Civil Service Reform 13

This is the thirteenth 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.  Like Note 12, it focusses on developments after the publication of the late 2013 PASC report recommending the establishment of a parliamentary or similar inquiry into the future of the UK Civil Service.

Appointment and Recruitment – esp. of Permanent Secretaries

Review and Updating of the Recruitment Principles:  A Consultation was published in January 2014, as the Civil Service Commission sought to move a little way in response to Ministers’ desire to have a greater say in the appointment of senior officials.   The Commission also sought to clarify and strengthen their existing Principles, stressing that (save in truly exceptional circumstances) recruitment at all levels must remain on merit on the basis of fair and open competition, but recognising that some problems had arisen in the interpretation of the principles.   The key text re Permanent Secretaries is below.

Head of Department Appointments

41. The Government proposed in the Civil Service Reform Plan in 2012 that for Head of Department appointments Secretaries of State should be able to choose from a list of appointable candidates, as assessed by an independent panel. They argued that Secretaries of State need to be confident in the senior civil servant with whom they will effectively share leadership of the Department, and that, if the Secretary of State is to be held accountable for the Department’s effectiveness, he or she must have the decisive say in selecting the civil servant who is appointed to head it.

42. In the progress report, “Civil Service Reform: One Year On” the Government repeated these arguments, but with the important new proposal that the Prime Minister, rather than the individual Secretary of State, should exercise the final choice.

43. The Commission accepts that Heads of Department are in a special relationship with their Secretary of State, different from that of any other civil servant. It is highly desirable, therefore, that the Secretary of State should be closely involved in the appointment process. However, that has to be within a framework which ensures that merit remains the basis for selection: this is not only because it is the legal requirement in the 2010 Act, but also because appointment on merit is fundamental to the impartial Civil Service which is a key pillar of the British system of government.

44. In our view – and that of our predecessor Commissions – merit is best assessed by a process which has independent oversight, is objective and evidence- based. The risk in the Government’s proposal is that it could lead to a Secretary of State substituting his or her personal view of merit for the outcome of an independent, objective assessment process. We doubt whether that is compatible with the legal requirement and it risks candidates being seen to be appointed on the basis of personal or political patronage.

45. We agree, however, that there should be special provisions in the Recruitment Principles to ensure that Ministers are fully involved in each stage of the selection process for Heads of Department, while always protecting the principle of appointment on merit. We are, therefore, putting forward for consultation two alternative propositions for inclusion in the text.

46. The first would put into the Recruitment Principles the new guidance which the Commission published a year ago in response to the Government’s original proposition. This set out in detail how Ministers should be involved in the process for appointing Heads of Departments. It includes for the first time a provision enabling a panel to seek a Secretary of State’s view on candidates of equal merit after final interviews and before it reached a final decision on the recommended candidate. This was designed to provide extra flexibility to involve a Secretary of State where there were two candidates of equivalent merit, between whom the panel was having difficulty making a choice.

47. We agreed with the Government that we would review that provision after a year. There have been only two Heads of Department competitions in the past year, in neither of which the new provision has been tested. Nevertheless, we think that it could be incorporated in the Recruitment Principles without further delay to provide some pragmatic flexibility at the end of the appointment process. Paragraphs 46 to 49 of the draft Recruitment Principles show how this could be done.

48. The second option is a variation on the first. It responds to some criticism that the new procedure introduced in 2012 increases the procedural complexity and leaves it unclear how much Ministerial influence can be exercised at the final stage. Some have argued to us that it enables Ministers to be offered, and exercise, de facto choice but behind the scenes.
49. In this second option, therefore, we are clear about the extent of Ministerial involvement. Where a panel assesses two or more candidates to be of equivalent merit (i.e. assessed by the panel as within the same marking band), it may put those candidates to the Prime Minister for decision. He should then make the final decision, which must still be made on merit, in consultation with the Secretary of State and Head of the Civil Service. In such cases the power for the Minister to ask the panel to reconsider is no longer needed and is therefore removed. Paragraphs 50 to 54 of the draft Recruitment Principles show how this second option would be incorporated in the text.

50. For the first time this provides an element of choice for the Prime Minister. But since this would only be possible where the Panel concluded that candidates were of equivalent merit, the principle of merit is protected. As an added protection, the First Commissioner, as Chair of the panel, retains the power to override the decision to put more than one candidate to the Prime Minister, in particular where he believes there is a danger of the merit or impartiality principles being put at risk.

51. Both versions of the text respond to the “Civil Service: One Year On” report by enabling the Prime Minister, rather than the Secretary of State, to be the key decision taker. The 2010 Act gives the Prime Minister the legal power to appoint or not appoint a recommended candidate.  It is a matter for the Government, not the Commission, to decide whether he exercises that power himself or delegates it to the Secretary of State. It is important, however, that this does not create a two-tier structure involving the Secretary of State and the Prime Minister in turn. Our proposition is that the panel should make its recommendations direct to the Prime Minister, who should consult the relevant Secretary of State as appropriate.

More Academic Comment - especially on Extended Ministerial Offices

Queen Mary's Professor Perri published this interesting blog in December 2013 (emphasis added):

"War" has broken out, journalists say. Introducing a confrontation between Conservative MP and former police and criminal justice minister, Nick Herbert and former cabinet secretary, Lord (previously Sir Robin) Butler on BBC Radio 4’s “The Week in Westminster” on Saturday 30th November, the Daily Telegraph’s Peter Oborne positively salivated with enthusiasm in telling us that hostilities between ministers and the senior civil service are at their fiercest for generations. Conservative bloggers such as Peter Hoskin are similarly excited.  So what is the dispute about and why does it matter? As with real wars, tensions between coalition ministers and the senior mandarinate have several causes. Four issues have come together.

The most immediate casus belli is Universal Credit, the government’s scheme for merging out-of-work benefits into a single payment. This has not been a teaching case study of successful policy implementation. The Major Projects Authority concludes that £140m has been “wasted” on information technology assets which will have to be written off (the department insists that some could yet be useful). So far there have only been local pilots covering a limited number of the benefits intended to be merged. But these have shown a number of problems. Although the government announced that the scheme will be implemented nationally by 2017 except for “some” recipients of Employment Support Allowance, this seems a very ambitious goal.
So the first issue is whether the civil service is to blame. In September, the Work and Pensions minister Mr Iain Duncan Smith seemed to be accusing the civil Service ITteam. By October, the allegation was being bruited in the press – presumed on the basis of briefings from within the coalition – that the Permanent Secretary, Mr Robert Devereux, had been asleep at the wheel. Precisely because he is a civil servant, of course, Mr Devereux can’t give his version in public unless a select committee asks him a question in a way that he can answer truthfully without compromising his duty of loyalty to his minister. And that’s a tall order.

We shan’t know for months or years who was most at fault for which aspects of the Universal Credit IT debâcle. Did Mr Devereux give the project as much attention as he reasonably could, given his department’s size and the number of its other projects? Were the junior technical staff not up to the job? Or the project managers? Or were Mr Duncan Smith’s instructions clear enough to enable them to produce a clear and robust project brief? Was the aspiration too big and complicated in the first place, as critics such as Colin Talbot of the University of Manchester argued? We don’t know, but I shall not be surprised if, by the time the papers are declassified, there is some blame for everyone involved because British government IT fiascos usually arise from all those problems at once, and more.

Second, the senior civil service is offended by criticism in the press based on briefings presumed to come from ministers. Much of Lord Butler’s broadside was a denunciation of just this. The current Cabinet Secretary, Sir Jeremy Heywood, is reported to have defended Mr Devereux to the prime minister and, apparently, to have pinned the blame for the Universal Credit fiasco on Mr Duncan Smith instead.  This looks like the senior civil service briefing off-the-record in the manner that Lord Butler complains that ministers have been doing. But off-the-record briefing is a symptom, not a cause of the breakdown of relations.

By the time Mr Herbert squared off against Lord Butler, the issue seemed to be whether this case was symptomatic of a wider civil service inability to manage big projects. That brings us to the third issue. On “The Week in Westminster” Mr Herbert claimed that because no permanent secretary had resigned over any of the long series of big project failures from the last two decades, the senior civil service is not sufficiently accountable, and that by contrast any private sector chief executive who presided over a big fiasco would have walked the plank.   In fact, private company CEOs certainly don’t always resign when project failures come to light. It helps of course that when many corporate IT projects do fail, as they often do, CEOs rarely face a hostile media or any questioning at annual general meetings even faintly reminiscent of a grilling by the Public Accounts Committee.

In any large organisation, large projects often fail, have to be abandoned, are delivered late or over budget, produce disappointing results or have their scope drastically reduced to get implemented at all. The more fundamental question is whether we think that the most powerful incentive we can give top civil servants to get them to run big projects better is a blunt expectation that they must resign when things go wrong. One outcome of using that strategy with the senior civil service might be that we’d get resignations so often that the capability of top management would be undermined. Another is that civil servants would do everything they could to reduce the number of big projects or ambitious activities they take on. Ministers who complain that the civil service is risk averse ought to be careful what they wish for. A duty to resign for any project failure could make that problem worse. Alternatively, if ministers insist on big, high risk projects and then insist that top civil servants take the blame they go wrong, they can hardly be surprised if few really talented people want to become permanent secretaries. Putting the word “scapegoat” in a job description is not usually recommended by recruitment consultants. Even then, it isn’t very likely that ministers would escape blame by such a rule anyway. It would strain civil servants’ loyalty under our “public service bargain” too far to hope they would not respond by briefing the press that the fault lay with ministers.

Probably the fourth issue behind the current row worries the top civil servants most. Cabinet Office minister Francis Maude set out proposals in June for ministers have French style “cabinets” of politically appointed staff with powers to give orders to civil servants. Whether that would apply to departments such as her Majesty’s Revenue and Customs which don’t now even have their own minister remains to be seen. For a system which has, since the 1870s, relied on a politically impartial and permanent senior tier of officials, this would be a major constitutional change. For senior civil servants, reporting to a politically appointees would mean, they fear, the final demise of their already eroded role of being the main source of policy advice to ministers, given directly and without intermediaries. At the same time, Mr Maude’s plan would make permanent secretaries, not ministers, individually accountable to parliament for the implementation of major projects. Taken together, the two measures would seal the change in the senior civil servant’s role from that of policymaker to that of managerial agent.

The senior civil service has sought to defend its roles in policymaking and policy advice against efforts by governments since the 1980s to focus the service on management and “delivery”. One of the Thatcher government’s aims for the “Next Steps” programme was to develop a cadre of senior civil servants who would gain the highest status through management rather than policymaking, but the most ambitious continued to pursue policy work. The efforts of Sir Michael Barber and his team working for Blair’s administration to concentrate top civil service minds on “delivery” may have been unduly narrow and mechanistic in approach, but civil service focus on policy work was probably an equally important reason for their limited impact on civil servants’ priorities. When the coalition formalised the already widespread use of policy advice from think tanks and management consulting firms into a programme and a set of contracts, among least some senior civil servants seem to have responded with chagrin or disdain.
In the United States, France and Sweden, a tier of ministers’ political appointees has powers to instruct civil servants. Since none of those countries has collapsed as a result, no one can claim that ending the century and half “British tradition” must necessarily be a catastrophe. Indeed, it’s a moot point whether we can something a “British tradition” at all, which itself took twenty years of effort after the 1854 Northcote-Trevelyan Report to get established. The commitment to a permanent civil service not reporting to political appointees was itself considerably overridden when Lloyd George brought in such personally appointed “men of push and go” as Sir Eric Geddes after 1916. Since the outbreak of war in 1939, increasing numbers of “irregulars” have been brought in to British government as temporary civil servants – more or less political appointees but given civil service status so that they issue orders to civil servants. Maude’s plan would turn them from irregulars into a different kind of “regular”, and would give them seniority over the routine kind of “regulars”.

Whether a ministerial “cabinet” with authority over the permanent officials would give ministers what they say they want is another matter altogether. Off-the-record briefings to the press in recent years suggest that ministers suspect the top civil servants of not being committed to implementing their policies. Even if that’s true – and of course it’s disputed by the civil servants – it’s far from certain that making them report to political appointees will make them more motivated. For all the merits of the French and US federal executive systems, there’s no evidence that they exhibit greater (or, admittedly, lower) levels of enthusiasm or commitment among civil servants for carrying out instructions. On the other hand, in Britain, losing opportunities to offer advice to ministers about feasibility of implementation or about scheme design – because ministers would take advice mainly from their own appointees – might make top civil servants less motivated rather than more.

Again, whatever the merits of ministerial cabinet system, there is little evidence that, in and of itself, it results in better design and execution of major projects. That France has had fewer disasters with government IT projects than the UK seems to due to quite other factors. And the fate of the Obamacare web portal reminds us that the US is capable of fiascos with its most ambitious schemes for online integration too.

A system of politically appointed senior executives in government is only as good at policy development and the oversight of civil service execution of programmes as the political appointees are. US government has sufficient resources to attract seasoned people to be political executives who have major public management experience as state governors or big city managers or who have worked in previous federal administrations. And the political parties can draw upon a large pool of experts in each ministry’s policy area who are aligned with them. The French system today – to the chagrin of many French critics – draws on a much narrower pool of talent. Tory, Labour and especially Liberal Democrat ministers in Britain would face difficulties in recruiting cabinet staff who are party loyalists, who understand the civil service but are not of it, who know what the implementing agencies and authorities can do, who understand how cross-departmental working in Whitehall has to be achieved, who can appreciate what costings are realistic, but who also have the political savvy to provide ministers with adroit political advice. Rather few people with all those characteristics are to be found in London’s think tanks or in party headquarters. Some might be found in local government, but not enough to meet the requirement.

The present senior civil servants say that they fear that politically appointed cabinets will be echo chambers, not places where even the political appointees will “speak truth to power”, let alone the permanent civil servants who are not invited. The evidence from other countries is mixed: toleration for challenge, use of devil’s advocates, interest in evidence and practice of open-minded deliberation vary widely between governments and between ministries in France and the US. Since Lord Butler complained on “The Week in Westminster” that even now under the coalition, civil servants are punished for speaking truth to power, even in private, one wonders whether political appointees would really be much more cowed than civil servants may be today.

But perhaps a more interesting question is how or how far Mr Maude’s system might address the demand from Mr Herbert for “accountability”, when that is understood as requiring resignation when things go wrong. If senior civil servants are to be asked to go when projects fail, under what circumstances will the tier of political appointees themselves resign, after being found to have advised a minister on a misconceived scheme?

As with most things in government, the first decision should be to choose which problem ministers most want to solve.

If we want to reduce the number of big project fiascos, it would be better to begin with a serious discussion about the issues of just how big and how complex a plan for a project has to be, before we can reasonably expect that it will probably go badly and ministers ought to be asked for something more practicable. Then we should look again at the organisational capability of project management in the civil service rather than endlessly fiddling with the sequence of approval stages for plans.

If we want to do something about civil service commitment, then we should come up with a set of explanations of just where, why and how far a deficit of commitment is important in explaining weak performance, and where, why and how far problems are due instead to poor management systems. Of those weak systems, one should be addressed as a priority. Few civil servants working on major projects work on them from beginning to end, whereas in local government it is much more common for the same managers to carry responsibility throughout a project’s life. The civil service moves them on sometimes after only a few months. The same has too often been true of ministers themselves. Until both ministerial and civil service career moves are more closely tied to project and programme achievement, project management will not be greatly improved just with improved techniques or more oversight at the various approval stages.

But if on the other hand, we really want to find a way to reduce ministers’ exposure to blame whenever things do wrong and instead transfer that exposure to civil servants, then perhaps we ought first to ask how we expect to adjust the “public service bargain” at the same time to offer some positive incentive for talented people to want to do senior jobs in the public service. More sticks and sermons without carrots may make for good headlines but usually make for poorly motivated organisations.

But the present “war” in the media so far suggests that may be all we shall get.

Support for PASC

There were numerous expressions of support for the PASC recommendation that there should be a Parliamentary Inquiry into the Civil Service.  Civil Service World, for instance, reported supportive views from a number of former Cabinet Ministers, and then ex-Minister Chris Huhne joined the discussion in December 2013, supported by Bob Dobbie in this letter to The Guardian.

As a former civil servant I support Chris Huhne's wish for a comprehensive review of the civil service.  However, many of the issues he describes lie at the interface between ministers and officials. Huhne says that civil servants should tell ministers when problems arise over new policies. To me that is part of their professional responsibility. But do ministers pay attention? Some do, others do not wish to know.

Evaluation is a powerful tool in improving policy. However, it is undervalued by both civil servants and ministers. Rapid change of jobs by civil servants is often unnecessary and inefficient. But over-rapid movement of ministers or, worse still, shuffling responsibilities between Whitehall departments, can also be a serious drag on performance of the civil service; changing structure is rarely a better solution than improving management. Better co-ordination across Whitehall is needed. It's unfortunate that the government office structure in the English regions has been dismantled as this provided useful experience in departmental co-operation.

Risk in introducing new policies can be reduced by deeper research, fuller consultation and a programme of pilots, including evaluation. But the accompanying delay compared to go-for-broke is rarely acceptable to ministers. And dealing with underperforming outsourced contracts is another issue which is likely to lead to differences between ministers and officials. So I hope any review will also look at the government's engagement with the civil service, and how this affects its culture, leading to change for both.

Liason Committee Report

But perhaps the most influential expression of support came from senior MPs, in the form of the Liaison Committee – made up of the Chairs of all the Commons Select Committees – who backed the PASC after they had met the Prime Minister in September 2013. Here is an extract from their report Civil Service: lacking capacity published in December 2013:

We remain unconvinced that the Government's Civil Service Reform Plan for Whitehall is based on a strategic consideration of the future of the Civil Service. The Prime Minister's evidence to us in September did nothing to suggest that the Government has a coherent analysis of why things in Whitehall go wrong.

We endorse the recommendation of the Public Administration Select Committee (PASC) that the Government should ask Parliament to establish a Parliamentary Commission into the Civil Service and that this should be a Joint Committee of both Houses, on the same lines as the Parliamentary Commission on Banking Standards. We share the view of PASC, based on the principles established by the Constitutional Reform and Governance Act 2010, that substantial reforms to the Civil Service—which exists to serve future governments as well as the present one—should be scrutinised by Parliament. We recommend that the Commission be established as a matter of urgency and report before the end of this Parliament, to enable its findings and recommendations to be implemented after the election. We recognise that there would need to be discussions between the House and the Government about the appropriate funding of this.

The Government's Response to PASC and Liaison Committee Reports

The Government's January 2014 response to the Public Administration Committee was an extremely – almost rudely - thin and bland document which said very little more than that “The Government is not persuaded by the Committee’s argument in favour of a Parliamentary Commission”.  There was no serious attempt to engage in the debate.

The Government's April 2014 response to the Liaison Committee contained slightly more substance but still obstinately (and in my view wrongly) claimed that its existing Reform Plan was based on a strategic consideration of the future of the Civil Service, and that a Parliamentary Commission would displace other reform efforts.  It concluded as follows:

The Government does not agree with the Committee that it has no coherent analysis of why things go wrong, nor that the Civil Service Reform Plan is not based on a strategic consideration of the future of the Civil Service. As such, it is not persuaded by the argument in favour of a Parliamentary Commission and continues to have the concerns the Minister for Cabinet Office set out during evidence to the Public Administration Select Committee that it could be used to “displace current reform efforts, which are urgently needed and very broadly agreed”. This was also the view expressed by the Prime Minister during his appearance at the Liaison Committee (10 September 2013) and in the Government’s response to the Public Administration Select Committee Report on Truth to Power. As the Prime Minister stated in his evidence to the Committee “the analysis [of what needs to change within the civil service] is pretty clear. The reform now has to follow that.”

The Committee’s own focus on the commercial skills and capabilities of the civil service emphasises the urgent need for change. The Government firmly believes that focus should not now be a further analysis of where the Civil Service’s weaknesses lie, but on action to address these weaknesses, while maintaining a clear focus too on the implementation of the Government’s policy priorities and programmes.

The Civil Service Reform Plan was drawn up following extensive discussion and debate within the Civil Service, and builds on successive external reviews, including successive reports from relevant parliamentary committees and the National Audit Office. The Government has been transparent on progress against this plan, invited external input, for example through the use of the contestable policy fund to commission the Institute for Public Policy Research (IPPR) to contribute further ideas that could drive reform, and been open about the need to step up the pace of change. That being said, reforms recently or currently being introduced will inevitably take time to have effect.

House of Lords Debate

It was left to Lord (Peter) Hennessy to trigger a serious debate on the issues, which took place in the House of Lords on 16 January 2014.  Extracts from this debate – which may well be influential – are here:-  House of Lords Debate on Civil Service Reform

Cross-Party Group on Radical Reform of the Civil Service

Tory MP Nick Herbert and Labour MP John Healey announced in December 2013 that they intended to launch, next month, a cross party group looking at ‘radical’ civil service reform.   GovernUp was in fact launched in April 2014 - see the next note in this series.

Margaret Hodge's Comments  

The Chair of the Public Accounts Committee rejoined the argument in a long interview in Civil Service World in February 2014.  Amongst a number of perceptive comments, I noted these in particular:
¥ [Under the current settlement] ministers feel furious when they've got to defend what they see as mistakes made by civil servants, and civil servants feel absolutely livid if they feel they've got to defent ridiculous decisions made by ministers
¥ There's a suspicion and hostility [to senior recruits from outside the civil service] and at the top levels the civil service too often feels like a club; like freemasonry.

The next note – No. 14 in this series - looks at subsequent developments from early 2014.

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