Vince Cable

After every election, the public sector is reorganised. It never seems to save any money.

After every election, the public sector is reorganised. It never seems to save any money.

Police Officers

BBC News – Radical police shake-up outlined.

After every election, vast swathes of the public sector are reorganised. And yet, within four years, the opposition — whoever they are — is able to point to a litany of inefficiency, bureaucracy gone mad, pointless red tape and wasteful duplication. Today, the police are being told they will be reorganised. A couple of weeks ago it was the health service. Other public sector bodies should expect the same.

We recognise that there have to be cuts. We are carrying a public sector sized for the economy in the hey-day of Tony Blair. We clearly cannot afford to carry on doing everything that we were doing, or, at least, not to the same extent. Lest we forget, it was not the public sector that got us into the economic trouble we found ourselves in. If Blair et al had had the Vince Cable-like foresight to take steps to avoid the crisis, they could have done it by dealing with our under-regulated financial sector, not by cutting public services.

But we are where we are, and we can’t simply go back. Cuts of some kind are inevitable.

But reorganisation? I’m not so sure.

Politicians, I feel, like reorganisation for two reasons. First, it gives them a feeling of being in charge — they can make their mark on history, leaving a legacy that will endure long after they are gone. Second, it makes them feel like they are running the nation like a business. Businesses reorganise, so should government. And, since businesses are driven by a profit motive, it is self-evident that reorganisation will deliver savings to the public purse, which can either go into more public services, lower taxes, or paying off debt.

Except, except.

First, since every government reorganises, even when the party in power stays the same, no reorganisation is permanent, and therefore no one gets to leave a mark in the history books. Or, if they do leave a mark, it is in pencil, to be rubbed out by the next owner of the book and replaced with their own mark. Nothing is more transitory than public sector reorganisation.

Second, businesses rarely reorganise successfully to reduce costs. Business reorganisations are as fraught with spiralling costs and new inefficiencies as public sector ones, although the losers are conveniently forgotten about. This is to some extent inevitable: public sector organisations tend to continue whether they are successful or not, and the ones which are axed are often not the ones which were inefficient. Private sector organisations that are unprofitable go under and vanish from our memory.

Business reorganisation, when it works, is done to meet new challenges and opportunities in the market place, which, under the now (in)famous BCG matrix, helps them develop the new rising stars which become cash-cows. A proportion of reorganisations can fail, as long as the business keeps its cash cows going, and creates its next generation from somewhere. The reorganisation itself is a costly process which creates duplication. But it is often out of this duplication and time of tension that new, creative, solutions to old problems emerge.

In the public sector this dynamic is not at work. First, there is no market place. The NHS cannot suddenly come up with an idea to beat crime, and move into police work. The Fire Service cannot muscle in on Education’s territory. Public services exist because we need them to exist, not because it is profitable that they exist. If the police spend their time trying to replace the fire service, then they are not catching criminals. Second, there is no profit. Any public sector organisation which underspends its budget faces having that budget subsequently reduced. It can reinvest its money in better services, but it cannot use that reinvestment to give bonuses to its staff — encouraging more efficient working — nor to develop new products for its future diversification.

Perhaps there is a case for a matrix working, self-diversifying set of public sector organisations without portfolio. A sort of generalised charity or trust, which moves to find holes in the public sector market place and fill them. Perhaps not — it would be another reorganisation.

We now face a very real possibility of the entire savings from the cuts being ploughed back into the costs of reorganisation, or, worse, real cuts which are not 25% but 50% in order to pay for the reorganisations. But our problem was not that the public sector was incorrectly organised, but because it was more than we could currently afford.

If we must cut, let us cut. But no more of this rearrangement of the pieces into another, no-more-efficient, and no-more-permanent solution which will be in turn abolished by the subsequent administration.

In the nation’s interests

I have received howls of protest over the last few days from Lib Dem members, people who voted Lib Dem but usually vote Labour, and people who have never voted Lib Dem and never intend to. Some have demanded that Nick Clegg immediately fall into line behind Cameron and stop negotiating for ‘party advantage’. Some have insisted that for Clegg to co-ally would be a betrayal of all that is most sacred. Some have told me that talking to Labour was equivalent to state treachery, and Clegg can never be trusted again. By email, phone, Facebook, txt, tweet and even visits to my door, and, bizarrest of all, an email sent from Australia by someone I had never heard of directed to all Lib Dem candidates who contested the election, it’s been made clear to me that whatever Nick Clegg did, not everyone would be happy.

I have to confess I’ve struggled to get quite as emotionally caught up in this as some people. Those of us who stand for parliament do so with an underlying notion of public service. Of course we want our party to win. And there is always personal ambition: we want to be in there, making the decisions, with our fingers on the turning of the world. But nobody would go through the five weeks of gruelling punishment, preceded by four years of selection and campaigning, preceded in turn by how ever many years of becoming involved and going through a candidate approval process, unless there was more than simply the desire for our team to win.

Nick Clegg was always honour-bound to make his decision in the nation’s best interests. Anything less would have simply ruled him unfit to be a party leader.

The only question was: what decision would be in the nation’s best interests?

I will put my cards on the table: after last year’s expenses debacle, and this year’s scandal over the Ashcroft million, electoral reform seems to me to be one of the nation’s most important and pressing concerns. The result of the General Election — no clear majority in parliament, nothing like a majority in the popular vote (Tories polled only 12% more than Lib Dems, lest we forget, but gained more than five times as many seats) — demonstrates very clearly that the public are not satisfied.

But, although pressing, electoral reform is not the most pressing concern. I do not accept the view of the scaremongerers that Britain is about to go the way of Greece. David Cameron has already had to eat his words that a hung parliament would spell economic disaster. But it is true that the economy is right at the top of the list of things that need to be fixed now, and fixed right.

A coalition with Labour was always a long-shot, and Clegg was right to honour his election pledge and talk first to the party with the most votes. But he was also right to at least attempt a deal with Labour. This was not treachery, as some of the Tory press and some of my own correspondents have suggested, but a necessary and entirely honourable step: Clegg was duty bound to explore both feasible possibilities as he decided for the United Kingdom who should be the next prime minister.

For the record, I think it would have been possible to do it. (I do not say that it would have necessarily been the best thing, but I do say that it would have been possible). Those who argued that this was undemocratic forget the very shaky ground on which they stand: Labour and the Lib Dems between them gained more than 50% of the popular vote, although, because of our misrepresentative system, this was not quite 50% of the seats in parliament. Labour certainly seemed ready to promise a much swifter, much surer route to electoral reform. And Gordon Brown nobly was willing to accept Nick Clegg’s other election promise — that, whatever happened, Brown would not continue as Prime Minister.

But it was Labour MPs themselves who made it quite clear that they had no real interest in staying in government. From the point that (then, still) government ministers went on the record in public stating this, the chances of a deal with Labour were over.

Many Lib Dem voters find the coalition with the Conservatives distasteful. I personally remained on good terms with all the candidates in the Stratford election, except for the BNP who never attended any of the debates and with whom I never spoke. But there have been instances where Tory attacks were brutal and unfounded. And we have endured the jeers and scorn of the Tory press barons for more than a generation.

It is certainly true that very few will have voted Lib Dem with the aim of putting David Cameron in government.

But Nick Clegg still had to put the nation’s interest ahead of his own. The choice between a Conservative minority government which would be almost certain to fall in recriminations within six months, in which time it would have made little real progress in tackling the economic crisis, and none at all in electoral reform, or a true Lib Dem Con coalition, was one that simply could not be made in any other way from the way it has been made.

The solution is not perfect. David Cameron could have divested himself of the lacklustre George Osborne. If having Vince Cable as chancellor was too much to swallow (though it would have pleased the nation, and the markets), Ken Clarke was waiting in the wings, the only member of Cameron’s team who had ever served in a senior role in a government. There could have been (and should have) a commitment to a referendum on true electoral reform, not merely the disproportional Alternative Vote (AV) system. If the Conservatives believe that the public has no appetite for electoral reform, then they should have agreed to a referendum on the real issue. If they were willing to accept a grudging compromise and no more, they should have offered a simple bill on AV as Labour did, and left it at that. The nation is to be put to the trouble and expense of a referendum without being allowed to vote on the real topic of discussion.

Nonetheless, the prospect of an autumn election has receded to the horizon. Cameron’s lightweight team will be strongly bolstered by 5 Lib Dem cabinet ministers, and a total of 20 Lib Dems across his ministries.

Lib Dem fortunes at the next election will almost certainly suffer, and there will equally certainly be a spate of recriminations and even member-resignations. And this is the true mark of Nick Clegg’s leadership: at personal cost, he has put the interests of the nation first.

The phoney war begins

Everyone knows that the General Election is this year. So, like clockwork, on the year’s first working day, the spin machines of both Labour and the Conservatives trundle into action, and then into overdrive and counter-spin, back-spin, side-spin and top-spin.

How long before they go into tail-spin?

You can now watch both in glorious web-colour in this BBC article.

The big problem with both Alastair Darling — stuttering and slipping his way through his speech like a reveller who has walked out onto the ice — and David Cameron — sauntering up to the microphone, leaning on the podium, like a Blairette imitating his idol — is that both were strong on attacking the credibility of the other, but bring no credibility of their own. Darling, of course, has not been a disastrous Chancellor, just an unlucky one. The world economic crisis would have happened whatever he did. It was just his bad luck that it happened on his watch. However, like Napoleon’s generals, we, the public, prefer lucky chancellors. David Cameron is not a bad man. He’s had some personal tragedy to contend with, and it probably really has changed him as a person. But he has no credentials for running the economy, and neither has his sidekick George Osborne.

It is much easier to shred the credibility of your opponent than to put up something credible. But credibility, or, more importantly, trustworthiness, is what politicians have in shortest supply at this time. We do not really care whether George Osborne’s budget is full of holes, or whether David Cameron really saw eleven mistakes in eleven seconds (seems a bit unlikely, though) in Alastair Darling’s analysis. What we really care about is whether or not we can really trust either of them.

On today’s showing, we cannot. Vince Cable, now the most trusted man in British politics, and probably the one politician people really trust with the economy, wisely stayed silent today. He does not need to enter the phoney war yet. After a decade of telling us that Punch and Judy politics is over, Darling and Cameron clashed in exactly that fashion. There will be other, more serious battles, but keeping out of that particular clash of sausage and hammer says a lot more about Vince Cable than either Darling or Cameron were able to say about themselves.

For “war-cabinet” read “My team isn’t good enough”

UK Conservative leader David Cameron has a problem. If he really believes that he is going to lead the country later this year (though the polls are pointing towards a hung-parliament), then his team is simply not strong enough. True, he’s got former chancellor Ken Clarke — good old Ken — but, aside from that, he has no-one with economic clout and muscle. And his party is determined that it will not follow Clarkeonomics, whatever happens.

His speech this weekend is full of promises on what he would to the economy. And I do mean ‘to’. The problem is, neither David Cameron nor treasury spokesman George Osborne have ever managed the finances of a large company, let alone a country. Their careers have largely been as political advisors and opposition MPs. They are skilled in saying things that sound right. They don’t have experience doing them.

If the General Election were a job interview, then David Cameron would be the candidate who has all the right words on the application form but, when questioned, can give no examples of how he has done them, and little specific about how he would do them, if given the chance.

This is the real reason why David Cameron has now suggested a ‘war-cabinet’. He’s thinking specifically of the war in Afghanistan, but he’s already made overtures to the Lib-Dems about us ‘not being so different’ in other areas. Clearly, Cameron’s hope is not very distant from Brown’s abortive ‘government of all the talents’.

Cameron doesn’t have the people who can rescue Britain’s economy, and he’s hoping that other parties will provide them. Naturally, of course, what he really wants is Vince Cable, the Lib-Dem treasury spokesman who foresaw the economic crisis, warned against it, and is the most trusted man in British politics. Gordon Brown wanted the same thing, and also didn’t get it.

It’s all very well for Cameron to talk about swingeing cuts to the public sector, higher taxes and (essentially) a national austerity programme. But this is not how companies are successfully turned around. My experience of turn-arounds, as a senior manager in some quite different organisations, is that it’s all about the senior team sitting down more or less every day tugging, tacking, adjusting, checking and re-checking the analysis, probing potential avenues, following up good decisions with careful planning even more carefully executed. Above all, it’s about a positive skepticism when things appear to be going in the right direction. Foolish optimism has been the death of far too many corporate recoveries.

It’s true that, in turn-arounds, companies do sometimes make redundancies, cut costs, increase their income stream by raising prices, issuing shares, or selling off capital. But companies that entirely fail to turn around and fizzle into administration also do all of these things. Especially when powerful forces are defending their own budgets, it’s often easier to cut the bits of the organisation that actually make it work, than to identify inefficiencies and deal with those. In fact, any company-wide solution, such as the ones Cameron describes, is apt to failure in a time of crisis. When times are good, companies can engage in grandiose strategy-rhetoric, and get away with it. When things are tight, the margin for error is slight, and the big picture stuff, without the little picture execution, hastens demise.

Cameron is increasingly revealing that he knows he does not have the team to make it work. Good. Voters should look elsewhere. Everyone know who the next Chancellor of the Exchequer ought to be. The current political system does not favour that solution. But it is five or more months to the election. And even a week in politics is a long time.

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