As the FT has noted this morning:
Whitehall needs to become more business-like to improve its less than rigorous financial management, one of the nation's leading corporate figures will argue this week in a bracing government-commissioned review.
In a report to be published on Thursday, assessing the role of non-executive directors — a group of private sector figures who sit on the boards of departments — Lord Browne, former chief executive of BP, is to argue that Whitehall still lacks rigorous financial management.
I think this ludicrous.
Of course strong financial management and buying efficiency is vital in government: it baffles me why some appalling practices still exist, especially on procurement. But to suggest business has got this right and government has not is absurd.
Let me just remind you how badly business got things wrong pre 2008. If it had not we would not have seen the whole financial sector try to collapse simultaneously.
And let's also note how badly wrong BP has got much of its commercial activity of late.
The business model has a role, of course. But to pretend it is either all knowing or produces right results is just wrong. Far from it: the risk of failure is an acknowledged part of the system and risk is taken knowing of that possibility.
Failure of government is not a possibility of we want life as we know it to continue. As a result completely different systems are needed for government that are required by business. That should be galringly obvious.
In that case to apply business practices to government is to court disaster. I'd rather we did not do that.
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Yet further evidence of the colonization – like some invading virus – of the governmental process, not only by business ideas, but by unelected and totally unaccountable business individuals. And like other colonizations, aimed, no doubt, at eventual take-over.
Two points in support of your post, Richard: first, Non-execs have a less than lowing track record, having been little more than a fig-leaf over the rampant greed of remuneration committees. Secondly, I posted a while ago on Larry Eliot’s attack on the importation of “business efficiency” into academia, when he said ity was business that needed to learn from universities.
Alas, Thatcherite “business” dogma corrupted and shackled our university system, and now Cameronian idiocy looks set to pull off the same trick over governance, when what is needed is a re-instatement of a government machine imbued with Northcote values and methods.
Again, I could weep!
Sorry for typo – should be “glowing”, not “lowing”. Also, the Larry Elliot article was way back in 1982, showing how long-standing is this process of invasion and take-over.
Lowing is good 🙂
On your other point this is nothing new, as you say. This type of thinking started with Thatcher, as you say. Either it is another bit of nonsense which cannot be done (like finding non-existent benefit fraud with initiatives and crack downs time after time none of which find the leprachaun’s horde: or the deed is done and that is what has ruined our public service. I favour the latter conclusion.
Fact is british business has been poor since the end of the war with low productivity and a demand for high returns which hampered investment. British public service, on the other hand, was generally quite good post Northcote Trevelyan. Why we decided that the private sector had anything to teach in those circumstances is truly baffling. But then this is not about evidence or about logic, is it?
The unfortunate thing is, Richard, that ever since Blair invited Lord Browne into government (in various advisory roles) following his resignation from BP, it’s been the case that pretty much anything he says gets done (e.g. the review of higher education). Strange really, given his questionable success while in charge of BP (see Tom Bower’s work on this). But there you have it really, pretty much any business person – even those whose record is questionable – is regarded as being far superior in terms of their skills, expertise, ideas and values, than anyone with a background in public service.
Lets not also forget that many, many, of the projects and programmes that have been devised to control public spending have actually been concocted by consultants, usually from the major consultancy firms (i.e. PWC, etc). Very few have ever delivered what they promised. That doesn’t get much reported, of course. And yet politicians just keep fawning all over these “leaders” and “experts” as we head ever further down the road to the corporate state.
No thanks Lord Browne. I don’t think you should be lecturing anyone on business practices after the most costly oil spillage in history! BP was nearly destroyed by ridiculous corner cutting….
The failures due to poor private sector advice need to be highlighted….so that the civil service don’t carry the can for everything that goes wrong and thus provide justification for “small government”
A “small government” would of course be too weak to stop the 0.1% fleecing the rest of us..
This raised its head in the wake of the West Coast franchise cock-up. Free-marketeers and advocates of private companies profiteering from public money saying that publicly unaccountable corporations such as Centrica & PWC should hold ever decreasingly publicly accountable civil service departments (due to increasing tensions between public interest and corporate interest) to account because publicly unaccountable corporations don’t like the decisions that ever decreasingly publicly accountable civil service departments make about them.
http://www.telegraph.co.uk/finance/comment/damianreece/9585356/West-Coast-fiasco-shows-our-civil-service-falls-at-the-first-hurdle.html#
As is the case with the banks and railways, people who think that ‘private money’ has a free market purity about it don’t realise that huge amounts of public money backs up the fact that private money doesn’t do the job.. The public still need to be fully informed about how much public money has been involved in propping up ‘private enterprise’ over the last 35 years.
I learned this week that PWC is “training” tax inspectors. I wonder how much that costs and why the wolves are teaching the game keepers their job. Shouldn’t that be the other way around?
Lord Browne was brought into government for a very specific ideological reason: he was and is an evangelist for the concept of free markets. Specifically, the concept of exposing the internal supply of goods and services in large organisations to market pressures, rather than running them by command-and-control. We refer to this as ‘The Internal Market’.
As an aside, it’s reassuring in this cynical age to hear that Lord Browne entered government because of his ideas and the ideological principles of senior politicians. It’s not, at all, the usual matter of him being rich, powerful, and generous to his friends.
Returning to my main point, the Internal Market was and is the foundation of the privatisation of the NHS. We do, of course, have reams of evidence that it was a glittering success when it was tried within BP.
…Don’t we?
I don’t have any evidence. BP will find you any number of ambitious and articulate managers who’ll praise Internal Market, and Browne; but it never quite rings true. It only seems tp be those who were service providers who ‘won’ who’ll speak in praise of it, and you can never quite get them to meet your gaze; others fall silent.