Appendix
The Government welcomes the Committee's focus on
the work of the Civil Service which, as they rightly point out,
affects every British citizen. We are grateful for the Committee's
recognition of the professionalism and commitment of civil servants
against a background of increasing public expectations and the
continuing need for efficient use of resources.
The Government, the Cabinet Secretary and all Permanent
Secretaries are committed to developing a culture of excellence
that continually improves skills and capability. That is why the
programme of Capability Reviews was introduced. The establishment
of the National School of Government (NSG) and Government Skills—the
Sector Skills Council for Central Government—the development
of Professional Skills for Government (PSG), and the Capability
Reviews have all been major steps forward.
There is real progress in developing professionalism
in the Civil Service. PSG is already improving the skills of the
top 30,000 and is now being rolled out to all. The swift action
by all central departments to sign the Skills Pledge recommended
by Lord Leitch and supported by Ministers, commits them to support
staff to gain qualifications, and demonstrates the determination
to act further.
The Government agrees with the Committee that strong
evidence to underpin activity is essential to ensure targeted
and effective action. Improving the evidence base has been a key
priority this year. Government Skills have recently completed
major surveys of both staff and employers to ensure that we have
a full and accurate picture of skills gaps and strengths that
will inform the Skills Strategy for Central Government to be published
next year. This will support departmental strategies by identifying
the key actions to strengthen skills development across the Civil
Service as a whole.
Capability Reviews were likewise designed to provide
strong, independent and consistent assessments of departments'
abilities to meet current and future delivery challenges. They
have found evidence of strong delivery in complex environments,
for example, the Department for International Development (DfID)
is recognised as a world leader in their field. The reviews have
been clear on the areas that need to improve to ensure the Civil
Service can meet future challenges.
The Government and senior leaders are very clear
that there is much more to be done and agree with the Committee
that collective and coherent action is critical if the Civil Service
is to deliver the services the public expect now and into the
future.
The Permanent Secretaries Management Group (PSMG),
which provides corporate leadership for the Civil Service as a
whole, has been working over recent months to agree the issues
that would benefit from being tackled collectively, rather than
being managed separately by departments. One such area is, as
the Committee identified, a common set of reward principles.
PSMG recently agreed to draw all this work together
under a Civil Service people framework. Building on the cross-cutting
capability review findings and complementing departmental people
strategies, the framework will bring together issues that need
collective action and will provide drive and coherence across
the skills and capability agenda. The Cabinet Office and departments
are taking this forward together.
The Government's response to the Committee's conclusions
and recommendations is set out below.
Although this report will look at ways in
which performance can, and must, be improved, we should not lose
sight of the very many excellent things that are done by excellent
people every day. It is a sign of the professionalism of the existing
Civil Service that we take so many of these for granted. (Recommendation
1, paragraph 11)
The Government welcomes and endorses the
Committee's recognition of the excellence, professionalism and
commitment of civil servants.
We welcome both the concept and the execution
of the Departmental Capability Reviews. It is particularly valuable
that their findings are being published; it gives us a benchmark
against which to measure future performance. We hope that they
will be repeated at regular intervals. (Recommendation 2. paragraph
22)
The reviews were designed to be open and demanding
assessments of a Department's future capability. They are intentionally
broad and recognise the importance of skills as one of the factors
that contribute to a department's capability. The reviews are
published to ensure the process is open to scrutiny, and the Government
will publish a progress report on the first four reviews later
this year. We will also publish an independent assessment of the
programme.
However, if future reviews are conducted in the
same way as the current ones, there will be doubts about their
objectivity. Any assertion of improvement will be questioned on
grounds of the reviewers' potential vested interest. We recommend
that future review teams should be externally managed. (Recommendation
3, paragraph 23)
The Capability Reviews paint a bleak picture of
Civil Service performance. They suggest a lack of leadership and
serious deficiencies in service delivery. But these results do
at least expose the scale of the challenge. Departments now have
a benchmark against which to measure progress. Ensuring civil
servants have the right skills will be essential to improving
services in future. (Recommendation 4, paragraph 33)
The Government does not share the Committee's view
of the Capability Reviews. By assessing the capabilities required
for future delivery of Government priorities, the reviews naturally
point starkly to the areas where the Civil Service needs to improve.
However, they also clearly articulate and lend credibility to
its strengths; the CPS review praised the department for "actively
engaging with historically under-represented, excluded and disadvantaged
communities"; and the DFES/DCSF review highlights "the
passion and commitment" of staff to improving outcomes for
children, pupils and learners.
The Government is confident of the independence and
objectivity of capability reviews. The majority of reviewers are
senior and experienced leaders in the private, voluntary and wider
public sectors. They have no vested interest in the results. Review
teams include just two civil servants, who are not members of
the department in question, to provide in depth knowledge of the
Civil Service and the imperatives of public administration. The
reviews are exactly the kind of self-improvement activity all
organisations should be involved in. As the Committee note, they
have been described as "rigorous to the point of self-flagellation".
In his evidence to the Committee Professor Colin Talbot remarked
that he was "surprised at how rigorous they were", and
Mr David Walker commented that they "substantially delivered
a shock to the system".
There is a clear consensus that the Civil Service
is weak in its performance management. We accept that this problem
is not unique to the Civil Service. Nonetheless, it is clear that
the way poor performance is currently managed is not acceptable.
A radically different approach may be needed, and it should be
a top priority for the Cabinet Office to find one (Recommendation
5, paragraph 37).
The Government accepts there is room for improvement
in performance management and this is indeed a top priority for
the Civil Service. The Cabinet Secretary is working with Permanent
Secretaries to improve accountability. The Civil Service Capability
Group (CSCG) has introduced a new performance management system
for the Senior Civil Service (SCS) with 5 key elements:
- Business delivery objectives
- Corporate objectives, which contribute to the
effective corporate management and coherence of the department
and the Civil Service as a whole
- Capability objectives which ensure that staff,
the department and the Civil Service have the right capability
to deliver business outcomes now and in the future
- Personal development objectives
- Leadership behaviours
Guidance is being drafted for dealing with poor performance.
This will include work on exit routes and how redeployment pools
should and should not be used. Senior leaders are examining the
skills and behaviours needed to make performance management work
more effectively at all levels, based on the PSG framework which
sets out the skills staff need to deliver effective services.
There may well be scope to expand the use of accredited
qualifications in the Civil Service, but we should not lose sight
of the crucial importance of practical experience. The skills
learnt through experience should be borne in mind before Civil
Servants without professional qualifications are dismissed as
"amateurs" (Recommendation 6, paragraph 56).
The Government agrees absolutely with the Committee
on the value of practical experience and is proud of the vast
array of skills civil servants possess. Practical experience is
one of the core strengths of the Civil Service and absolutely
critical to its success and, where appropriate, accredited qualifications
can help demonstrate that people have gained valuable, transferable
skills. The PSG competence framework was designed to describe
the skills needed in the modern Civil Service—project management;
financial and people management; leadership and change management—in
a way which is comparable to other sectors. There are of course
areas where professional training is vital. Finance Directors
in Departments are ultimately accountable for the expenditure
of more than 40% of national income. So it is right that we addressed
the historic lack of professional financial qualifications in
this area.
Nonetheless, while we should not underestimate
the Civil Service's existing skills, there ought to be some way
of measuring them more formally. It is clear that the Government
cannot currently assess its existing skill levels, let alone identify
how to fill gaps. Government Skills needs to concentrate on developing
a robust means of assessing individuals' skills. Accredited vocational
qualifications would certainly help, and there may also be a case
for expanding the use of academic qualifications in assessing
the skills of people at the higher levels of the Service. (Recommendation
7, paragraph 57)
Since Government Skills became the Sector Skills
Council for central Government in 2006, its main priority has
been to improve what was a limited evidence base on skills across
government. Through two major surveys—one covering Civil
Service staff and one aimed at Departments/Agencies as employers—it
has collated detailed information on existing skills levels; current
and future skills needs; identified gaps and the reasons they
exist; and gathered views on learning and development provision.
The surveys show the Civil Service exceeds Lord Leitch's
targets on accreditation at NVQ levels 3 and 4 and is close at
level 2. Qualifications are about more than simply measuring skills,
they help people develop. The Civil Service is keen to use them
at all levels for this purpose and to exceed Lord Leitch's targets.
The development of a number of vocational qualifications for government
is a priority for Government Skills—for example a refreshed
NVQ in public services will be available in 2008. However, as
the Committee acknowledges, many people are skilled without holding
formal qualifications.
It is not clear how the National School of Government
can simultaneously be "demand-led" and focus on providing
the professional skills set out in PSG. The Capability Reviews
indicate that most departments are poor at "building capability",
which in turn suggests that they have not been effective in identifying
the skills they need. The NSG should work closely with departments
and the centre to ensure a coherent strategy is maintained based
on identified skills gaps. (Recommendation 8, paragraph 65)
The development of PSG was led by heads of departments
and agreed by all Permanent Secretaries. The National School of
Government (NSG) supports the implementation of the initiative
as a cohesive approach to improving and benchmarking skills and
capability across the Civil Service. The NSG, through its
network of Strategic Relationship Managers, ensures that its services
are aligned to both the business needs of individual departments
and the strategies of the centre. It is fully engaged with
Government Skills on the Skills Strategy.
In identifying those skills gaps, the Government
should look both to Government Skills and to the Sunningdale Institute.
Both of these are potentially worthwhile innovations; but both
should look for more ministerial input, to make sure that the
Civil Service can respond to Ministerial needs. (Recommendation
9, paragraph 66)
The Government agrees with the Committee on the value
added by both organisations. Government Skills has significantly
improved the evidence base on current and future skills gaps and
consideration has already started within the Sunningdale Institute
into the idea of recruiting a set of associate Fellows who are
experienced political leaders.
Measuring the success of training is not easy.
The goal of training is to change behaviours over time, but it
will be difficult to detect whether this is happening and to what
extent it is attributable to training. Monitoring the demand for
courses is still a relevant judge of the effectiveness of provision;
revenue is surely one of the major tests of a demand-led organisation,
and reputation is a relevant factor in determining demand. Success
should be measured by both reputation and revenue. (Recommendation
10, paragraph 67)
We agree with the Committee's conclusion that success should
be measured by both reputation and revenue. Output-based targets
had previously incentivised the NSG to deliver high volume courses
on a narrow set of subjects. This led to criticisms of the
relevance of the provision to organisations' strategic objectives.
Whilst revenue and repeat business are important indicators of
performance, in giving increased emphasis to reputation and impact, the
NSG is now measuring its success against more than revenue alone.
The NSG is currently developing a series of key performance indicators
that reflect this new focus and we acknowledge there is more to
be done in this area.
We recognise the commitment of the Civil Service
to training. We have seen ourselves that staff are broadly positive
about the opportunities open to them, and this is commendable.
However, there is no point in offering training if there is insufficient
time to take it. Staff complements should be calculated in such
a way as to allow staff to make any necessary time commitment
to personal development (Recommendation 11, paragraph 73).
We welcome the Committee's acknowledgement of the
Civil Service's commitment to training. Earlier this year government
departments were the first national employers to sign up to the
Skills Pledge, which commits employers to offering time off and
training to all staff to gain their first qualification at NVQ
level 2 (5 GCSEs at A*-C or vocational equivalent). Alongside
that, PSG is helping to develop a stronger business case for training
and development and having an impact on decisions taken by individuals
and line managers about allowing time off for training.
If career Civil Servants have limited opportunities
of getting to the top, the Government will not get the benefits
of talented people joining lower down the service (Recommendation
12, paragraph 85).
The Committee is right to emphasise the importance
to the Civil Service of growing its own internal talent. Opening
up competition for positions enables the Civil Service to validate
the calibre of its own talent against the market. However, it
is not the case that career civil servants have limited opportunities
of getting to the top, 62% of new entrants into the SCS in the
year ending April 2007 were promotees.[1]
The Civil Service aims to strike a balance between
importing some of the best talent from outside to fill skills
gaps, and developing and retaining our own skilled, capable and
versatile workforce. There are a number of programmes in place
to achieve this. CSCG runs corporate career management programmes
such as the Fast Stream graduate recruitment programme; Leaders
UnLtd and the High Potential Development Scheme. The NSG also
offers a number of development programmes to further support this
goal.
We do not see any evidence that external recruitment
is a threat to the traditional Civil Service values of permanence
and impartiality. No organisation should be closed—outsiders
can bring different skills and perspectives which should be welcomed.
Every organisation can benefit from some degree of "ventilation".
This should not, however, automatically lead to recruitment from
the private sector. Much of the relevant skills and expertise
for the Civil Service is likely to be found in the wider public
sector (Recommendation 13, paragraph 87).
We do not understand why the target is that "about
half" of postings in the Senior Civil Service should be externally
advertised. This particular target seems arbitrary and inexact,
and does not seem to be based around identified skills gaps. If
the Government does want to set a target, there should be a clear
evidence base for it. (Recommendation 14, paragraph 88).
The Government supports the Committee's views that
external recruitment can make a valuable contribution to the Civil
Service. It is true that historically, the highest proportion
of external joiners to the SCS has come from the private sector.
However, the proportion coming from the voluntary and wider public
sector has been increasing annually. The latest available figures
(April 2007) show that 45% of all external joiners to the SCS
came from the wider public and voluntary sectors, up from 37%
in 2004.
It is in this context that the 50% target should
be seen. The Government's approach to SCS recruitment is determined
on a case by case basis according to the particular skills and
experience required for the job. Therefore, the target is kept
under continuous review.
We believe there are difficulties with the current
practice of recruiting directly to very senior posts. The current
pay differentials may serve to de-motivate internal staff and
discourage talented staff entering the Civil Service early in
their career. It is also problematic that new entrants can take
a considerable amount of time to find their feet in the Civil
Service, if those new entrants have important responsibilities.
We believe many of these difficulties would be alleviated if external
recruitment was focused slightly lower down the management chain.
(Recommendation 15, paragraph 89)
The Civil Service undertakes external recruitment
at all levels. A wide range of financial and non-financial benefits
are offered to attract the best talent whilst ensuring value for
money for the tax payer. It is important to retain a degree of
flexibility in pay determination, particularly to recruit specialist
skills. SCS pay levels are continually monitored to consider any
equal pay differentials and departments are encouraged to address
anomalies through the annual pay cycle. The Civil Service is developing
a strengthened induction programme including the first SCS foundation
programme for new entrants and a corporate induction programme
for new board members.
Interchange between sectors is laudable; Whitehall
can only benefit from first-hand knowledge of the private, voluntary
and wider public sectors. Sir Gus O'Donnell has been an advocate
of interchange between the Civil Service and voluntary sector
organisations—as he says, this is increasingly important
in a world where those organisations are being encouraged to provide
public services. We hope that Government is also encouraging civil
servants to get experience of other parts of the public sector.
(Recommendation 16, paragraph 92)
We agree with the Committee on the importance of
ensuring Civil Servants get a broad range of experiences. In 2007
over 80% of the SCS seconded out of the Civil Service joined the
voluntary and wider public sector. Specific examples include efforts
to formalise secondments to the Third Sector as part of the Fast
Stream accelerated development scheme with the Prince of Wales'
Charities; and the National School's highly successful cross-sectoral
Top Management and Leaders UK programmes. Moreover, the introduction
of PSG encourages individuals to look beyond their departments
or agencies to identify ways of broadening their experience. Departments
and agencies have Interchange Managers responsible for promoting
and advising on interchange as a development tool, and facilitating
secondments in and out of the Service. Organisations in the wider
public sector are also able to publicise interchange opportunities
directly on the Civil Service Gateway website, to which all civil
servants have access.
Staff development should not be at the expense
of doing the job properly. We are concerned that the current emphasis
on wide experience is affecting the Civil Service's ability to
carry out some of its core functions. A four year norm should
be just what is says; it emphatically should not be a four year
maximum. Although individuals should not stay forever in one post,
we need to recognise that some stability is also necessary (Recommendation
17, paragraph 98).
We recognise the distinction that the Committee makes
and we fully support their emphasis on a four year norm, rather
than a maximum period, for SCS postings. The policy was designed
as much to ensure that SCS stayed in post long enough to deliver
a specific programme of work as it was to encourage refreshment
of skills. Indeed, there is an increasing emphasis in Departments
on ensuring longer tenure in SCS posts, particularly because of
the need for stability in leadership teams. PSG has brought an
increased emphasis on developing 'depth' of skills and experience
in a particular professionalism. The emphasis on broader experience
is aimed at those in, or aiming at, the SCS who need the right
mix of policy and delivery skills and experience to manage large
and complex organisations.
There is scope for more active career management
in the Civil Service. We are encouraged by some of the schemes
being implemented in individual departments and agencies. Departments
should identify and nurture their own talent, beyond the confines
of the centrally administered fast stream. The centre should do
more to encourage and support such departmental initiatives (Recommendation
18, paragraph 100).
We agree with the importance the Committee places
on active career management in the Civil Service. It is important
the Civil Service ensures the right people are in the right jobs
at the right time. CSCG performs succession planning for the Top
200 Civil Service posts to align talent to roles across departments
at the most senior levels. CSCG also administers the High Potential
Development Scheme which helps those at or just below board level
to prepare for the most senior jobs. The professions in government
manage their people's careers, including promoting mobility, to
ensure they get the right experiences. For example, the IT profession
has its own version of the Fast Stream and the HR profession is
taking a new approach to professional development with plans to
develop a HR academy for Government.
Below this all departments now have talent management
functions to manage the careers of their own staff, and the centre
is working closely with senior leaders and talent management functions
to disseminate best practice and to establish common frameworks.
A team of officials within the restructured CSCG is making this
area of work a priority. However, the Government recognises that
there is more to do in this area.
The current system of delegating pay and grading
arrangements to individual departments may have its merits, but
it can also be a barrier to staff development. Care should be
taken that such arrangements do not militate against the free
movement of talented staff across the Civil Service to develop
their skills. (Recommendation 19, paragraph 105)
The Government welcomes the Committee's recognition
that there is merit in the current system of delegation and agrees
that there are areas that need addressing such as staff mobility.
A framework for reward across the Civil Service is a step closer
following Permanent Secretaries' recent agreement on a Civil Service-wide
framework of reward principles, including the need for a common
approach to some conditions of employment. In addition, the Government
is working with key stakeholders, including Trade Unions, to deliver
more consistent reward arrangements for some professional and
workforce groups identified by similar roles, skills and grades.
There may well be substantial scope for efficiency
savings in the Civil Service, but headcount cuts are a poor tool
for achieving those savings. Setting numerical targets for departments
is crude and counterproductive. (Recommendation 20, paragraph
112)
As the NAO has said, the Gershon Efficiency Programme
is more serious and more systematic than any previous attempt
to achieve efficiency in Government. The Government agrees that,
in isolation, headcount targets are an inadequate tool for delivering
lasting efficiencies. The 2007 Comprehensive Spending Review (CSR), published
9 October 2007, does not include headcount targets. However,
all departments have committed to reducing their administrative
budgets by 5% a year throughout the CSR period.
Dramatic changes to the Cabinet Office are underway,
not least the seemingly complete rebirth of its Corporate Development
Group. We welcome this development. When compared to the efficiency
programme, the Government's policies on skills and capability
are lacking in cohesion and lacking in drive from the centre.
Yet they are just as important. To rectify this imbalance, the
Cabinet Office needs an effective replacement for the Corporate
Development Group, with both the credibility to influence other
departments and the power to direct. (Recommendation 21, paragraph
122)
Capability and skills are closely linked. The
Government needs a co-ordinated approach to tackling both issues.
If the responsibility within government for both now sits within
the same Group, then that is a significant step in the right direction.
(Recommendation 22, paragraph 123)
The Cabinet Office capability review recognised the
need for reform of the Corporate Development Group (CDG) in the
Cabinet Office and the Government fully accepts these recommendations.
The unit has significantly restructured to better deliver Sir
Gus O'Donnell's vision for the Civil Service. It recruited specialist
skills including expertise in change management and pay and reward.
As the Committee note, capability and skills are closely linked
which is why CDG and the Capability Review team were brought together
to form CSCG. The reviews provide the strong evidence base that
inform and direct the leadership and people interventions. Government
Skills works closely with CSCG. The Skills Strategy, being developed
by Government Skills, supports CSCG work on workforce change,
competences and skills, performance management, employee engagement
and wellbeing, and leadership.
We see merit in Lord Butler's suggestion that
there should be a National Performance Office, equivalent to the
National Audit Office that scrutinises Civil Service performance
in detail on more than a financial basis. It is Parliament's job
to hold the Executive to account; therefore the National Performance
Office should have the same parliamentary status as the NAO. (Recommendation
23, paragraph 127)
It is intended that the Departmental Capability
Reviews will be repeated after two years. We believe they should
become a regular feature, and that future reviews should be carried
out by the new National Performance Office. Standards of government
will be increased both by external audit and greater parliamentary
accountability. Such a body could also provide a regular performance
report on government, in the spirit of the government's now discontinued
annual reports. (Recommendation 24, paragraph 129)
The Government does not see the need for a National
Performance Office (NPO) as outlined by the Committee. It is unclear
that such an organisation would add sufficient value to justify
added layers of cost and administration. The Government is confident
that robust, external challenge exists throughout the Capability
Review cycle. Review teams and stocktake teams include external
reviewers and, as Sir James Crosby, former Chief Executive HBOS
and review team member, has commented "the review process
is thorough, transparent and fair... I can't imagine any shareholder
owned company doing this in similar circumstances... each review
team's work is subject to independent moderation, a process which
runs through the review and has real bite".
Capability Reviews are published and open to scrutiny
by Parliament, Departmental Select Committees and the public so
that departments can be held to account. Furthermore, earlier
this year the Sunningdale Institute was commissioned to undertake
an independent evaluation of the impact of the Capability Review
process. This was published recently and a copy has been made
available to the Committee. It will inform the future of the Capability
Review programme. The evaluation team stated in the report that
'few previous attempts to reform the civil service…have had
such a good start. It is a tribute to the vision and energy of
those who led this programme that it has done so well so far.'
They also believe that 'with vigorous follow-through…the
momentum created by the Capability Reviews will be sustained by
the Civil Service itself without the need for external intervention.'
Moreover, much of the work of the proposed National
Performance Office is already undertaken by the National Audit
Office (NAO). Its value-for-money scrutinies cover many issues
of non-financial performance in order to assess effectiveness
and efficiency. The NAO's work is respected for its independence
and it would be unfortunate to undermine its reputation by narrowing
the NAO's remit.
Government does not have to be an entirely HR-free
zone. The Prime Minister must bear in mind when managing ministerial
moves that these can have a significant effect on Civil Service
performance. (Recommendation 25, paragraph 140)
It is for the Prime Minister to determine the shape
of the Government and the appointment of individual Ministers.
In doing so, the Prime Minister is mindful of a range of factors
including the balance of Ministerial teams, the needs of individual
departments, and the experience and skills of individuals.
Our witnesses made a compelling case for more
professional development for Ministers. We are heartened that
the Government has already accepted this case, and we are pleased
to see the efforts being made in this direction by several Ministers
in conjunction with the National School. These efforts go against
the historical grain, and so should be applauded. (Recommendation
26, paragraph 150)
Above all, though, it is the culture of commitment
to professional development that needs to be inculcated among
Ministers. We have spoken much in this report about how Ministers
require a professional Civil Service, and how that can be achieved;
but it is a truism that leaders of an organisation should not
expect that which they are not prepared to give. Both Ministers
and civil servants should be equipped with the right skills for
their differing roles. (Recommendation 28, paragraph 152)
The Government agrees with the Committee on the importance
of both Civil Servants and Ministers being equipped with the right
skills for their roles. We would like to reassure the Committee
that encouraging a culture of continuous development for both
Ministers and Civil Servants remains a priority for the Government.
The NSG has launched a new Centre for Working with Ministers and
Parliament that provides training programmes and consultancy to
help civil servants serve Ministers and Parliament better. This
complements the programme of Ministerial training already provided,
for which there is much enthusiasm among Ministers.
There is more, however, that could be done to
professionalise the ministerial side of the business of government.
We would be interested to see some of the ideas discussed in our
evidence sessions put into practice, if only on a trial basis.
Exit interviews to find how the support given to Ministers had
in fact met their needs seem eminently sensible. Systematic performance
appraisal is a worthwhile discipline. We see no reason why the
Government could not adopt these and other, similar approaches.
(Recommendation 27, paragraph 151)
We agree that Ministers play an important role in
the drive to professionalise Government. However, it is important
to note that it is the performance of departments and delivery
of services that matters most to the public. Permanent Secretaries
regularly discuss departmental performance with Ministers, including
changes that the department needs to make in order to perform
better. The capability reviews are helping departments act on
long term key development areas and therefore provide assurance
on future delivery. The fact remains that Ministers and their
performance are ultimately judged by Parliament and the electorate.
November 2007
1 Source: SCS Database 2007, Cabinet Office Back
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