Hello, I am Chris Cook, a senior reporter at the FT. In another life, I was a public policy editor and spent countless hours trudging around think-tank breakfasts and party conference fringes. And I was struck to hear one common idea from those forums make a comeback. More on that below. If you have any thoughts you would like to share about this newsletter email me at chris.cook@ft.com.
Business does not have all the answers
Nigel Farage has said that a Reform UK-led government would install “top business leaders” in ministerial posts if it wins the next general election. Politicians love to turn to gimlet-eyed business moguls to make the state leaner.
To be fair, some previous efforts at this have worked. Sir Roy Griffiths, a Sainsbury’s executive, was an NHS adviser over a decade under the Thatcher and Major governments. But all too often, these things do not quite pan out. Elon Musk’s journey into public sector reform is a rather high-profile recent failure.
So it is worth pondering why examples like Sir Roy worked.
Knowing the domain
In Griffiths’ case, his first big contribution was a report written for the Thatcher government in 1983. He proposed a reform of how responsibility was allocated across the health service’s network of sites and services. It really mattered that he was a supermarket man. He had very useful domain knowledge about organising an extremely large system that had to consider where decisions should be made.
When you read critiques of the latest NHS plan, such as this acidic one by Andy Cowper of Health Policy Insight or the Institute for Government’s Sam Freedman here, you can perhaps see the need for another Sir Roy to map out a delivery path.
I would, however, be sceptical about the idea that generic business experience would be enormously bracing for the public sector. I suspect a large part of the allure of the businessman-minister is snobbery about public sector workers. People think of the civil service as the one they know from the BBC comedy Yes, Minister.
But our generic business leader would be entering Whitehall 42 years after Griffiths (and 45 after the sit-com). The work he did was the start of what are now known as the New Public Management reforms, which have been the default policy responses of Labour and Tory governments ever since.
The English method of government is now to treat citizens as consumers, devolve power to service providers, set targets, use league tables and inspections to foster competition and allow private companies to deliver public services. Those services have a huge amount of contact with business and private sector management; departments even have non-executives drawn from outside. Business leaders are endlessly asked to lead policy reviews.
There is still a lot to fix: the public sector is generally bad at procurement, outsourcing and contract management. But these are issues where private sector expertise has been sought time and again.
And let me refer you to the views of one Doge staffer in Washington. After spending some time at the Veterans’ Affairs department, he told a journalist he was also surprised to find that officials were mission-driven:
“I would say the culture shock is mostly a lot of meetings, not a lot of decisions,” he says. “But honestly, it’s kind of fine — because the government works. It’s not as inefficient as I was expecting. I was hoping for more easy wins.”
I do not wish to be dismissive of the idea of bringing in accomplished people. Having leaders used to setting objectives, sticking to them and communicating them clearly to staff would be good. But the things that make the public sector struggle to keep services on the road are far bigger than underwhelming ministerial recruitment.
Baumol’s trap
A big one is Baumol’s cost disease, the idea that some sectors become costlier to fund because it is intrinsically harder to raise productivity within them. How do you make an intensive care nurse more productive without reducing care standards? Combined with our ageing society, we are caught in a trap that means the cost of a lot of public services will keep rising.
The last 15 years of fiscal policy have also left us with a recruitment and retention crisis across public services. A third of our police officers and the majority of our prison officers have less than five years on the job, according to the Institute for Government. There has been a centrally driven lack of investment in IT and buildings.
It is worth browsing what public sector managers actually say about their work in official focus groups. Lots of the complaints, at root, are about their attempts to raise productivity and use new technology while they struggle with ancient IT processes that should have been automated and — from the NHS, in particular — juggling their improvement efforts with meeting overwhelming demand. These are all downstream of the fiscal squeeze.
In addition, some of the strategies that a good private sector business leader might turn to will not work inside the state. You cannot try to appeal to a better sort of customer. You cannot drop services that prove expensive. Your customers may, by definition, be hard to deal with — and your services may never pause for a rejig. You may not be allowed to borrow to buy new kit.
All in all, I would be very cautious about the idea that private sector leaders would be efficiency-raising machines. Not least since, when push came to shove, if you give them a big cabinet role, they would also need to be effective politicians.
Britain in numbers
Relatedly, as the summer starts, I thought I would share some good news. HM Passport Office was, for years, a basket-case. But, during the lull created by the pandemic, officials quietly got to work digitising their systems. And now it is a roaring success. Of applicants who filled out the forms in full, 99.79 per cent of applicants received their passports within 3 weeks.
Happy holidays!
The State of Britain is edited by Gordon Smith. Premium subscribers can sign up here to have it delivered straight to their inbox every Thursday afternoon. Or you can take out a Premium subscription here. Read earlier editions of the newsletter here.
