Civil Service Reform
What has changed since Haldane Reported in 1918?
Why do Modern Governments seem so Powerless?
'To govern' is to rule or control, but rule and control are two things that modern governments simply cannot do. The second half of the 20th Century saw several fundamental changes in the nature of British society, with reduced respect for authority being accompanied by rapidly increasing voter wealth and longevity. It also saw the British constitution experience a number of major changes, including:
- Devolution (to the Scottish Parliament etc.),
- Extensive devolution to regulators (such as the Bank of England for interest rates), and
- The UK joining what is now the European Union, and its subsequent expansion to take in members from Eastern Europe, with their quite different political cultures.
All this societal and constitutional change potentially puts great strain on the Haldane model under which Ministers are solely accountable for policy decisions, supported by officials who are not accountable for their advice.
Society and The Media
Here is a more detailed list of changes in society and the media which may be relevant:
- The public are nowadays much less likely to accept large scale or long term sacrifice, whether of lives or living standards. Ministers – who are inevitably aware of the need to be re-elected in less than five years time - therefore find it difficult (verging on impossible) to undertake multi-generational investments whether in infrastructure (think London airport capacity, or HS2) or in overseas reconstruction (think Iraq and Afghanistan).
- Ministers are nowadays very responsive to what they see as the demands of the public as expressed by the 24/7 media. Martin Kettle has perceptively pointed out that politics has always been a team game played by individuals who are preoccupied with their own success. But modern politics requires successful politicians to be on message all the time, with the result that there are seem to be fewer ‘big beasts’ who are inclined to stand up for what they (and their advisers) believe to be the best long-term policies.
- Indeed, some Ministers are these days expert in their subject areas, having spent much time researching their policies in opposition. This changes their relationship with their civil service advisers.
- For these and other reasons, too much of the best civil service policy-making talent is nowadays devoted to maintaining the governing party in power rather than in formulating and delivering policy.
- It is nowadays particularly difficult for officials to challenge Ministers in ‘the first 100 days’ of a new Government. This is inevitably the time when Ministers are keen to drive through change, suspicious of civil service foot-dragging and unwilling to give officials a lot of time to assess options and draw attention to obstacles. It is also the time when Ministers are most likely to take decisions which they later regret.
- And resource constraints (especially after the financial crisis) often mean that there are tensions between Ministers – who want rapid results and don’t want to spend much money – and senior officials who believe that Ministers’ aspirations are unrealistic, but who do not want to be characterised as ‘negative’ or uncooperative.
- It is also noticeable that voters nowadays want to spend more and more money on holidays, clothes, durables, etc. whilst few seriously try to promote the benefits that result from the public provision of services. Voters therefore resent paying taxes, and the Government is under constant pressure to spend less, despite the problems summarised above.
In parallel with all this, society has become more complex and less deferential:
- Voters are much more likely to have been to university, to have travelled abroad, and to complain.
- The family is less important.
- Adult children are much more likely to live some distance from their parents
- 42% of children are now born outside marriage.
- The media are much more varied and much more influential, whilst the public are much more inclined to celebrate celebrity.
- Voters expect the quality of public services to improve and refuse to accept inadequate provision.
- They also turn more readily to litigation.
- The Human Rights Act and the Freedom of Information Act add to these pressures.
There have been other more subtle, but perhaps more profound, changes.
- The original welfare state was a system of mutual insurance - hence "National Insurance". It has slowly changed into a system of rights and entitlements based on need. This is morally attractive - but it is also open to abuse, which breeds resentment.
- The post-war generation believed in self-help. Much post-school education was through unions or organisations such as the Workers Educational Association. We now expect the state to provide, and 50% of our children go to university.
- Our increasing wealth and improving health - let alone the absence of major conflict - means that we really do have very little to worry about compared with our predecessors. But of course we still worry, and demand that the Government "does something about" all sorts of lesser risks, from dangerous dogs through to passive smoking.
Another interesting change has been the introduction of choice into health and education policies. This is in part because modern voters want to be able to choose between different approaches to medicine and education. But choice is also a very effective substitute for regulation in that it forces the vested interests in those sectors to take more notice of what their customers actually want. There are, however, some unwelcome consequences arising from the introduction of choice into public services:
- The availability of choice inevitably gives a relative advantage to the sharp elbows of the middle classes. They can, for instance, move into the right catchment areas, and are better at demanding access to the right doctors.
- Choice also requires there to be spare capacity, which has to be paid for. Less popular schools and hospital have to be kept open - often at significant cost - so that they can improve and offer choice when their busy competitors become complacent and less attractive.
- Ultimately, however, persistently unpopular and/or expensive schools and hospitals have to be allowed to close, or else they have no incentive to improve. But such closures always provoke various forms of protest.
Increased Wealth and Improved Health
Looking at society more widely, it is ironic that many of the problems facing today's politicians stem from the successes of their predecessors. Indeed most of them have their roots in our ever increasing wealth and ever improving health.
For a start, UK society is now vastly more wealthy than 50 years ago. A typical post-war household literally had nothing worth stealing:- No car, no TV, no phone, nothing! No wonder it was safe to leave doors open along most British streets. But GDP has risen four-fold since then. Most homes nowadays have a wide range of marketable goods, and huge amounts of money to spend on non-essentials, including on drink and drugs. The crime rate has therefore soared, as drug addicts seek to get their hands on others' wealth, and drunks cause various sorts of mayhem.
Our wealth causes other problems:
- We can afford to eat much more, and travel everywhere by car, and so get fat and unhealthy, with consequences for the health service.
- There are now 10 times as many cars on the roads as in the 1950s, with obvious implications for transport and environmental policies.
- Much the same applies to the growth in cheap air travel.
Other problems are caused by the fact that the distribution of the new wealth is uneven. This is in truth hardly a new phenomenon. A writer in 1590 observed that England's rapidly developing economy "has made of yeoman and artificers, gentlemen, and of gentlemen, knights, and so forth upward, and of the poorest stark beggars.". More recently, the top 5% of UK citizens increased their share of marketable wealth from 35% in 1991 to 44% in 1998. And in the US, from 2001 to 2006, the income of the median household - the point at which half of Americans have more, and half less - fell by 0.5% even though the economy grew by nearly 12%. Many in today's society accordingly feel totally alienated from the world inhabited by those who have well-paid careers. And many of us seek to catch up by borrowing as if there is no tomorrow. Credit card debt, for instance, increased from £34m in 1971 to £54,000m in 2005.
The other big success is our health, and not least the fact that we are all living so much longer than before. Life expectancy at birth is currently increasing at an astonishing 0.25 years per year. Healthy life expectancy is also increasing - but only at around 0.1 years per year. In 1981, the expected time that a typical man would live in poor health was 6.5 years. By 2001 this had risen to 8.7 years. Just imagine what pressure this is putting on the health and social services ...
... not to mention on pension schemes. The average age of men retiring in 1950 was 67. They had by then typically worked for 53 years and would live for another 11 years. By 2004, the average of men retiring was 64. They had by then typically worked for 48 years and would live for a further 20 years. As a result, the work/retired ratio had halved from about 5 to about 2.4. These are huge (and welcome) changes, but with equally huge - and politically unwelcome - implications for tax, pensions and benefits policies.
Globalisation and Other Policy Constraints
As if the above didn't cause Ministers enough sleepless nights, they find that their policy choices are these days highly constrained:
- There is "Europe" for a start. There is now literally no policy area in which Minister and their officials can ignore what is happening on the other side of the Channel.
- Even fiscal decisions need to take account of competition from lower tax economies in Europe and elsewhere. Note, for instance, the huge growth in the (legal and illegal) importation of alcohol and tobacco from France and Belgium. And it is noticeable that the G7 average corporate tax rate fell from 44% in 1996 to 36% in 2005 - which inevitably causes other taxes to rise.
- Incidentally, floating voter (i.e. middle class) resistance to increases in income tax mean that VAT is now the only tax that can be increased to raise significant amounts of revenue. The VAT rate is therefore now 20% compared with 5% when it was first introduced. But this tax is regressive (it impacts proportionately more on the poor than the rich):- another interesting example of the unequal distribution of the consequences of changes in the political landscape.
- Then there is "Globalisation". Eastern Europe, India and China are now major economic players. Indeed, both India and China's universities now each produce 2 million graduates a year.
- As a result, most economic decisions, and other decisions that affect business, must now take into account the mobility of businesses and jobs. There is, for instance, not much point in strengthening our environmental legislation if the result is that we drive polluting industries into countries where environmental protection standards are much lower than our own.
What has this done to Politics?
Many of the above changes begin to bring into question the basic Westminster/Haldane model of government. We are not nowadays disposed to accept that "Government knows best", nor the fiction that civil servants are no more than advisers to all-powerful Ministers. Behind the scenes, too, it is not difficult to get politicians from different parties to agree – at least in broad terms – what ought be done to improve transport policies, energy policies, pensions policies and so on. And voters are well aware of this:
- In 1987 85% said they could see a real difference between the parties. That figure is now much lower and probably below 30%.
- Party membership has fallen to c.190,000 (Labour) and c.140,000 (Conservatives). (2010 figures. Comparable figures in the early 1950s were c.1 million and c.3 million respectively.)
All leading politicians are, however, equally agreed that none of them are going to ask the public to take the bitter medicine that would be needed many of today's political illnesses. For instance, no politician in his or her right mind is going to restrain the growth of cheap air travel, whatever the damage to the environment. Politicians nowadays therefore make extensive use of the media to attack the detail of their opponents' policies, encouraging the likely losers to complain and ignoring those likely to gain, and/or the policy gains themselves. This not only slows or stalls all policy development, but also seems to generate a triple credibility gap between Government and the media; between the media and its readers; and between Government and the people.
Policy development has therefore become less to do with analysis and more to do with reaching out, consulting, involving and then persuading opinion formers, including politicians, think tanks, lobby groups and the media. As noted above, Ministers and civil servants often find themselves in a “permanent campaign”, for which many civil servants are arguably not well equipped.