WIG has recently lifted the veil on the links it creates between the UK government and its bluechip members, writes NICHOLAS TIMMINS

WIG IS not one of those sets of initials that trips off the tongue or is instantly recognisable. This is hardly surprising. For much of the past 25 years, the Whitehall and Industry Group has operated in the shadows.

Its members on the business side include 90-odd mainly bluechip companies from banks and retailers to manufacturers and consultants. On the Whitehall side, it includes most UK government departments and a few exotic extras – the government communications headquarters and the security service, for example – along with some councils and quangos.

Membership costs just under £4,500 (€4,900) a year. In return, WIG promises its corporate members “senior-level contacts and links with government”, along with “input into policy development and implementation”.

Outsiders wonder whether it is not all something of a conspiracy to allow business unfair access to government by an improper back door. According to WIG, however, the truth is much more prosaic.

The group provides career-developing exchanges and secondments between the two sectors; workshops and briefings on business concerns and Whitehall worries; and a “safe space” where the two sides can talk frankly to each other under Chatham House rules.

Mark Gibson, WIG’s chief executive and a former senior civil servant in the business department, insists that this never tips over into lobbying for a particular company.

Over the past year or so, WIG has begun to lift the veil. It has created a website and last week, at an event at the British Museum, launched a review on the state of communication between business and government to mark its 25th anniversary.

Its verdict is that things have improved but could be better.

Back in 1984, the report notes, Whitehall still ran, at arm’s length, a clutch of major industries: coal, steel, ports, airlines and sizeable chunks of the motor business. But it had “minimal interest or expertise” in successful private industries and sectors.

There was next to no outsourcing of public services. There were deep divisions within and between the political parties, and indeed within business itself, on the merits of “big” versus “small” government. And business’s impression of the way government departments conducted dialogue was that members of the private sector were “summoned and harangued”. Policy was made behind closed doors and set in stone before it became public.

Today – the recent forced nationalisations of banks aside – government owns much less. A wide range of public services – sensitive ones such as NHS operations, prisons and education management as well as cleaning, office accommodation and IT – has been outsourced to the point where the public sector now spends about £80 billion a year, or 6 per cent of the economy, on such services.

The divisions between government and business have also narrowed as the former has become more of a commissioner and regulator. And today business “seldom has complete and utter philosophical breakdowns with government”, the review says.

Senior civil servants are seen as more accessible, both sides are better informed of the other and there is “more trust”. But WIG also says a lack of technical knowledge in government can make dialogue on key issues – such as climate change – difficult.

At the same time, business needs to engage and be engaged earlier to help influence global policy through the G8, G20 and the EU – not least because half the legislation that affects business and the voluntary, or third, sector is now agreed by ministers in Brussels.

Moreover, both sides still do not fully understand the constraints on the other in implementing ideas and policies.

Business leaders need to grasp the legal and democratic restraints on government decision-making; sometimes the process has to be slow. By contrast, government could better understand how long it can take to change business systems to comply with new laws.

The report also puts huge weight on the value of informal consultation – with non-governmental organisations, which are seen as increasingly important players, as well as with business – before proposals are framed for formal consultation.

Still, Gibson, who has worked in a number of Whitehall departments, says “the dialogue between business and government has improved immeasurably [but] that does not mean that some significant challenges do not remain”. – (Copyright The Financial Times Limited 2009)