The Public Sector

My Contribution to a LinkedIn Discussion in Conservative Business Relations started by Malcolm Evans entitled: OK, so the RDAs were bloated and spendthrift but don’t we need a regional perspective?

For me the issue is not about the level of at which policy is both made and implemented ultimately this question is about both the machinary of government and the role and future of local government itself.

When we talk about regionalism we are actually talking about “super” regionalism. The North West Economy is actually larger than that of many Small European States (indeed the Economy of Greater Manchester is bigger than that of either Scotland, Wales or Ulster) and that the RDA was attempting to pull key levers of that economy with a staff the size of which was no larger than that of a large Local Authority. Indeed Staff Numbers were smaller than that of Birmingham City Council.

The failure of Tony Blair’s vision of sub national “big ticket” regionalism which was designed to replicate integrationist solutions and forced economic development paths found in only the core Euro-Regions of the Schenegen Group of EU States was ultimately due to two principle factors. The first was the lack of effective governmental machinary to support the delivery of such a vision. One North East came closest to developing such Pan Regional Institutions although even there the process was elite led and the mass population gave a resounding rejection in a referendum to a regional parliament burying forever Blair’s Vision of Regionalism. In the North West the problem was exacerbated by the structure of economies of place at a sub-regional level and the historic identities that are coterminous with this particularly in Merseyside, Lancashire and Cumbria but especially in Greater Manchester.Co-operation with the NWDA only gave the impression of being strong so long as it held the purse strings. As soon as it was apparent that this was no longer to be the case the rejection of “big ticket” regionalism in favour of much stronger and inherently more workable sub-regional localism was both swift and, in Greater Manchester’s case, brutal.

The NWDA did not help its case. There was a strongly held perception amongst key decision makers throughout the region (fully justified in many cases) of, as was the case right throughout the Labour Government, of an arrogance of approach. A major failure right at the start was, despite best advice, to locate RDA Offices across the Sub Regions and in Key Local Authorities thereby improving coordinatioin and collaboration.

The second factor in play is the increasingly anachronistic structure of Local Government in the UK which is surely due for a radical overhaul. Not for nothing was Local Government in the 19th Century dubbed Local Corporations characterised by the deep and embedded involvement of Local Businesses and Visionary “Social” Entrepreneurs in the running of the Borough. Many of the debates around Local Government unfortunately relate to structure and not enough about function.

The dividing lines between Local Government and Local Business (including Large Businesses with a Local presence located in the Borough) is stark. That is why I am such a strong supporter of the LEP concept bringing together representatives of Business and the Public Sector.

Unfortunately there currently exist competing visions of the relationship between Business and the Public Sector which have the potential to retard the progress of the development of LEPs.

I have attached a Presentation in the BoxFiles on My LinkedIn Profile which I gave last year at a Workshop in Preston hosted by CLES which articulates a theoretical approach to the issue.

I think it is a great pity therefore that BIS did not give Peel Holdings “Atlantic Gateway” Proposal LEP Status allowing a Totally Business led LEP Structure to exist compete alongside the “natural economic and political boundary” LEP structures that are currently in play at a Local Sub-Regional level in order to push some of the big infrastructure projects that are identified above.

My Contribution to a LinkedIn Discussion in Conservative Business Relations started by Malcolm Evans entitled:

Forgive me if I’ve missed something but I was pretty sure that LEPs had long ago sunk without trace………

Why was it that the Soviet Union succeeded in putting the first astronaut into Space? And yet, at the time, the United States was the most powerful economy on the Globe! An economy which was larger than that of all the other economies across the Globe put together. More important the vast majority of the largest Corporations in the World had their main manufacturing facilities located in and were headquartered in the United States. With the creation of NASA however, within a 5 year period, not only had the United States put a man on the moon but had also developed an unassailable lead in both the Space Race as well as the Strategic Arms Race. The lesson was that in the most dergulated and liberal market economy in the world it took action on behalf of the Federal Government to establish a coordinative institutional machinary for Private Sector Corporations to co-operate and achieve progress on a strategic agenda at a National level.

Is it time, I ask, to create a National Enterprise Council made up wholly of Representatives from the Private Sector, Big Business especially in order to drive forward the kind of Big Infrastructure Projects that will revitalise the Economy and bridge the performance gap. NEDC failed during the 1970s because it was a Corporatist Tripartite decisionmaking body desigened to manage Industrial Relations and Wage Negotiations between Employers and the Trade Unions. In no uncertain terms am I proposing a return to anything approaching such a failed State-led version of Corporatism. Instead what I am proposing is a Business Led Model of Corporatism. This will entail very high levels of close knit co-operation cooperation between manufacturers, suppliers, distributors, banks and local government with active acquiescence of trade unions and employer engagement and participation. Education and Training will become much more Business Focussed. There will be a much greater focus on identifying and backing winners and Business Led National Infrastructure Projects with the Public Sector encouraged to Get Out of the Way as far as is possible. This will be the Ultimate process of Creative Destruction – Continuous Change Management of a High Growth Enterprise Strategy on the scale envisaged has not been attempted since the Victorian era.

Such a Business Led Infrastructure Based Growth Strategy will ultimately force a rethink on Local Enterprise Partnerships and their current unhealthy level of dependence on the Public Sector especially as far as Bid Management for access to Regional Growth Funding is concerned.

Such an approach will also force much greater responsiveness from Civil Servants. The Regulations concerning Accessing Funding are too Complex, the Process is Too Convoluted and it is Taking Too Long for Proposals to Be Evaluated and Decisions To Be Announced. Competitive Bidding It May Be but the Competitiion Element is Now Getting In the Way of Infrastructure Led Growth.

Having Senior Representatives of Big Business firmly Embedded in the Treasury, BIS and CLG will be a salutory experience for Government showing what makes sense from a Business Perspective and What Doesn’t,

Am I Confident such a Business Led Corporatist Model of Growth will Transpire. Perhaps, not as much as I once was but if we are to address the problems of undercapacity caused as a consequence of the current structural issues which have resulted from the Financial Crash then we need as a Nation to be aware of the potentialities of Purely Business Led Solutions.

My Contribution to a LinkedIn Discussion in Conservative Business Relations started by Jane Dronsfield entitled:

Are the Governments good intentions failing due to the attitude of the public sector staff who are left to administer them?

As someone who has recently left a regionally based Public Sector Agency I absolutely share your frustration.

Working initially as a Private Sector Contractor and subsequently going on to work for the organisation on a semi-permanent basis I found Public Sector Employees some of the most risk averse people I have ever come across.

We had a maxim which we repeated to anyone who cared to listen which was “If you don’t stand up you can’t be measured. If you can’t be measured you can’t be held accountable. If you can’t be held accountable you can’t be blamed for failure to deliver. If you can’t be blamed for failure to deliver you can’t be sacked – so why stand up in the first place?”

It is testament to the recruitment of an almost exclusively private sector team and its can-do rather than you can’t do that mentality and some bold and inspirational leadership from dedicated and driven change architects determined to make a difference that we were recipients of a National Award for the best B2B Data Project in the Public Sector.

I have to say however that there was opposition at every change right up to the very highest levels in the public sector. Resistance is endemic. I don’t blame Public Sector Employees, the Audit State that we live in means that the constraints that operate when it comes to Accounting for the Spending of Public Money can lead to inertia.

The worst aspect of this is nonsensical operating procedures and ridiculous targets that no-one outside the Public Sector either understands or actually makes any difference in the real world.

It is hardly surprising therefore that some particular Public Sector Bodies become effectively colonised by organisations who are particularly skilled in the interpretation, implementation and management of delivery regimes.

I always say that at the end of the day it is absolutely vital to set out very clearly both what is expected in terms of delivery and the quality standards by which this will be measured – particularly if it has a monetary implication. This is a major Policy failure and requires urgent correction.

One of my major concerns at present relates to “high growth coaching” and the wide spectrum of offerings available ranging from the softer “leadership” skills at one extreme to the harder “financial management and attracting funding” skills at the other extreme.

There seem to be a lot of people engaged in the former. I genuinely worry how much value this is to business and how much of it is simply psychobabble.

To conclude, although some Public Sector Bodies have innate value and deliver an added value service I wonder how many would be genuinely missed and whether a more Private Sector approach would ultimately be preferable.

Witness the current debate over the NHS and you suddenly understand just how much resistance to Private Sector led approaches there are. Ultimately the fundamental barrier you have to overcome is the notion that if it makes a profit it somehow can;t be ethical. The problem is that if the Private Sector does not make a profit the less chance we have of digging ourselves out of the finacial mess we are in.

Long Live the Profit Motive!

My Contribution to a LinkedIn Discussion in Conservative Business Relations started by Malcol Evans entitled:

A group of us were talking about the A4E fiasco earlier and we all felt the same way – it’s the tip of an iceberg as OUR government slides back into some of the behaviour of the previous lot.

1. As a recently elected Local Politician I’d better drain the gravy from my train before I reply to this one Jane.

I have a number of concerns about not only the relationships that developed uring the Labour Administration between some parts of the Public Sector and certain Private Sector Providers. As a Private Sector Recruit into the Public Sector who brought with them Private Sector Change Management Methodologies and Implementation Strategies I was profoundly shocked by the extent to which some organisations had effectively colonised Public Sector Delivery Contracts. Of bigger concern was the lack of oversight and effective measurement of some of those contracts and the added value they delivered. Having lived in the surrealistic world of GVA (Gross Value Added) for 3 measures – a measure that no one in the Private Sector had even heard of let alone understood even when you tried to explain it to them – I just couldn’t understand why performance was measured much more simply by increase in Turnover or Number of New Jobs Created – then I realised that this was a measure that had been invented by a Civil Servant trying to justify their own existence. The Public and Private Sector exist in fundamentally different worlds.

It has not always been like this however. Michael Heseltine was incredibly successful in introducing MINIS as a Management Information Tool across 3 Departments to Measure and Account for the Impact of Spending – it shouldn’t be that difficult.

The problem has been the explosion in the size of the Public Sector under Labour and the need to invent measures to justify the existence of organisations that were little more than Employment Creation Schemes. It was hardly surprising therefore that the real effectiveness of many QUANGOs was monitored insufficiently closely.

Personally I find it very frustrating that the same names and faces keep cropping up in new guises in what I had hoped would be a braver new world.

Ultimately, I believe that we need first to be clearer about what it is that Private Sector Providers should achieve and then let them get on with it relatively unhindered. Part of the problem with A4E was that they were competing directly against Job Centre Plus. That relationship was never sufficiently clarified. Indeed we should ask whether JCP has a role to play any longer given the amount of criticism it receives at present.
My preference would be for it to be transformed from a Public Sector Agency and moved fully into the Private Sector – sold off to an Organisation who are going to be fully incentivised to get people back into Employment and provide an effective service by highly trained staff. There are enough Recruitment and Employment Agencies with sufficient resources at either a National or Regional level for this to work as a franchise model. It is the reality already that most peoples first port of call is a Recruitment Agency who have better access to Employment Opportunities and Local Employers than the less than optimal Vacancy List that comes through JCP – an Organisation which has clearly had its day and ought to be removed as a burden on the Public Purse.

Obviously Key Safeguards and Effective Monitoring ought to be built in to ensure that such Franchised Agancies are actually delivering people into real jobs, further education, training or apprenticeships as well as providing sufficient safeguards that vulnerable members of the Public are not being exploited and that Staff are highly trained with a recognised National Employment Finding Qualification.

2. “Michael Heseltine first raised the issue of performance in the Public Sector at the end of the 1980s stressing at the same time both reward and penalties for poor performance.

Britain’s poor industrial performance is in part explainable by inadequacies in the machinary of government which have never been fully addressed.

Slackness didn’t arrive in the Public Sector during the Blair and Brown Years but performance certainly deteriorated, inspite of the implementation of burdonsome monitoring and audit systems. The amount of management information was greater than ever before. Which why it is so surprising that the problems with A4E’s Service Delivery were not picked up earlier.

I dread yet another front page expose saaying that everyone knew what was going on but no-one was prepared to do anything about it. There were a lot of people with a lot of skin in the game. Which is why the unravelling of this process is proving to be so deeply unpleasant with a lot of fingers being pointed and accusations whispered with louder and louder stage managed volume.

I had bitter first hand experience of the need to measure the impact of every single objective down to the minutest degree. In the end one of the central reasons for the failure of the Business Link franchise was that it became bogged down with the collection of meaningless statistics and the shuffling of paper – this is a familiar story across a nu number of Government Bodies.

At the end the amount of data collected and forms and paperwork generated outstripped even that of the old Soviet Union. Britain became bogged down in bureaucracy to a greater degree than at any point in its history. Measuring outcomes became an end in itself. This more than anything explains the epidemic growth in the size of the Public Sector.

The problem however as many contributors to this debate have pointed out – it was not clear and measureable objectives – it was a willingness to take risks. The Public Sector Team at Business Link NorthWest which was entirely recruited from the Private Sector used to have a mantra characterising what it was like to work in the Public Sector: “If you don’t stand up you won’t be measured. If you can’t be measured you can’t be held accountbale. If you can’t be held aaccountable you can’t be blamed for failure. If you can’t be blamed for failure you can’t lose your job. So why stand up in the first place?

In that sense it would be worth considering how to make Public Sector Bodies more dynamic and be more accountable (responsible) for their actions at the same. It is not about playing hard and fast with Public Money but thinking how Performance can be improved so that Public Money is used and is seen to be used more effectively and efficiently.That involves adopting solutions which are known to work in the Private Sector and not the perpetuation of delivery strategies that have little other basis than the perpetuation of the existence of many Public Sector Bodies even when they have clearly exceded their usefulness. I suspect that will not occur until the discipline of the Private Sector is adopted. This will ultimately mean many more functions of the Public Sector being transferred fully into the Private Sector.

It is clearly time for the Government to carry out an audit of the the machinary of Central Government and establishing which bits can be transferred and quickly! In order to reduce the deficit further we can only do this by creating a smaller and more agile State.

My challenge to the Government is to carry out a wide-ranging audit to find out which parts of the Public can be transferred to the Private Sector.

3. Check out the Headline in the Daily Mail today (15th):

Could Whitehall manage with just a third of its civil servants? Departments asked to draw up plans by Downing Street

I think we all know the answer to that one.

I like this bit from the article especially:

One minister taking part in the review said: ‘We have already lost a number of staff, but I believe we could lose another third without it affecting what we do.

‘Many civil servants seem to spend a lot of their time trying to prevent us doing things. It might well be that with fewer of them we would get more done.’

All: I would strongly recommend reading John Redwood’s Book “Third Way – No Way: Private Enterprise – Public Service”. Although written in 2002. It makes a number of interesting points – that privatization is not as dogmatic as it seems; that introducing free enterprise wherever possible means a better service; that political of public sector bodies has been allowed to become detatched from the needs of the consumer and that political involvement is the greatest hinderence to the delivery of public services. I guarantee that you will be pleasantly surprised by this book. There is a lot more to Dr. Redwood’s thinking. Which goes to show you that our image of John Redwood has been badly distorted by the media. I especially identified with the notion of bringing common sense to bear and the impact that contracted out services backed by private finance can have on the efficient delivery of public services.

4. I don’t find it surprising that radical thinking of this nature hasn’t been given the attention that it deserves. The insight thtat it offers and the justification that it proferrs deserves not only revisiting but renewed attention. My problem Jane is that we went in completely the opposite direction for so long. We should absolutely invite John Redwood to join this discussion.

What I want to understand was whether the extension of the Public Sector was a deliberate strategy on behalf of the Labour Government (Brown) or whether they genuinely didn’t know what they were doing/understand the implications of their policies (Blair). The major implication is why there was so little creation on real growth versus Public Sector Job Creation to give a false sense of social cohesion. The result is that Labour bequeathed not only a bankrupt economy but a malfunctioning big government state that doesn’t work effectively and actually can’t promote growth and is not fit for purpose.

I am concerned that the Conservative Party is missing an opportunity for radical reform of the machinary of Government and a restructuring of the State and wonder why this is not taking place with more speed and alacrity so that this can have an even greater impact on deficit reduction – Liberal Democrats!

The essential reason for the failure of Peter Mandleson’s Business Support Programme during the recession and its extremely poor take-up, apart from the fact that it was promoting risk-based lending to businesses that were already struggling, was that it was impossible to pull levers of power.There were that many layers of bureaucracy and conflicts between different layers/levels of Government – witness that between the NWDA and Local Authorities that once an initiative had been inaugurated it was almost impossible to put into practice.

5. I don’t think I’m ready to send in the Cossacks yet although during the recent riots I felt like it. I believe in building coalitions of support through dint of reason and persuasion amongst groups of networkers and influencers. In some cases this means focussing on issues that require the deconstructing of complex issues sometimes by focussing on what went before and how it went wrong or at least avoid such mistakes in the futureIt is only by understanding past history that we can understand the present and offer prescriptions for the future. If you have a look at my previous posts you will see that I have attempted to offer prescriptive solutions for the future. Sometimes this has involved putting forward a narrative that arms those who operate in different networks with sufficient narrative or context to take the argument further. This is one of the strongest tools in the revolutionaries knapsack of ideas. I’m not a revolutionary myself although I do sympathise with some of the localist messages of Philip Blond’s brand of Red Toryism. Like yourself I would like to see the Conservative Case for the Small State put forward with much greater urgency. In that sense I’m less of a revolutionary, this is after all a Conservative Forum, and more of a constructive radical. Being radical requires us to be constructive in our approach helping others to understand how Labour got it wrong as much as putting it right for the better in the near future. That is why this is such a great forum as well as such an interesting debate. Keep your comments coming!

6. Check out the headline in The Daily Telegraph: “A4e stripped of contract due to “risk” to taxpayer”

7. Check out the following link shared by others on LinkedIn today:

The situation now clearly merits a Public Enquiry.

I said in a previous post, and I quote that, “I dread yet another front page expose saying that everyone knew what was going on but no-one was prepared to do anything about it. There were a lot of people with a lot of skin in the game. Which is why the unravelling of this process is proving to be so deeply unpleasant with a lot of fingers being pointed and accusations whispered with louder and louder stage managed volume.”

The shouting has now got very loud indeed.

If there was a problem with the controld and monitoring that were in place then that needs to be got to the bottom of. If auditors communicated the fact that there was a problem then we need to find out who they communicated this information to, who knew, but most importantly of all why they chose not to do anything about it?

I have a particularly deep feeling of dread about the whole issue not least because this is effects a very sensitive area of Public Policy and involves a Business making money off the backs of some potentially very vulnerable people during a very deep recession when they deserve better. I find that this gnaws at the heart of the ethics of my political and christian beliefs.

My Contribution to a Linkedin Discussion on Conservative Business Relations started by Malcolm Evans entitled: The Triple Track Recession & Recovery

Check out some of the Presentations in my Box Files particularly the Presentations on the Prospects for Economic Development, Entrepreneur Mapping and High Growth Businesses delivered to Lancashire Economic Developments

I did a lot of work on this issue at Business Link Northwest.The question we posed ourselves in the Enrepreneur Maping Presentation was threefold:

1. To what extent are High Growth Businesses concentrated in the High-Tech Advanced Manufacturing/Knowledge Based Sectors

2. What are the Behavioural Characteristics of High Growth Businesses and What Makes an Entrepreneur take the initial risk/leap?

3. What are the most propitious Socio-Economic Conditions (Business Neurone Networks)/settings necessary for High Growth to take place (we found that Entrepreneurialism is a largely Middle Class phenomenon in Affluent Areas)

This work was taken further looking at the Entrepreneurs behind successful High Growth Businesses located in Economically Underperforming Areas. A lot of High Performing Businesses in Blackburn are owned/managed by Businesspeople living in the Ribble Valley.There are also many examples of High Growth Businesses in Merseyside/Greater Manchester that are the beneficiaries of Super Neurone Networks (both Governmental and Non-Governmental) – a feature of the successful networks/hubs in the NorthWest initially established by Michael Heseltine and further developed by Domestic Investment Agencies like MIDAS, TMP and Liverpool Vision which built on the relationships between Central & Local Government, the EU, Banks and Private Sector Investors.

My Contribution to a LinkedIn Discussion on Conservative Business Relations started by Malcolm Evans entitled: UK business optimism rises:

Malcolm: I wonder therefore what Retail Businesses in areas where the High Street is in Retreat will spend the £100K trenches of Funding across the NW on. This equates to c. £1K per Storew in Towns like Preston. The criteria for the distribution of this funding is critical. Have a look at the Presentation in my Box Files from the Technology for Marketing & Advertising to find out how difficult this is. Liverpool Vision attempted to put together a Project called Rapier which attempted to protect jobs in the Retail Sector in Liverpool One and struggled to agree criteria. In the end they created a support hub of specialist advisers that Shop Owners and Proprietors could come to for help and assistance – in the majority of cases this was advice on cash management and how to manage short-term creditors.

My own fear is that we are about to repeat the mistakes of the past. It isn’t a case of throwing good public money after bad yet but it has the potential to be. The best solution is to back winners making this funding available to successful and prospering high street businesses.

In research on Liverpool’s Capital of Culture Year we found that most advice proferred by Business Link Northwest to Retail Businesses in Liverpool was on Sales & Marketing and 85% of that was on the redevelopment and upgrade of web-sites and the development of e-commerce platforms. This was where Grants & Loans were most effectively spent, in a lot of cases to very good effect indeed. I enjoyed a particularly interesting 2 days putting together a presentation which married up original briefs to Business Link Northwest for assistance from the Businesses concerned with final outcomes including links to the web-sites of the businesses concerned which I presented to the RDA – sadly no longer in my possession

This was Public Money well spent as it allowed the businesses concerned to develop a strong brand presence. The vast majority have prospered beyond this key investment in their business even during a period when discretionary disposable income is short

The retreat from the High Street is a long-term trend. I value Mary Portias initiatives but wonder whether the most successful outcomes will be where where they are accompanied by significant redevelopment of inner city shopping areas and town centres into family/consumer friendly zones. The most successful retail businesses however will be those that have an equally strong presence on the web. It is an expensive investment in the businesses beyond interior store decor and shop frontage but an investment well spent.