“I feel like with a small team and two-to-three years, proven tech founders could automate huge chunks of the government. I would sign up for a tour of duty (in the UK). It would need a lot of political air cover – I have no desire to fight a massive bureaucracy”
Tom Blomfield, co-founder of Monzo
Across Westminster and Whitehall, reformers still reach for the same nostrum: run government like a business. It sounds bracing: targets, bonuses, rapid re-orgs, the drive of the profit motive, “move fast and fix things”. But a state is not a firm. It exists to uphold rights as well as deliver services; it must act transparently; it cannot pick its customers or walk away from loss-making markets; and when government “breaks things,” it breaks public trust, generates political scrutiny and causes press controversy.
As we’ve argued in earlier articles, the challenge is not to import corporate metaphors into the debate about the reform of government, but to build a strategic state: one where the centre integrates political intent, fiscal realism and delivery capacity. That means rethinking the role of No.10, the Treasury and the Cabinet Office not as a corporate boardroom, but as constitutional stewards capable of aligning purpose, pounds and people.
Why the analogy of government as business fails
- Different purpose. A company maximises shareholder value within the law. A democratic state must balance growth with equity, resilience and rights and it must manage inevitable trade-offs through due process, consultation and accountability to parliament.
- Different incentives. Firms can chase a single bottom line. Governments must pursue multiple, often competing, goals. Copy-paste KPIs and bonus schemes breed gaming and perverse behaviours.
- Different continuity requirements. Startups pivot and restructure constantly. States must keep the lights on while reforming. “Corporate-style” re-orgs repeatedly erode institutional memory, disrupt delivery and as experience has now taught us, rarely save money.
Those who have tried to run government as if it were a startup have quickly found the metaphor wanting. Outsiders brought into Whitehall from the private sector often struggle when confronted with statutory duties, judicial review and political scrutiny, as we’ve seen recently with the departure of tech entrepreneur-turned-investment minister Poppy Gustafsson, who stepped down earlier this month after less than a year in government.
And even insiders who tried to impose private sector approaches have found limits to the relevance and utility of such mechanisms. Ministers cannot operate as they might have done as a chief executive.
The recent turmoil at the Alan Turing Institute under Doug Gurr (a former Amazon UK executive brought in to “professionalise” Britain’s national AI centre) is another cautionary tale. Staff complaints, votes of no confidence and accusations of flawed decision-making all reflect the limits of importing corporate instincts into a public research setting where legitimacy, accountability and trust matter as much as the pace of delivery. Contrast this with the innovation agency Nesta, which, while not perfect, has generally thrived by combining rigorous evidence with open, participatory methods and a willingness to convene across government, academia and civil society. Where Gurr’s approach allegedly leaned heavily on top-down private sector control, Nesta's impact has come from working with the grain of public service values and building coalitions for change.
Advocates of the “government as startup” model also overlook the reality that startups themselves are often chaotic, under-resourced and unsustainable places to work. They scale fast but frequently burn out staff, neglect basic governance standards, and fail to deliver consistently over time. One of the co-author’s own experiences of working in startups is a reminder that dynamism and disruption come at a cost: relentless churn, short-termism and fragile institutional memory. These may be survivable for a fintech or SaaS business; they are intolerable in public services that must be reliable, equitable and politically accountable.
Patrick Diamond is professor of public policy at Queen Mary University of London and a former head of policy planning in No.10. Vijay K. Luthra is a public service transformation specialist and former civil servant, local government councillor, school governor and NHS NED