Strachan's success in several careers

ANY CONVERSATION with James Strachan, high-flying chairman of the Audit Commission, has an oddly flattering effect as he seems to hang on to every word you utter. In fact, he's struggling like mad to understand what the hell you are saying.

Strachan, 50, is almost totally deaf despite two discreet hearing aids. If he switches them off, he cannot hear his own voice.

Important phone calls are intercepted by an assistant, whom he lipreads. In board meetings or Press conferences, he often relies on technical aids. Nothing daunted, he assures you that deafness has actually given him an 'immense ability' to read people. It's a clue to his success that he thinks not so much of overcoming his disability as exploiting it.

'I don't think in terms of the negative,' he explained. 'I think of the positive. I'm pretty good at vacuum-cleaning a person quickly, watching body language. I'm very, very, very determined, and I'm sure most of that comes from the deafness.'

No one could doubt the willpower, or the ferocious workload, of a man who grew up with more than one disadvantage. He came from a broken home, without much money. His father left when he was six and his mother told him before he went up to Cambridge that he would have to work twice as hard as his friends because of his background. He has assiduously followed her advice to get where he is.

Leading the Audit Commission is one of Britain's biggest jobs. The Commission is among the most powerful of 100 or so watchdogs, employs 4,500 people and spends £200m a year analysing how nearly £120bn of public money is spent by local councils, courts, housing and the NHS.

It is also controversial. In his recent credo, Conservative Party leader Michael Howard said the country needed 'protection' from such quangos, and Gordon Keymer, leader of the Tories in local government, has spoken of its 'tentacles and power' spreading 'far and wide across public life'.

To them it is a tool of Labour Government, used to enforce, for instance, the Government's 'comprehensive performance assessment' of local councils, which produces an annual league table of performances. They fear the assessment will be extended to district councils - traditional Tory bastions.

Financial independence

STRACHAN has had several careers. After Cambridge, his wish was to have been a film-maker but by 32 he had become Merrill Lynch's youngest-ever managing director: a deliberate calculation, he says, to gain financial independence. Apparently, all his colleagues at Merrill and Chase Manhattan knew he was in banking only for the money - 'although you had to be careful because of the bonus you were planning on at the end of the year'.

Once comfortably off, he gave up the City to be a photojournalist (for the Sunday Times and the Financial Times), the next best thing to making films. He still receives a royalty cheque every month for his travel photography, and is tickled that the last payment was for a picture of a town clock in Prague that has become the cover of a maths textbook for Commonwealth countries.

He was drawn to the voluntary sector in the early 1990s 'as a way of giving something back - something more than just squeezing a spark out of a deal' - and became first a trustee of the Royal National Institute for the Deaf and then, in 1997, its chief executive.

In his five years in charge, he doubled its income, negotiated subtitling on TV programmes and brought down the price of digital hearing aids on the NHS from £2,000 to £55. 'I and my colleagues wrapped some very commercial skills in the velvet glove of the voluntary sector,' he said drily.

Soon he was sitting on the boards of energy regulator Ofgem and the Community Fund, distributor of National Lottery funds, as well as working as a Disability Rights Commissioner and trustee of Save the Children.

He had never thought he would be at the RNID for long. He says he got 'sucked, willingly' into charitable activities and then began to think there must be an opportunity to make a bigger impact improving public services. The Audit Commission has been his chance.

Like a predecessor there, Sir Howard Davies, he has tackled the job with reforming zeal, stressing that users of public services must be consulted more and 'objective methodology' tempered. But he has continued to attract suspicion ever since his appointment (on Bonfire Night, 2002), which was criticised as cronyism because of his personal relationship with the Labour peer Tessa Blackstone.

Yet he has proved to be his own man, opposing the Government, in particular, over its promotion of 'choice' in the National Health Service: he thinks the public is more concerned about efficiency than the ability to choose hospitals or GPs.

Bonfire in regulation

'BE clear: I am pro-choice, wherever possible,' he said. 'But choice requires surplus capacity, and you are talking about a system that is absolutely without surplus capacity. I think that, until very recently, the NHS has been destructively over-bureaucratised. The challenge now is not to have fewer managers, as some say, but to have fewer managers who act bureaucratically and more who are inspirational leaders.'

More surprising still have been his views on what a public spending watchdog should be. No doubt reflecting on the date of his appointment, he has called for 'a bonfire in regulation' and described some of his teams' inspections as 'frankly, a waste of public money'.

So here was an extraordinary thing: a leading regulator, reporting to a Labour Government obsessed by regulation and targeting, stating that Britain had far too much of it - and acting on it. He is now cutting 12% of the budget earmarked for inspecting local government, thereby saving £24m a year, and promising to shed 20% eventually.

He will accomplish it through 'strategic regulation' - focusing on public services with problems and leaving good performers alone. For too long, he says, the Commission's role was seen as providing 'almost an alibi of assurance' and, since the departure of Sir Andrew Foster as controller, he has overhauled management and controversially brought in as chief executive Steve Bundred, former chief executive of Camden Council and former ally of London Mayor Ken Livingstone.

'The Audit Commission is not the sole driver of change,' Strachan explained, 'but, frankly, if all our work is not creating any significant improvement in public services, then we should significantly close down our activities. I'm wholeheartedly in support of getting out, of deregulating. At Ofgem, we've got out of 80% of what we were regulating. I want there to be more debate about how to reduce regulation in this country. There are too many public service regulators.'

Strachan is preparing for the publication later this month of the Commission's analysis of how youth justice reforms have affected offending and re-offending. He has also just been made a non-executive director of Legal & General, which faces the challenge of making a profit selling the low-cost financial products demanded by the Government.

But he appears positively hungry for challenges. He says he used to sit down once a year with a glass of wine and an empty chair opposite and interrogate the progress of his career - a kind of self-audit. He is past that now, presumably having achieved his objectives. But when asked if he has finally found his ideal job, he replied: 'It's my ideal job right now - but no job is for ever.'