Examination of Witnesses (Questions 122
THURSDAY 15 NOVEMBER 2001
122. May I on behalf of the Committee welcome
our witnesses this morning, Lord Haskins and Martin Taylor. It
is very good to have you along. You are here to help us with our
inquiry into public service reform issues and possibly marginally
with our parallel inquiry on changes to the centre of government,
as you operate in both these territories. I am sorry if I have
just sprung that on you but we shall probably ask you anything
that comes into our heads really. It is very kind of you to come
along. You both have substantial private and public sector experience
and that is why we want to draw upon you. Do you want to kick
off by saying anything or shall we just fire off at you?
(Lord Haskins) The only thing I would
say is that having been 35 years in the private sector and a dozen
years in the public sector, as I worked with the Conservatives
for about seven or eight years, there is a huge misunderstanding
on both sides of what the other is about. The private sector greatly
underestimates the complexity of government and the public sector
does not understand what on earth is going on out there. There
is a huge misunderstanding of what the issues are.
123. We shall want to explore that with you
in just a second.
(Mr Taylor) I would simply say that when asked about
my public sector involvement, I am usually spoken to as a "businessman"
as though all businessmen were much the same and were a species
which could not mate with others in the human race. Actually,
businessmen vary immensely and some businessmen are good managers,
some managers are poor businessmen and private sector experience
is not at all a uniform thing. That is perhaps a sub-set of what
Chris was saying, that people in the public sector tend to have
not only preconceptions about the private sector but also tend
to pigeonhole us as we sometimes pigeonhole them.
124. Thank you for that. If what you are both
saying is that there are problems in the public and private sectors
getting it together because of these views they hold one of another
and how they are organised, just in a nutshell how do we overcome
this from your own experiences?
(Lord Haskins) There is a whole cultural difference
here in the way people go into business, people go into public
life, compared with the French on the one hand where you get strong
cultural links between people in the public sector and people
in the private sector and academics for that matter. In America
you have this much more brutal but recognised way of putting business
people into very powerful political positions in the Cabinet.
We are sort of somewhere in between. It is all about Northcote
Trevelyan and that the idea of the Civil Service might have been
appropriate when civil servants were appointed to write the constitution
of the Punjab and things like that, but that role is not a key
role for a modern civil servant. The issue the Government spends
a lot of time talking about, delivery, is really what business
is about most of the time, delivering results and outcomes, and
the Civil Service has not been trained to do that. I think the
Civil Service is recognising that. If you go into business you
tend to start at the bottom end of the thing and learn. If you
are going into a marketing company you start writing very basic
advertisements, if you go into the food industry you start working
on a night shift, working out how it is at the sharp end. People
go into the Civil Service. My daughter left Oxford and went into
the Treasury at the age of 23 and started writing clever policy,
but she has never actually been involved in the sharp end of anything
in her life. That might have been all right 100 years ago, but
it certainly is inappropriate now. I think there is a training
issue within the Civil Service. The difficulty about that is that
if you ask a civil servant who is probably badly paid at any rate,
to spend six months or six years in the Trading Standards Office
in Newcastle-on-Tyne, that this is not going to be tremendously
enticing for the bright people and that is a dilemma. Then you
come back to how we pay civil servants.
125. May I stay with this for a second? In a
sense we heard something not dissimilar from the Cabinet Secretary
last week who rather disarmingly said that traditionally they
have not been concerned with delivery and suddenly they have been
asked to be. It was a revelation and you wonder what on earth
they have been doing all these years, whether they have been in
the Punjab. What this leads on to, if we are now saying that the
Civil Service should be about delivery, is the conclusion that
we now have to tool them up to make them become about delivery
or accept that in fact they are not about delivery and find other
ways of delivering and hence interesting private sector delivery
(Lord Haskins) That is the dilemma; it is a slight
over-statement but until the 1944 Education Act and the 1948 nationalisation
of the Health Service, these delivery services were all done at
local level and there had been a long history of high quality,
local delivery which we abandoned in favour of a centralised system
and we did not actually make the appropriate steps in the centre
to replace that delivery mechanism. We have allowed all those
local delivery systems to collapse. The only way forward is to
go back to basics and to decentralise and devolve. The problem
about devolving power in business and in the public sector is
that in the devolution process you get better accountability at
the local level but you lose consistency. If you have a National
Health Service devolved you are going to get inconsistencies.
On the other hand you get greater accountability. I actually think
that the trade-off is that it is better to have greater accountability
at local level, even if you lose a bit of consistency at national
126. It is always disagreeable to quote people's
words back at them, but I should like to know what you mean. Last
year you said on some occasion that we are in the worst of all
worlds where we have sort of abandoned the Cabinet committee,
we have a sort of Prime Minister's Office, including the Cabinet
Office, which really does not have the teeth to deliver what the
Prime Minister wants. I am not too sure that it is the institution
which should be delivering. This suggested to me that you had
a sense of what you would really do to the centre of government
if only you could get your hands on it.
(Lord Haskins) I separate policy from delivery. I
do think that the capacity of the Cabinet Office and the Prime
Minister's entourage to co-ordinate policy is quite limited by
resource. That was what I was getting at. I do not believe it
is the job of the Prime Minister's Office really in an ideal world
to be delivering. It is unfortunate that when we get a foot-and-mouth
disease outbreak it has to be pulled into the centre very quickly.
I think it is real politics, but it is not ideal. It is interesting
that Harold Wilson's memoirs do not even mention the foot-and-mouth
outbreak in 1967 because it was dealt with out there. We have
brought these things into the centre and we are compounding the
problem all the time. The fuel strike of 12 months ago became
a prime ministerial issue; I think that is bad business actually.
I am not blaming the Prime Minister for that, but it is the reality
if there is a public outcry, a demand for the Prime Minister to
get involved and I do not think he should be on the delivery side.
On the policy side, of course he has to be involved and with the
resources for co-ordinating policy across departments it is very
difficult. We are a long, long way away from achieving the wonderful
aspiration of joined up government; we are a long way away from
127. I am still not quite sure what you would
do if you got your hands on all this. Are you a Prime Minister's
(Lord Haskins) Yes, I think so; on balance. I feel
that Government should engage Parliament much more vigorously
in the scrutiny process than it does at the present time. However
making a Prime Minister's department more powerful when a Prime
Minister in our constitution is already pretty powerful, particularly
with a large majority, seems, maybe, a dangerous thing to do.
Therefore there have to be the checks and balances. One of the
things I find is that the job I do, for example, in the Cabinet
Office checking on regulatory process really ideally, should be
done by Parliament and should be done by the Select Committees.
There is an underlying adversarial tension in our system, not
so much between the Prime Minister and Parliament but actually
between officials and Parliament. I feel that there is a very
unhealthy tension on the Committee of Public Accounts, which means
that people approach these discussions in a very defensive way
rather than in an open way. I should like to see Parliament carrying
a more open role in that, but the quid pro quo for that
would be that the Prime Minister's Office perhaps has to be strengthened.
We have lost the Cabinet committee system a" la Harold
Macmillan now for ever.
128. So stronger Prime Minister's Office, not
pretending to do it through the Cabinet Office, but matched by
a beefed up kind of accountability. This would give us more coherence
and better delivery all round.
(Lord Haskins) I think so.
129. Is that a view, Martin Taylor, that you
(Mr Taylor) I do not have Chris's competence in the
question of the philosophy of administration. One certainly is
struck by the inconsistency between the demand, the very mediatic
demand for the Prime Minister to behave in a presidential way
and the means he has at his disposal. I suspect that what is happening
in a very British way is that we are stumbling through this by
making small changes here and there, bringing more specialist
advisers in to government, using more private sector people, having
more parliamentary work done in Select Committees than in the
Chamber, without anybody saying here is where we are trying to
get to. We have actually carried on for a long time like that.
130. Let me try one more angle on you and that
is on the business of a public service ethos. This is something
the Committee is exploring and will want to say something about
shortly. Because of your different backgrounds in public and private,
you can help us greatly with this. You chaired the IPPR inquiry
into public/private partnerships. I do not know why that makes
you chuckle. In your introduction to that, which is refreshingly
frank about all these things, you say, purity of motive does not
compensate for inadequacy of outcome. Then you say you are sceptical
of the doctrine of the public sector ethos. The Prime Minister
goes round celebrating it all the time. Which of you is right?
(Mr Taylor) I should think the Prime Minister is probably
right. Let me perhaps enlarge briefly for the benefit of the Committee
on what I was trying to say. I have absolutely no doubt at all
that many people are impelled by a sense of public service, at
least some of the time. I dare say that includes many or most
MPs. It may even occasionally include your witnesses here. It
certainly includes a number of people who work in the public sector
at high or lowly levels. What I do not accept and really see no
evidence forand we did scratch around on this subject in
the two years we worked on the report and in some circles denying
the existence of this is like denying the existence of the Holy
Ghost, it is a serious matterI do object to the idea that
people in the public sector are knights and people in the private
sector are knaves, that on the one side you have a group of people
driven by purity of motive and on the other side you have people
who are rapacious and untrustworthy. Even if that were the case,
which it most definitely is not, as I went on to say at the end
of the paragraph, purity of motive would not compensate for poor
public services. We are not, as Adam Smith said, particularly
interested in the benevolence of the butcher and the baker. We
are interested in the fact that for their own self-interested
reasons they want to sell us good bread and good meat. If I am
a consumer of public services, I do not much mind what drives
the supplier to supply them, I want them to be good.
131. We have heard arguments, and we heard it
very powerfully from Lord Plant last week, that if you move to
private sector provision across the board, if you move to a system
of contracting, contracting will never substitute for the bundle
of attitudes which in a nutshell we describe as the public service
ethos. If people work to a contract they will only do what the
contract specifies. If they carry a public service ethos with
them, they will do more than the contract specifies. Is that not
a fundamental point?
(Mr Taylor) First of all, nobody, as far as I am concerned,
certainly not me, is suggesting that the entire public sector
should be got rid of and replaced with private sector contractors.
That is the first point. The second point is that we have a system
at the moment of appointing private sector contractors which always
guarantees that we get the worst out of them. What the public
sector does is to try to buy cheaply. It tries to buy cheaply
and it tries to impose tough contractual terms. Under those circumstances,
it is not surprising really that people do the least that they
need to do. I do not want to be controversial but if you were
to set out what a normal person would think the social contract
was between society or government and many of the public services
at the moment, in spite of the existence of the public service
ethos, we are falling short in a large number of places. That
is not because of contractual terms.
(Lord Haskins) The concern I have is that the whole
public service ethos seemed to me to be built again on Northcote
Trevelyan, and a way of doing things behind closed doors and running
the country as people like Geoffrey Dawson behaved, rather unfortunately
in the run-up to the Second World War. That was what the public
service ethos was: you were able to do things without public challenge.
In the transparent society we have now, that ethos looks a bit
thin. The trouble with the ethos is that it gets mixed up with
these very dangerous words "loyalty" and "accountability".
Loyalty is a bad word and accountability is a good word. The first
loyalty in the Civil Service is to your Minister whoever he may
be and I have seen civil servants stand on their heads because
of a change of Minister. The idea that civil servants manage Ministers
. . . In some ways they do, but in some ways they respond to the
quirks of Ministers in a very inconsistent sort of way. The second
loyalty they have is to each other. Loyalty is a word which we
need to be very careful of. Accountability, is ever more problematical.
The modern Civil Service feels its accountability is partly to
Ministers but the thing which worries them more than anything
else is the Committee of Public Accounts. That sort of accountability
is not adequate and redefining the accountability of the public
sector is the key issue. It is very unclear to me who it is accountable
Chairman: Thanks for that; that has got us going.
132. You just talked about quirks of Ministers
but in the classic system as it operates, you will get a new Minister
with a completely different policy. Mrs Thatcher had this, the
present Prime Minister has had it and various other political
leaders and Ministers in their own departments. You spoke earlier
about what was ideal and then you contrasted that with real politics.
There is always a tension between. The Civil Service has to be
ready to change its policy view with the change of Government
or indeed with the change of Minister within the same administration.
(Lord Haskins) The change of Government is a slightly
different issue. Of course there is a need for civil servants
to rethink and understand what the manifesto of an incoming Government
is and to advise that incoming government and that process works
quite well. Advising an incoming Government as to whether that
will work or that will not work is an important process. I am
talking about changes of Ministers. Labour turnover is another
issue in the public sector which is rather more dramatic than
in the private sector. I have had four Ministers in four years.
I have had as many senior civil servants in four years. You hardly
get them bedded down before they are off. This is a very serious
point in terms of policy ownership. In the private sector when
somebody comes along to me and says they want to spend £5
million, I have learned of old to see that they are there when
that £5 million comes to fruition so that they have ownership
of the thing right through. In the public sector, you get a policy
going and all the chairs are turned round and the new lot come
in, including Ministers, and say it is nothing to do with them.
You do not get ownership and continuity as a result. It is difficult
but I think civil servants could be more firm with changes of
Ministers and somebody has to say before they start re-arranging
the chairsand re-arranging the chairs includes re-arranging
the people in a pretty confusing waythat there must be
a bit more consistency. I do not think there is enough consistency.
133. It seems to me you are trying to re-arrange
the constitution as well. In the end the guy who is accountable
in this is the Minister, either before the PAC, though rarely
these days, but it is quite possible for a Minister to have to
stand up in the House of Commons and explain why he has changed
his mind or why the present policy is going to continue. Ministers'
careers will stand or fall on whether they could get that call
right. Sometimes it is right to go in and change all the chairs.
It may seem blatantly obvious to a businessman that there is one
way of doing this but the whole point of a parliamentary democracy
is that there are two opinions if not many, many more. You can
(Lord Haskins) You can, but you have to have consistency.
134. What happens if the electorate does not
(Lord Haskins) That is fine, if that is what the electorate
wants but the electorate only has its say every four or five years.
I am talking about changes every three or four months. This is
micro stuff, this is not macro stuff. It is just an ordinary day-to-day
way of good management of day-to-day affairs. There is too much
135. When you were talking about the differences
between the ideal state and real politics you were talking about
delivery specifically around the foot-and-mouth business and saying
it was unfortunate and in an ideal world the Prime Minister would
not have needed to get involved in the delivery of a policy of
trying to eradicate this disease. Yet, I dare say, it was essential
for him, or he felt it was essential for him, to take a national
leadership role here, roll up his sleeves and show that he was
down there in the fields with everybody else. That is the reality
of politics and I do not see how you can get rid of that in any
(Lord Haskins) It is a big dilemma. That is why the
idea of strengthening the Prime Minister's Office is almost an
inevitability. If you take the example of foot-and-mouth disease,
when they were dealing with that 34 years ago, the environmental
issue was hardly there. It hardly existed, people did not think
about it. So how to deal with it was basically an issue between
the Minister of Agriculture and the farmers. In the year 2000
you have all sorts of cross-departmental issues which the Ministry
of Agriculture on its own could not deal with. There had to be
an over-arching interference which had to come from the Prime
Minister to bang heads together to bring the army in, for example,
though the army did come in in 1967 as well. The environmental
aspect, for example, makes it much more complicated for modern
136. May I go to a slightly different angle
now and the question of accountability? You have had a lot of
personal criticism about potential conflicts of interest and your
business and your role in government, which you may or may not
want to say anything about. That is not the point of my question.
The point is that in listening to you, you have said a number
of things which make me wonder who in a sense you are accountable
to. When you talked about Ministers you said that you had had
four Ministers. I dare say four Ministers might have felt that
they had had you.
(Lord Haskins) Or not.
137. In a world in which it is increasingly
difficult to see where accountability lies, Government, Parliament,
regulators and appointed bodies and quangos and all the rest of
it and superior advisers within the Government's framework, apart
from the fact that you appear before our Committee, for which
we are very grateful, how do we get checks and balances against
figures like yourself?
(Lord Haskins) That is a very good question. First
of all, I am only an adviser. Secondly, my advice is eminently
transparent in that I write a lot of reports, so people can make
their judgements about whether the advice was good advice or bad
advice. On the issue of conflict of interests, which comes up
very often, it is a dilemma for government. If you want to get
outside people in to look at something like foot-and-mouth disease,
the experience unfortunately is within that industry; farmers
and food manufacturers understand that better than judges. If
you bring a judge in you have three years before you get an answer
and by that time foot-and-mouth disease will have long since been
forgotten. My problem is to make sure that when my experience
is being used, I try to separate the public interest from the
vested interest. It is essential, therefore, that what I am doing
has to be transparent, has to be out there in the shape of a report.
People then can say, I hope, that this person is or is not behaving
in the public interest. That is the challenge. I welcome having
discussions of this sort because that is how advisers should be
operating in modern government.
138. On the Civil Service itself, you clearly
have had some interesting difficulties with the culture of the
Civil Service. I still find it quite difficult to understand why
the Civil Service cannot be turned into a body which specialises
in delivery and what it is that is lacking. A number of outsiders
who work for the Civil Service clearly feel that this is the case.
We are not saying the Civil Service is irredeemable in this are
we? What can be done?
(Lord Haskins) No, I am just saying size is the issue.
The National Health Service used to be the third largest employer
in the world after the Indian Railways and the Red Army; but both
of those have gone into some decline so it may now be the largest
employer in the world. I would argue that one million people working
for a single organisation is unmanageable. One has got to find
some way of government setting the broad strategy at that level;
that is what the Government is about to do. Then it passes that
strategy down the line to people at the delivery point. In business
you can do that in the sense that my board has got to make sure
the people down the line think this is a good idea. If they think
it is a bad idea they are not going to deliver it very well. It
is up to them to deliver it. In politics that is more difficult,
particularly at local government level where you may not necessarily
feel that the people who are delivering actually buy the idea
that central government is handing down. It is impossible to run
the National Health Service effectively as we are trying to run
139. In my constituency I have a very large
number of international companies whose HQs are there because
of the proximity of Heathrow. They are run by 50 people and the
senior management around the chairman and the rest of it.
(Lord Haskins) Correct.