INSIDE OUT: Tony Blair has created the kind of complicated chains of command that characterised bloated British corporations in the dark days of the '70s

INSIDE OUT: Tony Blair has created the kind of complicated chains of command that characterised bloated British corporations in the dark days of the '70s - If the British government were a company, it would be ripe for takeover.

by ROBERT PESTON, editorial director of QUEST, www.csquest.com;e-mail rpeston@csquest.com
Last Updated: 31 Aug 2010

If the British government were a company, it would be ripe for takeover.

Why? Well, spending is spiralling as the economy is slowing down, there is a risk of a sharp increase in borrowing and - most alarmingly of all - management structure is a mess.

Tony Blair, as a prime minister who purports to worship the private sector, has created the kind of unwieldy and complicated chains of command that characterised bloated British corporations in the dark days of the 1970s and early '80s.

Under New Labour, the centre of government has swelled. It teems with civil servants and political appointees, who oversee everything the Government does. They are powerful enough to stifle the creativity of the great departments of state. Ministers and officials in the spending ministries have had their confidence battered by a centre that reserves the right to remake or reject every proposal on education, health, transport or other areas.

Many ministers and their officials seem to have acquired a permanent hangdog expression, because they have learned from bitter experience that good ideas are hijacked by the centre while every poor one is pinned on them.

Yet Downing Street does not have the authority or - paradoxically - the resources to replace the great departments of state effectively or to run the country in a centrist way, along the lines of the Napoleonic French state.

In other words, the Government is run neither on centralised nor decentralised lines. It bumbles along, dominated by a few big figures, such as Blair, Gordon Brown, Alastair Campbell, and a load of nervous pygmies.

Blair had the opportunity - after his second landslide victory in June - to sort all this out. He could and should have streamlined and simplified.

I would have preferred him to slim down the centre and empower his individual ministers. My view is that big institutions work best if run on decentralised lines, with maximum authority given to those who run discrete divisions.

Yet that goes completely against the grain of Blair's personality. He does not trust his subordinates and colleagues sufficiently to give them a free rein.

But if handing over power was anathema to him, he should have reorganised the centre so that it has both the manpower and the money to become a powerful creator and implementer of policies. The way to do this would have been to reconstruct the cabinet office as a department of the prime minister, rather than as the department that serves the whole cabinet.

To use the corporate analogy, it would have become a proper head office.

And Blair could and should have taken two further steps. First, a senior business person should have been recruited as head of the home civil service to run this prime ministerial department as a 'change agent'.

Then Blair should have found a way to bind the chancellor into the new management structure. In the business of government, the prime minister would be chairman and the chancellor would be chief executive. For that to work, the Treasury's traditional instinct to challenge Downing Street would need to be replaced by a new commitment to teamwork.

And that would require a department of the prime minister to subsume the Treasury's policy-making role, leaving the Treasury as a finance department with fewer pretensions than it currently has. Of course, the reform would have risks, because the Treasury stands out over the past few years as the sole department with an impressive track record in initiating and executing radical policies.

This is not blue-skies thinking by me. The prime minister has considered these changes. But he shied away from them, largely through reluctance to have a stand-up fight with Sir Richard Wilson, head of the home civil service, who disapproves of radical constitutional reform.

So what has happened since June? Well, the structure of Downing Street has become even more complicated. Take policymaking. Superficially, it has been streamlined, with the creation of a policy directorate combining the policy unit and Blair's private office.

But who runs it? Blair's chief of staff, Jonathan Powell, seems to have the senior role, although day-to-day control rests with Jeremy Heywood, a bright young former Treasury official, while Andrew Adonis, a political appointee, heads the policy unit. It is a clear case of too many wonks.

And all of these seem to overlap with the responsibilities of a forward strategy unit, headed by Geoff Mulgan, and an office of public services reform, under Wendy Thomson.

Frankly, I think the prospects of this divided mob overseeing the kind of improvements in health and education demanded by Blair are slim in the extreme. This is not a thousand flowers blooming but a garden plagued by bindweed. I am loathe to say it, but it is time Blair called in some proper management consultants.

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