Let me start with a story, which has to be a little obscure to protect the innocent. The government has a Voluntary Repatriation Scheme for asylum-seekers and refugees who find their home has changed, and who get employment back there. The scheme is administered by the Home Office, who hang on to the passports of those involved until the very last minute, in case they skip away.
It so happens that a friend of mine has applied to go home under this scheme. He is vulnerable because, after the traumatic scenes he witnessed, violence to his family back home, he has very little functional sight. The Immigration Service promised to return his passport at Heathrow before his scheduled flight.
They failed to do so. My friend was found after a day wandering around Heathrow in despair, having given up his home and everything he needed to exist in the UK. The police very generously drove him back to another friend’s house in Croydon. The Immigration Service said they would try again later in the week. It remains to be seen if they will succeed.
I tell this story partly because it makes me so angry and partly as an example of how the public sector can undermine people’s lives when the institution involved is too big to care about individuals. It is also a balance to the story of the collapse of the outsourcing giant Carillion.
Political discourse in the UK has been stuck on the issue of whether public works better than private or vice versa, and clearly both can rise to a challenge with the right kind of leadership and the right kind of scale. But it is scale that tends to be the deciding factor. And until we realise this, it s hard to see how we can do much to tackle the trail of incompetence at the heart of these stories.
It so happened that, as the Carillion story broke last week, there was more confirmation of this, in the latest Which? survey of customer satisfaction with energy supply. The biggest (Npower) came out worst, the next biggest came out next worse and so on – with the smallest rated best.
Here is the problem. When we hand over our services to machines, which are too big to care, then we hand them over to incompetence.
The problem with privatisation, which was supposed to make services more flexible, is that the services were normally handed over to deeply inflexible machines. That is the story of Carillion and so many other outsourcing giants which became expert at providing Whitehall with the data they craved but at little else.
For that reason, it seems to me that we are at an important turning point. The Carillion collapse marks the moment we will look back and see how the government began to re-examine their assumptions about economies of scale, and realised that – although they did exist – they are very rapidly overtaken by the diseconomies of scale which too often renders services so inhumane, so inflexible and so expensive.
This column first appeared on the New Weather blog.
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There’s a closely related and I would argue more important distinction. The balance between a transaction based life / economy vs a relationship based life / economy.
An excellent reminder that bigger isn’t necessarily better. For me, it has never been a case of public versus private enterprise in the economic sphere: both are necessary. But something else is also necessary, and that is the idea that the size and structure of organisations should be based around what each has to offer in the provision of goods and services, rather than adopting the simplistic notion that one or the other, public or private, is the answer to everything. The problem is that unrestricted private enterprise leads to monopoly, and total public enterprise leads to bureaucratic paralysis. What we really need, if we are going to be genuinely radical, is to accept that there is also such a thing as community enterprise, based around localised needs, and which are often co-operative and mutual in their operation and organisation. Current economic wisdom pays lip service to this third sector, whilst prioritising the other two in policy and practice. What many people forget is that, once upon a time, every big firm like Carillion was once a very small business which has now grown beyond its structure by following the private enterprise route of amalgamations and take-overs designed to remove competition and produce a monopoly. That inevitably leads to the collapse that has now happened. A sustainable economic system needs to embrace public, private and community enterprises in a never-ending fluid environment in which businesses come and go depending on the problem that needs to be addressed, and in which the basic question that is asked is :”What is the most effective form of enterprise to deal with this problem?” rather than agonising over whether it should be public, private or community led. All three forms of enterprise are necessary for a complete economic system which functions on the basis of meeting need. And a further requirement is necessary – a level legislative playing field which recognises the right of each sector to exist, with equal access to the same opportunities to meet needs identified at whatever level, be that local national or international. The bias in the current system towards private enterprise is inhibiting creativity, innovation and enterprise at every level in the UK economy, and it is long overdue for genuine, sustainable and effective radical action.