Danny Payne, CEO of FCO Services. Image courtesy of the Foreign and Commonwealth Office
Government departments need to behave more like businesses – and civil servants should have more confidence – if they want to improve the way that projects are delivered, according to Danny Payne, chief executive of FCO Services.
Payne, who worked on major infrastructure projects for the likes of Network Rail and Carillion before joining the civil service, told CSW: “If you want to reduce the cost and the failure of delivery then I think being more commercial is a way to do it.”
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FCO Services is a trading fund set up as a commercial entity within the Foreign and Commonwealth Office. It does not receive government funding and pays dividends to the government department from its profits. The trading fund wins business “on merit, reputation and price,” Payne said. It does everything from designing and building embassies to installing security systems, operating Britain’s diplomatic bag service and supporting the FCO’s rapid deployment team in the aftermath of disasters and terrorist attacks.
The commercial approach taken by the FCO’s trading fund is something other parts of government could learn from, Payne argued. It drives a “genuine commercial attitude to money and delivery, so if you really want to deliver something and the risk is that no one will give you a budget unless you are good at it, it actually drives a different behaviour and a different attitude.” This means the focus is on customer service, delivering to the budget, and quality at the right price, he said.
Civil servants need to have more pride in their abilities, Payne claimed. “I don’t get the sense of confidence that you would normally get in delivery organisations in the private sector, so there’s something about people not having enough confidence in their own abilities.”
In the case of FCO Services, success has boosted the self-belief of staff. The trading fund makes revenues of more than £136m a year. Last year it made an £11m operating surplus. Since it was established in 2008 it has made more than a billion pounds in revenues and paid the FCO £15m in dividends.
“I’ve seen increasing confidence ever since we’ve become a commercial entity, so people see themselves winning, customer confidence has been improving, and winning brings a confidence to people,” Payne said.