Incompetence is our byword

A NOVEL and unwelcome word is about to force its way up Britain's political agenda: management. Novel, because the quality of management is never mentioned when politicians discuss the country's economic performance - and unwelcome because it is the fatal flaw in Gordon Brown's £60bn strategy for improving public services.

The Chancellor's public spending review is itself an example of a basic management error: raising expectations that can't be satisfied. The brutal truth is that managerial suites are woefully ill-equipped to deal with the daily grind of normal competition, let alone the colossal challenge that Brown has set them.

Let's be clear. The major issue for the UK economy is not Enron-style crookery, topsy-turvy stock markets or even public finances.

It is chronic, pervasive Railtrack-style incompetence. Foreign visitors are dismayed by our grubby cities, ruined countryside, shoddy service and crumbling public transport. They are appalled by our rip-off prices, and bemused to note that we earn no more than they do, despite working the longest hours in Europe.

It's not just our great public-sector institutions that are in trouble. Equitable Life, Marconi, Wembley and the Dome are spectacular examples of private-sector mismanagement. The complete list of over-budget, over-time projects would fill the page. The stampede from final-salary pension schemes is one of the major management scandals of our time.

The UK is uncompetitive at all levels. If our lagging productivity matched those of better performing economies such as the US, France and Germany, the economy would be £60bn better off - exactly the amount that Brown is now shelling out from public coffers.

The common thread between these failures is management, or lack of it. A large part of the blame belongs with governments that have ignored studies documenting the shortcomings of management training and education going back at least a century.

Unfortunately, governments, like UK managers themselves, prefer the airy sweep of policymaking to the hard graft of getting things done. One result was the damagingly stop-go economic policies of the 1960s and 1970s - another the unmanageable shambles of rail and NATS privatisations - both carried out with indifference to the practicalities of managing the new organisations.

Just as harmful has been the Neanderthal regime of bureaucratic controls placed on the public sector. Brown's largesse will be swallowed up by a wasteful bureaucracy that is the fastestgrowing part of government.

Tony Blair's ministers may have done a course at Cranfield Management School, but they don't seem to have learned much. It's typical that there should be a minister for corporate social responsibility, but none with an overall view of the management task - like a company with a director for employee benefits, but no one in charge of operations.

The economy is stable and inflation-free. Taxes are low, labour markets deregulated and large chunks of the public sector turned over into private hands. To a unique degree, in UK plc, management alone decides - and is solely responsible for the mediocre results. Yet it is on this fallible vessel that the chancellor has gambled his £61bn.

Perhaps he thought he was offering a bouquet to middle-class voters, by promising to prop up Britain's creaking institutions. But he may instead have loosed a torpedo that will return to hole the good ship New Labour below the water line.