Move a little closer

20 Aug 09
Whitehall and industry are often seen as miles apart, each holding long-held misconceptions about the other. But a group of representatives from both sides is attempting to close this cultural gap. Vivienne Russell reports
By Vivienne Russell

20 August 2009

Whitehall and industry are often seen as miles apart, each holding long-held misconceptions about the other. But a group of representatives from both sides is attempting to close this cultural gap

Some call it a wall. Others refer to it as a gap. Whatever the metaphor, the gulf – chasm, divide, what you will – between the public and private sectors is long-standing and well recognised.

Myths and mistrust persist. Civil servants can view business people with cynical disdain, as ‘wide boys’ hungry to make a fast buck. In contrast, the civil service has long been stereotyped as a slow-­moving bureaucratic behemoth staffed by timeservers working regimented hours.

Relatively little has been done to challenge these caricatures and, over time, they have been allowed to harden. The lack of people moving between the public and private spheres has only made ­matters worse.

Former information commissioner ­Richard Thomas – he stepped down from the publicly appointed post in June – is relatively unusual in that his career has zigzagged between the two sectors, taking in the National Consumer Council, the Office for Fair Trading and City law firm Clifford Chance. He feels strongly that a gulf has developed that must be bridged.

He gives Public Finance a colourful description of what he terms the ‘Berlin Wall’ between the public and private sectors. ‘Every time I’ve been working in a private sector environment, I hear the same phrase time and again: “These bloody politicians don’t understand how we work in the private sector.”
‘And if you go into a public sector environment, you hear: “These bloody business people don’t understand how government works”.’

Thomas’s own varied career has given him ‘fantastic insights’, he says. ‘But looking back on it, it was quite a risky thing to have done, to have moved across the ­different divides at different stages.’
At Clifford Chance and again at the Information Commissioner’s Office, Thomas ensured the organisations joined the Whitehall and Industry Group, a not-for-profit body that has been quietly working to close the gap between the two sectors for the past 25 years.

Founded a quarter of a century ago by Marks & Spencer executive John Sacker, Wig’s aim is to foster good relations ­between Whitehall and government and dispel some of the myths that have
grown up.

New chief executive Mark Gibson (he took up the post in March) is a former senior civil servant himself and was private secretary to Michael Heseltine, when he was Conservative trade & industry secretary and later deputy prime minister.

Gibson paints a similar picture to ­Thomas. ‘The [private sector’s] stereo­typical view of government is they all work from 9 to 5 and it’s simply wrong. Whitehall works late into the night, ­people don’t go home early,’ he tells Public Finance.

‘And the other way round. Lots of civil servants think of the private sector as used car salespeople with no strong ethical values, always after the next sale, but many private sector companies have ­really strong, tough discipline on standards of behaviour. There’s still a divide and it still needs tackling. That’s why we are still relevant.’

He remembers his frustration when, working as a civil servant in the then ­Department of Trade & Industry, ­companies would request a meeting with a minister and expect to secure an immediate policy change. Business people failed to appreciate that ministers make decisions based on advice from their civil servants, advice that can take a long time to prepare and requires a long-term ­understanding of how government works.

On the other hand, he adds, the public sector ‘needs to understand the immediacy of the private sector, the fact that chief executives expect delivery – and announcing a policy without announcing how you’re going to deliver it doesn’t have much credibility with CEOs and ­private sector companies’.

But Wig is doing its best to resolve the culture clash. Its membership list is impressive, comprising every Whitehall department, all government agencies, a handful of local authorities and 90 ­leading companies. In its early years, the group focused on identifying civil servants who were likely to make it to the top of Whitehall and sending them on attachments or ­secondments to the private sector.

Its activities have since expanded to include senior leadership and mentoring programmes, events and seminars. It also recruits business people to sit on the boards of Whitehall departments.
Sir Nick Macpherson, Helen Ghosh and Hugh Taylor, respectively permanent secretaries at the Treasury, Environment, Food & Rural Affairs and Health, are all Wig alumni.

Gibson speaks fondly of his own Wig secondment to Courtaulds textiles, undertaken when he was a middle manager at the DTI. ‘I was sent out by Courtaulds to a small dying company in the north of England which was in trouble. The chief executive of Courtaulds brought me along and said: “I want a view of this company. Will you have a look at it and tell me what you think about it?” It was a fantastic learning experience.’

Despite these outward-looking efforts, Wig deliberately keeps its public profile  low and its events are closed to the media. The idea, Gibson says, is to create a ‘safe space’ in which civil servants and business people can talk to each other with complete openness and freedom.

He denies claims that Wig is a ­covert lobbying organisation providing business leaders with a hotline to Whitehall. ‘We are absolutely not a lobbying organisation. We are not a think-tank. We are about doing practical things like ex­changing people that help the two sectors understand each other.’

He acknowledges that in the course of the events and exchanges, ‘people build relationships that can have business benefits for both sectors’, but stresses that the aim is charitable. It is about ‘understanding and building the trust between the two sectors’, he explains. ‘Everything we do is tested against that public benefit test. We don’t do things that don’t fit with our charitable purpose.’
Thomas, now a Wig board member, agrees, saying the organisation is very careful to avoid anything that looks like lobbying, while the opportunities it ­creates benefit both sectors equally.

 ‘Government is responsible not just for passing laws but also for regulation, for subsidies, for creating the environment both for people and for the business ­community,’ he says.

‘Equally, we’ve long since recognised that we depend on the private sector for wealth creation and prosperity. If government is making all sorts of laws that don’t maximise the potential of the private sector or put unnecessary restrictions in place that don’t fulfil policy goals, then it’s in no-one’s interest.’

The recession has muddied the waters between the public and private sectors in new and interesting ways. The government has had to step in to prop up a ­flagging economy and huge slices of what were once exclusively private sector businesses, most notably banking, have a new home, for the moment at least, in Whitehall.

Gibson singles out the car industry and the government’s role in the scrappage scheme. ‘You and I are being offered £2,000 [of public money] to trade in our old banger because there needs to be some demand injected into this sector ­because we’ve all stopped buying new cars. For the government to be able to deliver that scheme well, they need some help from the private sector. They can’t just invent it in a vacuum, they need to talk to the car companies about what will work.’

There are practical details to be hammered out, such as ensuring the subsidy is paid quickly and identifying who is responsible for paying it. Working together is critically important, he stresses, and can be achieved only if there’s trust, ­understanding and dialogue.

 ‘You can’t do it if you don’t know the people, you don’t trust them and you think they operate on a different planet.’

The ever-present focus on efficiency and value for money is another area where the private sector can help the public sector out, Gibson says. ‘The private sector has to control its costs in ways that are sharper… and they can pass that learning on to the public sector.’

But this isn’t simply a case of ‘public sector bad, private sector good’, nor is Wig trying to turn Whitehall into industry’s mirror image. ‘I think there’s an absolute need for the public sector to stick to the public purpose,’ Gibson says.

And the traffic runs both ways, he adds. From crisis management to web ­communications, Whitehall is not without its own ­lessons for the commercial world.

 ‘The public sector can do some absolutely fantastic things and the private ­sector is always interested in the great things the public sector can do.’

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