Civil Service Reform (3)
This is the third in a series of notes which provide more detail about, and comment on, the many attempts – some successful, most not – to ‘reform’ the UK Civil Service. It focuses on six influential external reports published between 2006 and 2010.
- IPPR Report: Whitehall's Black Box
- IPPR Report: Is Whitehall Fit For Purpose? An Analysis of the Capability Reviews
- Trust in the System
- The IfG’s Report: Shaping Up: A Whitehall for the Future
- The BGI’s Report: Good Government: reforming Parliament and the Executive
- The House of Lords Report: The Cabinet Office and the Centre of Government
There is also a section on the strengthening of Departmental Boards, ...
... and a reference to two academic papers published in 2008 and 2009: Old and New Labour Narratives of Whitehall and Leadership in the British Civil Service.
A broader look at the reform activities of the post-1997 Labour Government is in Note 2 in this series.
The 1997-2010 Labour Government made no attempt to drive through fundamental reforms of the structure, culture or way of operating of government, though some would argue that there was reform through stealth, in the way in which both Messrs Blair and Brown concentrated decision making in the hands of a small number of (mainly non-civil service) advisers. (See Note 2 in this series and, in particular, the final section on 'politicisation'.) Instead, Labour Ministers concentrated on improving the efficiency and capability of the civil service. But there was growing pressure for more fundamental change, marked in particular by the publication of the last four reports in the above list in the run up to the 2010 general election. All four were aimed at the next government and recommended fundamental changes in the way government policies were developed and debated, and in the relationship between Ministers and officials.
The authors of those four reports were expressing serious concern about 'sofa government' in which carefully considered civil service advice was said to have been squeezed out by knee-jerk advice from political advisers and others. It is true, of course, that all governments face criticism of the way in which they reach decisions. Governments and Prime Ministers that are admired by some for being decisive are criticised by others for taking 'knee-jerk' decisions without adequate analysis and consultation. But governments and Prime Ministers who deliberate at length, and consult all shades of opinion, run the risk of being portrayed as weak and feeble, and lacking leadership skills. This tension became more obvious during the Blair/Brown years from 1997 to 2009 when both Prime Ministers felt that they needed to both speed-up and centralise decision-making in order to respond to public and media pressure to 'do something' about the issue of the day, and to overcome what they saw as the natural inertia of the Government machine.
Most subsequent commentators have however concluded that the Blair government was indeed much less effective than it might have been had it not been so devoted to announcing initiatives ahead of any planning, and too often acted in haste and then repented at leisure. One Permanent Secretary later characterised the government as 'dysfunctional'. The Prime Minister and his entourage often appeared to believe that new legislation sent signals that forced the system to change. Laws, in other words, could substitute for management.
The public criticism of the Blair/Brown approach were led by a number of ex-senior civil servants (some of whom set up the Better Government Initiative) but was supported by an interesting mixture of others, including ex-Minister Lord Sainsbury (who set up the Institute for Government) as well as senior figures from the regulated and banking sectors who were perhaps more aware of poor government decision making than others in the business community. But the movement also drew strong support from those who criticised decision-making in the run up to the invasion of Iraq, as well as scientists and other academics concerned that their advice - for instance on drugs policy - was being ignored for short term political advantage.
Tom Bower, in his biography of Tony Blair, offers an interesting comment on the day-to-day performance of the Blair government:
'At the outset [of a meeting about the National Health Service], the discussion was about the gap between rhetoric and policy, and the huge cost of more change in the NHS. Blair waved the objections aside. His message was 'deliverology', a new word heralding a new vocabulary for the structural reforms to health, schools and universities.. The agent for change would be targets administered by Michael Barber [Head of the Delivery unit]. ... Barber did not offer complete reassurance. The civil service, he explained, required clarity, leadership and a sense of urgency, and without being told any plans, officials lacked confidence in the government ... [He did not say it but] he blamed Blair for creating the problem by establishing competing quangos and targets.'
But the first two in the above list of six reports were not intended to be critical of either Tony Blair or Gordon Brown. Let's look at these first:
IPPR Report: Whitehall's Black Box
In August 2006 the IPPR published a powerful and persuasive report suggesting that the constitutional conventions governing the civil service, and regulating its relationship with Ministers and Parliament, are now anachronistic and inadequate. They argued that UK government would be more effective if lines of accountability were less confused, and civil servants made more responsible for clearly defined operational decisions. The report's summary contained 12 key propositions:
1. The senior civil service is one of the most important institutions in the United Kingdom. No government of any colour will be able to achieve its aims without a high-performing civil service. This is particularly true of a government, like the present, that has made public service reform a priority.
2. The British civil service is admired throughout the world. It attracts an exceptionally high calibre of entrants; it has high standards of probity; the public it serves largely trusts it.
3. If an institution is under-performing, this is usually largely because of the way it is managed and governed, rather than because of any inadequacy in the people working for it.
4. Despite its qualities, the civil service is under-performing in key respects. It is often ineffective in carrying out its core functions of pol- icy design and operational delivery. Too much Whitehall activity is undermined by its inability to work effectively across departmental boundaries; by a narrow skills-base; and under-developed leadership. It lacks a strong centre able to think strategically, manage civil service- wide change or drive standards up. Performance is poorly managed, and poor performance too often goes unchecked.
5. These weaknesses are not new and have long been recognised. Indeed, the civil service has been subject to a long succession of reforms, intended, but frequently failing, to address them.
6. The constitutional conventions governing the civil service and regulating its relationship with ministers, Parliament and the public are now anachronistic and severely inadequate. This is particularly true of the most important of these: the convention of ministerial responsibility. Together, these conventions entail that relations between ministers and civil servants are ill-defined, and their respective roles and responsibilities unclear. As a result, there is a ‘governance vacuum’ at the top of Whitehall: lines of accountability are confused and leadership is weak.
7. Many of the civil service’s weaknesses are traceable to its inadequate system of governance and confused lines of accountability. They could be remedied by a better system.
8. Previous reform efforts have not addressed the inadequacy in the civil service’s governance arrangements. Instead of seeking to reform the way the civil service is governed, they have focused on second order problems and left its constitutional conventions, and so its basic accountability structure, in place. That is why many of the problems that they were meant to address persist.
9. Government should reform the governance system of the civil service as a priority. It needs, in particular, to recast the doctrine of ministerial responsibility.
10. There are, broadly, two options for reforming the way that Whitehall is held to account:
a. Ministers could, as in the United States, make a ‘reality’ of ministerial responsibility by appointing senior civil servants. Ministers would then be responsible to Parliament, and ultimately the electorate, for every aspect of civil service performance.
b. The convention of ministerial responsibility could be reformulated, making politicians responsible for ‘policy’ decisions and civil servants responsible for clearly defined ‘operational’ ones. Means would then have to be found to ensure that both were made properly accountable to Parliament and the public for the way in which they handle their responsibilities.
11. It is possible to combine elements of these two options. Nevertheless, the second is generally preferable. Britain already has a strong executive, and giving it further powers to appoint and dismiss civil servants would risk strengthening it further. Introducing a clearer division of responsibilities between ministers and mandarins and improving the arrangement by which both are held to account would improve government performance.
12. Both ministers and civil servants stand to gain from a greater demarcation of responsibilities. Civil servants will gain new responsibilities and a higher public profile. Ministers will get a professional, better managed, more strategic and outward-looking civil service. They will also get more support in making policy.
IPPR Report: ‘Is Whitehall Fit For Purpose? An Analysis of the Capability Reviews
The IPPR followed its Black Box Report with another in December 2006 entitled ‘Is Whitehall Fit For Purpose? An Analysis of the Capability Reviews’ (See note 2 in this series for more information about capability reviews.) This second IPPR report specifically recommended:
- The creation of a strong, Civil Service Executive, headed by a civil service Head. The Head of the Civil Service would, in consultation with the Prime Minister and individual Ministers, appoint and line-manage Permanent Secretaries. They would have the power to reward high performers and remove under-performers, in the same way as the private sector and in front line public services. They would also be responsible for strategic management of core corporate functions and services, like human resources, knowledge management, information and communication technology, and financial management. Ministers would not only retain control over resources, but would have a power of veto over senior appointments. And, most importantly, they would remain responsible for setting policy and providing adequate resources.
- The establishment of a new governing body for the civil service. Appointed by Parliament, this would be responsible for setting the strategic direction for the service, appointing a civil service head, scrutinizing performance, and laying out what is expected of civil servants and ministers and, where necessary, managing disagreements between them.
- The enhancement of Parliament's powers to hold Ministers to account and new powers to do the same for civil servants.
- The introduction of external assessment for all Whitehall departments. Departmental Capability Reviews would be conducted by an independent body outside Whitehall.
- A new Department for Prime Minister and Cabinet with a responsibility for co-ordinating government policy and policy development. As in Australia and New Zealand, this new Department would provide a strong centre but would also be open, transparent and accountable to Parliament.
- The enshrinement of these reforms in a new Civil Service Act. The traditional doctrine of ministerial responsibility, though vague and contested, remains powerful and it will be very difficult to establish new and clearer lines of accountability unless ministerial responsibility is reformulated in statute.
Now we come to the four more critical reports:-
Trust in the System was originally prepared for the Regulatory Policy Institute in the summer of 2009 but the Institute was concerned that it strayed too far into political territory. It was accordingly published independently by its authors who argued that too much of the best Whitehall talent is directed towards keeping the Government in power. Their report had two key themes:
- taking the politicking out of politics:- that is the need to draw a clearer distinction between the political game and policy making/management, and
- improving trust by demonstrating that decisions have been made transparently and by those best placed to make them, and through more effective accountability and greater accessibility.
The report was very wide-ranging but the key recommendations with the greatest impact on civil servants were:
a) The government should publish protocols defining the roles and responsibilities of Ministers and officials: while decisions on policy would rest with Ministers, policy making should be recognised as an iterative process between Ministers and advisers, and policy management should be attributed between Ministers and Civil Service and other advisers.
b) Every department should have a Trust Board which would set objectives, policy parameters and budgets, would be responsible for governance, and would be accountable and legally liable for all the activities of the department.
c) Ministers and Permanent Secretaries should jointly have to attest that any decision has been fairly based on the available evidence.
d) 5 to 10% of the worst-performing staff should be replaced every year.
e) The National Audit Office should be given a duty to audit the decisions underpinning resource allocation, so as to constrain Ministers from making pork barrel decisions.
f) There should be a pilot of online questioning of Ministers and senior officials by panels of experts, who would invite the public to submit questions. Similarly, all Parliamentary investigative committees should adopt the innovation of the Treasury Select Committee, which invited the public to send in questions for a session with the Chancellor, Bank of England and the FSA.
g) The essence of options presented to Ministers should be published so as to allow Parliament and public to assess whether Ministers have departed from advice and to seek explanations if they have not been given.
All these recommendations raised some tricky issues to do with Ministers sharing power and accountability with civil servants. Would Ministers be happy for the world to know that their principal advisers did not agree with some of their decisions? Would there be pressure on civil servants to hide their differences with their political masters?
The Institute for Government published Shaping Up: A Whitehall for the Future in 2010. It noted that 'the centre of government has become significantly more powerful, but [senior officials] doubt that this has resulted in much better joining up of policy'. As an example, one of the IfG's interviewees painted the following picture:
Lots of different departments are trying to influence [business] behaviour, so GEO [Government Equalities Office] are saying it’s really important you treat your people well, diversity etc and now BIS are saying it’s all about skills. DH and DWP are saying no, it’s all about health and wellbeing, BIS used to say it’s all about flexible working, DECC says it’s all about climate change, and I could go on and on. So you have got all these different departments, which for perfectly understandable reasons are saying, ‘no I’m the most important,’ but what you end up with is messages just getting lost in the noise. I mean, there is no real attempt to coordinate or prioritise messages.
The IfG accordingly made the following principal recommendations:
- "The Centre" - that is the Cabinet Office and the Treasury - needed to refocus on its traditional roles of coordinating strategy across government. (This would require decentralisation from the sofas of No. 10 Downing Street, the strengthening of the Cabinet Office, and the refocusing of the Treasury's efforts on the macro-economic picture picture and big budget setting, and ceasing micro-management of other departments.)
- Improved governance of government departments, mainly through the strengthening and increased accountability of departmental strategy and management boards. (This again raises some tricky issues to do with Ministers sharing power and accountability with non-executive board members and with civil servants - see the paras re Departmental Boards, below.)
- Improved joint-working across government (which requires Ministers to be willing to compromise and share credit with political rivals running other departments.)
Later the same month, the Better Government Initiative published Good Government: Reforming Parliament and the Executive. Sue Cameron, writing in the Financial Times noted that the report, written mainly by retired Permanent Secretaries, was implicitly very critical of the Blair/Brown way of governing, arguing that collective cabinet responsibility is essential "to prevent a PM - or any other minister - from taking significant decisions, even to go to war, effectively unchecked by their colleagues". The authors also condemned so-called 'sofa government' particularly at the Treasury, where officials were sidelined. Pretty much the only way to Chancellor Gordon Brown was through his special advisers, which meant that much sensible advice from other government departments was simply never heard.
However, to be fair to Ministers, the first chapter of the report does contain an interesting summary of the political and media pressures that encourage these behaviours and the report, although again wide-ranging, in fact recommended rather less substantive change than the two reports summarised above. This was perhaps unsurprising, given its authorship. In particular, there was no suggestion from the ex-mandarins that their successors should share accountability with Ministers, nor that 5-10% of them should be sacked each year! Instead, the report's authors drew particular attention to the need to, amongst other things:
- base policy on evidence and front-line experience
- reduce the involvement of the centre of government in departments' operations to the necessary minimum
- minimise and justify changes in machinery of government, delivery structures and appointments
- require checks by the relevant Cabinet Committees that proposals for legislation meet required standards
- have a legislative programme no bigger than Parliament can scrutinise
- set explicit standards for preparation of Bills and other major proposals
- ensure parliamentary oversight of compliance with such standards
- provide better opportunities for Select Committees to present reports and propose substantive motions
- reinforce civil service skills for the commissioning and performance management of services
- strengthen departmental governance (see the paras re Departmental Boards, below)
- ensure that impartial civil servants have an opportunity to provide advice which receives fair consideration by Ministers
There is some interesting data in the report and its annexes, including the fact that most Ministers only last three years before returning to the back benches - during which time they often have two ministerial posts. Many have never actually run anything in their lives. Sue Cameron noted that Sir Richard Mottram, a former top official at the Ministry of Defence and a signatory to the report, once recalled seeing a new Cabinet Minister turn green when told he was responsible for 400,000 people and a budget of £30bn. The largest number of people the man had managed before was three!
The House of Lords Select Committee on the Constitution published its report on The Cabinet Office and the Centre of Government on 29 January 2010. It did not make any particularly surprising or far-reaching recommendations, but simply encouraged more 'transparency and accountability'. The report nevertheless provided a huge amount of interesting information about the way 'The Centre' [of Government] operates in the UK. The report includes the evidence of a number of eminent witnesses, many of whom made coded (or sometimes not so coded) criticisms of 'sofa government' and dysfunctional relations between the post-1997 Cabinet Office, the Prime Minister's Office, the Treasury and other departments, whilst other witnesses (noticeably Cabinet Secretary Gus O'Donnell and Prime Minster's Permanent Secretary Jeremy Heywood) made a spirited defence of the system, and noted that many of the critics seemed to have a rather over-rosy view of the effectiveness of previous governments' Cabinets and supporting staff.
It is interesting to note that both the Institute for Government and the Better Government Initiative followed the Trust in the System Report in recommending improving departmental governance and the strengthening of departmental boards. These had originally been introduced some years previously as a consequence of requiring all government departments to become more like private sector companies and abandon cash-based accounts and prepare their accounts on a 'resource - i.e. accruals - basis, as well as appoint professionally qualified finance directors. But these early boards had relatively little power or influence. A member of one board said that he felt that he was no more than "a Christmas Tree decoration" - appointed just for show.
There were some differences between the three reports' views of the purpose of departmental boards. The Trust in the System Report had focussed on what would be needed to improve trust in government and government processes. The two later reports concentrated instead on effective public administration. The Trust report therefore offered a vision of strong departmental boards with collective responsibility - and public accountability - for policy development and delivery, whereas the two later reports see the boards more as internal management bodies. Either way, however, the creation of powerful boards would have serious implications for both Ministers and senior officials. The following extract from the Better Government Initiative report summarises the arguments particularly well, even if some would go further, and some would go less far, than was recommended:
"Much effort has gone into trying to clarify the boundaries of ministerial accountability and the division of responsibilities between ministers and officials. The Public Administration Select Committee's report in 200724 showed the difficulties in seeking to do so. It is not practicable to make absolute distinctions between ministerial and official roles in terms of developing strategy and formulating policy; but there could be benefits in delineating more clearly the roles of ministers and civil servants in departmental management, and clarifying and strengthening the advisory role of non-executive directors.
The guidance document 'Corporate governance in central government departments: Code of good practice', issued by HM Treasury in 2005, provides a helpful starting point. The minister in charge of the department is responsible to Parliament for the exercise of the powers of that department; and the permanent secretary/head of the department, as its Accounting Officer, is also responsible to Parliament for the use of public money. Departmental boards and their non-executive directors have advisory roles rather than the accountabilities of a company's board.
The dual personal responsibilities of the minister and the head of the department are we believe valuable for governance in central government, including for propriety and value for money in the use of resources. In terms of the management dimension of the work of a department, the division could be seen as akin to that of the chair of the board and the chief executive in a company. Non-executives were often originally brought in to departments to supply expertise not available in the civil service and tended (though not in every case) to sit on boards chaired by the head of department. The role has since evolved into a stronger challenge function and the company analogy would suggest the minister rather than the head of the department should chair the board.
We see potential merit in this change. Its success is likely to depend upon a shared understanding of their respective roles by the minister and the head of department. The minister's role would be to act as non-executive chair of a board concerned with strategy, business planning, and performance management, not as executive chair of a body micro managing the department. The head of department would be expected to fulfil all the responsibilities of a chief executive, not to act as company secretary. The board should not become involved in the detail of day-to-day policy issues, on which the non-executives, particularly if drawn principally from the private sector, are likely to have little to offer. It would address significant delivery issues on existing operations and performance against budget. Looking to the future, it would concentrate on the portfolio of major programmes and projects, ensuring that programme planning, project management, and delivery models are effective; costs, benefits, timescales and risks are realistically assessed; and that proposed delivery models are appropriate. Below the board the head of department would chair an executive committee responsible for the management of the department.
Departments operate in a political environment. Hard and fast rules are unlikely to survive all circumstances or the skills and inclinations on ways of working of individual ministers. While there is a case for adopting a two-tier model with a strategy board chaired by the secretary of state, and an executive committee chaired by the head of department, other models should not be ruled out. For example, the board might be chaired by a senior non-executive director, with access to the minister, as already happens for the boards of trading funds and some other executive agencies. Whatever the precise structure, the non-executive directors should have periodic access to the minister in charge of the department on the performance of the management team and on the management of risk by the department."
See Note 5 in the series to read about the introduction of 'enhanced departmental boards' by the Conservative/LibDem coalition government.
Two interesting academic papers were published in this period.
David Richards, David Blunkett and Helen Mathers published Old and New Labour Narratives of Whitehall - Radicals, Reactionaries and Defenders of the Westminster Model.
And Richard Chapman and Barry O'Toole published Leadership in the British Civil Service in October 2009. The following abstract gives a good feel for its content:
'This article is essentially a polemic. The argument is that when politicians and officials now talk of ‘leadership’ in the British civil service they do not use that word in the way in which it was previously used. In the past leading civil servants, acting in partnership with ministers and within constitutional constraints, exercised leadership in the sense of setting example, inspiring confidence and encouraging loyalty. The loosening of traditional constitutional patterns, the marginalization of senior officials in the policy process and the emergence of business methods as the preferred model for public administration have led to a political and administrative environment in which leadership in the British civil service is now about encouraging patterns of behaviour which fit in with these changes. Leadership skills are now about ‘delivery’; they are not about motivation. It is time for politicians, officials and scholars to be open about this.'
The next, the fourth note in this series, turns to changes introduced by Gordon Brown's government between 2007 and 2010.