Select Committee on Public Administration Minutes of Evidence

Examination of witnesses (Questions 915-919)




  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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