Yesterdays Guardian reported on a recent visit to the London HQ of KPMG by Oliver Letwin MP, Minister for Government Policy advice  (http://tinyurl.com/44d7tjp). The visit was to launch a report called ‘Your Choice: How to get better public services’ written by Chris Nicholson who is now Chief Executive of think tank Centre Forum. He was previously Head of Public Sector at KPMG. 

Letwin explained to those present 

“You can’t have room for innovation and the pressure for excellence without having some real discipline and some fear on the part of the providers that things may go wrong if they don’t live up to the aims that society as a whole is demanding of them”

and went on

“If you have diversity of provision and personal choice and power, some providers will be better and some worse. Inevitably, some will not, whether it’s because they can’t attract the patient or the pupil, for example, or because they can’t get results and hence can’t get paid. Some will not survive. It is an inevitable and intended consequence of what we are talking about.”

These comments appear to reflect some of the elements of the report by Nicholson who refers to the nature of market forces and the role that is played by the fear of failure. However Letwin seems supportive of this line of thought and is suggesting it is consistent with Government policy.

Inevitably many have read Letwin’s words and interpreted them as a desire to instill fear in the minds of the individual workers in our public services which to be fair to Letwin is  not reflected in the words from the Guardian. However my concern is not the precise meaning of Letwin’s words but the whole strand of thought which he and Nicholson are enunciating. It is self-evident that innovation is needed in our public services and that markets are driven forward by innovation. There is also plenty of evidence that a failing business creates a scary environment for all involved. There may be some examples where the pressure created leads to innovation, but usually it leads to inertia and the impending failure becomes inevitable. Most industries recognise that innovation depends on a secure environment where creativity can flourish. That is why businesses create a different culture in R&D to the more cut throat polarised elements in the sales office. Even if Letwin has been correctly understood by commentators such as the influential readers of Mumsnet who have been very critical on this occasion, the problem is not that Tory Boy has been harsh about public services (after all for many public servants the fear began on May 7th 2010 with the election of the coalition) but that the Minister for ideas and his ex-KPMG researcher have confused the role of the accelerator with the emergency brake.

The irony is that the report by Chris Nicholson contains a series of useful and pertinent ideas. The focus on evolution rather than revolution as the recommended approach by Government is spot on and if heeded would have avoided many of the cock-ups that have marked the first year of the coalitions reign. However nothing in the CV of either Letwin or Nicholson suggests they would know entrepreneurial activity if it was taking place under their noses. If they want to understand what leads to innovation in markets they should both spend a few days with people who know!