Select Committee on Public Administration Minutes of Evidence

Examination of Witnesses (Questions 122 - 139)




  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 methods.
  (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 level.

  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 it.

  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 department man?
  (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 would share?
  (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 for—and 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 matter—I 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 to who.

  Chairman: Thanks for that; that has got us going.

Mr Trend

  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 chairs—and re-arranging the chairs includes re-arranging the people in a pretty confusing way—that 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 change.
  (Lord Haskins) You can, but you have to have consistency.

  134. What happens if the electorate does not want consistency?
  (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 moving around.

  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 way.
  (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 government.

  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 it now.

  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.

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