Civil Service Reform (4)
This the fourth 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 two things done by Gordon Brown’s New Labour Government between 2007 to 2010.
- Putting the Frontline First: smarter government was a major cost-cutting exercise
- The Civil Service Act (formally the Constitutional Reform and Governance Act 2010) was enacted after much foot-dragging, and made very little difference in the real world.
The first few days of Gordon Brown's premiership, in June 2007, surprised most civil service watchers because there were several signs that Mr Brown (belying his ‘Stalinist’ Treasury reputation) had a more positive approach to the civil service than did his predecessor. He was certainly not known, when in the Treasury, to be a fan of the upper ranks of the civil service, preferring to deal with a small number of trusted advisers, and refusing to let them communicate openly with colleagues elsewhere in Whitehall. It would not have been surprising if he had announced something pretty dramatic in his first few days in office, perhaps along the lines of the IPPR's 2006 ‘Black Box’ recommendations – see Note 3 in this series.
The Cabinet Secretary is reported to have said that the end of the Blair era and the beginning of Gordon Brown’s premiership had been characterised by an overwhelming vote of confidence in the Civil Service. We were told that Mr Blair had gone out of his way, at his last Cabinet Meeting, to praise the civil service - and similar sentiments had featured in the new Prime Minister’s first remarks. It was noticeable that the civil service had been at its best in changing gears to quickly and efficiently changed circumstances after the departure of a long-serving PM. And the new PM had wished to send an early signal regarding his wish that the Civil Service should play a more influential role abolishing the power of a small number of Special Advisers to give instructions to civil servants. He also seemed to move towards more traditional ground, by announcing a Civil Service Bill.
A few days later, in July 2007, Mr Brown announced that 'citizens' juries' were his new government's "big idea" for allowing citizens to exercise their right to influence policy. Speaking on BBC's Today Programme on 11 July, he said: "I'd like to have what are called citizens' juries, where we say to people, "look, here is a problem that we are dealing with - today it's housing, it could be drugs or youth services, it could be anti-social behaviour - here's a problem, this is what we are thinking about it, but tell us what you think. And let's look at some of the facts, let's look at some of the challenges. Let's look at some of the options that have been tried in different countries around the world, and then let's together come to a decision about how to solve these problems". In practice, and perhaps unfortunately, very little seemed to come of this interesting idea, which maybe needed more careful thought, planning and testing, before its formal announcement.
Mr Brown’s premiership was of course dominated by the 2008 financial crisis but he in due course turned his attention to the government machine.
Putting the Frontline First: smarter government
Sadly, however, 'Putting the Frontline First: smarter government', published in December 2009, contained little more than a series of cost-cutting measures. Introducing this "plan for reforming government", Prime Minister Gordon Brown said the goal was to make government and institutions both responsible and responsive to the British people. But there were no fundamental reform proposals. Instead, during his speech, the PM announced plans to:
- Cut the senior civil service pay bill by up to 20 per cent over three years to release savings of £100 million a year.
- Halve Whitehall spending on consultancy, and reduce spending on marketing by a quarter - in total, an annual saving of £650 million.
- Merge or abolish 123 government arms length bodies with the remainder subjected to greater oversight, with a view to save a further £500 million a year.
- Relocate more staff outside London and the south east.
The following extract from his speech did however provide interesting background to his proposals.
"We are now entering the third generation of public services. The first generation ensured everyone could have access to essential services that up until then had been provided patchily and inadequately. But in previous decades successive governments skimped on the investment that our public services depend on, and became complacent about the quality of the services they provided to the public. So in the second generation of public services which began in 1997 we transformed investment in our public services. What were once seen as ambitious goals are increasingly seen as the norm. Today there are over 42 thousand more teachers, more than a hundred new hospitals with over 89 thousand more nurses and 44 thousand more doctors, and 16 thousand more police officers on our streets. This investment - coupled with tough performance management - has driven a rapid increase in standards. The next stage of public service reform will be characterised by a radical shift of power to the users of public services, all users, not just those who are wealthy and powerful, not just those who have the resources to make the best of what government offers them. Power will shift to everyone who needs to use our public services."
Turning to the proposed cuts in the senior civil service (SCS), Mr Brown went on to say:
"So our plans will mean some of the most sweeping changes in administration in this country in half a century. In line with the way people carefully and wisely manage their household budgets, every penny spent by Whitehall must count. And this prudence will start at the top. That is why I can announce today that the senior civil service pay bill will be cut by up to 20 per cent over the next three years to release savings of £100 million a year. Of course, public service is admirable and important and it deserves fair reward, but we must never forget that our priority is excellence at the frontline."
The accompanying document tried to make it sound as though there was more to the proposal than mere cost-saving, describing the "key action" as being to: 'Equip the Civil Service to meet future challenges, by reshaping the organisation of the senior civil service, reducing its annual cost by £100 million within three years, and put in place radical reforms to senior pay across the wider public sector.'
The proposed cuts in the Senior Civil Service were hardly unexpected - total SCS staff in post had risen substantially between 2000 and 2008. It was nevertheless interesting that the target was described as cuts of "up to" 20%, leaving plenty of wriggle room if the target was not met. The senior civil servants' union, the FDA, made similar points:
'At this stage it is unclear which, if any, of these announcements will have any impact upon the civil service before the General Election ... this comes at a time when the demands on the SCS are greater than ever and there is a real possibility of a change of government, with a new team of Ministers who will have a new set of policy objectives and Manifesto commitments. Following a similar round of savage cuts in SCS staffing levels by the then Conservative Government in the mid 1990s, the new Labour Government found in 1997 that it had to significantly increase capacity at this level to deliver its own new policy initiatives ... The SCS has grown over the past decade because - since 1997 - Ministers have significantly extended the role of central government. It is likely that, in the first period of a new Parliament, Ministers will need all of the currently available resources to take forward manifesto commitments and likely reforms to public services in the coming decade, even if the SCS eventually contracts in size as these reforms bed down.'
It might also be noted that, although the PM pointed out that the £100 million could pay the salaries of 3,200 nurses (or 2,200 teachers) for a year, he had elsewhere in the same speech claimed credit for the Labour Government's recruitment of 42,000 teachers and over 89,000 nurses. But it was more than likely that this huge rise in public spending would be reversed over the coming two or three years. Put another way, the £100m cuts were pretty small beer compared with the UK's public sector deficit which was not far short of £90,000m in the year to September 2009.
It was interesting, too, that the SCS was hardly touched by the Prime Minister's announcement that he was "targeting" the pay of those public servants that earn over £150,000 pa. Almost all of these supposed 'fat cats' were employed in the wider public sector, not the civil service, and even those few within the civil service were not career officials but were recruited to senior jobs from outside the service.
[In the event, SCS headcount peaked at 5071 as at 31 March 2010, and then started falling under the successor Coalition Government, down to 4340 as at 31 March 2013.]
The other key action of immediate interest to the civil service was introduced as follows:
"Five years ago the Lyons review successfully relocated 20,000 civil servants and this year's budget increased that figure by 4,000. And there are opportunities to review the working practices of the remaining 132,000 staff still based in higher cost areas of London and the south east with a view to moving 10 per cent to cheaper locations." The corresponding key action was that "by March 2010, Ian Smith will advise the Government on the scope for further relocations out of expensive parts of the South East and London."
The FDA's response pointed out that most civil service employment in the South East consisted of relatively junior staff in local office networks such as Jobcentre Plus, tax offices and the Courts Service. Moreover, any financial savings were very limited in the short term and significantly offset by the initial costs of the relocation and the disruption to effective delivery of services.
Two other key actions were to:
- Rationalise and reform arm's-length bodies (ALBs). ‘We will merge or abolish over 120 ALBs and publish stronger governance proposals in the new year on ALBs, as well as the results of a review by Budget 2010. this will deliver at least £500 million in savings.’
- Improve back office and procurement processes to the standard of the best, to deliver the £9 billion of savings identified in the operational efficiency programme. ‘We are publishing, alongside this document, data on every department's back office performance with a new set of comparators. We will look to expand the most successful shared services centres, exploring the best governance and ownership structures for every department. And we will release further resources for frontline services by reducing spend on consultancy by 50%.’
The Civil Service Act
There had been a debate since 1997 - and probably long before that - about the advantages and disadvantages that might be associated with putting the impartiality etc. of the UK civil service on a statutory basis. The debate was eventually resolved by the passing of the Constitutional Reform and Governance Act 2010. The following notes summarise the background to this legislation.
The proponents of a Civil Service Act saw it as support for the status quo, including statutory protection for the impartiality of the civil service and a defence against the employment of too many imported czars and cronies. They were very happy with the Civil Service Code, the Code of Conduct for Special Advisers and the Ministerial Code, which require Minsters to take advice from their apolitical civil servants before making decisions. But they said that these rules were often flouted, and would like them to be made enforceable. They also felt that modern day Permanent Secretaries - one of whose traditional tasks was to defend the status and ethics of the civil service – had become too "pragmatic", and needed to have their backbone stiffened by force of law. And they wanted to ensure that future change in the status and role of the civil service is implemented only with the agreement and authority of Parliament.
Opponents argued that an Act would stifle much needed Civil Service Reform and entrench the monopoly of current civil servants, a monopoly which shelters poor and unimaginative performance.
But many influential figures had argued for some time that the constitutional role of the civil service needed to be protected by something stronger than the Civil Service Code. The Civil Service Code did of course set out the constitutional framework within which all civil servants work and the values they are expected to uphold. However, although the Code had some legislative force as it was made under an Order in Council, it lacked the force of a law passed by Parliament. As a result, both main political parties committed, before the 1997 General Election, to introduce a Civil Service Bill if they were elected. The introduction of a Bill was further encouraged by a report by the Committee on Standards in Public Life - see further below. The Labour Government accepted the committee's recommendation that there should be a Civil Service Act, but did not announce a timetable for its enactment.
One problem was that Tony Blair's Ministers probably feared that the Bill would open a can of worms, and facilitate renewed attacks on its handling of the David Kelly affair, its supposed love of "spin", its supposed centralist tendencies, and so on. They were concerned, too, that the passage of the Bill might be used to reopen debates about privatisation and related issues, such as the accountability etc. of Executive Agencies and the effect of "contracting out" public sector jobs. Ministers were therefore understandably concerned that the effort of producing the legislation would not be worth the resultant benefit. In other words, is there was not very much wrong, then why try to fix it?
But the pressure had been mounting for some time:
Sir Robin Mountfield (then Permanent Secretary of the Cabinet Office) had in 2002 published a note summarising the intended content of a Civil Service Act.
Sir Richard Wilson, outgoing Head of the Civil Service, had delivered a speech in March 2002 dealing with the role of Special Advisers, the need for a Civil Service Act and so on:- Portrait of a Profession Revisited.
But his successor, Sir Andrew Turnbull, had seemed lukewarm:- "We have lived without one for 150 years" (Financial Times 1 May 2002). And Cabinet Office Minister Douglas Alexander was reported to have said on 2 July 2002 that, although the Government remained committed to legislation, it had higher priorities.
The Committee on Standards in Public Life repeated its strong support for an Act when it published its ninth report in April 2003 - Defining the Boundaries within the Executive: Ministers, Special Advisers and the permanent Civil Service.
. The Government responded as follows in September 2003:-
'The Government accepts the case in principle for legislation but any legislation has to compete for its place alongside many other priorities. The Government also believes that much more can be done to implement most of the Committee’s concerns without or in advance of legislation. For example, in recommendation 14, the Committee feels strongly that the appointment of the First Civil Service Commissioner needs to be able to carry the confidence of each new Administration. As the Committee acknowledges this can be achieved through consultation with Opposition leaders. Another example is the appointment procedures for public appointments where a rigorous and effective process has been established without legislation. The Government believes that the present arrangements work well but it will continue to reinforce the impartiality of the Civil Service. Once the Public Administration Select Committee’s proposals for legislation for the Civil Service have been published, the Government will itself publish a draft Bill, as a basis for further consultation.'
The Public Administration Select Committee was also a strong supporter of a Civil Service Act. It is for instance well worth reading a note of a Public Administration Committee conference hosted by the Committee in October 2003. No doubt remembering that the Civil Service Code was only adopted because a draft was first published by a Select Committee - and as foreshadowed in the Government's above mentioned response to the CSPL - the Committee then published its own draft Bill on 5 January 2004. According to the committee, the draft Bill 'provides a clear framework which would enable Parliament to ensure that public service principles are upheld and that civil servants and others are carrying out their jobs with propriety. It is firmly based on existing codes and institutions, while giving Parliament greater powers of oversight and strengthening accountability. The Bill is not intended to shield civil servants from change or make them a protected species. In fact, it would make their duties and obligations clearer than ever. Neither would it affect the right of ministers to run their departments, make policy and deliver programmes. What it would do, for the first time, is to anchor some of the key operating principles of our system of government in Parliament.'.
Various clauses of the Committee's draft:-
- replaced Orders in Council as the principal legislative vehicle for civil service matters,
- strengthened the position of the Civil Service Commissioners
- put the Civil Service Code on a statutory basis, and
- clarified the role of special advisers without limiting their numbers.
The media reported that the Committee's draft Bill was merely intended as public reassurance, to provide a framework rather than change relationships, and to 'anchor the civil service in Parliament'. Tony Wright, Chairman of the Committee, said that the Bill 'sought to express what we take to be the prevailing consensus'. But the Committee's draft did unambiguously transfer control over the status, role etc. of the civil service from Ministers to Parliament.
The Government nevertheless undertook to publish its own draft Bill and did so, with an accompanying consultation document, on 15 November 2004. The consultation document was written in fairly unenthusiastic terms, but the draft Bill was uncontroversial, and did indeed follow the lines of the earlier Select Committee draft (see above) apart from failing to give the Civil Service Commissioners the power to undertaken enquiries into the operation of the Civil Service Code and the Code of Conduct for Special Advisers. In other words, although the Commissioners would retain their power to consider appeals from civil servants under the Civil Service Code (which could in future if necessary be made direct to the Commission rather than first to the official's department) their 'primary function would continue to be the principle of selection on merit'. This disappointed those who would have liked to see the Commission given the role of guardian of traditional civil service values.
The draft Bill also usefully made it clear that (apart from two special advisers in No.10 - itself a reduction of one on the previous maximum) special advisers could not authorise expenditure, exercise line management responsibility over permanent civil servants, or discharge any statutory power. However, they would continue to be free to commission work from civil servants on behalf of their Ministers.
The Government then said nothing on the record after the end of the consultation period. In particular, there was no mention of any Civil Service Bill in the May 2005 Queen's Speech following that month's General Election. And, although incoming Cabinet Secretary Gus O'Donnell told the Public Administration Select Committee in October 2005 that he favoured legislation, he also stressed that it was not a legislative priority for the government. It therefore looked unlikely that there would be legislation in that Parliament - until Gordon Brown's first announcements as Prime Minister, on 4 July 2007, that he did indeed intend to introduce a Civil Service Bill. The accompanying statement from the Justice Ministry was inevitably pretty vague, given the very few days in which it had been drafted:
'The Government believes that, as part of the legislation it intends to bring forward in the next Session, it is right to include measures which will enshrine the core principles and values of the Civil Service in law. This legislation will place the independent Civil Service Commissioners on a statutory footing. It will also make a legal reality of the historic principle of appointment on merit following fair and open competition. As the Civil Service Commissioners themselves have pointed out, legislation will ensure that the Civil Service is not left vulnerable to change at the whim of the Government of the day without proper parliamentary debate and scrutiny. It is also important, however, that legislation in respect of the Civil Service is concise and focused, ensuring it does not hamper the Service's ability to respond flexibly and rapidly to changing circumstances. Amongst other matters, the legislation will clarify the legitimate and constructive role of Special Advisers within government. Having Special Advisers allows Ministers to get the political advice they need, and reinforces the political impartiality of the permanent Civil Service by clearly distinguishing the sources of political and non-political advice.'
Lord Chancellor Jack Straw announced on 25 March 2008 the introduction of 'a Constitutional Renewal Bill', part of which would, for the first time, put the civil service on a statutory footing by enshrining the core values of the Civil Service - impartiality, integrity, honesty and objectivity - into law, as well as the historic principle of appointment on merit. This was part of a much wider set of proposals entitled The Governance of Britain – Constitutional Renewal. The Bill made provision for special advisers and the Civil Service Commission. Indeed, the civil service part of the Bill was pretty much as predicted - useful in its way, but changing very little. In particular, there was no suggestion that Parliament would take any form of control over the civil service. And, although the Civil Service Commissioners would have power to 'undertake inquiries without a complaint being made by a civil servant', such inquiries would only be made 'with the agreement of the Government, on the advice of the head of the Civil Service'. The legislation was not enacted by the end of the 2008-9 session and was therefore carried over to 2009-10 and was rushed through its final parliamentary stages to become 'the Constitutional Reform and Governance Act 2010' just before the 2010 General Election.
The main - or at least most interesting - elements of the Act, from a civil service point of view, were as follows.
- The Act (re-)establishes the Civil Service Commission
- It requires the publication of a Civil Service Code, which forms part of the terms and conditions of service of civil servants.
- The code must require all civil servants (inc. special advisers) to carry out their duties with integrity and honesty, and must require all civil servants (except special advisers) to carry out their duties with objectivity and impartiality.
- Civil Servants may complain to the Civil Service Commission (who will carry out investigations) if they suspect breaches of the code. But there is nothing in the Act which authorises the Commissioners to undertake inquiries without receiving a complaint, which undoubtedly means that investigation will remain very rare as civil servants will remain highly reluctant to bring an official complaint.
- Selection of civil servants (other than special advisers) must be on merit and on the basis of fair and open competition, subject to exceptions determined by the Civil Service Commission
- The Act defines 'special adviser', requires their numbers etc. to be reported annually, and provides that they may not authorise expenditure, nor exercise management or other power.
The next note, the fifth is this series, focuses on changes introduced by the Conservative/Lib Deb Coalition Government between 2010 and 2012.