by John Forkin.

I WAS fortunate to see the play Yes, Prime Minister when it came to Derby Theatre a few weeks ago.

Many will remember the 1980s original when Paul Eddington’s hapless PM, Jim Hacker, was mercilessly outwitted by Nigel Hawthorne’s sardonic Sir Humphrey Appleby, the civil service bigwig who generally found a way to bend and block Hacker’s ideas.

The recent TV show In The Thick Of It brought this up to date with the introduction of Peter Capaldi’s foul-mouthed political enforcer and uber-bully Malcolm Tucker. Apparently, politicians love these shows and many will comment privately that these portrayals are often terrifyingly close to the truth. Disturbingly, I don’t think anyone is really shocked by this.

But having a laugh on stage is one thing – knowing these characters have their hands on the tiller of government is quite another. As the UK enters its fourth year of limited economic growth, with little light on the horizon, the joke is beginning to wear a little thin.

Last month, the House of Commons Public Administration Select Committee certainly thought so when it produced a pretty damning report on the Government’s failure to create a strategic response to generate growth. The report stated it had “little confidence that Government policies are informed by a clear, coherent strategic approach” and called for an annual statement of national strategy.

This desire for a clear strategy is now becoming almost desperate and yet there seems to be little hope of it emanating from the people paid handsomely by the taxpayer to advise and support the political infrastructure. The Sir Humphreys of the world, it seems, are missing in action. But who are the mysterious centralised servant-bureaucrats who pack many of the massive buildings around Whitehall?

“Clueless kids,” is how one investor described them to me last week, following a frustrating day spent at the Treasury. “Bright but with absolutely no real world or business experience,” he went on. Take Martin Donnelly, the man who heads the Department for Business, Innovation and Skills (BIS).

Last year, he claimed that the Whitehall bureaucracy sometimes had to save politicians from themselves, claiming that “politicians can come up with ideas that sound very good but when tested don’t deliver value for money.” When the Department of Transport visited so much gloom on Derby through its Thameslink decision, its permanent secretary was Lin Homer, whose entire career has been spent in local authorities and Government departments.

Donnelly’s CV is an impressive template for a perfect Sir Humphrey. Inevitably, a degree in politics, philosophy and economics gained at Oxford was followed by a gentle glide through various Government and international departments.The Permanent Secretary at the Treasury is a certain Sir Nicholas MacPherson, who trod the well-worn path from Eton to Oxford to the corridors of power.

Certainly impressive CVs in public service but apparently not one single day spent in the rough and tumble of frontline business and precious little time away from Whitehall. Governments have recently attempted to counter this lack of experience by appointing various populist czars from business but this has turned out to be no more than window dressing.

I’ve got a better proposition: every member of staff in departments such as BIS should be seconded into the myriad of businesses around areas such as Ascot Drive for one whole month each year.

It almost doesn’t matter what they do there but I bet that just from being in that environment they start to get a different insight into the challenges facing businesses today. Maybe then they might be able to focus all that brainpower to form solutions to deliver growth.

You don’t have to be a driver to design a car engine but I bet it helps.

Published in Business Weekly, Derby Telegraph on Wednesday 30th May 2012

by John Forkin.

DO you believe in numbers? Last week’s official figures suggesting a 0.2% drop in gross domestic product, following the previous quarter’s drop of 0.3%, heralded the dreaded double-dip recession. The actual definition of a recession is brutally simple, two consecutive quarters showing gross domestic product in decline – and two consecutive quarter reductions we now have.

Yet, the announcement was met with muted mumbles in the market which expressed concern over the accuracy of the numbers because so many other indicators seem to point away from a dip. And, as we know, the markets dislike surprises unless they come packaged up as a bonus.

Apparently, the UK is unique in that our Office of National Statistics issues gross domestic product figures only 25 days after the quarter end when only 42% of the numbers are available.

Would you issue your company management accounts on the back of only 42% of the information? Thought not. I didn’t know this but the remaining 58% of the calculation is based on our old friend, the computer model.

Yes, the same computer models that predict barbecue summers, arctic winters and the fact that Barcelona were going to win this year’s Champions League. In the forecasting business, what we do in the UK is called a flash estimate. This might be why other countries don’t bother doing it.

My question though is more fundamental. I can’t get my head around the fact all of the millions of economic activities, all the buys and sells that go on every day, when all added together come in at 0.2 above or below the same activity compared with the previous period.
Surely the differentials should be greater? Disturbed by these thoughts I carried out my own flash scientific exercise.

I looked at my weekly shopping bills for the past quarter to see if I was managing to achieve this remarkable balance in spend. How would all of my banana, yoghurt and nacho purchases balance out in a 13-week period? Was I in growth or recession?

The result was a disaster – my weekly differential ranged wildly from week to week with no underpinning logic, short of being overly influenced by clever marketing tricks involving a few juicy three-for-two offers and 50% wine reductions. If the weekly tolerance in the Forkin household differs by as much as 100% how does the whole UK economy manage to come in at less than 1%, whether plus or minus?

Another figure much-loved by economists is the balance of payments.

Each country produces its annual balance of payment figures, that is the difference between imports and exports. The economic Holy Grail is to have a positive balance of payment figure, a surplus that shows you are exporting more than you are importing.

Our friends at the IMF decided to add all the countries’ reported figures together and came out with some surprising results. According to the IMF, in 2010, planet earth as a whole exported $331billion more than it imported.

We have no idea to what other part of the universe these exports went but, according to the numbers, go they did. Even better, by 2014 the surplus will be $700 billion. Politicians, the media, the market, business people all talk about confidence being the critical factor in getting us out of the current economic mess. Confidence isn’t a number but an intangible emotion influenced by the statistics seemingly produced in rather a haphazard way.

Maybe the Office of National Statistics could bring their expertise to my shopping. At least we’ve got those extra-terrestrial exports to fall back on.

Published in Business Weekly, Derby Telegraph on Wednesday 2nd May