The conversations I have had recently with senior civil servants, advisers and Labour ministers have often had a plaintive tone. Why, these people want to know, aren't the electorate more grateful for what's been done for them? Where's the political reward for all the money spent on schools and hospitals and economic regeneration? Why doesn't the country appreciate the fall in crime figures? How could voters be flirting with the cost-cutting Conservatives, when Labour's statistics show that spending money produces measurable and improved results?

These sound like the right questions, but they aren't. What the questioners really mean is not "Where did we go wrong?" but "What's wrong with all of you?" And what's wrong with us is that we're not the automatons New Labour thought we were. We're not remote and dispassionate observers of our society, making cool calculations about its success or failure on the basis of government-generated numbers. We're complicated, vulnerable, emotional creatures, and we live with the consequences of official decision-making every day of our lives. What matters to us aren't the figures we're fed, or the targets that get hit, but what the experience feels like to us. Yet that part of the process has been almost completely neglected in official eyes.

Take the NHS. As Labour keeps reiterating, spending on health has trebled in 10 years. True, waiting lists have been cut, hospitals rebuilt, medical staff who might have gone elsewhere retained. But those things are only a part of what we value about a health service. At its essence, what we most want is care and concern, and those qualities are no longer a priority for the NHS. Filling in forms, keeping records and manipulating targets have become the explicit focus of staff concerns, and often patients are left brutally aware that their own wellbeing is the last thing on anyone's mind.

In the past few months no one I know who has been in hospital has left without feeling distressed by the levels of incompetence and indifference among the staff. An elderly stroke victim was left weeping by the steadfast refusal of the night agency staff to bring him a bedpan or turn him at nights. The wife of a cancer patient says that, if she had not been by her husband's side over the past year, there would have been many occasions when he would have died, because drips had run out, or medicines had been forgotten, or the wrong ones prescribed. An 80-year-old with a hip replacement was discharged on a Friday night into the care of her blind and demented husband, because the hospital staff didn't think it their business to arrange or notify anyone of her need for aftercare.

These people don't emerge from the system thinking how brilliant and well resourced it is. They come out grateful for having survived it, and conscious of how anxious and threatened they felt within it. They care less about gleaming new buildings than about the human relationships that take place within them – and those have been made less warm, less good and less likely to flourish precisely because of the reforms that Labour has pursued.

Our disillusionment with education has the same roots. The chief business of schools is no longer to produce educated people, but education statistics. For the first few years of Labour, the vast majority of the population could be impressed by those. But as more children went into the system, and more school-leavers emerged from it, the faster it became apparent to parents, students, employers and universities that there was a disastrous mismatch between the claims made by the figures and the reality of bored stressed and puzzlingly under-educated teenagers emerging from it.

Every part of the state has been obliged to participate in this culture, and has had its priorities skewed by it. This week Jan Berry, the senior policewoman the government appointed to look at how bureaucracy had affected the police, talked despairingly of how the police had become slaves to statistics. She said that producing and recording the official figures had now "become more important than investigation and resolving crime-related problems".

Many of us already know that. We know it because we've experienced the police's lack of interest in a crime that's unlikely to be solved, or that won't count towards their targets. It's why we don't believe the crime figures. Bike thefts, assaults on teenagers, handbag snatchings or muggings outside street-crime priority areas are all too frequently ignored.

This year we discovered that one of the principal reasons a cab-driving serial rapist in London was left free to attack women for so long was that sexual assaults, unlike car crime, didn't feature on the Home Office priority lists. Berry is pleading for a change in the embedded culture, and for a return to problem-solving as a priority.

Doing so, though, would involve a reversal and recantation of every assumption that this Labour government has made about how to run the state. It thought it was being modern and innovative by treating the country as if it were a business, where all outcomes could be measured by putting money in and getting targets out. It made the false assumption that building a school or a sports complex was automatically an investment, just as it would be if the government were in the business of mechanising chicken factories or building car plants. It thought it could close police stations or post offices in the name of cost-cutting, with as little effect as if it were Coffee Republic shutting down some unprofitable shops. It didn't stop to remember that the business of all public services is dealing with the needs of people, and that those are never just mechanical, but social and emotional too.

Governments cannot afford to take a business's narrow and mechanistic view of people's requirements, because it's not just a collection of service providers. A government's wider duty is to frame and structure the society in which we live. Rebuilding society was one of Labour's explicit aims, in contrast to Mrs Thatcher's infamous reference to there being no such thing. Yet our encounters with the state are profoundly important in shaping our culture, and every time we run up against the wooden indifference, public lies or robotic responses of officialdom we shrink into ourselves, and the bonds between all of us are weakened a little more.

Labour thought that what we prized above all else was economic efficiency. Clumsily, it tried to give it to us and, even when the evidence showed it wasn't delivering, it went on attempting to give us statistics instead. But the priorities were wrong. What we all prize in our encounters with others is a sense of our value. We are social animals, alarmed by the uncertain world in which we live, with a profound need to be recognised, respected and responded to. We want public services to respond to us as people, and to give us the sense that we matter. It is the deepest human need, and yet this government has been oblivious to it.

When it wonders why we're not grateful to it, the answer's really simple. It's the experience, stupid.

jenni.russell@theguardian.com