Examination of witnesses (Questions 915-919)
WEDNESDAY 24 JANUARY 2001
THE LORD
SIMON OF
HIGHBURY, CBE, THE
RT HON
DR DAVID
CLARK MP AND
THE RT
HON MICHAEL
HESELTINE, CH, MP
Chairman
915. Let me welcome our witnesses this afternoon.
It is very kind of you to come along to assist the Committee with
its inquiry into Making Government Work. We have three former
Ministers of different kinds with a huge amount of experience
between them and we want to draw upon that experience if we can
in the session that we have got this afternoon. I understand that
you do not want to make any opening remarks in which case, if
I may, I will kick off with a question or two. Could I, first
of all, ask you this: when Government produced its Modernising
Government White Paper one of the things it said is that its
key commitment was to the idea of public service itself and it
said, "We will value public service, not denigrate it",
and I just wonder how that sits alongside the attempt to bring
the ethos of the private sector ever more into the workings of
government. Is there something called a "public service ethos"
that sits there that needs protection from these marauders from
the private sector or is it the other way round, that in fact
the public sector is desperate for an infusion of the kind of
skills that the private sector has? I wonder which of you would
like to help us with that to start with.
(Dr Clark) Perhaps, Chairman, I can make
a bit of a stab at it having attempted to write the Modernising
Government White Paper 12 months before it appeared. I think
there is a general feeling amongst those who are trying to manage
the Civil Service, which was certainly one of the roles I had,
as to how you actually persuade the Civil Service and how we enable
it in a sense to use the skills and professionalism and dedication
and integrity which they undoubtedly have to (a) match the needs
of the general public and the aspirations of the general public
and (b) to match the needs of industry in a very fast-changing
society. I think certainly as a Labour Minister I felt that there
had to be an attempt to increase productivity and, as I say, perhaps
place the Civil Service in the context of the 21st Century that
was changing very very quickly indeed, with e-commerce, the global
economy and so on and so forth, plus the demands of our citizens
who felt that they were standing in queues and filling in forms
which they found incredibly annoying. It may have been necessary
before we had IT but once we moved into the IT age we did not
need to have those experiences of government. That is one of the
things that drove me as part of a Labour Government to try and
produce that Modernising Government White Paper.
916. I notice that when you spoke on the Queen's
Speech Debate you mentioned the Civil Service and you said: "It
consists of wonderful men and women, of the highest integrity
and competence, who provide a wonderful service to the Government
of the day ..." and so on. Then you say, "However, I
wonder whether their modus operandi—the system under
which they operate—is absolutely compatible with the new
world of e-commerce, e-business and the global economy in this
new century. I do not doubt their ability to give advice, but
I wonder whether their accountability fits neatly with their philosophy."
You are choosing your words carefully with us today but is your
argument, David, that the Civil Service really is no longer fit
for the tasks that are now being asked of it?
(Dr Clark) Perhaps I just would not use quite those
words but I do feel that there have got to be fundamental changes
in the Civil Service. I feel that probably they can only be imposed
and the analysis has got to come from the outside. I have studied
the reforms Sir Richard put forward but I think he almost gave
the game away when he said his reforms were reforms for the Civil
Service, by the Civil Service, led by the Civil Service, and I
feel that if one looks back at it historically it is now 40-odd
years since we had the last major report, the Fulton Report—and
I very much welcome your inquiry—and Michael will remember
as well that there was a Committee of the House of Commons that
did the work that led up to Fulton. I think there is a case for
us now to try to examine the Civil Service from the outside. I
do not want to hog the issue but government's relationship with
industry is changing as we move from the old industrial society.
The days of intervention, if not gone, are very much weaker than
they were 20, 30, 40 years ago. We are now finding governments
and industry having to exist side by side under regulatory regimes.
One of my criticisms of the Civil Service would be that they are
not able to move swiftly enough. Perhaps I will give an example.
Companies often complain to me, and I am sure to other Members,
that they are trying to export and there is a government ethical
foreign policy, but they still say that it often takes months,
sometimes more than a year to get an export licence and we often
lose business in that sort of situation. I am not blaming anyone
but I think a system that cannot issue or refuse an export licence
in a matter of six or seven months, there is something wrong there.
That is the point I would make about the speed of change. With
the ability of the culture and the method of working of the Civil
Service, it is very difficult to force change through.
917. I wonder if I could ask Michael Heseltine
something about this because in your splendid book Life in
the Jungle you had some fairly robust things to say about
your endeavours to change the system from within, and you trample
on all kinds of conventions and you say, for example: "I
totally rejected a convention that Ministers decide on policy
and officials execute and administer..." which in a way drives
a coach and horses through how we normally think about those matters.
Would you like to say something about that?
(Mr Heseltine) The essence of management is to set
objectives and then to secure the results. In order to do that
you have to monitor and in some way measure the objectives that
you have set to the best ability you can. In the private sector
it is relatively easy because you have the disciplines of the
balance sheet and the profit and loss account and the bottom line
is common to the ethos of the capitalist system. In the public
sector the objectives are obviously immensely diverse and often
complicated and difficult to measure but much less difficult to
measure than the conventional view would hold. I do not myself
think that the responsibility for the relative inertia of bureaucracy
is the fault of the bureaucracy. I think it is the fault of the
politicians. If you work on the philosophy that I work on -"Don't
show me the foot soldier who lost the war, show me the general"—the
generals are the politicians and choosing a government is an extraordinarily
narrow and confined opportunity in which a Prime Minister has
to choose from people most of whom have never run anything of
any size in their lives and never will again. So it is not surprising
that a new government coming in is bemused. There is no induction
training course for Ministers; you are thrown in at the deep end.
The day you go and a new Minister comes, he usually does not talk
to his predecessor, and often has (even within governments) objectives
totally different to his predecessor, let alone a change of government.
The civil servants over very very many years have got used to
the fact that the tide comes in, the tide goes out and what they
will be doing one day will be very different to what they are
doing the next, even within governments, let alone between governments.
My own experience is that they have therefore learnt the art of
caution because they know full well that there is little credit
for what goes right and there is huge opprobrium for what goes
wrong, not least from select committees of this sort who expect
every detail, every file, every dot, every cross to be available
at relatively fast speed to account for the most trivial of incidents
which took place ten years ago. The way to ruin your career is
not to have records of that sort. This is not, if I may say so,
compatible immediately with a fast-moving entrepreneurial system,
but those are the disciplines they are taught by us as politicians
to believe in. The real sanctions are when they fail to deliver
that sort of detailed accountability. David is right, there will
be occasions when it is difficult to get export licences but there
will be areas—and I will not trespass on the politics of
the ethical foreign policy—where perhaps it is not quite
so clear in the basements of the Trade and Industry as to what
that means as it is on the hustings from which the programme came,
and so caution is the name of the game. My own experience of the
Civil Service is therefore that I define it as a "Rolls Royce",
the most brilliant engineering in the world, with no petrol, no
driver, and it is the job of politicians to provide those two
things, and if you can provide the petrol and you can drive we
have one of the finest Civil Services in the world and my own
experience of them is that they will do the most remarkable things
if they are told precisely what you want, if they are set the
clearest objectives, and if you have the good sense to have a
timescale which you constantly keep them to, in other words if
you are a professional manager. They are not used to professional
management because that does not exist in the broad politics of
this country. I cannot talk of any other system. There are no
prizes for being a professional manager in politics, but I believe
that the Civil Service would respond to professional management
if there were any rewards in so doing.
918. Could I bring Lord Simon in on this same
point.
(Lord Simon of Highbury) Could I respond to your first
question because I think there are two interesting separate points
that you raise. One is the value structure and the beliefs of
the Civil Service which I do not think need changing in any sense.
They have a very strong sense of values, a strong what the private
sector would call "corporate" culture, and quite a developed
pride in their capacity to deliver. Now the second part of the
question is what can the private sector do to help that culture
because I think Michael has just outlined that delivery or implementation
is not the strength of that culture. It is analysis, policy formulation
and risk management, as he explained it. So accountability, particularly
of Ministers, can always be managed and that is the strength of
the system. I think the issue for the Service is how to manage
performance more appropriately so that customers, electors, voters
get a more professional service. That is really what David was
saying. I think you can separate out the two issues and one should
be able, with the right advice, development, training selection
(which I hope will continue in the Service) to get a service which
combines the strength of its values and cultures but a much more
effective sense of performance management. Where I would add a
gloss to what Michael said is in the following: I think Ministers
are like the board, if I could broadly use a private sector analogy.
They should set the strategy and objectives very clearly but they
do not manage the delivery. When they do it can be quite confusing
for the civil servants. They should know where they want their
department to go and they should see and measure whether they
are achieving it. I think it gets difficult when they try to micro
manage, just as in a company when the board start believing they
are operating the system you often get difficulties.
(Mr Heseltine) I do not agree with that view. I think
that most boards have a significant proportion of executives on
them and those executives are there to monitor and manage the
system. To have essentially a non-executive board, which is what
you have if you separate the Ministers from the officials in the
classic 19th Century way, is where the problems start. One of
the reasons they do start there is because in very limited parts
of the national public sector is there sufficient detailed information
for the board to know what is going on. One of the first things
I always did in coming to a Ministry was to ask for a organogram,
which never existed. You got that and the second stage is you
said what is each department costing? They eventually told you
that. What is the money going on? Eventually we got them to analyse
down to £1,000 what everybody was spending on everything
they were doing. It was unheard of as a process. Then one went
through each one of these fields of activity and asked what the
objectives were and who set the objectives and how long ago. There
were great unanswered questions for most of those sort of questions
so we set objectives. But what happened every time I left the
Department, practically every time, was the system disappeared—not
altogether, in the Department of Environment it has survived—so
without Ministers that never would have happened.
919. Let me ask David Clark to adjudicate here.
This is most interesting because you are offering us the hands-on
ministerial model, Ministers as managers. I think Lord Simon you
are saying no, not at all, the Civil Service is quite happy to
do the managerial stuff as long as they have the strategic objectives
clearly put. David, how do you respond?
(Dr Clark) Perhaps I could make the point I have been
for quite a considerable number of years a non-executive director
of a British company and now an international company so I think
I understand the legal responsibilities of a non-executive directorship
and I think Michael is right, that is where the strategy is carried
out and the delivery is done by the executives. That is the model
and I see that model working. But Lord Simon made a point—I
think he made the point and I do not want to pick his words incorrectly—about
delivery, and politicians cannot deliver. We cannot pay out the
unemployment cheque to the constituent in Blyth; that has got
to be carried out by the civil servant. I think we do get a case
sometimes where we get a clash—I think this is something
which could help—between policy objectives and the management
of the Service and perhaps I could give a specific example to
make my case. I remember one occasion when we had just published
the Freedom of Information White Paper and my next major
task was to launch the White Paper on Modernising Government.
It will come as no surprise to members of this Committee that,
of course, key to my thoughts was the use of IT and we had a very
good head of IT in situ reporting to me. I remember my Permanent
Secretary, a very good Permanent Secretary, Sir Robin Mountfield
coming in to see me shortly after this stage and we were having
this meeting and I was talking about what we thought we needed
to do to produce this White Paper on Modernising Government. Almost
as an after thought he said, "By the way the head of the
IT Unit is leaving." I said, "That is not very sensible
because we are just about to embark on this major White Paper
where IT is central." We had this long discussion about the
differing demands of delivering a policy and managing the Service
and, quite rightly, Sir Robin said to me, "Managing the service
is nothing to do with you. Your job is to set the policy. I will
manage how it is brought about." I thought that was rather
a classic case. We explored this at great length. I said, "I
do not think this guy should leave, "and he said, "If
he does not leave, he gets stuck in a rut and loses promotional
opportunities. I said to him, "Can't we give him Brownie
points for staying another six months?" and he said, "No,
that is not possible, the system is simply too rigid." That
may be an extreme example but it is an example which Members may
be able to understand as to where we need greater flexibility
within the system.
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