Examination of Witnesses (Questions 140-159)
3 MARCH 2005
PROFESSOR CHRISTOPHER
HOOD, DR
MARTIN LODGE
AND PROFESSOR
COLIN TALBOT
Q140 Chairman: That is the kind of thing
I am asking you about; that is the big structural thought that
we would like you to have.
Professor Talbot: If we take a
step back and look at what the whole of the public sector do and
where the Civil Service fits into that, the Civil Service is roughly
10% of the entire public sector and of that 10% probably less
than 10% of the Civil Service do the policy making and about 90%
of it is actually involved in delivering services very much like
other parts of the public sector. It seems to me that that raises
some fundamental issues about structures; that is an historical
accident that evolved in that way. Most of those services have
now been organised into executive agencies which is a very weak
form of re-organisation into semi-autonomous bodies. That could
easily be reconsidered to see whether or not they could be put
on a statutory basis; I think there is a strong case for that,
as are non-departmental public bodies and particularly some of
the bigger agencies like the prison service so they are actually
moved away from direct political management. That does then raise
issues about their status and whether or not they are still part
of the Civil Service because again we have this historical accident
where we have large executive non-departmental public bodies which
are not Civil Service but which do more or less the same things
as large executive agencies which are part of the Civil Service.
It is an accident of history that they happen to be in those positions.
I think there is a good case for that, thinking about moving it
out. I think there are also issues about the structural relationship
between the Civil Service and the rest of the public sector. There
is a very strong presumption from Whitehall that the rest of the
public sector has nothing or very little to tell Whitehall about
how to organise things and one of the most obvious ways in which
that manifests itself is the very small amount of interchange
that takes place between the rest of the public sector in the
UK and Whitehall as opposed to other jurisdictions where it is
not at all unusual for people to move from central government
level to local government and back again. It is actually very
unusual in the UK; it has become a bit better in recent years
but not tremendously so. By and large insofar as Whitehall does
want to move people in and out it is always from the private sector
rather than the rest of the public sector. I think there are some
issues around that. I think there are some fundamental issues
about boundaries as well in relation to delivery of some services.
Why do we have some benefits operations in local government—like
housing benefit—and others in central government? Why can
some of those things not be devolved more? There are certainly
a lot of models around where those sorts of things do happen.
In Denmark, for example, tax collection and benefit are at local
government level; although policy is set nationally, the tax rates
are set nationally and the benefits are set nationally, local
government does the delivery. There are all those sorts of issues
that we have had debates over in the past—the favourite
has always been the health service about whether that should be
devolved down to local level—but we have never really had
a thorough look at the whole of the public sector, started with
a blank sheet of paper and asked what would actually be a more
sensible way of organising these things.
Professor Hood: One other point
that is also mentioned in the paper that I submitted with Dr Lodge
is the issue of how far you need to think about recruiting internationally
to a greater extent than in the past. If you want a Civil Service
that is the best in the world perhaps you should really be thinking
about a more international pattern of recruitment than we currently
see.
Q141 Mrs Campbell: If you were to do
that, to bring in people on an international level or even from
local government what sort of skills do you think that would bring
into the Civil Service which they do not have at the moment?
Professor Hood: I think that one
of the arguments for a more international pattern of recruitment
is simply that you would increase the competitive pool from which
you could draw talent. More specifically I think it might bring
in perspectives, particularly about European government, that
British civil servants are not terribly well-informed about. On
the whole they tend to be pretty well up in my experience on the
commonwealth structures but not usually so well informed about
continental European structures of government.
Q142 Mrs Campbell: Does that apply to
local government as well?
Professor Talbot: I think there
are obvious advantages in bringing people in from other parts
of the public service. This does not just relate to other parts
of public service; there has been a long time problem with the
senior ranks of the Civil Service essentially being people who
have always worked in policy jobs and have never got their hands
dirty actually running anything. There have been attempts in recent
years to try to improve that, but it is not actually terribly
good. You still have a situation where the vast majority of senior
jobs are in parent departments whereas 70 or 80% of civil servants
work in agencies with probably only about 20% of the senior posts
in agencies. I think that speaks volumes if you are a civil servant
about where you want to be in terms of your career structure.
So even within the Civil Service there is a prejudice still against
actually being involved in operations management. To some extent
the new professional structures that they are putting in place
with the separate operations and policy professions actually codifies
that and says there are two different roles. Obviously we have
people in local government and the health service and various
other local services that have tremendous experience about how
to organise public services which could be brought into central
government more effectively than it is at the moment. At the moment
they tend to be drafted into specialist units. We have only had
one example of somebody coming from local government into central
government and ending up as a permanent secretary and he has now
left. (I think we all know who that is.) That is a real problem
I think and, as I say, there is a lot of interchange. I would
just add to what Christopher was saying about international recruitment.
I have not looked at the figures recently but certainly a few
years ago the UK was extremely bad at taking up our allocation
of places in the European Union bureaucracy whereas other countries
like Ireland were extremely adept at making sure they had a lot
of people in there.
Q143 Mr Prentice: I am a member of the
UK delegation to the Council of Europe and I think the British
Civil Service runs the show over there, which brings me to the
point that Professor Hood made. You told us that the Civil Service
ought to recruit internationally because there is an international
talent pool, but just a few moments before you told us that the
Germans paid tribute to the British Civil Service and their knowledge
of European structures. How do you reconcile these two points?
Professor Hood: I do not think
those comments are entirely incompatible. I quite take the point
that you are making and I was trying to show you ways in which
the Civil Service was admired when we interviewed people from
Germany. However, I do not think that one should necessarily conclude
from that that it is impossible for the Civil Service not to be
able to recruit people from overseas. I think that is compatible
with what I have said.
Q144 Mr Prentice: There are people out
there who would say, "If it ain't broke, don't fix it",
but we spend millions constantly reorganising, taking structures
apart, putting them together again but it does not bring any substantial
outcomes that are different from what went before.
Professor Hood: Yes, I am very
sympathetic with that view myself. I think what you need is sustained
policies pursued over time. I do agree with that and I do agree
with you, if this is what you are implying, that one of the real
problems with Civil Service reform is that particular ideas get
taken up, run with for a while, not really followed through and
then dropped before the next thing comes along. Again, if you
are putting me in the position of trying to direct this show,
I would want to try to do something that was sustained over time
and was not just a short term initiative.
Q145 Mr Prentice: Can I just go back
a stage because you were talking about the perils of closed policy
making in the Civil Service—those are my words, not yours—but
can you tell us of some major policy blunders that were the result
of the Civil Service playing its policy cards too close to its
chest?
Professor Talbot: The most recent
one and probably the most controversial is in the Butler inquiry.
The evidence there is quite clear that there was a degree of group-think
going on between not just civil servants—by which I include
the intelligence agencies—but politicians as well. That
is a very clear example. I can think of others: in the setting
up of the CSA (Child Support Agency) there was some scrutiny of
the policy but there was never any serious look at the thinking
behind setting it up as a separate agency, yet it was obviously
a disaster from the start. I can point to the reason why it was
a disaster and if anybody had bothered to ask anybody outside
the Civil Service about whether this particular model would have
worked as a way of organising that function, I would have said
no at the time and I suspect a lot of other people would have
said that this was likely to fall flat on its face.
Q146 Mr Prentice: So if you ask the right
questions then there will never be any policy disasters.
Professor Talbot: I am not saying
that at all. I am saying that I think if you open the process
up to greater scrutiny there is a better chance that you can avoid
disaster. It does not mean it is not going to happen; there are
always going to be mistakes made. We are very bad at opening up
those sorts of processes.
Q147 Mr Prentice: What about foot and
mouth or BSE that cost the nation billions of pounds?
Professor Talbot: I was talking
to somebody who was involved in one of the foot and mouth inquiries
who said that when they finally got hold of a copy of the 1968
report[1]they
read through the list of recommendations and concluded that if
those recommendations had ever been implemented we would not have
had the problems we had with the second outbreak. I think that
is a pretty good example of where Whitehall is not always terribly
good at following through all these things.
Q148 Mr Prentice: You have it in for
the Civil Service and you would like to see a unified public service.
Professor Talbot: No, I do not
have it in for the Civil Service; I have great respect for the
Civil Service and for a lot of people who work in it. I think
the system as an institution is to some extent broke in the sense
that it is a very hermetically sealed system. I think there are
fundamental constitutional issues about the role, the Service
and its attachment to government. It is not open, for example,
in the way public servants in local government are open to scrutiny
by other people. I think some of those things need addressing
quite fundamentally. I do not think at the moment, for example,
that the draft Civil Service Act actually deals with some of those
fundamental issues.
Q149 Mr Prentice: But neither you nor
your two colleagues are calling for a unified public service.
Professor Hood: I would like to
say that as a long term goal there is a lot to be said for that.
I am not saying that it should be done overnight but I do see
potential advantages in that.
Q150 Mr Prentice: We had a memorandum
from the Civil Service Commissioners and they tell us that bringing
everyone together—that is welding together the Civil Service,
local government and the rest of it—could lead to confusion
about role, purpose and loyalty and they question whether the
creation of a single service would be possible. However, you are
telling us that it would be possible and in the longer term it
is desirable; it is something that you would argue for.
Professor Hood: It is possible
in the sense that in the German state you do have a single public
service which works for different elective authorities and different
parts of the state so somehow or other they do resolve the loyalty
problems.
Q151 Mr Prentice: Are people better governed
in Germany as a result?
Professor Hood: I would say that
in some respects they probably are, but I do not want to argue
that in all respects they are.
Dr Lodge: It has been a long-standing
tradition in a couple of government departments to only recruit
from other administrations so in that sense you do not recruit
straight from university some large scale of your population of
ministries, but you take the best talents who have already been
on the receiving end of federal legislation, know how to transpose
it and have seen implementation of that on the ground. In that
sense you have the result of that kind of system.
Q152 Mrs Campbell: Turning to the skills
agenda and coming back to what sort of skills you need to be a
civil servant, many civil servants were probably recruited some
years ago and in this hermetically sealed environment they maybe
have not had the time or the opportunity to develop their skills.
Would you like to comment on that?
Professor Talbot: First of all
we have to be clear about what we are talking about by civil servants.
What we are talking about here I suspect are not the civil servants
as a whole, we are talking about people who work in the Whitehall
Village, the senior civil servants and those involved in the policy
making side of things; we are not talking about prison officers
and so on. The salient characteristic of the British Civil Service
is that most senior civil servants have been historically recruited
with a first degree and have no further degree qualifications.
They receive a certain amount of in-house training. That has by
and large been fairly weak for senior people and they have acquired
their skills by the traditional "sitting next to Nellie"
approach of acquiring skills as senior civil servants. As a consequence,
because of the whole generalist tradition and that way of recruiting
and training people up, we have people who are often very, very
intelligent, extremely good analysts, but their educational qualifications
and their qualifications in things like formal policy analysis
and formal evaluation techniques and understanding those sorts
of issues tends to be very weak. That is still the case compared
to other jurisdictions where we have relatively highly qualified
people in those sorts of senior Civil Service jobs.
Q153 Mrs Campbell: Moving on to service
delivery, these are the areas that affect us most as members of
Parliament because we have constituents who suffer the consequences
of policies that are not well delivered, like the CSA for instance.
Certainly there is still a substantial proportion of people who
come to my advice surgeries who are victims of the failure of
the CSA. We do often fail to deliver these important services.
Are you saying that because something like the CSA was faulty
from the start and was not set up properly, one cannot blame civil
servants for that kind of failure? If so, what about other things
like, for instance, tax credits? There was a time when the Inland
Revenue took over the issue of tax credits and it was a complete
disaster.
Professor Talbot: The answer to
the question of who do you blame I think is we do not know because
we very rarely know in our system who is actually responsible
for the decision or the police advice that was given because we
have such a non-transparent system. A report was published this
morning on the e-university fiasco. It is very unclear in that
as to who actually was responsible. It was clearly driven by the
suppliers but whether or not it was the civil servants or the
politicians who were responsible for accepting that position I
have no idea. The problem about scrutiny I think in our system
is that because there is this almost indissoluble link between
politicians and civil servants, civil servants very rarely get
scrutinised properly in the way in which they are in some other
jurisdictions.
Professor Hood: I do not have
that much to say about the service delivery aspects as such because
my study was on policy making skills, but I would only venture
to say that many of these failures—certainly the two to
which you have referred—as I understand it are failures
that go back to the information systems that were selected for
these organisations and the problems that were associated with
that, so that the front line civil servants that your constituents
deal with may well have been doing their best with information
systems that were not easy for them to use or perhaps properly
fitted for the job. Therefore I think you need to look at the
process by which those kinds of systems get selected and developed,
which is indeed a policy making role and where indeed you do have
issues about how you select effective information systems that
are fit for purpose.
Q154 Mrs Campbell: You have digressed
onto another of my favourite subjects, but before we move onto
information systems could I just clarify what you were saying,
Colin, about not knowing whose responsibility it is when things
go wrong. Do you think there is a strong case for having a much
better analysis of failures so that we can learn from those failures
because that does not seem to be happening at the moment?
Professor Talbot: There are several
issues on that, the first is the constitutional point that our
Civil Service, in Lord Armstrong's famous phrase, has no constitutional
personality separate and apart from that of the government of
the day. That is very unusual in most democracies and it makes
them into what I jokingly call "serial monogamists";
they are not neutral in the sense that they are neutral and independent
of the government, they are very much wedded to whoever is in
government at a particular time. Because accountability goes through
ministers to Parliament without any direct scrutiny of civil servants
themselves and because they only give evidence at least formally
to Parliament on behalf of ministers, it makes it extremely difficult
to scrutinise where the decision points were where things actually
went wrong. How do you get at that? I think one is that you could
change the rules—the Osmotherly rules—which mean that
civil servants only speak on behalf of ministers so that they
could actually be interrogated by Parliament directly in a way
in which they could actually answer for themselves. In practice
that has happened with a lot of the agency chief executives who
have spoken out quite clearly on issues which have not followed
the ministerial line. Secondly, you could change the role of the
National Audit Office so that it could investigate in a way in
which the General Accounting Office does, for example, in the
United States, in a lot more detail. You could then start to prise
that open a little bit and start to understand where these mistakes
are actually being made. One of the things that is quite clear
about the British system is that we are appallingly bad at analysing
when there have been disasters and teasing out what actually went
wrong. There are certain examples elsewhere where other jurisdictions
are much better at doing that than we are.
Q155 Mrs Campbell: A good example seems
to be the CSA because when it was first put together in 1993 it
never worked, it was a complete disaster so we redesigned it and
lo and behold we have another complete disaster so we certainly
have not learned from that example. Can I just move onto IT systems?
It seems to me that one of the problems with IT systems is that
we do not properly evaluate what the requirements are before companies
ask to develop them. Whose fault is this? Is this because we have
not adequately defined policy? Or is it because we have a Civil
Service which does not know how to analyse the requirements? Or
is it that the commercial contractors actually have an incentive
for it to go wrong because then they get paid to put it right?
Is it all those or just some of them?
Professor Talbot: Having dealt
with a large IT project in local government when I was there many
years ago, I have to say that your last point about the IT contractors,
I remember being told by a large IT contractor that they love
detailed specifications from government—the more detailed
the better—because they could guarantee that they would
make a lot of money on all the variations to the contract and
they were quite happy to bid for next to nothing for the initial
contract on the grounds that they would make all of their money
on the contract variations. That is a hazard in the public sector
because of the way in which we do competitive tendering. I cannot
see an easy way round that; it does seem to be a fairly common
problem and it is not just a problem in the UK. I think there
are some problems which are generic and certainly Peter Gershon's
evidence to you pointed that out, that there is quite a dismal
record across quite a lot of OECD countries of failures in IT
projects in government and in some large private sector organisations
as well. However, I do think there is specifically in the UK a
weakness in terms of understanding, certainly understanding IT
at senior civil servant levels and also project management skills
and procurement skills; I think there is clearly a weakness there
which needs to be addressed. There are not enough people who are
properly trained in those things. I know individuals who have
gone from being a head of personnel in one Civil Service department
to be head of procurement in another with absolutely no background
whatsoever in procurement before they went there, then they are
suddenly in charge of millions and millions of pounds' worth of
procurement projects with no training at all.
Professor Hood: I would add to
that that IT systems of this kind, as complex projects, take a
good deal of time to develop and during that time all kinds of
things happen: governments change, the personnel within departments
and agencies change as well. The lead time of the project is a
very long time in politics and the bureaucracy and it would not
be surprising if specifications start to alter.
Q156 Mrs Campbell: One of the problems
that we do seem to have on projects like Airwave, for example
(the communication system to bring together the police, the fire
services, et cetera) is that the project is so massive and has
been on-going for such a long time that the initial solution to
the problem has actually changed and yet we are only half way
through implementing it. Is there an answer to that? All government
projects are likely to be big and take years to develop and in
that time not only has the technology changed and there may be
a different solution, but the requirements have probably changed
as well. What is the answer to that?
Professor Hood: I am not sure
that I think there is a single one shot answer to that. I started
my career studying tax administration over 30 years ago, well
before the age of modern computers, and exactly the same kind
of thing tended to happen. I do not want to portray myself as
an expert in IT systems—I have colleagues who are and would
be better equipped to take you through these particular issues—but
let me only say that some of those claim that these problems are
exacerbated by the lack of open source software in IT systems
which makes it extremely hard for other contractors or indeed
any outside party to understand the operating code that is involved.
Certainly there are professors, for instance, at the Kennedy School
of Government at Harvard University who argue that governments
ought to move more generally towards open source software as a
means of at least ameliorating this problem. I quite take your
point that it probably cannot be completely removed.
Q157 Mrs Campbell: We are doing completely
the reverse. Through Europe we are trying to slap patents on all
the software.
Professor Talbot: It is not my
field of expertise but I do think there is an issue because there
always seems to be a presumption that big is beautiful when it
comes to IT systems and it seems to me that is not necessarily
always the case. If you are talking about long term development
to end up with something that is unified there may well be a case
for piloting several different types of systems and seeing which
one actually works and different areas and then spreading that
eventually with less of a risk than these huge projects which
cause problems because of the cycle times of these things. You
can end up designing something for a war that has gone away.
Dr Lodge: May I just add a German
example of what may politically be regarded as a fiasco but it
works perfectly fine now. It is the Toll Collect system, a road
haulage charging system where government got some very sophisticated
technical system developed by two large scale German companies—strangely
enough—but required this system to come up very early in
order to fill budgetary deficits. It was too ambitious and therefore
caused a political fiasco. However, one year later the system
works perfectly well. In that sense you have a technical system
which works but one year late and therefore was regarded politically
as a big problem.
Q158 Mr Heyes: We have got this far without
mentioning Gershon so this is an opportunity for you to share
your thoughts about him. Is it appropriate? Does it go far enough?
Can it deliver?
Professor Hood: Can I say that
I thought it was very interesting that we are re-introducing specific
job cut targets for the Civil Service almost exactly 10 years
after the last Conservative Government abandoned them. My understanding
is that that government abandoned them because they were getting
in the way of effective management and, as I understand it, the
problem was that Civil Service managements struggling to meet
job cut targets were doing that in a way that did not necessarily
lead to more effective management. For example, they might hire
more consultants, more expensively than the civil servants they
were firing to meet the targets. I think that kind of problem
is always going to be with you if you have a specific job cut
type target. The other comment I would make is that I spent some
time analysing the job cut targets that existed under the Thatcher
and Major governments and a large part of those job cuts were
achieved by outsourcing the so-called industrial Civil Service,
the blue collar Civil Service and the scope for that has almost
gone because that bit of it hardly exists. I think again this
time it would have to be different for these job cuts to succeed.
Professor Talbot: First of all
I have an interesting historical I was going to say parallel,
but it is the wrong word, paradox is probably better. In 1979
when Margaret Thatcher came to power the first thing she did was
to appoint an efficiency scrutiniser and they tried efficiency
scrutinies for about five or six years and discovered that of
roughly £600 million pounds' worth a year of savings that
they had identified only about £300 million were being delivered.
They did a review of all of this which was eventually published
as something called the Next Steps Report Improving Management
in Government so they switched from doing efficiency scrutinies
to doing a systemic change of creating executive agencies and
putting all the technology and agencies in place. What is interesting
under the Labour Government is that we have done almost the reverse
of that process. We started off with the systemic change of introducing
the comprehensive reviews and public services agreements and a
whole series of planning mechanisms to try to make the system
work better and six or seven years later we seem to have decided
that it is not working terribly well and we now need Lyons and
Gershon to come along and find out why all these planning mechanisms
did not produce savings. I am very sceptical about what Gershon
has actually said about all that, but I do think that is an interesting
switch around in terms of priorities. In terms of Gershon itself
I read his evidence to you with great interest and at the end
of it I was totally confused as to whether the purpose of the
Gershon review was about delivering efficiency savings or identifying
efficiency savings. Certainly the way in which it has been portrayed,
the way in which the report is written is all about identification
of efficiency savings. I think it is absolutely astonishing that
it was months after the report was published that he finally admitted
in the Economist that the base line for this 2.5% saving
per year that he had identified was zero. In other words, they
were assuming no efficiency savings. Given that if you look through
most of the departmental plans they have built in usually about
2% efficiency saving targets somewhere lurking around, this 2.5%
does not sound quite so impressive once you do that. I think that
is quite astonishing, first of all. He seemed to admit that in
the first half of his evidence to you when he said that this was
really all about delivering efficiency savings that the departments
have been very good about identifying in the past but they have
never actually delivered them. If it is about delivering then
I have grave doubts about it. I agree with Christopher's comments
about the head count issue but again if you go back to the parallel
with the Next Steps programme, the Next Steps programme was implemented
by putting a second permanent secretary in the Cabinet Office
reporting directly to the Prime Minister to make all of this work.
With great respect to John Oughton and the Office of Government
Commerce the same impetus is not there behind these Gershon savings.
If I were being really cynical -as I was accused of being at the
Treasury Select Committee last year—then I would say that
I would be surprised if we heard much about Gershon after 6 May.
Q159 Mr Heyes: That is the price of operating
in a democratic system where electoral considerations have an
impact; that is the reality of the world we live in.
Professor Talbot: I think that
is true. I am disappointed at the detrimental affect that that
may have on public servants because there are an awful lot of
people out there scared about their jobs, it has a demoralising
effect on people who are not going to lose their jobs. It re-creates
this message that the public sector is inveterately bad at organising
things, which I do not believe for a moment. I think there are
always problems as there are in any big organisations and you
have to find ways of dealing with them. I do agree with Peter
Gershon that it is always a mixture of systemic ways of dealing
with it and episodic attempts and campaigns to try to identify
savings and make them. I would say that one of the things that
I do not think he has done at all and nobody seems to have addressed
is that if the whole comprehensive spending review process and
PSAs have failed so badly that there are these huge savings to
be made, what is wrong with them and what do we do to put them
right?
Dr Lodge: As a German case we
do not have these kinds of issues because of federal government.
Since German unification we have a smaller federal bureaucracy
than we had and every year there is a cut back of about 2% total
staff in each ministry which is regarded as pretty tough and pretty
disillusioning on junior staff.
1 Report of the Committee of Inquiry on Foot-and-mouth
Disease 1968, Cmnd 3999, April 1969. Back
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