Devil's Advocate: Who wants government run like a business?

The appointment of Ian Watmore as head of e-government is expected to make public services more efficient and cost-effective. But, says Martin Brampton, we'll pay the price in other ways.

The government has appointed a new head of e-government. Ian Watmore is moving to the job from being managing director of the consultancy Accenture. Tony Blair claims Watmore will play a "pivotal role ensuring that IT supports the business transformation of government". Should we welcome that?

Presumably Blair thinks we should, because he goes on to claim that the result will be "better, more efficient, public services". This is consistent with his apparent belief that every organisation can be improved by making it more like a business. There are at least two reasons why we might doubt that.

First, we might question what counts as better public services, while at the same time wondering how efficiency should be measured in this context. And do the two go hand in hand? Often, the experience of services provided by business is that they are made less costly at the expense of the standard of service, at least as perceived by the customer.

This notion of efficiency has at least some justification in a business, which may see its objective as maximising income while minimising expenditure. But the reason people continue to want key services provided by the state is that they want different considerations to apply. They believe that critical decisions on, say, health ought to be made on the basis of valuing each individual as a person, and not as a mere customer.

Pursuing the same example, people are not persuaded that the market is a cure-all for the difficulties that face the health service. If you are seriously ill, it is far more reassuring to have a decent standard of care at the local hospital than to be told you have customer choice across a range of hospitals, many of which may be quite inaccessible to someone in poor health.

Quite apart from the practical difficulties, many services in both the private and government sectors are very difficult to evaluate. In the government sector, the only solution offered so far is the league table. By now, we all know that simply creates distortions, as hospitals decline to treat high risk patients because it will lower their position in the league table.

Much more could be said about the need for different concepts of efficiency when delivering a service that's truly public spirited. There is another important question, though, especially on the appointment as head of e-government of a top manager from a leading consultancy.

It is to wonder about the belief that the success of an organisation is largely attributable to its leader. Corporate executives encourage this belief, not least because it is used as a justification for huge salaries and even larger bonuses, backed by bountiful pension funds. There is no independent research to back the claim that offering rewards to executives actually yields benefits to shareholders.

Leaving that aside, another point is particularly relevant to the public sector. A new survey undertaken by international research and consulting firm ISR shows that growth in net income is strongly related to the engagement level of employees. The survey showed a spread of 15 per cent between the best and the worst of the 50 companies studied.

From these results, unsurprisingly, we are entitled to draw the conclusion that the way employees feel about an organisation can have a dramatic impact on outcomes. The belief that organisations function best when dominated by a chief executive who makes all the decisions, with employees merely acting as functionaries, looks suspect at best. And nobody has been stronger in support of this notion than the leaders of the large consulting firms.

So, although Ian Watmore is a talented individual, there are good reasons to doubt whether his appointment to a key role in government IT is likely to lead to better public services. And if we could figure out a measure of efficiency that took into account the extent to which services met people's real needs, we might also doubt whether it will lead to "better, more efficient, public services".