Select Committee on Public Administration Appendices to the Minutes of Evidence

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.


  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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