators need to have contact with. that Those relationships are important.

16:42.44
Marcial
Politics. You mentioned there, Matt, rightly that there changes of administration. Regulators are unlikely. Other public bodies in some in regards are have a public profile. um And those people who are um at the top of the regulator, whether they're the chairs or the chief executive, are sometimes, um you know, they have to defend decisions and and they can be the lightning rod, I think, as was, you know, that metaphor was used ah earlier on. So roles are really important um and relationships are really important. so So Martin, coming back to you, um you mentioned the financial issue 20 years ago, but there are lots of other examples, unfortunately, where regulators are blamed and their leaders have had to take the heat. Sometimes ah people have had to quit um you know without getting into the details of individual cases. and Do you think that's just part of the job of being a regulator?

17:37.59
Martin
Yes, I so i suppose it it's it's a risk. A bit like a football manager, you know that if the results aren't good aren' good for a few games, and you're likely to be out, fairly or unfairly. so So it is a risk. and And to that extent, it's a very unfortunate risk because I think it'll put some – the more often it happens, the more likely you are to deter good people from becoming regulators.

18:03.80
Martin
um And, ah you know, that i I know you you don't particularly want to go into examples, but there have been two or three in recent years of the Ofqual chief executive who was forced to resign, ah the chairman of the CMA who was forced to resign.

18:23.32
Martin
ah They are then they're not good ah ah examples if you're thinking of becoming one of their successors.

18:32.66
Marcial
Well, um again, um this is something that we've already spoken about, about the the degree to which people come into these senior roles need to come in with their eyes open. And some of them will come in from an industry background, and maybe they won't understand some of the politics or some of the the issues that they'll need to to grapple with. matt Matt, from your point of view, what what are the kinds of things that um people need to bear in mind when they're coming into senior roles in regulators and thinking about blame?

19:01.88
Matt Flinders
Well, ah two things I think they need to understand. First of all, is that um they need to have some fairly strong understanding of the culture and the mindset of how ministers work. And they need to understand basics, difference between an MP and a minister. They need to understand what the House of Lords does. They need to have a pretty good level of political literacy and nows.

19:27.09
Matt Flinders
Now, um not whi wishing to be rude at all, um that isn't easy to develop unless you go looking for it, unless you've had some experience within the public sector.

19:36.93
Martin
Mm-hmm.

19:36.95
Matt Flinders
So one basic thing for anybody thinking of coming into a ah regulatory role is to make sure that they seek out expertise and they listen. The second thing, which we don't talk about enough, is there is a need for more information.

19:52.22
Matt Flinders
strategic scaffolding around regulators. I think regulators are often quite isolated. They work in their own organizations covering a sector. And what there hasn't been until really just the last few years is a structure of what you might, in a typical academic phrase, call mesh governance, which What is the structure that allows regulators to meet, learn, build up expertise, develop that tacit knowledge, know where to go to for professional and sometimes even personal support when things go wrong?

20:27.19
Matt Flinders
So I think one, it's the independent self-knowledge expertise, but also having that broader professional safety net structure to go to and to keep developing But at the end of the day, as Martin has said, there is something that's called the public service bargain, which I think really does go well towards the regulators. And that means, unfortunately, it's exactly like a football ah manager that if you take a big hot topic regulatory role,

20:58.39
Matt Flinders
I don't think you actually do get well paid, but the literature suggests that you get reasonably well paid on the basis that if something goes wrong, you're going to take the hit.

21:08.73
Matt Flinders
And to some extent, and I think, again, without being unduly negative, I think it's better to go into that role, understanding the need to to be strategically aware of playing the small p politics so that your minister understands that although sacking you might stave off tomorrow's headlines, it might not be good for him or her in the medium to long term.

21:34.84
Marcial
Good. Okay, well, we're moving into the territory now of what people can do to um help themselves um and to mitigate risk. You've mentioned already having that kind of mesh governance, I think you called it, the kind of support network, the Institute of Regulation is obviously one vehicle. to develop those kinds of peer to peer links between regulators to to provide support. Martin, coming back to you, what what other ways do would you recommend to senior regulators or indeed anybody who's going to be in a senior role in the future to help them deal with the blame?

22:07.77
Martin
Okay. um i i think answering that question and picking up what Matt said ah a moment ago, at least one of the senior regulators in a team has to be good with the media.

22:22.55
Martin
They don't have to be good at spinning, but they have to be able to explain clearly on the Today programme or to the major newspapers what they're doing and why.

22:38.11
Martin
may not go down well.

22:38.49
Marcial
So that's that's about narratives, as matt Matt said earlier on, telling the story.

22:40.74
Martin
it's ah It's about narrative. So they need to be able to get the narrative over.

22:44.66
Marcial
Yeah.

22:45.27
Martin
And in a typical regulator, there'll be a chair there'll be a chief executive, and one or other of those needs to be able to do that. Beyond that, um I think ah picking up very quickly what was said before, you have to have established in advance good relationships with the departments, not the ministers, but with the officials. um And it it helps ah a lot if again one of that team is from from the home department and can actually know the people um and there can be a a sort of two way trust.

23:21.69
Martin
And the second thing is you've got to be um good at actually talking to politicians ah as you announce a ah decision. um i remember when I was at the ah competition commission, we would take some quite major decisions affecting, let's say, supermarkets or the airports or whatever.

23:48.47
Martin
And what we really, really did not want to happen was the opposition to come charging in and saying, how can that stupid regulator make that stupid decision?

23:59.61
Martin
ah The department, happy or not with it, we'd done our best to explain it. But I made a point on the higher profile decisions of going to see the opposition spokesman and actually talking them through the decision. Now,

24:18.34
Martin
It's up to them then what they did with the information. But at least it cut away a lot of the... they They couldn't say, hopefully, that we were idiots. they could They could hopefully understand why we'd taken the decision, and they could argue ah more intelligently than otherwise um about why what why they welcomed it or not. So, yeah, don't forget the opposition. Don't forget the media.

24:45.91
Martin
And ah don't forget the department.

25:16.53
Martin
Yes. You've got to be careful, obviously, not to jump the gun and and provide information before it can be made public. But with with correct timing and making appointments in advance and so on, you can do a lot.

25:31.80
Matt Flinders
Sure.

25:37.68
Matt Flinders
Well, one thing just thinking there is, you know, there's a ah brilliant book ah by Gerald Kaufman called How to Be a Minister, which has been, I think, was published in the early 70s. But anybody wanting to have a a quick insight into really getting some of the challenges and tribulations of how ministers think, then that is a a brilliant book to read. I think some of the other interesting insights here, um I think,

26:03.20
Matt Flinders
Maintaining relationships with a broad range of stakeholders is a very good idea of the small p politics. And that may well sustain you if the government changes that you may well be known not to be a high level partisan appointment, but a sensible man or woman that any minister can get on with. um I think I'm a great fan also of ah mentorship.

26:27.32
Matt Flinders
And I wonder if there might be scope for more ah mentorship amongst regulators, particularly regulators, because we're talking about a massive ah population of different bodies here. And again, it's all about what are the professional and personal learning and support networks. And just having a mentor, which I don't mean a primary and a secondary, I mean like joint mentoring. Two people meet regularly, just have an open chat about their challenges in their role.

26:58.17
Matt Flinders
I think that could be hugely supportive, particularly when thinking about EDI dynamics, because different stresses will fall on female regulators in a way that it will not fall on male regulators. And we've not even touched on the P word here, which is the future of regulation and populism.

27:16.92
Matt Flinders
Because populism is absolutely raising fundamental questions about the future of regulation and the narrated story of elites and failure and the need to overthrow systems. And it's a really interesting thought. How is the regulatory architecture preparing for the perils of populism? If that wasn't too many P's.

28:26.81
Martin
ah to Not particularly. we've covered it fairly well. ah But in terms of dealing with other stakeholders like the companies that are affected by your decisions or the institutions affected by your decisions, again, yeah, lots of pre-preparation, lots of and networking to to in the absence of a better word. ah But if if necessary, be prepared to bite back. Be prepared to argue very openly when they are being stupid, which they sometimes are. you know The attacks can just be quite wrong.

28:53.82
Martin
And when they are totally wrong, when when they're they're putting out false information and false arguments, you've got to be prepared to say so.

29:10.39
Martin
Yeah. Yeah.

29:11.54
Matt Flinders
Well, there have been some ah very interesting examples of regulators engaging in what we would call blame boomerangs, where the minister has tried to deflect blame and the regulator said, not here, mate, not not so easy. you know um And usually that involves either the regulator saying, well, we're working within the minister's legal framework. So we, you know, don't blame us or, and I think this is a really important one, um our resources have been cut back massively. And if you want to deliver what you're saying, then we need the efficient resources to do it. I do think, though, the notion of biting back is very interesting and again goes to the politics. um You can bite back

29:53.09
Matt Flinders
politely, internally, hopefully informally with a minister over a cup of coffee to say, you need to understand the machinery of government and governance, which involves regulators. Because to be honest, most ministers haven't got a clue about the machinery of government beyond their office. They just expect it to happen. And then there is the bigger bite back, which is you go public Now, once you start fighting back in public, you usually the game is over. And again, it's just to make sure that regulators understand that, you know, if they go on the Today programme and bite back, and they might think they're being completely rational in a business world or in an academic world, that would be fine.

30:32.25
Matt Flinders
In the political world, It's all just finished in one quick phrase on the Today programme. So bite back internally, hard, evidence-based, and often what you want, and these are the best ministers, are ministers that are willing to learn and want to learn. um Some will, some won't. Thank you.

31:06.03
Matt Flinders
Thank you.

31:10.87
Martin
I think if we take a long-term perspective, it's just worth bearing in mind that a lot of regulators that were, as Matt mentioned, set up to be independent or were thought to be independent, how are these days really very closely intertwined with their departments?

31:28.28
Martin
i mean, Ofgem is very clearly now but you just an offshoot of of the Department of Energy. You could say the same about Departments of and of Environment and the Environment Agency, Ofsted and the Department of Education. I'm not saying it's a ah bad thing, But the relationship between those sorts of regulators and their departments are quite different to ah perhaps the that the pure relationships that we tend to tend tend to think of.

32:15.45
Matt Flinders
Yeah, I think Martin's right. One thing that's happened in recent years is at the arm in the arm-length relationship. ah Someone described it to me recently as being more like a finger now. than an arm.

32:25.62
Martin
yeah

32:26.78
Matt Flinders
And I think that does raise very important issues that nobody's really talking about, about what good governance means and how the regulatory state has changed. It raises issues about should a reformed government ever take over the number 10. So ah yes, I think fundamentally, there are big questions about the future regulation that need to get far more detailed coverage and discussion.