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November 16, 2002

The Lowdown: Never mind the Baroness, here's the auditor

From: Independent, UK
Nov. 16, 2002

James Strachan, head of the Audit Commission, is a profoundly deaf ex-banker. So why is his private life all anyone can talk about?
By Heather Tomlinson
17 November 2002

An audit of James Strachan's colourful career shows that he has crammed several fascinating jobs into a short period. Any of them would be a highlight on most people's CVs. First an investment banker, he was then a writer and photographer, and later a charity executive.

And now, at the age of 49, he has become the new chairman of the Audit Commission, the body that comments on the efficiency and wisdom of public spending. It scrutinises the finances of health services, the criminal justice system and local authorities around the UK. And it has projected him into the limelight, not least because he is the partner of Baroness Blackstone, the Culture minister.

Strachan honed his financial skills as a credit risk analyst at Chase Manhattan bank, and soared through the ranks of the profession to become, at the age of 32, the managing director of the London office of Merrill Lynch.

But he chose to turn his back on the City in the late 1980s, becoming a freelance travel writer and photographer. Then in 1997 he was appointed chief executive of the Royal National Institute for the Deaf, a post he has just stepped down from. He also serves on the board of Ofgem, the energy regulator.

It would be an impressive CV for someone with the full complement of physical capabilities. For someone who has been profoundly deaf since birth, it is all the more remarkable.

In the 1980s, the stereotypical investment bank was prejudiced and unsympathetic to those from any minority group, including the disabled. But this was not Strachan's experience: "Merrill Lynch itself, and my colleagues there, were very supportive," he says.

However, the graduate in economics and English found that other, unnamed City workers had a more blinkered attitude. "Elsewhere, I will never forget lip-reading someone across a room saying: 'That guy James, he said he went to Cambridge. Surely not, he's deaf isn't he?'"

In person, Strachan still exhibits a touch of the City slicker in his polished demeanour and good-looking charm. People who meet him are astonished at his ability to lip-read. He also speaks without any impediment. Both abilities have come from the "superb speech therapy" he received as a child, intended to stop him being bullied at boarding school.

Strachan is not afraid of controversy. His first taste was on the board of the Community Fund, the body that distributes Lottery money and was recently vilified in the pages of the Daily Mail for making a donation to a charity that helps asylum-seekers.

The Conservatives are up in arms about his appointment to the Audit Commission, implying that it has some connection to his three-year relationship with Tessa Blackstone. They point out that, as companies are supposed to be independent from their auditors to avoid Enron-style accounting scandals, so the people who scrutinise the Government's books are supposed to be dispassionate observers.

But Theresa May, the Conservative chairwoman, wasn't too concerned about his partisanship when she posed with Strachan to promote an RNID campaign for a recent issue of the charity's newsletter. And to underline its political neutrality, the publication also slammed the limited access deaf people have to the arts – an issue that falls under the responsibility of Strachan's partner.

Strachan gets agitated when asked about the issue. "I have a record of being highly independent. I have never been active in party politics," he states. "I am absolutely determined to protect the Audit Commission's record of staunch independence. This will be clearly shown in our work and in our actions."

The role of the Commission, along with that of its peer, the National Audit Office – which reports on government departments – is set to become even more important in the coming months. It will be monitoring the large increases in public spending and making sure taxpayers' money is being spent wisely. It will also be involved in the monitoring of performance targets and is soon to publish a "league table" of local authorities, ranking them according to the level of service they provide.

The Commission's work will also be integral to the ongoing debate on the role of private companies in public services. The Government has continued the Conservative policy of getting the private sector to improve services through the controversial Private Finance Initiative and similar schemes.

Although the Commission will often praise a council's decision to introduce PFI, it can also be a stern critic. Recently it described a PFI for managing waste in East Sussex as "excellent", but noted that the County Council's spending on refuse disposal was among the highest in the south of England, and its level of recycling among the lowest.

This scrutiny of PFI is to be stepped up. Next month the Commission is expected to release a report on PFI schemes already introduced in schools and make recommendations on how they should operate in the future.

Strachan's personal views are uncontroversial. It is up to the electorate, he says, to decide whether PFI is desirable in principle. In the meantime, its efficiency can be judged on a case-by-case basis. "There are fantastic public-sector companies and absolutely appalling private-sector companies," he says. "No one should be under any illusion that the private sector is just good."

And he sees the services of the Audit Commission as essential to the future of PFI. "The whole PFI debate needs more light, less heat. There is an urgent need, in my view, for more robust, independent, evidence-based analysis of the way in which deals have been struck to date."

Strachan wants to change the Commission in several ways, first by making its findings more transparent at a local level: "There needs to be much more thought given to making information more accessible to intelligent laymen who want to take part in the debate on how to improve and nurture local democracy."

He also wants to apply the Commission's tough standards to itself, and make sure it is providing value for money.

Finally, he wants to make it a priority that the public services are not deluged with audits and inspections. "I come with a deregulatory frame of mind," he says. "I've a strong sense that we have got to a point where, in too many parts of public service, people are just drowning in performance indicators – and see that as end in itself. Once we start doing that, we start losing the plot."

© 2002 Independent Digital (UK) Ltd