Examination of Witnesses (Questions 1-19)
SIR GUS
O'DONNELL KCB
11 OCTOBER 2005
Q1 Chairman: If I could call the Committee
to order. It is my great pleasure to welcome to the Committee
Sir Gus O'Donnell, recently installed as the Cabinet Secretary
and the Head of the Home Civil Service. We congratulate you warmly
on your appointment and we look forward to our dealings with you.
Some of us on this Committee I think could say that we have had
good and instructive dealings with your three previous post-holders.
We find, by the way, they become more interesting when they have
left the job rather than when they are in it, but we hope to do
better still with you! I understand that you may want to make
just a short opening statement?
Sir Gus O'Donnell: Thank you,
Chairman. Could I echo those words and say that I very much look
forward to a very constructive and long relationship with you.
I thought it would be useful if I just said a few words about
how I see my role both in terms of Head of the Civil Service and
Cabinet Secretary and the big challenges as I see them. First
of all in terms of the Head of the Civil Service, I am a strong
believer in the public service ethos. I want to get across pride
in being a civil servant and I want to reflect the fact that four
out of five civil servants do not work in Whitehall and that mostly
they are out in the country. I have been going round visiting,
to Edinburgh to talk about policy, to Newmarket to visit a JobCentre
Plus, to Cambridge to see a new court in operation, to visit a
Thames Gateway project down in Rochester, the Passport Agency,
those sorts of things, to really get a flavour about civil servants
in the front-line. I have been impressed by the Prime Minister
on his desire for the Civil Service to deliver better public services
and the need for Civil Service reform to do that. I am trying
to get across to him that it is very important that we have pride
in our Civil Service, and that in terms of reform, yes, we probably
need more pace, a bit more passion, and a bit more professionalism
in the way the Civil Service operates, and I am up for doing that.
I think the Professional Skills in Government that my predecessor
and I worked on together with Richard Mottram is a very good vehicle
and I am thoroughly committed to implementing that. On the reform
agenda, my first task was really to get the people right. As you
will have seen, the Prime Minister has announced the appointment
of a large number of permanent secretaries, those permanent secretaries
covering around 50% of all civil servants, so that is well underway.
In terms of policies, I talked to the Prime Minister about ensuring
that we have proper Cabinet committee procedures for the various
reform initiatives on health, education, welfare reform and the
like, and that we ensure that the Civil Service provides good
advice not just on policy but on how deliverable policy is. That
is one particular area where I think we need to strengthen things.
I wanted to mention this to the Committee today that I feel that
we need to enhance central government departments' capability
to deliver policies. As you know, the Prime Minister's Delivery
Unit looks at delivery in the sense of achievement of PSA targets.
What I want the Prime Minister's Delivery Unit to do is to enhance
its role by looking at the capability of departments to deliver.
The idea of this would be capability reviews run out of the Prime
Minister's Delivery Unit but using external people as well—people
like, for example, the private sector, the Audit Commission, people
who have been good at these from the Audit Commission with experience
of comprehensive performance assessments (CPAs), and use them
to assess departments' capabilities on a range of functions like
HR, finance, ability to run IT projects, with the idea that we
would publish the results of the performance of departments in
specific categories. That seems to me the right way to do it because
for CPAs you can have an "excellent" rating for local
authority A versus "weak" for local authority B, but
we have only got one Ministry of Defence so I cannot do that.
If I had ten I could do that. What you can do, though, is compare
the capabilities of, say, the Ministry of Defence and the Department
of Health to, for example, conduct financial management. How good
are they at that? How good are they at the HR function? In some
departments it will be more important that they are good at that
particular function than others. The idea is that we would do
these reviews and with external input publish the results and
then there will be an action plan to ensure that the permanent
secretary and I were happy about and agreed on what the steps
forward were, and I would then hold the permanent secretary to
account for improvements in that department. I have put this idea
to my permanent secretary colleagues and to the Prime Minister
and received enthusiastic support so I am pleased to say that
everybody is behind this and we will now start to consult on how
to do it, with a view to getting the first pilot departments around
December or January. I would really like to roll this out across
the whole of central government departments over the next couple
of years—2006/2007. I just wanted to explain that that is
where my thinking has gone on all of that and I think these capability
reviews will help us to assess how best to improve the way in
which central government departments operate.
Q2 Chairman: I am grateful for that.
We have an announcement and we are grateful for the fact that
you have made it here. Could I just stay with it for a moment.
I think it is interesting what you have said because obviously
one of the things that this Committee and others have been saying
over recent times is that central government is very good at assessing
everybody else but not very good at having itself assessed, and
this is clearly your response to this. What I am not clear, though,
from what you have said is is it really going to be a performance
assessment? What is a capability review? Does it look at how well
departments are performing in terms of, for example, policy making
and particularly in terms of policy implementation? Is it going
to be as hard-edged as that?
Sir Gus O'Donnell: I see it in
two parts because you have to remember what it is that departments
are trying to achieve. We have tried to get the essence of what
departments are being asked to achieve into their PSA targets.
They are the outcomes that we are asking departments to achieve.
This is why I think it makes sense to put it within the Prime
Minister's Delivery Unit because they are the ones making the
assessment of how departments are doing against those targets,
what are the trajectories, what are the risks they face in delivering
those outcomes. This says, "Okay, department X is not doing
very well in delivering its outcomes," but that does not
tell you why. What this will look at is the capability of that
department and possibly (probably I hope) give you indications
as to why they are not able to deliver the outcomes required.
In some cases it may be, yes, that the policies are not very well-aligned
to the outcomes and that will be something that we will need to
look at.
Q3 Chairman: But you know what people
are going to say. They are going to say, "Are we going to
have league tables? Are we going to have naming and shaming? Are
we going to have failing departments? Are we going to have special
measures? Are we going to get some departments taken over by other
departments? How far is this going to go?"
Sir Gus O'Donnell: Like I said,
there is only one Ministry of Defence so we do not have another
Ministry of Defence to put against the one that we have got. I
have nothing against the Ministry of Defence, I think it is doing
an excellent job, let me be absolutely clear about that! The point
is that what we can do is assess the different functions and capabilities
within them, so if we take the HR capability, we could look at
the HR capabilities across a range of different departments and
then we will publish an assessment which is comparable across
departments where it says this department is particularly good
at HR, this one is particularly weak at HR. It may be that that
is not a problem. If you are running a very, very large department
the HR requirements may be rather different from running one that
is rather smaller. In the Treasury, for example, when you are
talking about around 1,000 people, you want an HR function that
is very good at trying to sort out people who are very good at
policy and policy implementation (deliverable policies I mean).
When you are talking about the Department of Work and Pensions
with 130,000 staff, the HR function that you need for running
a department like that is very different and it is a very different
challenge. I am hoping that these external teams will be able
to assess how good departments are at these different things but,
yes, there will be comparable measures which we will publish.
Q4 Chairman: But to get away from
the softer stuff like the HR function for a minute, if we have
got a DWP which tells us still that CSA is a shambles, if we have
got reports telling us that Tax Credits out of the Treasury and
the Revenue have been massively defective, are these the kinds
of things that you are going to interrogate and learn lessons
from and indeed adjudicate upon?
Sir Gus O'Donnell: In a sense
they are rather different. They are examples where you have got
policies and implementation issues as to whether the policy is
delivering exactly what was expected of the policy. It may be
that there we are talking about issues which relate to how well
formulated was the policy, and I think there will be an element
where capability reviews will get into that in the sense of "did
we take full account of the practical side of implementation when
putting forward policy advice?" I think there is that element.
That is really at the heart of what Professional Skills for Government
is about. It is saying that you have got some people who can be
very, very good policy analysts but that they would be even better
if they spent some time learning about operational delivery. Then
they would be able to give ministers advice not just on particular,
let's say, tax or benefit policies to deliver a certain outcome
but actually about the problems of implementing them in practice.
Q5 Chairman: This relates to a couple
of other things I was going to ask you, if I could just do that.
One is that I noticed on the day that you were appointed you visited
the Passport Agency and the Driving Standards Agency and you have
now been telling us that you have been visiting other places where
civil servants work outside Whitehall. Do you think senior civil
servants ought to have operational management experience before
they become senior civil servants?
Sir Gus O'Donnell: I think in
an ideal world they should have experience of as many of the specialisms
that we have got in Professional Skills for Government as possible.
So that is policy delivery, operational delivery and corporate
services. Those are the three areas that we have looked at. Clearly
not everybody is going to have everything and we also have a generational
issue. There are people like me who came through the system when
PSG did not exist. I certainly wish that earlier in my career
I had had the opportunity to get more operational experience but
there we are. I did manage a certain amount of operational issues
in terms of looking at, for example, Revenue and Customs and the
operational aspects of delivering their policies. So, yes, I think
it is a good thing and we are trying to encourage civil servants
to get those sorts of ranges of experience. The phrase I used
in the Treasury that summed it up was "if you want to get
on; get out" basically to give them the idea that, yes, you
will learn about policy delivery in the Treasury but get some
experience outside. Go out and do secondments, say, in the wider
public sector, in the voluntary sector, in the charitable sector,
in the private sector, get some ranges of experience. Certainly
I found that when I got out of the Treasury and went abroad working
in Washington I gained a lot of experience, and just the ability
to see your own department from outside and see how others view
it is an enormously helpful thing to do.
Q6 Chairman: Is there not a big difference
between a typical private sector organisation and a public sector
one which is that usually the people who run private sector organisations
have actually had to run things in order to get to where they
are. Civil servants on the whole do not have to have run things.
They are able to sit at the centre and to imagine people running
things further down the line. Is not one of the problems we have
with policy implementation that policies are put in place by people
who have not run things at the front-line? We say endlessly in
these conversations, "Oh well, it would be desirable if things
were different". What I am asking you is are you going to
make it different?
Sir Gus O'Donnell: Yes and that
is the whole point of the Professional Skills for Government agenda,
that we will be saying to people, "Here is a route to the
top and what you should be getting experience in is policy delivery
and operational delivery." First of all, there needs to be
a culture shift. You are absolutely right in saying that in the
past the policy idea was up there and then operational was something
that other people did and somehow at a lower tier. What we are
trying to do now is to get across the idea of equality of esteem
for people doing operational delivery with policy delivery and
those corporate specialisms, the ideal being that you get some
experience along the way, so that if you are a policy delivery
expert you get some experience doing operational delivery. I was
very impressed by someone we interviewed. We have a high potential
scheme for people we are trying to bring through in precisely
the way you are saying. A Home Office policy expert had come in
and done the traditional sorts of jobs and they had moved him
out and he had actually been a prison governor. I am very impressed
by that. I am sure that kind of experience when he has gone back
from doing that sort of job to working in the Home Office in the
criminal justice system thinking about policy is absolutely vital
for him and will make him a much better policy person.
Q7 Chairman: Just to round this off,
someone who has been very critical of the Civil Service on these
kind of grounds recently has been Sir Michael Bichard, who is
of course a former civil servant but he is also someone who has
run things around the system, and he says that unless the Civil
Service now has some proper transformation, not, he says, just
another instalment of internal reform, then these kinds of big
changes are not going to happen. You said you are going to approach
this job with more pace and passion. What I want to know is are
you on the continuity side of this argument for internal reform,
or are you on the Bichard side and some kind of "big bang"?
Sir Gus O'Donnell: I am pretty
passionate about improving the performance of the Civil Service
so I want to do this quickly but, to be honest, it is the next
generation that we need to get at. If we are going to develop
the people who will take over from me in the years to come, who
will be better qualified than I am, then we have got to get them
when they are at the Grade 7 level, and get people coming in with
the idea that their career structure will involve all of these
elements. I am very strongly committed to making that happen throughout
the Civil Service, yes, so we will be transforming, but it will
start at that generation where we can get to them and develop
their careers so they are ready when they get to the top.
Chairman: I am not entirely sure which
side of the divide that puts you on but I am going to bring colleagues
in. Ian?
Q8 Mr Liddell-Grainger: How many
people are in the Delivery Unit, which is going to be your watchdog,
your Rottweiler?
Sir Gus O'Donnell: The Delivery
Unit is very small.
Q9 Mr Liddell-Grainger: Will it be
able to deliver with that amount of people?
Sir Gus O'Donnell: That is a very
good question. When I say "very small" I think it is
under 50 and we are advertising currently for a new Head because
Michael Barber has left, as you know, and we will need to resource
it up to do this second strand that it has not done before. Some
of the members of the Delivery Unit have been talking to the Audit
Commission (which does CPAs for local authorities) to ask them
to think about what kind of resources it will need, so, yes, we
will need more resources. My number one challenge was to persuade
everybody that this was the right way forward. It is a bit of
a problem of success in that, having done that, a lot of departments
are now really keen to get on and do this, so I need to think
about how we resource up to make sure that we do these things
well. The first time we do them we will make mistakes and they
will not be perfect. So we need to do some pilots and improve
them and find the best ways to do it.
Q10 Mr Liddell-Grainger: Would you
allow the Head of the Delivery Unit to appear before the Public
Administration Select Committee?
Sir Gus O'Donnell: You request
whoever you want to come before you.
Q11 Mr Liddell-Grainger: Would you
be supportive of that?
Sir Gus O'Donnell: I am supportive
of people coming before you, most certainly, yes.
Q12 Mr Liddell-Grainger: The reason
I am asking is that when we did have Michael Barber here, he was
very interesting on the way that the workings of government were
operating, especially when departments failed—the Department
of Work and Pensions, Defra, others. That is obviously of interest
to us. The deliberations of the Delivery Unit are obviously private.
Will you be publishing a report from the Delivery Unit yearly?
Would you submit it to this Committee? How would you do that?
Sir Gus O'Donnell: We will be
publishing the results of these different capability reviews,
most certainly, as they are finished, I would hope, so as we go
through them. I am not going to save them all up and do them in
one report at the end. I would like to get them out. One point
there, however, I would urge you to treat them in a symmetric
fashion. Yes, there will be some challenges for departments that
emerge out of these but please also notice the things they are
doing well because, boy, does that motivate people when you celebrate
success.
Q13 Mr Liddell-Grainger: My constituents
tend to go the other way, they tend to want things done. When
Tax Credits go wrong or farmers do not get payments they get pretty
stroppy and we have to pass them on to you as line manager.
Sir Gus O'Donnell: Indeed, but
I am sure you also want to encourage the Civil Service to do a
really good job.
Q14 Mr Liddell-Grainger: Do you still
have a "blue skies thinking" unit? Is that still operational?
Sir Gus O'Donnell: There is a
Strategy Unit.
Q15 Mr Liddell-Grainger: What is
that doing now?
Sir Gus O'Donnell: Actually I
want to use the Strategy Unit in part to help me with the capability
reviews because when I come to look at departments, one of the
things I am interested in is how good are they at formulating
strategy so I am going to use resources from the Strategy Unit
to do that. They are doing a range of different reviews for the
Prime Minister looking at some issues related to specific areas—education,
health, some of the big reform areas.
Q16 Mr Liddell-Grainger: At departmental
level or as a Cabinet Office function?
Sir Gus O'Donnell: As general
issues, yes.
Q17 Mr Liddell-Grainger: So they
are working outside the department?
Sir Gus O'Donnell: They will tend
to work increasingly with a department on a specific issue.
Q18 Mr Liddell-Grainger: And who
is heading that at the moment?
Sir Gus O'Donnell: Stephen Aldridge.
Q19 Mr Liddell-Grainger: Would you
let him come here?
Sir Gus O'Donnell: He is a civil
servant; I am very happy for it.
|
