To apply business practices to government is to court disaster

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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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