Memorandum by Sir Peter Kemp (PSR 12)
1. In their press notice of 11 October the
committee seek comments from the public about public service reform.
I write as a former senior Treasury and Cabinet Office civil servant
responsible among other things for the Next Steps Programme of
civil service change, referred to in the press notice. I have
since taken a good deal of interest in public service matters
and the like. Here is my tuppence worth towards your inquiry.
What is "public service reform"
2. I will start, with respect, in suggesting
that the inquiry, two-staged as I understand it to be, is largely
the wrong way round. Issues of whether or not there is a public
sector ethos, and questions of accountability, are in my view
elements that should follow from the first order questions of
what public services is actually all about and how we can improve
the service given to the public and the value for money to the
tax payer for money laid out.
3. It's not an easy question to answer as
to what "public services" actually are. No convincing
definition exists. On the one hand there are, for instance, law
and order and the courts service, which cannot be provided otherwise.
On the other hand there is, not to be frivolous, the Ritz Hotel,
which is certainly public providing you have enough money and
are decently dressed. Private versus public services maybe best
defined in a general sort of way by questions such as; of the
need and choice existing; how essential the service is; what alternatives
there are; whether the "user" pays, and how; and perhaps
in many cases a rather "feely" opinion as to whether
a certain sort of activity ought to come under the disciplines,
no matter how difficult to define, of a "public service"
4. Howsoever defined, it's obvious and accepted
by all that the public services are enormously important. Pretty
well everyone in the country has to use them one way or another;
and their cost is immense. The civil service alone comes in at
something over £20 billion per year, the health and education
services something like £50 billion each per year, and social
security over £100 billion per year. These figures—the
amount of public expenditure to be allocated to public services—and
the services that are expected to be delivered to the public in
return for the money, are for governments of the day to settle.
Improvements in the system of public service delivery and government
bookkeeping may help inform those decisions, but they'll always
be essentially "political". Where reform really comes
in is seeking to make sure that the resources laid out do result
in the public getting the services which ministers bargain for
when they allocated these sums.
5. This seems to be simply a matter of good
management. But it has to be tempered, as the committee clearly
recognise, by questions of public sector ethos—whether it
exists and if so is it unique across the public services or varying
between them; and accountability. On these points my view is that
the appropriate and optimal management system should be devised
in the first place, and issues of ethics and accountability factored
in as necessary. For there is a trade off here; but it must be
done by taking the best systems and then modifying them, rather
than starting from an a priori view of what is actually meant
by "ethics" and "accountability".
6. So this comes us back to doing things
better. Public service reform, is nothing new. As the press notice
says there's been a whole range of work, perhaps starting most
recently with Mrs Thatcher in 1979 (though if Mr Callaghan won
the election he probably would have done the same thing) attempting
to get better value for money from civil service, the health service,
education, and elsewhere. Some of this succeeded—for instance
in my view anyway the civil service reforms; and some of it was
on the right track but went wry, for instance health service and
local authority reforms, and some of it seemed to get not very
far, such as education.
7. But on the whole progress was forward
rather than backwards, albeit from a low base of the 1960s and
1970s. The question is how to pursue this forward, against the
background that while certainly not perfect public services aren't
too bad in this country (members of the committee should go abroad
to let us say Eastern Europe or South America to confirm where
we stand) and so "reform" has to be sure that it capitalises
on the basis it's got, and develops those; rather than throwing
everything overboard.
Some approaches
8. Against this sort of background there
is the question of how further reform might be approached. I say
"further" because reform is a constant process and going
on all the time; the public services like any other are—popular
opinion sometimes to the contrary—pretty permanently keen
to improve themselves.
9. Public services are enormously varied
and are delivered through a huge range of different vehicles.
The first effort thus must be to tackle the relative minutiae
of better management in these discrete units. There would be better
people brought in to run them, recruited by open advertisement
and coming from the private sector where appropriate, and paid
appropriate amounts to recruit, retain and motivate them. Freedoms
to the various individual units to take their own decisions within
appropriate overriding policy and resource instructions. Openness
so that these individuals are public people, who can appear in
the media and particularly can appear in front of select committees
to answer in their activities. A standing back of government and
a calling off of the so-called "top dogs" including
ministers and Permanent Secretaries, for instance—so these
units in terms of delivery can get on with what they are doing.
An end to the "hunt the failure" ethic of the National
Audit Office and up to a point the Audit Commission, and a concentration
on success.
10. Second, there's the question of an improved
continuing scrutiny of what these various units are there for,
how they are tasked to do what they are expected to do, how this
tasking responds to the need for "cross-cutting" so
as to ensure that the policies being followed and the results
looked for are those which ministers want and not something else;
and then an effective follow-up as to what has been delivered
in return for what resources. Unfortunately these three elements—setting
the objectives, improving the cross-cutting, and post-audit—can
be and often are the source of a very considerable amount of time
consuming and relatively futile bureaucracy. But this is not to
say they must not be done; only they must be done better. The
essence is that those who deliver the services in the discrete
units must know clearly what they have to do, which is relatively
easy; and those who task them must know too exactly what they're
asking for, something which people often don't find so easy, given
in particular the huge complexity of objectives which even relatively
small public service units have.
11. Then third there's the question of structural
change. This is something which most ministers and on the whole
the senior civil service and other senior public service managers
have a great horror of. Yet it is possible without too much cost
and with relatively little disruption, to bring about improvement,
as the Next Steps executive agency programme showed. The essential
point is that the great multiplicity of discrete units delivering
services and their huge variety of size, shape and objectives,
has to be better matched to the standard for delivering those
objectives. There is now, as compared to say twenty years or so
ago, a fairly wide range of types of unit available for the delivery
of public services, thus civil service department, executive agency,
quango, nationalised industry, government owned limited liability
company, partnerships, contracting out arrangements, and private
sector entities with or without a regulator. Part of the drive
on reform should be to ensure that the right sort of structural
arrangement has been chosen for each separate activity, so as
to do it as well as possible—as opposed to the old practice
of squeezing the activity into a structural straight jacket.
12. And in a slightly different way the
same goes for public services such as local authorities, health,
education, the police, and so on. What is wanted is some more
and wider thinking in these areas, essentially aimed at creating
as appropriate the sort of model of manageable delivery unit tasked
and run properly with an eye to its wider position in the total
of public service and what ministers are looking for and tempered
as appropriate by accountability. Some very big ideas can be floated,
for instance local authorities might be strengthened (and their
democratic base better legitimised) if they were less simple agents
of central departments, and more autonomous; which means amongst
other things giving them more of their own money raising power.
The National Health Service might be strengthened by a federalising
process within a national service continuing to be free at the
point of service, but associating the federalised elements not
just with better and more independent management in their own
right, but with closer association with the local authorities
whose population they serve, perhaps even to the extent of having
local authorities taking over elements of local health services
in the interests of a service better joined up with their own
social services. At the same time a process in the opposite direction
might take place with education.
The shape of Whitehall
13. Some five years ago I wrote a little
book, with David Walker commenting on the anti-quated shape of
Whitehall and the way in which it has essentially not changed
since around 1945, this notwithstanding the huge developments
that have taken place since then. The question should still be
revisited. So far the tinkering has been half-hearted. The change
from MAFF to DEFRA, and from DETR to DTLR, didn't go to the heart
of things, in terms of what ministers want of policy making and
delivery. DSS and the former Department of Employment and their
Agencies are being emasculated by the Treasury and its creatures
as they turn cash benefits into tax reliefs but without any thought
being given to the creation of a comprehensive department of personal
incomes separated from the Treasury. The law and order departments—elements
of the Home Office, the Lord Chancellor's Department, the Attorney
General, and so on could well operate much more effectively as
a Ministry of Justice, continental sounding though name may be.
And so on. This would not be change for its own sake—although
occasionally change for its own sake is no bad thing—but
an attempt to modernise the structure to meet the 21st Century.
The devolved administration—Northern Ireland, Scotland,
Wales and London, and as and when they come the regional assemblies—all
call out for this sort of thinking at the centre.
14. The committee might also want to turn
their attention to the centre of government. The role of the Permanent
Secretary is a confused one, divided essentially between policy
advice to the minister, and the running of the department's functions,
whether directly or through various agencies. The role should
be split. Special advisers currently are getting much stick but
the committee might want to consider some notion on the one hand
of a chief executive in each department who delivers what the
minister wants, and a chief policy adviser, who might or might
not be a regular civil servant, who gives the minister the advice
he needs. The same argument goes in for the roles of the head
of the Civil Service and Secretary to the Cabinet. It's been discussed
over the years whether these posts should be separated; and the
upcoming retirement of Sir Richard Wilson would give a chance
for this to be properly aired again. The jobs are, indeed, very
different and potentially occasionally conflicting.
15. There are also ministers. The committee
might want to consider, based on this obvious distinction between
policy and delivery, what the role of ministers and Cabinet really
are. One could imagine a shape of government in which Cabinet
ministers are purely policy making people, both individually for
their allocated responsibilities—which need not be the departments
as we know them today—and collectively. Their decisions
would be passed through some kind of "public service executive"
which would ensure that action was delivered as required, bringing
together and tasking whatever units are necessary, across the
whole public sector and the private sector as appropriate. Each
minister would have his or her policy adviser, as discussed above,
and some kind of small team; but executive action should take
place through the chief executive officer in their departments,
themselves almost certainly reconfigured to meet the needs of
today. The accountability issues arising are not insuperable.
16. The object of this would be to seek
to meet the requirements of so-called "cross-cutting"
government, and the deleterious effects of the so-called "smoke
stacks" created by current departmentalitis, as well as freeing
up senior ministers for senior policy thinking and reducing the
number of junior ministers—all while retaining the expertise
and loyalties of individuals currently in particular departments.
It should be a recognition that whatever different heads of civil
service say from time to time, there are in fact two (or perhaps
many more) civil services; a part who thinks and advises; and
parts who manage and deliver. And the same goes for other public
services too.
Your questions
17. I am afraid I have not answered your
questions as put. Briefly, however, I would say this:—
— Principles and strategy for reforming
public services (questions 1-5)—
The principle has to be to start from
the job to be done and the resources available then choosing an
appropriate and effective structure that has both the tasking
and the delivery clearly identified. Individual units need their
own strategies for improving services, but clearly there's a role
for the government as a whole to help this along, though I am
not sure about the word "strategy".
— The concept of a public service ethos
and the involvement of the private sector (questions 6-18)—
I do not believe there is a single
public sector ethos, but one which will vary with each and every
activity. Not do I believe that the public services necessarily
have a "better" ethos, whether collectively or separately,
than a great many private sector organisations which are well
and honourably run and who have a clear consciousness of their
duty. So far as the involvement of the private sector goes, it
seems to me this is not, or at least not solely, a question of
ethos in that as I say, most elements of the private sector have
a worthwhile and effective ethos of their own; but a question
of whether, all things taken into account and in particular value
for money and service to the public, a private sector entity can
deliver the public service looked for better than a public sector
entity.
— Accountability issues (questions
19-26)—
Accountability in the public services
will vary as between public services entities, having regard to
the service being delivered, the cost of accountability measures,
the profile of the user, and the position and needs of the individual
or organisation to whom the accountability is due. No single arrangement
would seem to be appropriate. Private sector deliverers can be
just as accountable, in appropriate ways, as public sector deliverers.
The question is not so much whether the body in itself is accountable,
but to whom it is accountable and in what way, and whether the
body to whom it is accountable is sufficiently ready to take on
its responsibilities. The role and enthusiasm of Parliament itself
in the shape of the select committees might be relevant here.
— Service users and public reform—(questions
27-32)—
Users and consumers of public services
have to come first alongside the resources available. In general
at the macro level it seems that users do, via ministers, get
a reasonable hearing—though the increasing power of the
Treasury as against the various sponsoring departments needs watching
to ensure that this continues. At the micro level on the whole
the consumers aren't too badly treated, but I believe that an
extension of the local reach me down ombudsmen systems for each
and every delivery unit would be a help.
Conclusion
18. I hope the committee find these thoughts
helpful. If I can answer any further question I should be glad
to try to do so.
November 2001
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