Examination of Witnesses (Questions 1000
- 1019)
WEDNESDAY 31 JANUARY 2001
SIR MICHAEL
BICHARD, KCB AND
SIR RICHARD
MOTTRAM, KCB
1000. What was quite interesting, in talking
to people on the ground, was that there was a crisis, and we kept
asking the question, "Who are you accountable to?",
and it was back to their primary sponsoring Department and the
infrastructure within that. At the end of the day, if the plug
was pulled, or there was a major crisis, and somebody saying,
"Well, what did you do?" or, "What went wrong?"
it would be back into either the Department of Health, for some
of the Health Action Zones, or DfEE for Sure Start, or DETR for
various other ones. And that was quite revealing; that was still,
despite what you were saying, and I accept what you say about
PSAs and about the various initiatives that the Government has
done about joint teams, but that fundamental, back into the Department,
was still there?
(Sir Michael Bichard) You cannot be surprised at that,
particularly when you are talking to people who are out there,
as it were, not within the Whitehall village. I think, in a way,
they require a sense of security even more than those of us who
are working within the village; so they do need an understanding
of who is responsible for their career and their terms and their
conditions, and they need a reference point. So I am not surprised
about that. I would not even be too worried about it. I think
what I am concerned about, as I said earlier, is the way in which
they behave and whether or not they are working together, to a
common task and a common set of objectives, and I think many of
them are working really, really hard just to do that.
(Sir Richard Mottram) One of the things which is interesting
is, you said people see it like that. It is actually within the
local government you can see that. Individual component bits of
local government sometimes see themselves actually almost as more
loyal to the people they are getting the money from than their
authority. And that, I think, is not, I was going to say not ideal,
that is a Civil Service sort of expression. If one thought about,
let us say, Government Offices for the Regions, we are actually
doing quite a lot of work; again, it happens that the responsibility
for those rests in my Department, but increasingly they work for
a wide range of departments. And the great message that goes out
from me, when I go round, and the message that goes out from Michael,
I know, when he goes round them, is, "Don't think about yourself
as though you are a little bit of DETR sitting here." I walk
round and I talk to people and they tend to introduce themselves
by declaring a previous departmental allegiance, and I look very
puzzled, "Why are you doing this; you are working for the
Government as a whole, and think about how you can get the synergies
between what is happening on the educational skills front and
what is happening on the regeneration front." And we have
been reorganising them and cross-posting the people to get that
sense. So I think we are all committed to the idea that we do
not want to replicate, all up and down the chain, these silos.
1001. The final question from me is, the PSAs
are a very useful initiative, but is not that just a question
of the Treasury coming in and then running every Department; and
what should be the relationship between the departments that you
are talking about and the central departments?
(Sir Michael Bichard) PSAs ought to drop naturally
out of departmental business plans. If all you are actually seeing
is the Treasury coming in and agreeing with a Department a small
number of PSA targets, and there is nothing to support and back
that up, then I think it is going to have little impact. I think
if we are going to achieve results then every Department needs
to have a business plan which people take seriously, which adds
value, which provides a strategic framework but also a framework
within which individual objectives can be set; and, from the objectives
within that business plan, a small number should just drop out
into the PSA, that is how the process should work, and I think,
in many departments, it is beginning to work. I certainly think
in my Department that is how it has always worked. We have just
had a peer review of our business planning process, with people
coming from outside of Government and other Government departments,
and they would, I think, bear that out; they have made some suggestions
for improvement, but I think they would say that is how it works,
and people do take it seriously.
(Sir Richard Mottram) I agree. I am a bit nervous
about saying this, in case my budget gets cut, but there is, I
think, a risk in the PSA process that you will get micro-management
by the Treasury of component parts of departments, and you will
get a lack of flexibility, a lack of capacity actually to redeploy
resource to best effect; that is a risk. It is not something I
spend a lot of time worrying about. I certainly think that, compared
with what has been done under this Government, in terms of PSAs,
in terms particularly of revamping the public expenditure cycle,
so that we are looking three years ahead and coming back to it
every two years, so to speak; that, I think, is a substantial
improvement. What the Treasury have tried to do this time, in
relation to PSA targets and linking those to objectives and all
the things that Michael was talking about, I absolutely agree
with him, that that, too, is an improvement. But there is a risk
that you are getting money related to objectives, related to targets
which are component parts of departments' business, and it will
all get a bit too silo-like; and the answer to that is to have
an active dialogue with the Treasury, which we certainly do.
Mr Tyrie
1002. Can I begin by saying, from what I saw
of Whitehall, I was extremely impressed by the quality of the
Civil Service, I thought they were extremely committed, capable
people and quite imaginative, and that they were probably less
corrupt than any Civil Service in the world; so that is a pretty
good starting-point.
(Sir Richard Mottram) Absolutely, yes.
1003. What I did think and what I still think
is, the common criticism which you do not make so much, Sir Michael,
that the Civil Service has all its best people right at the top,
and that there is a neglect of implementation; so bright ideas
are thought up, which should work in theory, should work on the
ground, but somehow something goes wrong and there is a disconnection,
and all this is connected to the joined-up debate, the cross-cutting
debate that you have just been referring to. But your article,
this article here, in September 1999, Sir Michael, is not saying
that. It is saying the policy advice is substandard and could
be much better, is it not?
(Sir Michael Bichard) I am not sure it is. I thought
I had been in the forefront of people who were saying that we
needed to improve our delivery capacity, our implementation, and,
as somebody who, as I say, used to run a Next Steps Agency, I
feel pretty passionately about that. What I was saying in the
article, and what I have said elsewhere, is that, actually, whether
or not things have changed is another matter, but, actually, over
the last ten to 15 years, there has been a huge emphasis upon
delivery, implementation and management. Richard has actually
been at the forefront of that, in setting up Next Steps Agencies.
What worried me was that people seemed to be rather less interested
in the quality of policy advice, and that now was the time to
think a little bit more about that. I think delivery and implementation
are critical. The Chairman asked me, right at the beginning, are
there areas where perhaps we still have not made enough progress;
well, I still do not think probably we have made enough progress
in developing the delivery capacity, partly because we do not
still value sufficiently the deliverers within the system, and
we have not defined their career paths sufficiently. So I think
the point you are making is terribly, terribly important.
1004. You say that the development of policy
has not received much attention, the way you develop policy needs
a radical rethink, in the old days you said policy is thought
to be okay if it is politically safe—I am paraphrasing—and
intellectually clever, suggesting that something quite radical
is required on the policy advice side now, as well; that is your
view, is it not?
(Sir Michael Bichard) Yes, it is.
1005. Let us just think about how we should
go about this, and just go through the various parts that I have
picked up from the article, and make sure I have got your argument
right. The first main plank of what you think should be done is
that we should bring people in, far more people in, from outside,
from other walks of life, into the Civil Service; is that right?
(Sir Michael Bichard) I think we need to be even more
creative and innovative, and one way of being innovative and creative
is to bring fresh ideas in; so, in order to enhance creativity,
I do think we need to bring more people in, yes.
1006. Right; and how are we going to do that?
Do we do that by, I think you have a proposal in here not to recruit
people straight from university but always to try to pick up people
who have had some other experience, or some other life, or have
18 months' operational experience, at least, in some other form
of job?
(Sir Michael Bichard) I think that is a slightly separate
point. It is related to delivery capacity. I believe that we should
be even stronger than we have been, actually, in making it clear
to civil servants that they will not gain promotion to the Senior
Civil Service unless they have had a genuine experience in delivery,
either in an Agency, work in a JobCentre, a Benefits Agency office,
or a local authority. So that is a slightly separate point from
the one of bringing people into the Service other than when they
leave university. Clearly, I would say this, would I not, that
I think there are people out there who develop maybe later, who
want different kinds of experience, before they think they might
like to work in Government. I am not sure we have in the past
made it easy enough for them to come into Government.
1007. You mention advertising, and that sort
of thing. Does the idea, the ethos, of a lifetime career in the
Civil Service need to be re-examined, should that be the bedrock
of the way the Civil Service operates? It is true, of course,
there have been far more people coming in, over the last 20 years,
than there were in the 20 years before that; nonetheless, the
culture of the Civil Service is still that of a mandarinate drawn
from a group of people who are largely the people right at the
top, largely career civil servants, people who have done very
little else. Is it your view that that needs to be altered fundamentally?
(Sir Michael Bichard) I think it is changing, and
I think I was saying that that is a good thing and we should encourage
it. I think someone said once that you were always to look at
your organisation and ask whether it is a stagnant puddle or a
fast-flowing stream; if you do not have people coming into organisations,
at different stages in their career, if you do not refresh organisations,
there is a danger that they stagnate, and, clearly, I do think
that people coming in from outside bring fresh ideas. What you
also need to be careful of is that you do not get the balance
wrong; people who come into the Civil Service as bright youngsters
from university, who want to make a career in the Civil Service,
we should encourage, and we must not leave them believing that
they are no longer going to be able to pursue that career because
all the important jobs are going to go to people from outside
when they become available. So you have got to get that balance
right. I do not think the balance has been entirely right in the
past.
Chairman
1008. Are you saying, if that is the question
you have to ask, are you a stagnant puddle or a fast-flowing stream,
then your answer is, "We're a stagnant puddle"?
(Sir Michael Bichard) No, there is a continuum between
the stagnant puddle and the fast-flowing stream, and I think somewhere
on that continuum there is a point which you should aim for; and
I think that in the past we could have done with a few more outsiders
to freshen up the stream.
Mr Tyrie
1009. What I am trying to ask you is, how are
we going to go about that, without collapsing the traditional
Civil Service ethos, I am not saying it is impossible, I support
the suggestion, what I am doing is looking for how you think that
should be achieved?
(Sir Michael Bichard) There is a practical way you
can do it, in terms of advertising, but what I was saying earlier
was, you need to go beyond that. To give you a couple of specific
examples. If I advertise now for a job outside for someone to
fill a post, I may get someone, I may not. What I am looking for
is maybe the person who was second or third in that competition,
who might be looking for a career in Government but did not win
that particular competition. Now, in the past, I think, we have
just sort of left them and they go back to local government and
that is an end of it. I think we need to be trying to engage them
in the work of the Department so that when another job comes up
they are more likely to apply. There are all sorts of ways in
which you can warm up the market, if you like, ways like that,
which we have not—
1010. Implications for pay, implications for
pensions?
(Sir Michael Bichard) Of course, there are implications
for pay, and we do need to be reasonably flexible about that.
1011. Different pay for the same job; that is
the heart of the matter, you have got a Civil Service pay scale
at the moment which makes it very difficult, particularly if you
need someone urgently?
(Sir Michael Bichard) I think there are occasions,
if we are serious about attracting people in from outside and
from the private sector, in particular, when we are going to have
to confront that issue, and I think we ought to.
1012. What is your view about final salary,
unfunded pension schemes, and what does that do for labour mobility
between the outside world and the Civil Service?
(Sir Michael Bichard) I think it is a very interesting
question, which is not saying I do not have views on it, I am
just thinking whether or not I want to share them with you.
1013. That is why we asked you along.
(Sir Michael Bichard) I think I have always been surprised
that it is an issue which has not been taken more seriously, because
I think pension arrangements do affect people's willingness to
move, and I think the traditional systems do not necessarily encourage
mobility. I think there are other reasons, however, why people
have not come in, it is not just pensions. I think some of the
people in local government, whom I think we might have been looking
to attract, have actually been on salaries which are higher than
Civil Service, and have not, frankly, been prepared to make that
transition, certainly at a later stage in their career when they
may be looking forward to some early retirement arrangements.
So all of those are reasons why you actually need to sell the
Civil Service to people. But my final point is that one of the
things that these people bring when they come in, which refreshes
it, is an excitement and a passion. It is possible for all of
us, even Richard and me, to lose that sense of excitement, or
passion—
(Sir Richard Mottram) Speak for yourself, Michael.
(Sir Michael Bichard) Well you just said your whole
life was not the DETR, which I was surprised to hear. But it is
possible to lose that excitement if you are in one organisation
or one system for ever. I am really struck by the people that
we have brought in, who will come and sit in my office and say,
"This is the best moment of my life, because I have the ability
to influence and to make a difference, in a way that I never did
in a voluntary sector organisation, in a local authority."
And that kind of passion and excitement really makes a difference
across the whole of the Department.
1014. Sir Richard, can I just put that point
to you, the same point, which is about bringing people in from
outside, what the bare minimum required to achieve it is, and,
in particular, whether you would be prepared to share a little
more of your thoughts than Sir Michael was on pensions and the
final salary schemes, which lock people in for a long time after
a few years' service?
(Sir Richard Mottram) On, what was it, stagnant puddle
or fast-flowing stream. What I think is absolutely true is that,
if you have an organisation where you all join at the bottom and
you all grow up together and you fall out at the end, and it is
an inward-facing organisation, you are likely to end up as a stagnant
puddle. I have never worked in a Civil Service organisation that
itself had that culture, because I think I have been lucky that
I worked in the Ministry of Defence, which actually had a regular
flow-through of people with different backgrounds, and when I
was not doing that I was working in the Cabinet Office, which
again had people coming in and out. So having people coming and
out is, I think, an important component of this, but it is only
one component of it. The other key thing is how the Department
is orientated, is it orientated inwardly, or is it orientated
outwardly, is it outward-facing, does it actually consult a lot.
An organisation like the DETR, where certainly we are trying to
change the balance and bring in some new people, and I can talk
about that, if you want to, that is an important thing for us;
but much more fundamental is that we have engaged all sorts of
people, just as Michael has done, in the policy-making process
of our Department. So one of my biggest problems, as Permanent
Secretary, is to keep up with the process of consultation, on
a very positive basis, that we are engaged in, and our big message,
my big message, to all of my staff, is, "You are to be outward-looking,
you are to consult, you are to develop partnerships with local
government or whatever"; and that is one of the ways in which
you get this cross-fertilisation of ideas. So I do think, actually,
bringing people in is important, I think it is one component part
of a much more complicated picture, and we should work on all
of them and think about all of them. And, therefore, one of my
big passions, and actually I do think the organisation should
be passionate, not passionate about those issues which Ministers
do not want to be passionate about, but we should have an idea
this is exciting and we can make a difference in those areas where
Ministers want us to make a difference. The way you get that passion
is by mixing people up, but by exposing them to the wider world,
so it is one component part. I do not really know about pensions.
Throughout my career in the Civil Service, which has been quite
a long one, every so often I have thought about leaving, and usually
when I have thought about leaving it was because the work had
lost its interest for me, and on one or two occasions somebody
came along and said, "Would you like to work for us?"
and usually put big numbers alongside the proposition; at no stage,
in any of those considerations, did I ever think about my pension,
this probably just means that I am a sad person that does not
think about the future. I am not trying to be flippant, actually,
because I think that there are serious issues about whether—so
I think this pension thing and job for life is in danger of being
a bit of a caricature. As it happens, I have spent my working
life in the Civil Service. It has been a process of chance. I
did not join it in order to spend my working life in it, I did
not join it as a job for life. If somebody had said to me, "I've
got this amazing offer I can make to you, you can have a job for
life in the Civil Service," I would have said, "Well,
I'll take anything other than a job for life." Who wants
a job for life? So when I deal with the people who are joining
my organisation now, the biggest turn-off for them would be if
what we are offering them is a job for life, where you go up a
hierarchy and at the end you get some marvellous pension. They
are not remotely interested in this. When I talk to them, what
they want is work which is demanding, and they will stay if the
work is demanding, they will leave if it is not. But, nevertheless,
we do need to have pension arrangements that give people more
flexibility, so that it is not a barrier. I am not interested,
I do not want to attract people who are interested in a pension.
1015. I am sorry to labour pensions, I am going
to ask one—
(Sir Richard Mottram) No, no, I think you are right
to labour pensions, I know why you are doing it. I am just not
a great expert in pensions because it has never been a big part
of my life.
1016. I know there is an upfront Treasury cost,
but do you think that we should move from unfunded to funded schemes;
that is the heart of the matter, because they can become portable
and then one can get much greater interchange between public and
private sectors? I think you are unusual in what you said about
pensions. When I discussed this matter with colleagues of mine
when I was in the Treasury, they often said, "Well, I look
at my pension"?
(Sir Richard Mottram) That is because the Treasury
is full of people who are introverted, thinking about their pension,
whereas—
(Sir Michael Bichard) You have got tomorrow's headline
now!
(Sir Richard Mottram) The DETR—as long as this
is not being in any way recorded, but, if it is, it was Michael
Bichard who said that. To be serious, there are issues about pensions,
I do not know whether it is whether it is funded or not, because
I think that is a second-order question just about how you generate
the money to pay it out. I will leave that to the Treasury. You
must have flexibility so that it is not a block on people moving,
as Michael says, it is not a block on people transferring between
sectors. Now we are changing the Civil Service pension scheme.
I hope you are not going to question me about it in detail, because
it is not my expertise, but one of the reasons why we have been
working on changing it is precisely so that it is not locking
people in; but it is a small part of the thing. For me, the big
thing is create an organisation which it is exciting to work in,
where people have a sense they are doing something in the public
interest; that is the key.
1017. Would you be prepared just to send us
a note, setting out as much as you can, without going beyond what
is permitted in this ivory tower world, of what has so far been
thought about on pensions?
(Sir Richard Mottram) Can we arrange for the Cabinet
Office to do that for you, because they are the experts?
1018. If you could; that is very interesting.
(Sir Richard Mottram) Yes, of course; there is no
secrecy in this. We can explain to you exactly where we are on
reform in the Civil Service pension scheme.
1019. Can I just ask about what you said on
the Treasury, because I thought that was—
(Sir Richard Mottram) No, I did not say anything on
the Treasury!
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