Memorandum by First Division Associates
(PSR 13)
1. The FDA welcomes the opportunity to give
evidence to the Public Administration Committee Inquiry into Public
Service Reform and has considered the Issues Paper. We do not
at this stage wish to comment on the paper in its entirety, particularly
given its breadth but there are a number of points we wish to
make in advance of the oral evidence that I will be giving on
29 November.
Reforming public services
2. The FDA was involved in the dialogue initiated
by the then Ministers, David Clark and subsequently Jack Cunningham,
during the preparations for the Modernising Government White Paper
published in March 1999. We broadly welcomed the White Paper and
remain committed to an agenda of public service reform, recognising
the entitlement of UK citizens to high quality and efficient public
services.
3. The FDA also had significant involvement
in the preparation of the Civil Service Reform Programme, agreed
by Permanent Secretaries at Sunningdale in autumn 1999 and published
in December that year. The FDA again broadly welcomed the programme
of reform and remains committed to its delivery.
4. The FDA believes that public service
reform must be underpinned by a partnership between elected politicians,
management and staff that involves staff at all stages during
any process of reform and recognises that staff have legitimate
interests in the overall delivery of reform. The FDA, together
with the other unions in the Civil Service, signed a partnership
agreement with the Government and the Head of the Civil Service
in spring 2000. This we believe has enhanced dialogue and involvement
at the "centre" of the Executive (which we would define
as No. 10, the Cabinet Office and Treasury), although we remain
concerned at its piecemeal application across Government departments;
that said, the unions and Cabinet Office have initiated a joint
working group to examine the implementation of the partnership
agreement and how this can be enhanced in future.
5. We believe that the Civil Service Reform
Programme does offer a coherent basis for enhancing the work of
the Civil Service and in addition has the potential to offer significant
improvements to the quality of working life, and the employment
terms, of civil servants at all levels. We remain concerned that
reform is running more slowly than we would wish in a number of
departments, although a report of progress is currently being
prepared, we understand, by the Cabinet Office.
6. We are also concerned at the apparent
lack of cohesion between the Cabinet Office, Treasury and No.
10. Although the key link between individual departments and the
centre is through the Public Service Agreements and Service Delivery
Agreements signed between departments and the Treasury, there
are also a number of units within No. 10, in particular the Delivery
Unit headed by Michael Barber, which also monitor departmental
performance. In addition the Office of Public Service Reform,
part of the Cabinet Office and headed by Wendy Thomson, is also
considering wider issues, mainly outside the Civil Service but
which nevertheless impact on the delivery by departments of agreed
programmes. There is evidence from departments that they find
this overlay at the centre both confusing and at times an impediment.
It is also not clear how these different units interact, and in
particular the FDA is not clear about the role that the Office
of Public Service Reform will play. It would be helpful to have
a clear statement of where the boundaries are and how the different
departments and units relate to each other.
7. Part of this apparent confusion arises
from the process by which different units were brought together,
often at short notice, immediately following the General Election.
We do not believe that it would have in any way undermined the
democratic process and political debate during a General Election
had the Government planned the creation of units, and the reorganisation
within No. 10 and the Cabinet Office, well in advance of the General
Election.
8. A similar haste is apparent in reorganising
departments; an example is the merger of MAFF with a substantial
part of the old DETR to create DEFRA. Although civil servants
were involved prior to 7 June in plans to merge MAFF with part
of DETR, the scale of the change announced immediately after the
General Election went considerably beyond that mooted in the weeks
before. In a less high profile context, the relationship between
LCD and the Home Office was also not clarified, and then at very
short notice, until the week immediately following the General
Election. The FDA recognises the political sensitivities attached
to reorganising Government departments, but we believe that the
tendency of both Labour and Conservative governments to propose
reorganisations at short notice and without inadequate preparation
undermines at least for a period the ability of those departments
to deliver effectively.
9. We believe that there is merit in a comprehensive
review of the role of the centre vis-a"-vis individual departments.
Recognising that it would be helpful to let a period of time elapse
for the new central structures to clarify their roles and interaction,
it would be appropriate to launch such a review next autumn.
10. The FDA also supports more effective
regional government, drawing together the work of the Government
Offices of the Regions and other regional bodies. Enhanced regional
government has the potential to play an important role, but we
recognise that this would not be feasible without a coherent review
of the relationship between central and local government, and
the link between the NHS and regional government would require
consideration in depth.
11. The FDA represents more than 1,000 Chief
Executives, Executive Directors and equivalents within the NHS,
and is well placed to comment on the concerns and pressures felt
by those responsible for delivering change within the National
Health Service.
12. The pace of change in the NHS over the
past decade has been considerable. As senior managers, our members
know that they must continue to demonstrate the highest degrees
of flexibility, adaptability and creativity to deliver the improved
Health Service demanded by politicians and citizens. As senior
managers they also have a fundamental commitment to ensuring that
the NHS provides the best healthcare possible and we have no doubt
that they will continue to provide the health service with the
dynamic leadership it needs.
13. However, senior NHS managers are increasingly
concerned and affected by the "blame culture" in which
many of them have to work. The FDA is alarmed by the number of
cases where our NHS members are forced out of their jobs on pretexts
that defy the most basic tests of fairness. All too often this
removal is on the whim of a board of non-executive directors and
has more to do with decisions that managers' faces no longer fit
than the quality of those managers' performance. The effect of
this unreasonable and unfair employment context goes beyond the
individual dismissal and creates a climate of fear among his or
her colleagues with all the negative effects on morale and trust
that such insecurity generates, as well as diverting much needed
resources—both human and financial—from the delivery
of health services.
14. Senior NHS managers have fewer safeguards
against unfairness at work than almost any other comparable group
of public sector professionals. No one benefits from this situation.
Our members face a working environment where no matter how well
they do they can be dismissed, and patients end up relying on
a health care system where those responsible for the quality of
that health care lack many of the employment rights and expectations
they take for granted. The FDA believes that systems and structures
need to be put in place that ensure that NHS managers' performance
is assessed and responded to fairly and proportionately. Insecurity
and unreasonableness will never lead to optimal use of any senior
professional's capabilities.
15. The FDA believes that reform of public
services cannot however be successful unless the political framework
overseeing the delivery of services is also subject to reform.
Two important areas of political reform are required.
16. Firstly, whilst the Government can take
credit for the Freedom of Information Act, it is disappointing
that implementation has been deferred until 2005. Reform within
the Civil Service and NHS is likely to be more successful if it
takes place within a framework of greater transparency and openness.
The decision to defer implementation was taken by ministers and
sends an unfortunate signal throughout the public services.
17. Secondly, the FDA is disappointed that
the Government has, despite an election commitment in 1997, moved
extremely slowly in seeking to reform the House of Commons and
appears highly reluctant to ensure effective scrutiny and accountability
of ministers and departments. There is clearly a balance to be
struck with regard to Parliamentary accountability, just as with
freedom of information. For example, the FDA has not supported
those campaigners who argue that civil service advice to ministers
should be available for public scrutiny when decisions are announced.
Similarly, given the multiplicity of monitoring from the centre
of the Executive, detailed monitoring and scrutiny by Select Committees
could be extremely burdensome. However, the FDA believes that
there is too little effective scrutiny by the House of Commons
of the work of departments and are disappointed that the Government
has rejected proposals from the Select Committee on Liaison to
enhance the role of select committees in a constructive manner.
Linked to the failure to enhance accountability within Parliament
has been the clear failure to review the Parliamentary processes,
including the way in which legislation is taken through Parliament.
18. We believe that there should be an overhaul
of the role of select committees to enhance their responsibilities
in conjunction with the proposed review of scrutiny by the centre
of the Executive in a way that could develop a more comprehensive
but co-ordinated balance of scrutiny and accountability between
the Executive and Legislature. It would be interesting to compare
the experience of scrutiny by the Scottish Parliament and Welsh
Assembly with that undertaken within the House of Commons. The
key is to achieve a balance between scrutiny within the Executive
and scrutiny by the Legislature, within an overall framework of
greater transparency.
19. Further, though this may seem like wishful
thinking, consideration and debate about public services, including
the role of the private and voluntary sectors, currently suffers
from the adversarial approach of Parliament, an approach often
replicated at other levels of government. Too often a Government
tries to hide issues about public service delivery and reform
because it fears taking political flack were it to be more open
about problems. There is a responsibility on all political parties
in the UK to seek to examine issues about the public services
and service delivery in a way that fosters meaningful debate rather
than seeking to score easy political points. Clearly, there are
important differences at a political level about the future of
Britain's public services, but as we are clearly now seeing, the
country as a whole has been the loser for the failure to address
these issues in a more mature fashion.
20. A move away from the blame culture,
highlighted above in the context of the NHS, and from partisanship
would also benefit the work of the Public Accounts Committee.
Too often witnesses are subjected to hostile, but nonetheless
superficial, examination by some MPs.
21. Finally, the Government needs to come
to terms with the scale of the task they are undertaking in reforming
public services that have suffered from at least two decades of
persistent underfunding and neglect. The Government, for obvious
reasons, has not always drawn attention to the level of spending
cuts required of the Civil Service and other public services throughout
the 1990s, including during most of New Labour's first term. The
Government often gives the impression that it believes that the
Civil Service and NHS have "failed to deliver". At one
level this is hard to refute; big problems obviously still exist
in many areas of the public services, and the Civil Service and
NHS managers no doubt share some of the blame (if blame is an
appropriate concept). But the Government is at special risk of
confusing a failure to "deliver" with their own failure
to lead, and their even more marked failure to understand the
discrepancy between a realistic timetable for "delivery"
of any major change, whether in the public or private sector,
and the political/electoral timetable of expectations.
Public Service Ethos
22. The FDA does not consider that the concept
of public service is in any way an anachronism. We also recognise
that it is an extremely difficult concept to define. That said,
we have been impressed by the recent work of Professor Raymond
Plant and would draw the Committee's attention to his paper "A
Public Service Ethic?" published by the Social Market Foundation.
We understand that Professor Plant is revising the paper in the
light of debate fostered by the Social Market Foundation.
23. We also believe that notwithstanding
the difficulty of defining a public service ethos, senior managers
and professionals in the public sector are motivated by such an
ethos, which is internalised by senior public servants and impacts
upon the goals of their organisations. Public servants deliver
services (of whatever type) in order to benefit the wider community
and nation, and are accountable, even if indirectly, to elected
politicians, whether that be a government minister or a parish
councillor. This clearly differs from the private sector, where
the ultimate accountability is to the financial viability of their
business, and to the voluntary sector where different accountabilities
operate.
A Single Public Service?
24. The FDA has traditionally represented
the more senior civil servants. However, as noted above, we represent
a growing number of senior managers within the National Health
Service, as well as representing senior managers and professionals
in NDPBs. In addition, although we do not recruit senior local
government managers and professionals, we regularly receive applications
from such individuals seeking to join the FDA. We believe that
this is in reflection of a recognition, particularly by younger
public servants, that careers in the public services will in future
tend to move across different areas of the public sector rather
than, as in the past, for individuals to work predominantly in,
say, the civil service or local government. This is a trend that
has been encouraged, rightly in our view, by the Government. In
England this trend is particularly noticeable already within the
NHS and Department of Health, where the boundaries for individuals
are increasingly blurred, but has also accelerated in Scotland
and Wales since devolution.
25. We believe that this process will continue,
particularly in Scotland and Wales, and possibly Northern Ireland
although there the architecture of the public sector is somewhat
different to that of the rest of the United Kingdom. Given the
population and size of the public sector in Scotland and Wales,
we believe this is a positive development and can help to ensure
that senior public servants have a much better personal grasp
of the intricacies of both policy making and delivery in different
parts of the public sector.
26. In England the process is moving more
slowly given the size of the public services, although were the
Government to move ahead with proposals for stronger regional
government, the process is likely to accelerate.
27. Overall, we believe that this is a healthy
development but that it would be unrealistic to expect the creation
of a single public service in the short term, even in Scotland
and Wales. It would also have profound HR implications for existing
public servants and would possibly be unmanageable. Rather, individuals
should be encouraged to experience work in different parts of
the public sector as a natural career development and HR barriers
to such movement should be minimised as far as possible.
Joining Public Services from the Private Sector
28. Whilst there is a natural tendency for
any union to protect promotion and recruitment at senior levels
to ensure promotion opportunities for more junior staff, the FDA
has accepted the trend for an increasing number of posts to be
opened up to public competition. We recognise that this helps
to foster greater cross fertilisation even within the public services,
and of course recruitment to local government and NHS posts has
always primarily been by public advertisement, and a percentage
of posts publicly advertised are nonetheless awarded to serving
civil servants.
29. The single most obvious barrier to private
sector individuals joining central government has been the salary
differentials between the civil service and private sector, which
become more acute the more senior the post. Unless there is an
overwhelming business case, because of say a specialist skills
shortage, for offering a higher salary to a private sector applicant
than to a public servant, we believe that this should not be undertaken.
A salary is either fair or it is not. However, a more significant
barrier for private sector individuals joining the civil service
is often the different levels of accountability required in senior
posts linked with the need to understand the political framework
within which public servants, and in particular civil servants,
operate; this is a feature of civil service work that private
sector individuals have rarely encountered.
30. We believe that three steps can help
to minimise the negative consequences of private sector individuals
being recruited to senior civil service posts. Firstly, all private
sector recruits to the civil service should be given very early,
intensive and comprehensive induction into the positive cultures
of the civil service, including ethics and accountability. Secondly,
such recruits should, as is now increasingly the case, have the
opportunity to develop careers in the civil service rather than
be offered short term contracts which inevitably give an individual
little stake in the future success of the civil service nor, for
that matter, helps retain their skills for the future benefit
of the civil service. Thirdly, we are pleased that there is now
a register of both inward and outward secondees to the civil service,
which will help to avoid any public suspicion of conflicts of
interest. There must also however be very clear and continued
monitoring of individuals who leave the civil service, whether
permanent civil servants or previously private sector recruits,
to avoid any suspicion externally of conflicts of interest.
31. Examining the Civil Service in the round,
over and above the centre, we now have a significant number of
appointments made either by secondment, with sketchy protection
of the proprieties from the Civil Service Commissioners, or appointments
on a permanent or fixed term basis by open competition. The FDA
does not doubt that these are generally made on the basis of excellence
for the job, although we are aware of a prior intention in some
cases to appoint from outside the Civil Service come what may,
because ministers want "fresh blood". However, the concept
of a professional, permanent and politically impartial Civil Service
does not stand on appointment by excellence alone—it requires
an ability to deserve the confidence of a future government of
a different political persuasion. An individual who wins appointment
by excellence, but could not realistically serve under another
government, ought not to be appointed.
The Private Provision of Public Services
32. The FDA believes that there can be a
legitimate role for voluntary or private sector providers in delivering
public services although the appropriateness of adopting such
forms of delivery depends on the service and the circumstances;
each proposal should be considered on its merits. However, we
are concerned at the framework within which the private sector
is involved with public service delivery.
33. We believe that all too often the decision
to use private or voluntary sector providers appears to be driven
by political considerations, not the merits of the case. Whilst
the Government appears to have retreated from some of its more
strident claims for the benefit of private sector involvement,
particularly in the period immediately following the 2001 General
Election, there has been a great deal of spin and rather less
substance about the Government's overall plans for the private
provision of public services. There are a number of uses that
should be considered if such provision is to continue.
34. First, PPP or similar vehicles must
be developed within a framework of greater transparency and accountability.
All too often, such proposals and detailed contracts are shrouded
by a catchall of "commercial in confidence" which appears
to be being deliberately used by ministers to prevent scrutiny
either by the public, those to whom a service may be directly
delivered, or by Parliament or elected bodies at more local level.
Further, all too often the private provision appears to be being
used by politicians to shield themselves from accountability for
service delivery. We see no reason whatsoever why contracts awarded
to the private sector for the delivery of public services should
not as a matter of policy be open to public scrutiny. Procurement
exercises are already covered by European legislation. Any company
that did not wish a successful tender to be public need not tender
in the first place. The main argument against appears to come
from companies claiming that it would "threaten their competitive
advantage" were successful contracts to be public. However,
publication would put pressure on such companies to continue to
innovate and moreover would, if these fears are correct, simply
mean that other companies themselves might become more competitive
and therefore be in a position to offer the public sector a wider
cross section of potential service providers in future. Too many
tender exercises at present are restricted to a tiny handful of
private sector organisations. Further, given that some PPP contracts
run for up to thirty years, to shackle future governments or public
sector organisations and managements to contracts signed in secret
and subject to no scrutiny or accountability whatsoever is storing
up trouble.
35. Second, the NAO and Audit Commission
must have the right to intervene and scrutinise any tendering
exercise at any stage. Such scrutiny could also consider the dangers
of such contracts, in effect, cherry picking more easily delivered
public services to the potential detriment of the efficiency of
a particular service overall.
36. Third, the NAO and Audit Commission
should agree and publicise "value for money" procedures
that should operate in all cases of private or voluntary sector
tendering for public service delivery. These should include agreed
methodology and value for money criteria which are open themselves
to public scrutiny. There should be consistent and open principles
and models for the evaluation of PPPs, which would give a much
more assured framework for Parliamentary or other scrutiny.
37. Fourth, there must be greater clarity
about funding for services. All too often where guaranteed funding
over the longer term is necessary, the Government almost automatically
sees a PPP as the preferred option. This appears to be partly
driven by ideology but also by Government accounting conventions
(although resource accounting reforms may ameliorate this pressure).
Some of the worst decisions in Government appear to be made where
a PPP is seen as the preferred option for guaranteeing funding
beyond a spending review period. There is a real danger that in
a few years' time departmental budgets will be heavily committed
to projects that do not offer particularly good value for money
but the terms of which cannot be varied. It is also highly unfair
to criticise public servants when they operate within a regime
of short term funding commitments with great uncertainty about
the future whilst private sector operators are increasingly being
offered guaranteed funding over an entire contract period.
38. Fifth, where tenders are awarded to
the private or voluntary sectors, the existing accountability
of public servants should transfer. These should include the application
of the Seven Principles of Public Life, the scope of Freedom of
Information and other related legislation, the requirement if
necessary for private sector providers to be subject to Parliamentary
scrutiny, and a declaration by senior staff of other interests
to avoid conflict.
39. Sixth, there must be clear mechanisms
to prevent any deterioration of service and the ability to end
contracts if standards are not maintained or targets delivered.
Similarly, all targets set for private sector providers should
be transparent and public, just as with targets set for government
departments and other public sector organisations.
40. Seventh, the Government should ensure
that private or voluntary sector providers of public services
offer guaranteed underpinning in terms and conditions of employment
to all staff they have engaged to work in the delivery of public
services, including equality and diversity commitments.
The Civil Service Code
41. Clearly, the Civil Service is of necessity
reskilling, with project and contract management skills, and a
better grasp of financial accountabilities, all increasingly important
for senior civil servants. However, under both this Government
and its predecessor, civil servants are now expected to offer
a more public face on behalf of the Government. This is particularly
acute in the context of private sector provision, where civil
servants are often negotiating with the private sector about the
delivery of services which can involve selling and "championing"
a policy where for example a PPP is involved, although it is a
problem not unique to such circumstances. This is increasingly
blurring the traditional role of the civil servant in representing
Government policy and the FDA believes that it warrants a review
of the terms of the Civil Service Code to take account of this
new environment.
November 2001
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