“The reduction in spare capacity is a management imperative imposed in order to survive the regular scrutiny of analysts and auditors. Increasingly this applies to the public sector and utilities, too. For instance, the stocks of oxygen bottles, bandages, spare beds, and spare nursing capacity are being run down as hospitals come under pressure to reduce their tied-up working capital and become “lean and mean.” The corporatization of public assets and utilities has seen staffing and resources treated as commercial considerations. The result is that spare capacity and stocks, rather than being valued as assets, are valued as liabilities. The implication is that increasingly all parts of the system are less able to withstand shocks or respond to unexpected demand or failures in the supply chain. A pandemic that required more hospital beds would quickly overwhelm capacity and the supply of drugs in most societies.”
Goldin, Ian and Mike Mariathasan The Butterfly Defect Princeton University Press, 2014 Kindle Edition. [location 2061] NB This was written six years ago
Comment: The financial model that Lansley introduced during the early years of the Age of Austerity was uncritically lifted from MBA courses. There the focus is on just-in-time manufacturing with ‘lean’ staffing ratios. Deleting redundancy means if a system runs hot i.e. over-capacity, it will collapse. Toyota, where this originated, suffered financial penalties when their supply chain faltered. If the NHS falters the consequence isn’t lost production it’s lethal.