Philip Green and the public sector - a cautionary tale
14/09/2013
"The process is shocking. There's no reporting, there's no accountability….You could not be in business if you operated like this. It would be impossible." Thus spoke Sir Philip Green in October 2010 having spent six weeks conducting an efficiency review of Government spending. Many people no doubt nodded in a world weary way when they read Sir Philip’s comments. Here was a successful business figure confirming all their worst fears about the management of the public sector. But was this a fair and informed analysis?
In the first place why was Sir Philip asked to do the review? And why did he accept? Sir Philip’s major business, the Arcadia Group, has an annual turnover in the low billions. It employs fewer than 50,000 people in the UK and its main purpose is to sell clothes. The accountability within the business is relatively straightforward because Sir Philip and his family own ninety-two percent of the shares. By contrast the public sector spends £670bn every year, employs more than six million people, provides thousands of different services and has a highly complex system of accountability. It is hard to imagine how Sir Philip would have been able to make a significant contribution since he has little experience of dealing with such scale and complexity. And within six weeks?
Sure enough the report is ill-informed and superficial. Sir Philip tells government to centralise procurement, collect better data and co-ordinate assets. If Sir Philip had written the equivalent report for the England football manager it would read ‘score more goals, let fewer in’. It is implicitly, and at times directly, insulting to the intelligence and competence of public sector managers. He shows no awareness of what the public sector has already done nor of the constraints of delivering his recommendations (how can we score more goals and let fewer in?). For example his proposal to mandate centralising procurement is unrealistic. On practical grounds it is hugely difficult for central government to tell local government what to do. On political grounds it is a non-starter at a time when the government is doing its best to devolve and not centralise. And anyway, many previous initiatives – for example the Office of Government Commerce – have attempted, and in some areas succeeded, to centralise procurement. Why did they not succeed as much as Sir Philip would like? What would Sir Philip do differently?
This episode typifies the often dysfunctional relationship between the public and private sector. On the one hand an unself-confident public sector seeks help from a private sector figure with little public sector experience. On the other hand, the private sector figure imagines that he can swashbuckle in and sort things out. The result in this case as in many others is a report whose lasting impact has been to reinforce mistaken prejudices about the way the public sector performs.
In the first place why was Sir Philip asked to do the review? And why did he accept? Sir Philip’s major business, the Arcadia Group, has an annual turnover in the low billions. It employs fewer than 50,000 people in the UK and its main purpose is to sell clothes. The accountability within the business is relatively straightforward because Sir Philip and his family own ninety-two percent of the shares. By contrast the public sector spends £670bn every year, employs more than six million people, provides thousands of different services and has a highly complex system of accountability. It is hard to imagine how Sir Philip would have been able to make a significant contribution since he has little experience of dealing with such scale and complexity. And within six weeks?
Sure enough the report is ill-informed and superficial. Sir Philip tells government to centralise procurement, collect better data and co-ordinate assets. If Sir Philip had written the equivalent report for the England football manager it would read ‘score more goals, let fewer in’. It is implicitly, and at times directly, insulting to the intelligence and competence of public sector managers. He shows no awareness of what the public sector has already done nor of the constraints of delivering his recommendations (how can we score more goals and let fewer in?). For example his proposal to mandate centralising procurement is unrealistic. On practical grounds it is hugely difficult for central government to tell local government what to do. On political grounds it is a non-starter at a time when the government is doing its best to devolve and not centralise. And anyway, many previous initiatives – for example the Office of Government Commerce – have attempted, and in some areas succeeded, to centralise procurement. Why did they not succeed as much as Sir Philip would like? What would Sir Philip do differently?
This episode typifies the often dysfunctional relationship between the public and private sector. On the one hand an unself-confident public sector seeks help from a private sector figure with little public sector experience. On the other hand, the private sector figure imagines that he can swashbuckle in and sort things out. The result in this case as in many others is a report whose lasting impact has been to reinforce mistaken prejudices about the way the public sector performs.
