A “lowly official” in Washington, Tyne and Wear, loses two computer discs containing the personal details of 25m people. Meanwhile the government spends billions creating an identity card system stuffed with personal information. As if that wasn’t enough, it is also setting up a super-computer containing all our medical records. But don’t worry: your secrets will be perfectly safe. Only about 300,000 health service personnel will have access to them (just think how many of those discs they can lose in the post).

We need a comic George Orwell to do justice to last week’s black farce. His 1984 was an alternative vision of 1948, a dark amalgam of Stalin’s totalitarian Soviet Union and drab, austerity Britain. A satirist today could make great sport with our dystopic country where the only efficient functions of the state are performed by traffic wardens and speed cameras.

Until then, the Pythonesque film Brazil will have to do. It depicted an authoritarian society, overreliant on machines, where nothing worked well except the secret police. A freelance repairman defied the state by fixing things. We would all like his telephone number.

Alistair Darling’s apologies for the data fiasco were as handsome and dignified as they could be in the circumstances. Let us hope, for his sake, he told us the whole truth and nothing but the truth. But even if he did, the ramifications are far from over.

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Most examples of government incompetence are quite obscure. Though the cost of a Home Office or health service computer may be billions, the details sound about as relevant to the public as a row over lost paperclips. But Northern Rock demonstrated that government errors have real-life, real-time consequences as the pictures of customers queuing in long lines to retrieve their money showed.

The lost discs affair is equally real. More of us are involved. I received a letter from the Revenue this morning – never an event to gladden the heart – announcing: “I am writing to you to make a personal apology. A copy of some HM Revenue & Customs data about families, including yours, who have received child benefit, have been lost.” This government disaster is, literally, being brought home.

As one shadow cabinet bigwig told me: “Even my wife asked me at breakfast ‘Have they got my bank account details on that disc?’” And the opinion polls are registering the voter disquiet. Last week’s dire poll results register the country’s verdict on Brown and Darling. The mood on Labour’s back benches is bleak. “No one understands how we got there that quickly,” says one bellwether MP, “and no one has a coherent narrative of how we are going to get out of it. Normally we judge these events through the prism of ideology, interest groups or factions but we are all dazed.” Good to know the party is united, if only in bafflement.

His best solution was that Brown fight a long war of attrition to restore his reputation for sound financial management. “If the fundamentals on the economy are sound we can pull through. If they aren’t, then we are f*****,” he concluded.

This is bad. But comparisons with John Major’s and Norman Lamont’s black Wednesday, when sterling fell out of the European monetary system, are overdone. The economy is buoyant still and mortgage holders are not suffering from negative equity – yet. Labour has a solid majority, too.

Of course Brown will fight on doggedly; he knows all about long campaigns. It took him 10 years to get rid of Tony Blair. But had he taken my well-meant advice to go for an early election – calling it in the narrow window of opportunity by early October – he would be able to describe the present debacle as a serious difficulty, but one easily amended under his shiny new mandate. In the present climate he can do nothing right.

The charge now is not that he and his ministers are uniquely incompetent – Murphy’s law applies to governments of all political persuasions – but that the system is uniquely broken. This is a direct challenge not only to Brown’s reputation for sound administration but also to the Fabian belief of the Brownites that an active, centralised state is still a force for good.

Four years ago, as chancellor, Brown gave us his defining philosophy in a speech to the Cass business school. He spelt out what he saw were the limits to markets in delivering state services, most notably health. For most people, the jury is still out on that one. What he didn’t admit is that there are strict limits to the state’s competence too.

For years Brown could sneer that Blair was a lightweight when it came to delivery. That was indeed Blair’s tragedy. But Brown’s supporters claimed nobody understood the micro-machinery of government as well as their hero by dint of his long tenure of the Treasury. Then finally their man got to No 10 to pull the levers of government for himself. Only to find that the machinery didn’t work. That is his tragedy.

All this bears directly on the present disaster. As chancellor, Brown decreed that the Inland Revenue was given the welfare function of paying child benefits. This compromised its relatively simple task of collecting taxes. Even that function was made more complex by the chancellors’s constant fiddling with the tax code. Brown’s working families tax credit threw the system. It was too complicated for many to claim and its payment was often miscalculated and overpaid. Beneficiaries were told to give money back with menaces after it had been spent.

Paul Gray, the chairman of HMRC, who resigned over the missing computer discs, had the task of clearing up the mess left by tax credits. He was also trying to sort out Brown’s messy merger of the Revenue with Customs.

Critics home in on new Labour’s governing style. In management theory there is only a 50% chance of orders being followed when the chief executive gives a top-down command. Halve that figure again when it comes to the chance of those orders being well executed. Most efficient corporate organisations are therefore either decentralised or standardised so that a fallible human being can, say, flip a hamburger in the same way the whole world over.

Blair and Brown have been issuing commands, targets and overnight initiatives to a creaking Whitehall machine as if this were the Soviet Union. The system can’t cope. The decentralisers are having the better of the argument in politics right now. Government is neither efficient nor accountable.

Now I don’t expect this government to privatise the Revenue – but even within the Brownite camp there are those who express doubts about the ability of ministers to govern. The Cabinet Office minister, Ed Miliband, brother of the Blairite foreign secretary, David, is obviously worried. Ed Miliband, who clearly disliked all talk of an early election, has admitted that ministers are “probably undertrained” for their jobs. “Government doesn’t do enough – a lot of things the private sector would take for granted aren’t done sufficiently.” he told the public administration select committee on Friday.

Nick Raynsford, a decent minister sacked without good cause by Blair, echoes him: “The only difference I would take with him is his use of the three letters ‘der’ in undertrained. There is no organisation in the world with similar responsibilities which is as utterly cavalier as British government about the capability of people it puts into ministerial positions.” Another former minister told the Guardian: “It’s hopeless. I was appointed before the weekend and was making big spending decisions on the Monday.”

France deploys professionals from institutes of administration. Here few ministers have even run the proverbial whelk stall. They don’t understand complex systems. They are easy prey for sharp computer salesmen and fast-talking management consultants who promise to ‘reinvent’ government or ‘gold-plate’ its functions.

Do too much at breakneck speed and you get the chaos that engulfed the Home Office, the benefits system, the health service and the Revenue. And crucial data lost in the post. Mr With apologies to Stevie Smith, Brown is not governing but drowning.

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