Wednesday, 13 October 2010

A “Green” of Truth ?

Sir Philip Green’s long-awaited report into Government waste has been seized on by many in Conservative circles as proof-positive of a culture of mismanagement and evidence (if any were needed) that there is or will be huge scope for savings and expenditure reductions.

The Green report tells a story but it’s less about waste and more about the nature of Government itself. As an interested observer from the local Government world, the Green report took me back some ten or fifteen years when the same faults of procurement and property mismanagement were prevalent within most local authorities. Individual Council departments functioned as autonomous fiefdoms operating as almost standalone businesses and taking decisions predicated purely on their own Service needs and ignorant (whether by accident or design) of what the rest of the Council was doing.

In the past decade or so, most Councils have undergone a fundamental transformation in their internal practices and procedures. Procurement and property mismanagement as well as a range of other services have been coordinated and centralised and huge efficiency savings have been made. The use of technology such as ERP systems has further streamlined the payment of invoices and the management of finances.

Green paints a picture of Government that few will recognise. There is a misconception of Government as a monolithic entity which the less charitable might view as a kind of inebriated dinosaur thrashing ineffectually through society. The true is more prosaic – Government is a loose confederation of (often) warring tribes much as Britain was before the Romans.

The paradox now confronting the Coalition is that making Government more efficient and driving efficiency savings will require a more concerted effort at centralisation than that attempted and failed by successive Conservative and Labour Governments. At the same time, the Coalition is pledged to devolve decision-making down to communities. Squaring the demand for efficiency with the commitment to decentralise won’t be easy.

In addition, the attempt to better manage property by driving out efficiency savings through co-location of services and the relinquishing of under-utilised assets is not without problems. A fragile commercial property market would be disrupted by a glut of ex-public sector property coming on to the market and the likely effect is to drive down values and thereby reduce potential receipts and savings.

There’s much to commend the Green report and plenty for everyone to think about but while the template for a more effective central Government machine can be seen in the way best-practice Councils operate, the journey to a more effective and efficient Government won’t be quick or easy and it will have significant ramifications in other areas of the economy and society.

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