Civil Service Reform 15

This is the fifteenth 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 focusses on developments from mid 2014 through to the May 2015 UK General Election.

Sir Bob Kerslake Retires

Sir Bob Kerslake’s imminent departure as Head of the Civil Service was announced in July 2014, although he would remain as Permanent Secretary at the Department for Communities and Local Government until February 2015.   There would be a new Chief Executive to lead civil service reform, and also take the post of Permanent Secretary of the Cabinet Office. The current permanent secretary, Richard Heaton, would keep the job until the chief executive is in post, after which he would retain his other current role as first parliamentary counsel.

Sir Bob's departure was hardly unexpected as he was not getting on at all well with activist Civil Service Minister Francis Maude.

The IfG's Peter Riddell sensibly commented that:  "The real problems in the civil service leadership are structural. It was right in January 2012 to split the functions of Cabinet Secretary and Civil Service Head since no one could perform both roles. However, it was a mistake for Sir Bob to double-hat as Head of the Civil Service and a departmental Permanent Secretary. That created impossible pressures on him, and, in this position, he never had the powers or authority to lead the changes expected of him.  However, yesterday’s announcement confuses as much as it clarifies. Sir Jeremy Heywood will take the title of Head of the Civil Service while maintaining his current responsibilities as Cabinet Secretary. That makes it clear who is in charge and who reports to the Prime Minister, and this we welcome. The problem is that the new chief executive, who will report to the Cabinet Secretary, is not really going to be a CEO of the Civil Service, but, rather, someone who is in charge of civil service transformation, efficiency and reform plus taking over responsibility for running the Cabinet Office. The inclusion of the latter muddles the tasks of running the headquarters operation with oversight of the whole civil service.  A real CEO of the Civil Service needs real powers, such as being in charge of the appraisals for permanent secretaries, having a clear role in the recruitment and promotion of top civil servants, and overseeing those running the civil service professions. If these roles are not to be undertaken by the new chief executive, they will both undermine his or her effectiveness – and authority among other permanent secretaries – while adding substantially to Sir Jeremy’s already heavy workload."

David Normington's Interview

Sir David Normington, First Civil Service Commissioner, gave an interesting interview to Civil Service World in August 2014.  He stressed that his disagreement with Minister Francis Maude, concerning the extent of Ministerial involvement in the selection of Permanent Secretaries, was only a small issue compared with the totality of their interactions.  Indeed, he said that he had offered a compromise - Ministers would be able to choose if the appointment panel found that two or more candidates were equally matched - but that had been rejected  by the Public Administration Select Committee, to which he reports.  He also noted that the 2010 Constitutional Reform and Governance Act gave him powers which could only be amended by Parliament, and so gives him important stability and protection.

But Sir David did express concern that the number of exceptions to the open competition appointment rules had steadily increased to 3,900 in 2013-14, raising the risk that bypassing the normal rules (usually to speed the appointment process) might lead to recruiters saying 'I know someone who can fill that post' - and so encouraging patronage.  Indeed, the vast majority of exceptions are men - which suggests that predominantly male recruiters are saying 'I know another group of men who could get in here'.  The Commission is therefore reducing the extent to which the power to make exceptions is delegated to departments..

Reform's Essays

The Think Tank Reform published an interesting and well-written set of essays in September 2014, entitled How to run a country - A collection of essays. The text is here, and brief extracts from the Foreword and Summary are in the next few paras of this note:

"Foreword

"When it comes to the reform of our Civil Service, there is a pattern in British politics that has seen successive governments realising too late the scale of the challenge facing them. Tony Blair spoke of “the scars on my back” and of his frustration fighting “the forces of conservatism”. Francis Maude acknowledged last year that “despite the very best endeavours of many people”, the implementation of his Civil Service Reform Plan had been held back “by some of the very things that it was designed to address – weaknesses in capability, lack of clear accountability, and delivery discipline.”
At Reform we believe that a key part of the problem is the failure to think about the system of government as a whole, including the role played by Parliament, by ministers themselves and by other political actors (not least those in local government). This needs to change if the country is to move beyond the immediate challenges of fiscal consolidation and begin to implement the vital structural reforms that are needed to respond to demographic change and persistently low productivity.
….
Britain is at a crossroads. The decisions taken by the next Government will determine the welfare of our citizens and our place in the world for decades to come. To make the right choices, our leaders must be supported by a system of governance designed for the twenty-first century, not the nineteenth. A Parliament properly able to scrutinise legislation and hold the executive to account. A government freed from silo thinking, led by fewer ministers with clearer objectives. And a Civil Service with the flexibility, capability, confidence and mindset to take risks, embrace innovation, and deliver much more for much less. That is how to run a country.
…

Summary

…

On the relationship between ministers and civil servants, Damian Green sets out key challenges such as the limited time spent in operational jobs, multiple centres of government and their relations with individual departments, and ministerial selection and assessment. He suggests better preparation and performance assessment for ministers. Bernard Jenkin argues that to make ministers more effective there needs to be closer consideration of behaviour and relationships. He makes the case for accountability, trust and leadership as the core values of the Civil Service. Lord Turnbull begins by noting that many of the problems highlighted in the Civil Service are usually within the senior Civil Service and therefore the focus needs to be on relations between ministers and this group. Huw Evans asserts that 21st century ministers face greater challenges with relatively less power compared to their predecessors and highlights the importance of leadership. The focus should be on what ministers want to achieve and how to structure the Civil Service accordingly, which he argues would include a project management approach, emphasis on core skills and building the capacity of the centre.

On delivering a Civil Service fit for the 21st century, Ivor Crewe argues that governance blunders are not all the fault of the Civil Service, but that three key challenges should be addressed: the asymmetry of expertise between the Civil Service and private sector partners; the high level of staff turnover, and the disconnect between policy formulation and delivery. Lord Browne sets out four key priorities for improving the delivery of policy, focused on the management of major projects and risk; the importance of embedding functional leadership; improving human resources and talent management; and recognising secretaries of state as organisational leaders. Sara Weller highlights key challenges as the number of separate departments with overlapping roles and the balance between localism and centralisation. In her list of factors for a world class Civil Service she notes the importance of understanding the front line, commercial skills, co-ordination at the centre and a focus on results. Rob Whiteman sets out three areas where change is required; including increasing transparency and promoting long-termism, the idea of the policy generalist, and the interface between politicians and officials. Measures to support such change would include new rules so that at times officials’ advice would not be privileged and a decoupling of the role of permanent secretary and accounting officer. R A W Rhodes cautions that would-be reformers have generated “Civil Service reform syndrome” and that the underlying assumptions behind reforms are often not fit for purpose. Relationships between ministers and top civil servants are the fulcrum of the system – and politicians are a key factor behind the inertia. [Emphasis added]
…

As the essay authors emphasise, there is appetite for reform and belief that government can perform better; the challenge is how best to approach this in a holistic way to deliver real change. Reform will continue to encourage debate around the necessary ideas and actions."

Chief Whip to attend 'Wednesday Morning' Meetings

It was reported in October 2014 that Chief Whip Michael Gove had irritated senior Mandarins by being offered a ‘standing invitation’ to attend their weekly  ‘Wednesday Morning’ meeting, chaired by Cabinet Secretary Sir Jeremy Heywood.  However, if we step back, we can reflect that all executive teams will meet regularly and will then transact both formal business (progress chasing etc.) and informal business, such as wondering what to do about their bosses’ or board’s latest concerns, complaints and suggestions.  Their superiors will sometimes suspect, with good reason, that the executive team will be less than enthusiastic about some of their bosses’ pronouncements – but this does not mean that the meetings should be abolished, nor always attended by a boss or board member.

I have myself been approached by superiors who have wanted to join my management meetings.  The superiors in question have inevitably been amongst the weaker and more insecure of their type, and my answer has always been to offer them a standing invitation to join my team and me.  Their evident boredom when they chose to sit through routine management stuff, and our failure to gossip in front of them, soon meant that the invitation was soon forgotten.  Equally, however, it was very useful to have them at a meeting when we were discussing key strategic issues, and it would be a strange (and weak) management team that felt any reluctance to engage in this way.

It seemed likely, therefore, therefore, that Mr Gove would turn out to be an irregular attender at Sir Jeremy’s meetings.

Civil Service Reform Plan - Progress report, and

Civil Service 'Chief Executive' Appointed

The Government published its second progress report in October 2014. It summarised very useful progress in a wide range of practical areas such as project management.

But its publication was over-shadowed by the simultaneous announcement that John Manzoni had been appointed as the first 'Chief Executive' of the whole of the Whitehall machine.  His background was in the oil industry (principally in BP) but he was already working as a senior civil servant as head of the Major Projects Authority - in which role he had impressed both Ministers and his new Permanent Secretary colleagues.  The prevailing sentiment at that time was that 'business knows best' - and Mr Manzoni's appointment and promotion seemed consistent with this otherwise arguable assumption.  In the event - and several years later - the Greensill affair (in which Mr Manzoni played a role) demonstrated that the rules governing the the movement of business people in and out of Whitehall had become rather too opaque.

(Those who were familiar with the culture and size of BP were not too surprised that Mr Manzoni was able to make the transition to Whitehall relatively seamlessly.  But it is worth noting that he had resigned from BP having been seriously criticised for failings which contributed to the 2005 explosion at BP's Texas City refinery which killed 15 and injured 170.)

The ' ' signs around 'Chief Executive' are deliberate, as Mr Manzoni's role was nothing like that of a normal CEO.  He reported to the true Head of the Civil Service (Sir Jeremy Heywood) for a start, and had very limited line management responsibility for Permanent Secretaries.  Instead, he was responsible for efficiency, commercial/supplier relationships, IT, property and project management.  

Ministers said that they intended to appoint 'an outstanding individual who has a proven track record of running large complex multiple-stakeholder organisations' but were disappointed that no credible candidate applied from outside the civil service, partly because of the salary (£200k) and partly because of the tightly-circumscribed job description.  In contrast, the civil service's 'Chief Operating Officer' - Stephen Kelly - had announced in August 2014 that he was leaving the civil service to become the Chief Executive of Sage (the UK's largest software company) on a salary of £800k and c.£1 million of shares.

Manzoni then addresses the IfG

New Civil Service ‘Chief Executive’ (in truth he more like a Head of HR) John Manzoni said some sensible things when addressing the Institute for Government in February 2015. Here are some extracts from the IfG’s report of the event (emphasis added).

He set out four priorities.

First, getting good people into Whitehall, keeping them there, and training them. This doesn’t just mean attracting people from outside … but also improving the offer the Civil Service makes to talented young people ... The Civil Service still attracts the “brightest and best”, he said, but needs to do more to invest in development.

Central to achieving this, Manzoni said, is his second priority: developing functional leadership. This means having people responsible for building capability in vital functions – including finance, projects, commercial, communications and legal.

The third priority he set out was performance management. “For a system which delivers so much,” Manzoni reflected, “we don’t yet have a well-developed performance management culture”. The Civil Service needed “mechanisms which performance manage outcomes and which at the same time reinforce and clarify accountability” – though he didn’t mention previous attempts at doing this through public service agreements or departmental business plans. Manzoni referred to the first set of published permanent secretary objectives – the long lists of which “tells us something isn’t right”. … While the role of a permanent secretary is complex, this year’s much improved objectives show that it is possible to avoid the long lists so evident in previous efforts.

The fourth priority Manzoni identified was leadership. Supporting and harnessing confident “big leaders” in the Civil Service is essential to his vision .... He showed frustration at government being “remarkably un-joined up” when “the future will demand a greater degree of collaboration” – both between departments, and between the centre and departments. Manzoni was though optimistic about the willingness of civil servants to work together: “if you set the context right, guess what, intelligent people reach the same conclusions and they move in the same direction”. But intelligent departmental officials also have diverging incentives … [set by their often competing Ministers].

[He went on to deliver a] sharp criticism for the civil service preference for generalists. “Government does really hard things, and we ask very bright generalists to do them, and the blunt truth is that doesn’t always work very well.” ... “The mistake never to make,” Manzoni repeated several times, “is to assume that just because you can conceptualise something on a piece of paper, you actually understand the risks and trade-offs.” Instead, investing in delivery specialists needs to be taken seriously - even if “they can’t speak fancy language, and they can’t write erudite papers, and they can’t recite the history of the damn thing” - because “they know what’s happening”. In terms of favouring generalists, “I believe we’ve gone too far,” he said. That may be true, but the real test will be to watch who gets promoted to see if real change is coming.

This left an unanswered question though: what about policy? Lord Sainsbury reflected from the floor that his experience as a minister was that there were problems with the quality of policy put to ministers. Manzoni didn’t quite accept this, preferring to focus instead on his delivery theme. “I am a simple guy,” he shrugged, “start with delivery and we’ll get to the rest”. In fairness, policy is not one of the functions he is responsible for, resting instead with the Cabinet Secretary and Head of the Civil Service, Sir Jeremy Heywood, and the policy profession head, Chris Wormald. But while Manzoni sees his role as “setting the context” and “harnessing” the functional leads to deliver the government’s agenda, stripping policy out of the equation seems a curious omission.

The other unanswered question was what kind of political drive is required for the change Manzoni wants to see? While paying tribute to Francis Maude as the “shock the system needs”, he also said “the Civil Service should not need Francis Maude to reform itself, we need to do it to ourselves”. The next phase of reform should be “designed and delivered by us” and far from wanting political support, Manzoni asserted that “we should not and do not need anybody else to tell us what to do”.

On one level he has a point. The collective leadership of the Civil Service – especially the Cabinet Secretary and the Permanent Secretary to the Treasury – must take responsibility for the reform agenda. Yet the history of civil service reform suggests that to go it alone without political support may prove unwise. If the connection between political priorities and reform is not made, the likely tendency of the rest of the system – not least the Treasury – is to ignore reform and fall back on the established way of doing things.

While the Civil Service might benefit from having more of Manzoni’s “big leaders”, it’s rare to find one in Whitehall who doesn’t have a supportive minister backing them – something Manzoni did not mention explicitly. As the Institute’s study of previous reforms has found, while strong association with any particular politician (like Francis Maude, perhaps?) is risky, a certain level of political support is essential. Manzoni did touch on this in another point in his speech, noting that to achieve planned efficiencies of £10bn would require “brave decisions politically and administratively”.

There is no question John Manzoni is deeply committed to the four priorities he has set himself. But the crucial question is whether the civil service leadership, the Treasury, and the politicians are “up for it” in the same way Manzoni believes permanent secretaries are. “The first lesson I learned in Whitehall”, he reflected, “is that I can’t do it by myself”.

Comment: I would not be so sure that even the Permanent Secretaries are truly supportive. They are very good at pretending!

GovernUp Conference

GovernUp’s published its proposals in February 2015, nicely timed, they hoped to influence the thinking of the government that would be formed after that May’s General Election. It was essentially forward looking and wasted very little time pointing fingers of blame at either politicians or civil servants. Instead, it focussed on discussing what governmental structures, systems and cultures would be needed to be equal to the challenges that now face the UK.

GovernUp had created six significant project teams each of which has produced a discussion paper now on the GovernUp website. Comments are requested by 11 March.

The six GovernUp projects (with links to the papers themselves) are:


The following comments focus mainly on the ‘Repurposing Whitehall” and ‘Role of Politicians’ proposals.

Repurposing Whitehall: Five Key Proposals

Comment: All these seemed sensible and do-able. They did not threaten anything held dear by the Civil Service. But they would sharply reduce the power of individual Secretaries of State who would no longer have their own big departments – and they reverse recent trends, particularly in the Home Office, to bring Executive Agencies back under tighter political control.

Role of Politicians: Five Key Proposals

Comment: The more I thought about it, the more I worried about the first two proposals. A separate team of policy advisers sounds like a recipe for internal conflict, rather than creating a structure which would encourage constructive debate. And a Chief of Staff who didn't know their way round the department - and who was not familiar with the strengths and weaknesses of the key advisers - would be pretty dangerous, or useless. And the suggestion that the Chief of Staff would not have a reporting line to the Permanent Secretary would also encourage division rather than effective team building. My view is that the existing structures (Private Offices/EMOs, Special Advisers and civil servants) can and do work very well. They don't always, of course, but that is usually because of poor internal working relationships. These would only be exacerbated by GovernUp's proposals.

MPs and Ministers, rather than officials, were most likely to be troubled by the third, fourth and fifth proposals. The third weakened the principle of Parliamentary accountability for Ministerial behavior. And the fourth and fifth transfer power away from the PM and Secretaries of State, many of whom treat some junior Ministers as little more than pawns on the political chessboard.

Other Points

These other points were made in the plenary and networking discussions.

Will It Happen?

So far, so good, then. But will change happen?

It was noticeable that the MPs that supported GovernUp were all well outside the political mainstream. It will be surprising if their ideas are quickly taken on board by the political Establishment. (The project is led by ex-Ministers Nick Herbert and John Healey, and the other MPs attending the event (other than two Front bench speakers) were Margaret Hodge, Bernard Jenkin and Richard Bacon – all of them having somewhat maverick reputations. But it was good that Bernard Jenkin now seemed favourably disposed to GovernUp despite his initial opposition – see above.)

In particular, further work will need to be done on the role and responsibilities of Secretaries of State. How exactly will they work within One Whitehall?

There was certainly no suggestion that anything should be done to weed out those weak leaders but clever courtiers that many suspect now form a significant part of the most senior ranks of the Civil Service.

And there is a danger that One Whitehall would be dominated by policy wonks, for all the good managers will have been found homes in the autonomous budget units. It would be very important to guard against this.

There was (for good reasons) very little discussion of what had stopped change happening in the past.   So we can’t be sure that those same obstacles won’t arise again – and I mention some of them above.

There was a slight sense that the six projects had been run quite independently. And yet change of the magnitude being discussed by GovernUp is so often impeded by a failure to look at absolutely everything that contributes to the culture and effectiveness of an organisation. One fixed structure can force all the other flexible structures back to their original position. I would now like to see one internally consistent reform plan, with suggestions for change for all of what the management schools call “the five Cs”:- these are the five elements of any organisation, all of which need to be addressed around the same time, for none of them can be changed without simultaneously causing pressure for change in the others.:-

It was very good that the 6 GovernUp papers contained ideas in all of these areas. The challenge now is draw them all together and ensure that the ideas do not conflict.

IfG's Comment on GovernUp's Proposals

The IfG's Julian McCrea wrote a broadly welcoming blog about GovernUp's papers. But he reacted more cautiously to their discussion of structural reform. Here are the last few paras of his blog:

Probably the bit of these papers that gave me most pause for thought was the structural reforms proposed for Whitehall. Autonomous operational business units throughout the civil service; merging all departments into a strategic core, provisionally named ‘One Whitehall’; a new ‘Office of Budget and Management’ combining Treasury’s spending side with Cabinet Office’s Efficiency and Reform Group – it’s an ambitious agenda. So ambitious, indeed, that changes such as the abolition of the Treasury are merely implicit consequences of the reform plans!

For me, it is not the scale of these changes that is slightly worrying; it is the lack of a clear link to people’s experience of government. Enduring changes such as the creation of DWP were rooted in a need to change how people experience the state: it was the desire to bring together people’s conversations about claiming benefits and getting into work that led to the merger of benefits offices and employment exchanges – in turn demanding the merger that created a new Whitehall department. It is not clear how GovernUp’s radical proposals for Whitehall’s structure relate to a need to change the way that people interact with government.

Finally, the potential unhelpful bit for those trying to build a consensus for change. There is always a risk of overplaying one’s case. One of the GovernUp reports confidently states that Whitehall is “not fit for purpose”. This is a sweeping term – and perhaps true if you think that in order to be fit for purpose, Whitehall should be able to solve all the ‘wicked’ issues faced by our society. But against that yardstick, no country in the world has a system of government that is “fit for purpose”.

Against more reasonable yardsticks, it’s difficult to judge Whitehall this way: it compares well to most central governments, particularly of large, developed countries, and has obviously changed hugely in its capability and composition in the last 20-30 years. Nonetheless, there are of course many areas in which other nations perform better than us, and many ways in which our system can be improved. In the run-up to the election, the Institute will be putting forward our own thoughts on how we can make UK government more effective – focusing both on the early decisions facing our next administration, and some of the longer-term challenges.

Meanwhile, though, it’s important not to overstate the case for change; and in the process, end up creating pantomime villains. Listening to some exchanges at GovernUp’s conference, there was a risk that civil servants – including even those leading the current reforms – were being cast in this role. I’m certain this is not the intention of GovernUp, but I do think it is a risk that is being run.

David Cameron's Interview with the Financial Times

In an interview in March 2015, Prime Minister David Cameron complained about the “buggeration factor” of trying to “force policy through the system, with its consultations and reviews”. The IfG's Jill Rutter blogged as follows, in response:

"... it is far from clear that “consultations and reviews” are his biggest problem … some of David Cameron’s biggest problems have their roots in a lack of consultation, or at least a failure to pay attention to the results of consultation … More front-end haste does not necessarily lead to quicker, more effective implementation. Indeed, the commitment in the Civil Service Reform Plan to make ‘open policymaking’ the default approach suggests that at least some of those inside government are committed to a policymaking process that is more consultative and, arguably, slower in development.

It’s also worth recalling that when David Cameron came to office, he promptly dismantled the limited machinery his predecessors had created to deliver their priorities. … the Policy Unit was shrunk, the Strategy Unit disbanded and the Delivery Unit was put into cold storage. It took two years to realise that a small and inexperienced Policy and Implementation Unit, trying to oversee progress through business plans, was not fit for purpose. These days, a prime minister needs the capacity to check up on his priorities and assure delivery – and when that was realised, today’s more powerful and well-staffed Implementation Unit was created. …

For a prime minister frustrated about implementation, there is something else that is important. We have argued that the Cabinet Office – like its counterparts in Australia or Canada – should have the capacity to challenge policies up-front on ‘implementability’, ensuring that the government doesn’t make political commitments that it will find difficult or impossible to implement in a timely and cost-effective way. At the moment, the Implementation Unit and Major Projects Authority generally only get involved once a policy has been agreed, announced and legislated.

Politicians might regard such up-front challenges as another annoying “consultation and review”, which gets in the way of their grand vision and risks sapping momentum. But they could save a lot of frustration – and much “buggeration” of prime ministers, service users and taxpayers – as policies move from the spotless clarity of the drawing board into the messy world of delivery."

PASC on Civil Service Skills

This fairly low key 2015 report recommended that the Cabinet Office should have a standardised framework for auditing departmental skills levels and that the National Audit Office should be invited to carry out a Civil Service wide skills audit on a regular basis.   It supported the proposed Civil Service Leadership Academy to address the unique challenges faced by public sector service leaders which conventional business training cannot address.  The committee did not call for the National School of Government to be reestablished but we saw a crucial and influential role for a new institution to serve as a nucleus for civil service reform.

Deep Impact?

In April 2015, the Institute for Government published an interesting report (Deep Impact) on the Government's use of impact indicators. The IfG noted that the Government had intended that the public, departments and the centre of government would be able to use the indicators to judge progress. But the indicators were not used by half of departments; poor availability and access of data made it difficult to use – so no army of armchair auditors had been enlisted - and the plans did not appear to have any political link with the centre of government.

Developments after the May 2015 General Election are summarised in Note 16 in this series.

 

Martin Stanley

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