Why skills don't matter any more

British companies look not for people who are proficient at specific jobs but for those who have "po

Why does nothing work properly any more? Why is everything such a mess? I don't wish to sound like Victor Meldrew, but it sometimes seems that the entire country has become a botched job. We have just seen further evidence that the Home Office, whether it is dealing with sex offenders or immigrants, is not fit for purpose. But we know from the "capability" reviews carried out by the No 10 delivery unit that other departments are almost as bad at delivering "value for money" and motivating staff.

The list of bungled IT projects is shaming: the NHS, passports, criminal records and benefits have all gone badly wrong at various stages. Maintenance of the London Underground gets worse. Getting anything built on time, whether it's a new school or Wembley Stadium, seems impossible. Nobody expects things to be ready on schedule for the Olympics.

Incompetence isn't confined to the public sector, which rarely runs anything now without private sector help. At home, we recently had a new extension built. The windows, when delivered, were all the wrong size, the wrong shape, the wrong type or otherwise flawed. Every householder has similar stories. Turn to financial services - supposedly a star British industry - and it's no different. Only one in eight fund managers consistently outperforms the FTSE all-share index - which means, if you've got money, you'd be better off throwing darts at the relevant page of the Financial Times and investing it wherever they land.

Yes, all right, I do sound like Meldrew. Unlike him, though, I think I've found clues as to why everything goes wrong. They come from Richard Sennett, the outstanding sociologist of the past 30 years in the Anglophone world. Sennett, now at the LSE, has long been preoccupied by the changing nature of work. Modern capitalism's emphasis on flexibility, he says, has deprived most employees of any sense of narrative in their working lives. They no longer acquire skills, develop them, gradually become better at what they do and thus rise up the pay and promotion ladder.

Rather, their skills are declared obsolescent, their job is outsourced, their company is taken over or suddenly switches to different products and markets. Constant downsizing and delayering make any promotion provisional. In such a world, only a fool commits either to a particular company or a particular skill.

Downwardly mobile

In an essay for a newly published collection, to which I am also a contributor (The Rise and Rise of Meritocracy, edited by Geoff Dench, published by Blackwell and Political Quarterly), Sennett reveals research from companies, mainly in the "new economy" (financial services, media, etc), here and in America. Personnel managers, he finds, look not for people who are committed to and proficient at specific skills but for those who have the "potential" to cope with change. The upward career mobility so familiar to previous generations has been replaced by downward mobility.

By their late forties, people often work at lower skill levels than employees who joined more recently. And because such a high premium is put on flexibility and seizing the new, "you are constantly . . . walking away from your own commitments".

This surely explains why everything is done so badly. You don't try to improve your performance and do your present job well; you get ready for the next big change. It may also explain why the government seems always to be struggling to improve the population's skill levels.

Gordon Brown, in his old-fashioned way, may think skills are important. Companies and individuals don't. As the think-tank Compass observes in its latest report (A New Political Economy), company growth strategies that pay no regard to continuity and employment stability, when allied to outsourcing and sub-contracting, "lessen the incentives . . . for employers to invest in human capital". Sennett would add that they also lessen the incentives for employees to spend time on their own personal development.

Compass believes a revitalised social democratic politics should address these issues. It proposes a standing commission on quality of working life, to operate in a similar fashion to the Low Pay Commission. More important to my mind, it notes that, where trade unions are strong, employees are more likely to get skills training and career development.

I fear the problems go deeper. Neoliberal capitalism has removed any yardstick for judging performance other than short-term shareholder profit. Such attitudes inevitably infect what is left of the public sector.

As Sennett dispiritingly concludes: "People who actually get good work on the basis of their education, because they know how to do something, because they have specialised skills - that kind of world is dying out." That seems to me as bad a deal for consumers as it is for employees.

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.