Examination of Witnesses (Questions 80-99)
SIR GUS
O'DONNELL KCB
11 OCTOBER 2005
Q80 Paul Flynn: What were those?
Sir Gus O'Donnell: Not everybody
was happy with the conclusion that the Treasury came to on the
Euro, for example.
Q81 Paul Flynn: Could we take another
concrete example. There is a report that has been widely leaked
from "blue-skies thinking in government" on our drugs
policy and their report comes to the conclusion that our drugs
policy is killing people, it is not working, it will never work,
it has not worked for 40 years and it is a disaster, and to continue
with it would result in increased deaths. The message is that
prohibition does not work. That is a piece of hard evidence from
a distinguished thinker on the subject. What should the role of
civil servants be? There is the evidence. Is it to be based on
that? Is he going to present it by trying to persuade politicians,
or is it going to be mythology-based evidence which we have been
operating on since 1971, or is it going to be "the first
thing that came into the head of the Prime Minister"-based
evidence?
Sir Gus O'Donnell: I do not think
it is mythology based. I think there is a strong case for saying
in government we get a lot of things right.
Q82 Paul Flynn: Can we take that
as an example then. What should we do with it? That report exists.
Sir Gus O'Donnell: That report
exists—
Q83 Paul Flynn:— And it is
saying something that is contrary to the policy of any political
party. What should a courageous civil servant do?
Sir Gus O'Donnell: What any civil
servant should do which is to say, "That is an interesting
critique of where we are now but, Minister, we need to sort out
how to do this." I do not know what this particular policy
said but what were its positive conclusions? Saying that what
we are doing now does not work is not much use to anybody.
Q84 Paul Flynn: I can tell you—that
prohibition does not work and that harm reduction does work.
Sir Gus O'Donnell: Harm reduction?
Indeed, I think it is right for us to consider various different
options and put them before ministers in the end.
Q85 Paul Flynn: What is the duty
of a civil servant? Is a civil servant's prime duty to his career
so that if he does the bidding of his political masters his career
would be advanced, but if he follows a policy that he thinks is
right for the country and right in the long term, his career might
be damaged?
Sir Gus O'Donnell: His duty is
very clearly to put before the minister the objective evidence
for the various policy options. It is then his duty when the minister
has made a decision to try and implement that policy, even if
he disagrees with it, to the best of his ability.
Q86 Paul Flynn: If we go back to
the original question we had from the Chairman, I was a bit alarmed
to hear it was a choice between a big bang approach or something
that sounded like a process of continually reviewing. I think
we all are familiar with this. If you are in a review or reorganisation
it gives the operators the chance to say, "Things are a shambles
but we are about to do a review", and then later, "They
are still a shambles because we are in the middle of a review",
and later they say, "Of course it is still a shambles because
the review has to bed down". You used a daunting phrase talking
about getting it ready for the "next generation". Are
we in a position of continuously reviewing until there is another
generation, particularly with the examples we have had of the
CSA and so on, or is it not time we had a big bang?
Sir Gus O'Donnell: On capability
reviews we are going for a big bang ie, there were not any before,
they are there now, and I am going to try and roll them out as
quickly as possible. My point about the next generation was about
getting the next generation of civil servants better prepared
for the top jobs. I think that is something that will take a generation
to work through. Our whole approach of trying to improve the careers
and career choices of civil servants needs to start from an early
age, so for some of us it is too late!
Q87 Paul Flynn: You described yourself
as a traditionalist and one of the aspects of a civil servant's
work is that they are bound by certain limits that have been placed
there by tradition and by Treasury rules. We have heard a great
deal about outsourcing. Why do we not hear more about insourcing?
Let me give one example. There are a number of operations that
depend on the work of the Patent Office for the skills and knowledge
base of the Patent Office and there are people who are trademark
agents and patent agents who run very profitable businesses which
are entirely dependent on the resources of the Patent Office.
They could not operate otherwise. The profits are made by the
agents outside and the work is done by the funds of the public.
Is it not time as part of the big bang to change those rules so
that we change the character of the Civil Service in such a way
they can be entrepreneurial where they can go into areas where
traditionally they did not operate and they could run an operation
that would certainly be more profitable and have wider careers,
but they could operate the many aspects of the Civil Service as
though they were businesses.
Sir Gus O'Donnell: Certainly I
am strongly in favour of civil servants being more entrepreneurial
and being more risk-taking and the like. One of the issues in
that, of course, is if you get people being entrepreneurial and
taking risks as part of the accountability mechanism you need
to be sure that you will support civil servants who make decisions
where nine of them go right and the tenth goes wrong, so that
you do not have a report on the tenth and ignore the nine. You
are part of the issue here. I am strongly in favour of entrepreneurial
skills. As to precisely where the boundary should be between public
and private sector, you need to think very carefully about where
these things operate best. If you take an agency like the Ordinance
Survey, they have prepared maps and digital mapping and all the
rest of it, lots of things which they have decided are right in
terms of the welfare of the country to operate freely, but it
is run by Vanessa Lawrence in an efficient entrepreneurial manner
and helps businesses do their jobs in the United Kingdom very
well.
Q88 Paul Flynn: Do you see this as
an area for great change in the future? Will there be more business-type
activities from the Civil Service?
Sir Gus O'Donnell: I think there
will, but the question will be what is the best model to deliver
them. I am aware of a model in National Savings and Investments
where the back office functions which were done by civil servants
are now mostly done by Siemens. That has worked incredibly well.
The people now working for Siemens are doing an excellent job,
they have got good careers, and National Savings is going from
strength to strength.
Q89 Paul Flynn: The attraction of
developing these things is they can be created as small additional
activities of the government agency or Civil Service office without
setting up its own separate organisation as the private sector
would have to do. Do you think it is worthwhile investigating
this?
Sir Gus O'Donnell: I think it
is. One thing you could have to watch is whether the private sector
thought that you were competing on—
Q90 Paul Flynn: They will say that.
That is where the courage you mentioned comes in because the private
sector would certainly kick and scream against it and say it is
unfair competition.
Sir Gus O'Donnell: The issue would
be are we doing something that would not otherwise be done by
the private sector?
Q91 Paul Flynn: But it makes sense
in the national interest to do it if it can be done at a fraction
of the cost by a Civil Service operation.
Sir Gus O'Donnell: If we can do
it more efficiently and more cheaply than the private sector that
would be a strong argument for us looking very closely at whether
we should do it.
Q92 Paul Flynn: If I could go back
to the question asked by Julie Morgan when you mentioned the office
in my constituency in Newport, the ONS, the Passport Office and
the Patent Office, the objections that were raised about relocation
were raised by one of the Civil Service unions on the grounds
of the decreased diversity of staff. I do not know that necessarily
happened but it is a serious point to raise. What is your view
on the advantages particularly of the Lyons Report which gave
the Patent Office as the modern example of a successful relocation
outside of London? How do you take the objections made on the
question of racial diversity by the civil servants and where it
should be treated in consideration of the other advantages and
disadvantages?
Sir Gus O'Donnell: I am strongly
in favour of creating a more diverse Civil Service. At the moment
we are working on a ten-point plan to increase diversity in the
whole Civil Service. For me this is an issue about the whole Civil
Service, so I want to increase diversity all the way through.
There is a separate issue about relocation and I am strongly in
favour of relocation. If relocation happens to be that we relocate
to areas where there are ethnically less diverse populations that
seems to me to be a case for us having to redouble our efforts
in all locations to try and increase the ethnic diversity of those
offices.
Q93 Paul Flynn: How would you do
that?
Sir Gus O'Donnell: We have to
think very carefully about where we advertise. Like I say, there
is a ten-point plan which we are about to launch which will involve
things like having diversity champions on the boards of every
government department that will say to them, "Have you got
plans to assess how to increase an ethnically diverse population?".
I stress that we are actually doing quite well on this front on
ethnic diversity at the moment relative to our target, but I think
we should do more. I have been working very strongly with a group
mainly from Treasury and Revenue and Customs to set up a Civil
Service Islamic Society. The more we can open ourselves up to
and be seen as welcoming different groups, be they religious,
ethnic or whatever, that is the kind of thing a modern employer
needs to do because I want to take talent from the whole range
of the British population.
Q94 Chairman: Could I take you back
two or three questions very very quickly to your evidence-based
policy. That all sounds very splendid and we all think that is
what we should do, but if you have a minister who says, "I
do not want all this evidence-based policy stuff, this is what
I want to do, this is what I believe, this is what should be done;
I want you to go away and do it"; what happens then?
Sir Gus O'Donnell: The ministers
decide; we advise. However, they might find that, for example,
the Treasury might say, "Could you show us the evidence behind
this policy?"
Q95 Paul Flynn: The machine would
kick in, would it not, and raise complexities?
Sir Gus O'Donnell: It would ask
questions, which is what the machine should do.
Chairman: Well, that would take us into
territory we would love to go into but we are not going to. Kelvin?
Q96 Kelvin Hopkins: I am deeply sceptical
of what has been happening in government and the Civil Service
over the last two decades, particularly some of the terminology
used such as "modernisation", "reform" and
indeed even "delivery". I suspect that they are warm
words to disguise a policy direction I do not like and obviously
a policy direction that many other people do not like either.
Is that unfair?
Sir Gus O'Donnell: You are sceptical
because you think that—could you expand on that?
Q97 Kelvin Hopkins: Okay then. "Modernisation"
seems to me to involve privatisation, marketisation and liberalisation
intended to re-create a society which would be more recognisable
to Gladstone than to Clement Attlee or Harold Macmillan. That
seems to be the reverse of modernisation. When it comes to "reform",
reform was considered to mean something which increased the role
of government in securing the welfare of people and for greater
demoracy, from 1832 onwards. Reform now seems to mean reducing
job security, minimising employment rights, to make workers more
"flexible", which is really the opposite of what reform
might have been in the past. I can imagine a trade unionist saying
to someone, "I don't like losing my job", receiving
the response "Ah well, you have just been reformed."
Sir Gus O'Donnell: If I look back
20 years ago, which is what you said, the unemployment rate was
a lot higher so a lot of people did not have any jobs.
Q98 Kelvin Hopkins: It is good Keynesian
economic policies since that have raised demand.
Sir Gus O'Donnell: Good economic
policies, yes.
Q99 Kelvin Hopkins: That does not
mean reform.
Sir Gus O'Donnell: I think it
does. If you look at the context in which we operate with globalisation
and all the challenges that presents, I think the reason that
we are doing well is because we have flexible economies. If you
compare our employment performance, say, versus the unemployment
rates in Germany, for example, you will observe that we are doing
very well and that reform I think is true of the Civil Service.
We have to be flexible, we have to be highly skilled. When I spoke
to the unions earlier I shared their very strong desire to work
together on a professionalisation agenda. Over the last 20 years
as well it has been associated, to my surprise when I look at
the figures, with a big increase in trust in the Civil Service.
Going back 20 years the proportion of trust in the Civil Service
was something like 25%. Fortunately that has gone up considerably
and it is around 44% now.
Kelvin Hopkins: I would love to debate
economics with you but would disagree about the recent course
of success. It is much more to do with the surge in demand deriving
from the great vacuum in the economy which occurred in 1992 after
the collapse of the ERM, and since then the surge in asset prices
which has driven demand. That is another view.
Chairman: It is.
| 
