Be careful about buying into the mantra that government should be run like a business, says mayoral candidate Bill Crumplin.
“Governments must be fiscally responsible,” Crumplin says, “but they are different than businesses and do, therefore, require more nuanced fiscal and operational approaches.”
He says other candidates are slinging out clichés that the city needs to be run like a business, but offers up some significant differences to prove his point to the contrary.
The full press release below:
“For many weeks now,” mayoral candidate Bill Crumplin says, “I have listened intently to other mayoral candidates tout their expertise in running a business and asking you to believe that as business owners they and their business models are a better choice for running our city.”
These candidates are dusting off the old cliché that we should run the government like a business. Crumplin, however questions, “But ask yourself, if that was the answer to better local government why does this cliché get repeated every election? Why has the business model not been adopted far and wide by municipal councils given its popularity since the 1950s.”
“Quite likely”, says Crumplin, “because it is not appropriate!”
He goes on to explain some of the obvious and significant differences between the operation of a business and government.
“First, a business operates in competition with other businesses each driven to earn as much profit as possible. Businesses compete on the bases of offering products or services of varying qualities and prices. Potential customers and clients have a choice between products and services and whether or not to purchase in the first place.”
“A government is not driven by competition nor profits. City governments provide a bundle of services, like garbage pickup, road maintenance, policing, parks and recreations etc., to citizens. Citizens do not get to pick and choose the items in the bundle of goods for which they pay taxes and citizens are tied to their government and vice versa.”
Crumplin goes on to explain, “Governments do this while trying to maximize service levels at the lowest cost (taxes) possible. If governments were profit orientated (that is, focused on reducing costs without increasing taxes), the result would be reduced services.
The second major way a business differs from government according to Crumplin, “is that a business does not have to consult with the public before making a change in purchasing products or out-of-house services or its operational policies.”
He goes on to say, “Businesses are nimble and can award contracts with or without tendering. In many cases, a business manager will ask a supplier to meet or beat the price of another one.”
In contrast, Crumplin points out, “A government is a public corporation that has to make decisions in open and transparent manners. The public loathes decisions being made behind closed doors. When a government needs to purchase something, whether it is paper or a snow plough, it has to offer a tender to all possible suppliers and give them time to assemble a quote. This takes time and if it is not done openly and fairly, potential suppliers can sue for unfair treatment.”
A third basic difference is that, “Business in a democracy wants to operate with the least amount of government control as possible.”
On the other hand, states Crumplin, “One of governments obligations is to create a fair playing field for all citizens and business. Without procurement rules and regulations and clear operational procedures, the chances of bias in decision making becomes a reality.” “This also makes governments vulnerable to lawsuits for not treating citizens and businesses fairly,” says Crumplin. “Take away the rules and regulations of government and we all lose”.
In closing, Crumplin cautions, “be careful about buying into the mantra that government should be run like a business.” “Governments must be fiscally responsible,” Crumplin says, “but they are different than businesses and do, therefore, require more nuanced fiscal and operational approaches.”
