Civil Service Reform 10

The preceding Note 9 (1-3 below), this note (4-6 below), and the following Note 11 (7-9 below) summarise developments in 2013 …

  1. beginning with the complaints about the civil service,
  2. including persistent complaints about the quality of Permanent Secretaries,
  3. before taking a closer look at the Education Department,
  4. and then moving on to the debate about the need for wider reform ...
  5. and an important report from the IPPR,
  6. which led to HMG taking a number of decisions aimed at improving civil service accountability.
  7. Ministers were then reported to be disappointed with the performance of Sir Bob Kerslake, their own appointment as Head of the Civil Service.
  8. And the NAO expressed severe disappointment with HMG’s management of the introduction of Universal Credits, only the day before …
  9. The PASC recommended the creation of a Parliamentary Commission to look at the relationship between Minsters and civil servants.

4.    THE NEED FOR A FUNDAMENTAL REVIEW

The Public Administration Select Committee had correctly forecast, in September 2011, that two key government policies – Localism and the Big Society – would fail because the government was reluctant to undertake a comprehensive reform of the civil service and had ‘failed to recognise the scale of reform needed if it was genuinely to shift power out of Whitehall and into communities.'

And the NAO had drawn attention, in February 2012, to the need for Whitehall departments to make fundamental changes if they were to achieve the lasting reductions in their budgets required by Ministers, but most departments ‘have yet to develop a clear picture of their future state or a detailed plan based on a strategic view across the business’.  A further NAO report, also in February 2012, noted that the MoD was implementing plans to reduce its headcount by 54,000 without fully understanding how it would manage to operate with such a significant reduction in both civilian and uniformed staff.  The MoD would need to make “profound changes to how it works” but the NAO was not provided with evidence that demonstrated that the MoD would do this.

There were also clear lessons for Government in the huge success of the Summer 2012 Olympic and Paralympic Games, in large part as a result of (a) cross-party cooperation, (b) management continuity despite political changes in central and London government, and (c) highly accountable non-political project leaders such as Lord Deighton, Sir John Armitt and Lord Coe.

There was accordingly a flurry of interest in early 2013 in the idea that a Royal or Parliamentary Commission or should be asked to examine the role of the Civil Service and its relationship with Minsters and Parliament.  The idea was strongly supported by Bernard Jenkin, Chair of the Public Administration Select Committee (PASC) in a speech to the First Division Association (the senior officials' trade union) in May 2013.  Here is an extract:

‘ The failure of whole functions of government is becoming common place.  …  I believe that the key concern for the state of the Civil Service must be the quality of leadership of our government administrative system.  …  Any effective administration depends upon trust amongst the leading protagonists, effective governance of the organisation, which in turn depends upon the quality of leadership at the top.  Perhaps these questions can only be addressed by a parliamentary commission, a joint committee of both houses …  This would not be instead of the Civil Service Reform Plan, or an excuse to obstruct or block that programme, but to ask what should follow it.’

And there was support for a Commission from Lord Browne, ex CEO of BP, who argued that:

‘Our model of governance was built for the 19th century, when government was small and uncomplicated. Today, the roles and duties of the permanent civil and wider public service need rethinking and realigning with a political system which has moved on considerably from the [the 19th Century].  The whole nature of departments needs to be reconsidered … Whitehall is failing not because civil servants are lazy or incompetent, but because in the current outdated structure no one could succeed. … It is time to learn from experience and look more fundamentally at how we expect the Civil Service to behave and perform into the 21st century. A comprehensive and independent review of the Civil Service’s structures, processes and lines of accountability is long overdue. So too is a thorough review of the roles and responsibilities of Ministers and Parliament when it comes to their relationship with the Civil Service. The Chairman of the Public Administration Select Committee has, for example, called for a Royal Commission, which would be the first independent examination of the Civil Service and our whole system of governance since the Fulton Committee of 1968.’

[Note:  The Fulton Committee was not in fact as wide ranging as suggested by both these speakers.  Fulton focussed on 'the structure, recruitment and management, including training, of the Home Civil Service'.   The most recent review of the wider role of the civil service, including its relations with Ministers, was in the Haldane Report - published in 1918 ! ]

But the idea of a Commission was opposed by Cabinet Minister Francis Maude.  Speaking to some extent on his behalf, Cabinet Secretary Jeremy Heywood, and Head of the Civil Service Bob Kerslake, told the PASC in April 2013 that "the urgent need was to address identifiable weaknesses in the civil service, including its capacity, and to address those.  A Commission would be a distraction  and there was a real risk that “we’d lose a lot of time when vital change need to happen now”.

The FDA, the senior officials’ association, published their alternative reform plan in April 2013 : Delivering for the Nation: Securing a World-Class Civil Service.  To no-one’s surprise, its key recommendation, amongst many rather dull and detailed ones, was that ‘the civil service must retain the job of presenting final policy advice to Ministers’.

In an extraordinary speech at University College London, in May 2013, former Cabinet Secretary Lord (Gus) O’Donnell said that he thought that an Office of Taxpayer Responsibility (staffed by ex-civil servants, especially with Treasury experience!) should report to Parliament before legislation could be passed, so as to prevent ‘bad policies’ from being introduced.   He had previously been reported as saying that election manifestos, too, should be vetted by an independent body – rather as a Dutch body examines the fiscal consequences of political manifestos.   No one seemed likely to bet on either of these ideas gaining general traction in the foreseeable future.

The NAO then reported in June 2013 on Building Capability in the Senior Civil Service to Meet Today's Challenges.  Within its limits, it was an excellent document which confirmed the existence of many of the skills and leadership failings which so concerned Ministers and outside observers. 

The Guardian’s David Walker wrote an insightful critique of the NAO report as follows:

‘Over successive studies of the senior civil service looms the brooding figure of Ludwig Wittgenstein.  … Whereof one cannot speak, the Austrian philosopher intoned, thereof one must be silent.  Successive reports, including the NAO's, are indeed silent about some of the most obvious reasons for serial underperformance in civil service management, cultural deformation and (getting on for 50 years after the Fulton report) the persistence of unskilled generalism at the top of Whitehall.  That's because they cannot speak about ministers, about parties and parliament, and about the messy interaction between political necessity and administrative logic.

The senior civil service isn't some hulking reactionary beast fighting off ministers avid to cleanse and modernise. Roles are shaped and maintained – especially those around policy and political management – because they are what ministers want. Departmentalism, faulted yet again by the NAO as a source of cost and inefficiency, isn't a bureaucratic trick: it results from political ambition and the democratic necessity of checking and balancing prime ministers and chancellors. 
…
What the NAO also can't do is name names among the leaders of the civil service who – for whatever reason – have conspicuously failed to make the changes any rational observer of Whitehall demands. The report lists [the necessary changes] once again. Why doesn't the Cabinet Office manage; why is personnel data so lacking; why is the diplomatic service excluded, when its members presumably have relevant skills and their interpenetration in Whitehall might be useful (witness the appointment of a diplomat as permanent secretary at the Home Office); why are professional skills demeaned; why aren't senior civil servants required to possess the easily identifiable skill set of modern public management (including numeracy and finance)?

And so on. Richard Wilson, Andrew Turnbull, Gus O'Donnell – now all Lords – and now the odd couple of Sirs Jeremy Heywood and Bob Kerslake: why did they fail? If that sounds harsh, look at the data in the NAO report on civil servants' own appreciation of their management. It's dire, and implicitly says that the Senior Leadership Committee, chaired by the head of the civil service, has over the years made some pretty duff decisions.  With this critique, Amyas Morse, the comptroller and auditor general, is leading the NAO into pastures new. This report is more cogent and direct about Whitehall's failings than ever before. But the NAO, and the Public Accounts Committee, have no choice. To explain their own repeated findings about ineffectiveness and inefficiency, they must go deeper into the structure, culture and operations of government.

But this report shows the limits of inquiry. Unless and until we look at ministers, their practices and ideologies, we are potentially left blaming the senior civil service for doing what the political system requires of it.’

5.    THE IPPR REPORT

One minor reform was that Ministers set up a the Contestable Policy Fund which would pay for outsourced policy advice, to some extent in competition with that from Whitehall officials.  This was probably less of an innovation than it seemed, for Ministers had never been short of advice from all quarters.

(DECC’s Permanent Secretary announced in April 2013 that his would be the second department, after the Cabinet Office, to commission policy-making from outside the department.  But the work “to inform policy around barriers to consent in the Green Deal” (an energy efficiency initiative) looked more like routine consultancy than true outsourcing of traditional civil service policy advice.  Presumably it was easier to access funds from the central Contestable Policy Fund than from the Department’s own severely depleted funds.)

But the first piece of outsourced policy advice had been more the sort of thing that Ministers had expected to receive.   The Institute for Public Policy Research submitted its report in June 2013 ("Accountability and Responsiveness in the Senior Civil Service: "Accountability and Responsiveness in the Senior Civil Service: Lessons from Overseas").  The IPPR had been asked ‘to review the accountability arrangements used in a number of overseas Civil Service systems with the aim of identifying best practice, and proposing recommendations for reforming current arrangements in Whitehall.’  The IPPR summarised their findings and recommendations as follows:

‘This review has focused on understanding how other Civil Service models work in respect of four specific areas:

1.    The appointment process for senior officials;
2.    The level of support provided to Ministers to enable them to perform their roles effectively;
3.    Internal accountability arrangements for senior officials;
4.    External accountability arrangements for senior officials;

At the heart of debates about the relationship between Ministers and civil servants is a question about how best to balance two fundamental values - values that often appear to be pulling in opposite directions. Simultaneously the Civil Service must be sufficiently ‘responsive’ to the Government of the day, while at the same time it must retain a degree of ‘independence’ from the political masters it serves if it is to ensure public services are administered and delivered fairly and legally to all citizens, irrespective of their political orientation.

Tip too far towards ‘independence’ and there is a danger that the Civil Service will become self-serving and immune to political leadership (as depicted by the Sir Humphrey caricature); too far the other way and there is a danger that it will become captured, serving partisan rather than the national interest.

Balancing these two forces is a constant struggle across all major democracies, prompting on-going reform. It is therefore no surprise that today there is a lively debate underway in the UK about how best to manage the relationship between Ministers and officials.

Unfortunately, however, debate here has become intensely polarised, in a deeply unhelpful way. ‘Responsiveness’ and ‘independence’ are seen as polar opposites; locked in some zero-sum relationship where more responsiveness can only be gained by eroding independence and vice versa.

The international evidence we have reviewed strongly challenges this position. It shows that it is perfectly possible to have a more responsive and ‘personalised’ system, without compromising the independence of the Civil Service. The risk of ‘politicisation’ in current debate has been overplayed.

We draw on international experience to develop a set of recommendations that are explicitly designed to make the Civil Service more accountable, more effective and more responsive, while at the same time preserving its political neutrality. We believe – as demonstrated by the experience of other countries – that so long as sufficient safeguards are put in place it is perfectly possible to strengthen the degree of political oversight exercised by Ministers without undermining the fundamental commitment to a merit-based, non-partisan Civil Service.

We argue that Ministers need stronger support and a greater degree of control over the Civil Service. At the same time the accountability of civil servants needs to be clarified and strengthened. These two requirements are not mutually exclusive but reinforce each other. …

In summary we recommend:

1.    Giving the Prime Minister the power to appoint Permanent Secretaries, choosing from a list of appointable candidates. The Civil Service Commission would continue to oversee the recruitment process to ensure appointments are based on merit, but the final decision would now be made by the Prime Minister, not the First Commissioner. The Commission would be tasked with drawing up a list of appointable candidates, which the Prime Minister would choose from.
2.    Providing Secretaries of State and Ministers who run Departments with an extended office of Ministerial staff that they personally appoint and who work directly on their behalf in the department. Ministerial staff should comprise a mixture of officials, external experts, and political advisers. We do not recommend a Cabinet model made up exclusively of political appointees.
3.    Strengthening the role of the Head of the Civil Service in respect of holding Permanent Secretaries accountable. The Head of the Civil Service should be a full-time post, taking on all responsibilities for managing Permanent Secretaries, providing a similar role to that performed by the New Zealand State Service Commissioner.
4.    Introducing fixed-term contracts for new Permanent Secretaries. These would be for four years and would be renewable depending on performance. The Head of the Civil Service would be responsible for appraising Permanent Secretaries but the ultimate decision over whether to renew contracts should rest with the Prime Minister.
5.    Strengthening the external accountability of senior civil servants in key operational roles. Senior Responsible Owners – the senior Whitehall officials charged with major programmatic and implementation tasks – should be made directly accountable to Parliament for their performance (in the same way that Permanent Secretaries appear in their own right as accounting officers).
6.     Enabling the Civil Service to better support Opposition parties by allowing civil servants to be seconded into the offices of opposition parties to help them with policy development.

Combined, these measured reforms would strengthen the accountability of senior officials and improve Ministerial confidence in the Civil Service. Crucially they build on - and pose no risk to - the core traditions of the UK Civil Service. They go with the grain of current Whitehall practice, and could be easily implemented.’

6.    THE DECISIONS

The July 2013 ‘Civil Service Reform Plan: One Year On’ responded the IPPR report and announced further steps to ‘accelerate progress’ on civil service reform and ‘boost support for Ministers’ by:

Ministers decided not to proceed with the first IPPR Recommendation (IPPR 1 - PM appointment of Permanent Secretaries) in view of the opposition summarised elsewhere in this website. (See above for a list of all 6 IPPR recommendations.)

The decision (IPPR 2) to create Extended Ministerial Offices was relatively uncontroversial as long as they were well integrated into, and maintained good communications with, the wider department.

The IPPR’s third recommendation – strengthening the role of the Head of the Civil Service – was not proceeded with, perhaps because its effect would be to strengthen the Senior Civil Service, a direction in which Ministers did not want to go.

But Permanent Secretary fixed term contracts (IPPR 4) were to be introduced, thus increasing Perm Secs’ incentives to keep their noses clean by not speaking ‘truth unto power’ as firmly as in the past.

The most far-reaching change might have resulted from acceptance of IPPR 5  - senior officials’ direct accountability to Parliament for the delivery of major projects.  This is because Senior Responsible Officers might have been unwilling to accept responsibility for implementing their Ministers’ risky plans, and more concerned about having to account to their Permanent Secretary and Parliament when things go wrong. In practice, however, little changed. SRO appointment letters were no more than that. They specified neither the programme's objectives nor its resources nor its timescales.

Even worse, most departments appear to have decided to appoint very senior staff as part-time SROs, rather than nominate SROs who were truly responsible for key projects. The SRO for the National Cyber Security Programme was accordingly told that he would need to devote only two days a month to the role!

I am writing ... to confirm your appointment as Senior Responsible Owner (SRO) of the National Cyber Security Programme ... This will be a part time role which requires two days per month. As SRO you have personal responsibility for delivery of National Cyber Security Programme and will be held accountable for the delivery of its objectives and policy intent; for securing and protecting its vision, for ensuring that it is governed responsibly, reported honestly, escalated appropriately and for influencing constructively the context, culture and operating environment of the project.

Another typical letter is here. Note again that the role is 'part-time'.

It was perhaps no surprise that Ministers did not accept IPPR 6 – the secondment of officials to support Opposition parties.  Apart from the obvious political issues, the officials would have been placed in an invidious position, especially when returning to work for the Government.

The next, eleventh note in this series continues to examine the debate, from 2013 onwards, about whether there should be an independent commission to review the relationship between Parliament, Ministers and the Civil Service.

Martin Stanley

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