Examination of Witnesses (Questions 40-59)
SIR GUS
O'DONNELL KCB
15 NOVEMBER 2007
Q40 Julie Morgan: I wanted to ask
you some more questions about diversity in the Civil Service,
which you have raised. It does seem to me that the progress is
slow and in the Department Report it was felt that expectations
had not been met on the pace of progress. I wondered if you could
comment on that and whether, in fact, you are likely to meet the
targets in April 2008 which do seem unlikely to me.
Sir Gus O'Donnell: We set the
targets at very stretching levels. We are doing better on women.
I think there will be an issue on ethnicity at senior levels,
not at junior levels. We are working hard on the disability one,
that will be difficult as well. It is worth getting it in context.
We are doing massively better than the private sector and that
is an increasing trend, that whereas the private sector is going
backward on a number of these things, the public sector is moving
forward.
Q41 Julie Morgan: You would expect
that, would you not? You would expect the public sector to be
better at these issues than the private sector.
Sir Gus O'Donnell: No, I would
not. I do not see any reason why. I believe in diversity because
I think there is an absolutely strong business case for diversity.
A more diverse Civil Service will be a much more effective Civil
Service. Yes, I am committed to it very strongly. I think if I
was running a business I would want to have a diverse workforce
as well.
Q42 Julie Morgan: Surely you have
more resources in the Civil Service in order to take the measures
to attract people from different groups and to support them than
private businesses do.
Sir Gus O'Donnell: We certainly
are putting lots of resources into this, and that is proving effective
in moving things up, but I would not want to let the private sector
off in terms of saying—
Q43 Julie Morgan: I do not mean to
let the private sector off, I am just saying I am not surprised
the public sector is ahead and it should be leading the private
sector.
Sir Gus O'Donnell: Absolutely.
Going back to the leadership question, we do want to lead society
in this, which is why I say I think we are getting there. We have
this 10 point plan and we are looking at specific areas to help.
For example, the black and minority ethnic situation is fine but
we are not getting into the senior levels, so what I did was to
look at the Fast Stream. When I joined the Civil Service the Fast
Stream was basically white, male, Oxbridge, to be honest. Our
Fast Stream entry at the moment is majority female and the black
and minority ethnic percentage was 11.1% of successful applicants,
which is way above what you would expect. We are starting to get
a number of things right. Will we solve these problems overnight?
No, because I have to work on getting the people into the system.
We are living with a number of cohorts coming through that were
recruited in a different way. I am very committed to this. We
have got diversity champions on the boards of all the different
departments, we are working hard to attract people and I think
it is starting to come through.
Q44 Julie Morgan: You say your targets
are very ambitious, so I just wonder about the logic of that if
you are not expecting to achieve the targets.
Sir Gus O'Donnell: You have two
options with targets: you can either set very easy targets and
hit them, or you can set targets that are very stretching, and
ours on diversity were very stretching. We will have made a lot
of good progress but we will not be quite there although we will
still have moved ahead much faster than the private sector. We
are on track. That 2020 time will be quite interesting when I
suspect we will have a majority female Senior Civil Service and
you will have a chance to grill the Cabinet Secretary and I wonder
how she will respond.
Q45 Julie Morgan: Do you expect to
meet the April 2008 targets?
Sir Gus O'Donnell: I think we
will have made good progress towards them but I suspect that we
will be slightly short.
Q46 Julie Morgan: Could you briefly
tell me exactly what you are doing? You have given one example
about the Fast Stream, and that has obviously been very successful
when you look at the numbers compared to the numbers in the workforce
for black and minority ethnic candidates. Can you give me another
example to show how you are trying to change the face of the Civil
Service?
Sir Gus O'Donnell: Absolutely.
If you take the leadership programmes that I talked about, we
have a programme called Leaders Unlimited and another one called
META—Minority Ethnic Talent Association—where we are
specifically targeting. One of the things we have found is there
is a lack of confidence in some cases in minority groups and they
are not putting themselves forward for promotion opportunities,
for example. When you get the group of people you are promoting
in a good, diverse way, but actually if you are not getting people
putting themselves forward for promotion it is not going to happen.
In order to do that we need to work on people's confidence, their
leadership skills and their own development, so we have got programmes
that are actively working on that.
Q47 Julie Morgan: One of the reasons
given for resistance to relocation of Civil Service jobs is the
fact that in London, for example, there are more people from the
black and minority ethnic communities who hold those jobs and
it is felt if they go to other parts of the country that will
not happen. Have you got any views on that?
Sir Gus O'Donnell: It is obviously
something we monitor. It depends where you are relocating jobs
from. In principle, I believe it is a very good idea for us to
relocate away from what is the richest part of the country towards
areas of the country where we can produce services for the public
more efficiently and cheaply. I am strongly in favour of relocation
in principle. If we relocate to certain areas which have a very
diverse population in some cases that can help us but, you are
right, when we move out of Inner London, and we will be moving
out of the very expensive parts of London more and more, they
are quite diverse and we have got to watch this. For example,
I know the ONS[6]
relocation to Wales and the areas they are going to are not as
ethnically diverse but I would say when you view it from the Civil
Service as a whole to have good diversity of where we are regionally
located is also a goal that is an important one.
Julie Morgan: I would agree with you
entirely.
Q48 Jenny Willott: I wanted to ask
some questions about the Capability Reviews. When Sunningdale
did a report into the progress of them and their evaluation they
identified one of the failings as being the failure to follow-up
on area of weakness. What is being done to improve that?
Sir Gus O'Donnell: We asked the
Sunningdale Institute to evaluate the Capability Review programme,
so I think we should be given some credit for the fact we are
very transparent about this and we are trying to monitor this
programme. In general, the findings of that report are very positive
about the Capability Reviews and it is worth noting that. You
are right, we continuously want to improve. We are working on
the follow-up. It is pretty intensive. For example, for any particular
department I will go with Gill Rider, Nick Macpherson, now quite
often with David Varney on the service transformation side, and
we will challenge that department at the three month stage just
to be sure: "Have you really worked out what the lessons
in the Capability Review are? Have you got them or are you in
denial? Are you sorting out how to attack them? Have you got the
metrics in place which will tell us whether you are succeeding
or not?" I go at three months, I go at six months and I go
at a year. After all of these visits I write back to them saying,
"This is what we have found", and we get the assurance
teams to go back in. In general, I think it is pretty intensive.
We are trying to regulate it such that those who are doing well
will move to a more light touch, but those we have got problems
about we intensify the process and for those where there were
serious concerns in the Capability Review process, for example
Home Office and Department of Health, we have a more intensive
structure.
Q49 Jenny Willott: Why did Sunningdale
flag it up that they felt there was a danger that the impetus
tailed off after the initial reports?
Sir Gus O'Donnell: If you look
at their reports they have got these interesting charts that say,
"This is where it could go" and it is highlighted in
their title, "The take-off or tail-off". It is just
a warning to us that we have made excellent progress and it is
a bit like the sprinter, we are doing well at 60 metres and 100
metres, do not slow down now, accelerate through the tape, that
is what they are telling us, and they are right, we must make
sure we do not take our foot off the pedal, to use a Drayson-like
analogy.
Q50 Jenny Willott: Why did the Cabinet
Office come out worse than most of the other departments in the
Capability Reviews?
Sir Gus O'Donnell: That's a bit
harsh! It is about in the middle of the pack.
Q51 Jenny Willott: We are challenging
you!
Sir Gus O'Donnell: That is fine.
That is the league table, and we are about the middle. The interesting
part about the Cabinet Office is that it does have some interesting
challenges about being cohesive. It is a very, very wide range
of different things that have been put into it for all sorts of
reasons. When I came in I wanted to focus its attention on supporting
the Prime Minister, supporting the Cabinet and strengthening the
Civil Service, those three clear things. Back in 2004 we had 2,200/2,300
staff. I ruthlessly said the Government Car Service is something
transport can look after, we are not adding a great deal of value.
We have done things like that and we have got the Cabinet Office
down to about 1,300 core staff, a really big reduction in the
size of it. We have focused on the things that really make a difference.
That is one area. If you want to have a really cohesive department,
one of the key lessons I learnt from being in the Treasury in
open plan, and as Permanent Secretary sitting in open plan, was
the importance of everybody being able to talk to each other and
get cohesion from meeting each other. I inherited a Cabinet Office
with a very large number of buildings all around London. I am
reducing them as rapidly as I can and I want to get to two complexes.
The plan will get me there by 2010. We had 15 occupied buildings
as early as 2006 in London and we are down to nine now. We have
already saved two million in rent as a result of that. I want
to carry on doing that. The Capability Review marked us down because
they thought that whilst we had really good units, like the Civil
Contingencies Unit that deals with crises, we were not getting
the most of bringing them altogether. We now have a real opportunity
with the PSA we have got on socially excluded adults, for example,
where we can bring together the skills from all of our economic
and domestic policy areas, harness the fact that the Cabinet Office
is now where a lot of the key policy advisers for the Prime Minister
are located (with the Office of the Third Sector and the Social
Exclusion Taskforce) to really drive forward a very important
delivery area, which is a new thing for the Cabinet Office.
Q52 Jenny Willott: One of the things
that we suggested, and Sunningdale also recommended, was that
the Capability Reviews should be redone every 18 months to two
years to track progress and so on. Are you planning to do that?
If you are, what do you think a follow-up report on the Cabinet
Office is likely to flag up as areas that are improved and areas
that still need improvement?
Sir Gus O'Donnell: The answer
is yes. Always from the start we had envisaged this process: going
in there, analysing departments' strengths and weaknesses, being
very transparent, then publish them, go back after approximately
two years and do the same thing and publish the scores so you
will be able to see the changes in the departments. For the Cabinet
Office, I will be very, very disappointed if we have not improved
our scores over that two year period, and that is why we are doing
the enormous number of things that I have been talking about,
trying to work on that cohesion. Obviously we have to be flexible.
Different prime ministers will want different things in the centre
and they will want the centre organised in slightly different
ways, so we have to be flexible and adapt to that. You talked
about the number of statements the Prime Minister came out with
and we are working very hard trying to produce in areas across
security and intelligence, you name it, at the same time as dealing
with a CSR[7]
settlement of minus five real per year. So we will be getting
smaller and smaller and will be trying to do more and more with
less and less resources, which will be a particular challenge
for us. When you get to a size of only 1,300 and think about all
of the responsibilities we have, this is going to get tougher
and tougher.
Q53 Jenny Willott: When will the first
follow-up be published?
Sir Gus O'Donnell: We are going
to publish something around Christmas on the follow-ups at the
one year stage. We have published reports as we have gone along.
For example, we did one on bringing together the Capability Reviews
of the first four departments and what were the common themes.
We have got exercises and plans to work on those common themes
which are things that go across all departments. Just before Christmas
we will publish a review of how departments are doing in year
one of their Capability Reviews, those that are at that late stage.
Q54 Jenny Willott: When will you
start to do the next cycle of Capability Reviews?
Sir Gus O'Donnell: It will be
about two years after we started the whole process, which is next
summer.
Q55 Jenny Willott: A final set of
questions. In your Annual Report you talk about a project to explore
how and why cross-cutting units are brought into the department
and how to make the process more systematic, which links into
what you were just talking about. Can you tell us a little bit
about what that project is doing?
Sir Gus O'Donnell: Sure. One of
the things we identified that the Cabinet Office needed to be
good at was managing transfers and, indeed, this was quite perceptive
in that with the change of Prime Minister there were some transfers.
For example, the regulatory reform area moved across to BERR[8]
out of the Cabinet Office. We need to be quite flexible and some
of the policy areas inside Number 10 we moved into the Cabinet
Office. We need to be good at managing induction of new units
coming in and managing the transfer of units out and handling
whatever new issues might be thrown at us. For example, with the
Comprehensive Spending Review we've got two things that we need
to do: first we have got a PSA target on socially excluded adults,
and second, we were also asked, and the Prime Minister asked David
Varney to lead on this work and I have got Alexis Cleveland in
helping on this, to work on service transformation across the
whole of Government, things like how we manage contact centres,
how we improve our use of online services, websites across Government,
the whole area of direct.gov, which was another example of us
moving that out to DWP,[9]
who are really rather good at that. That is one of the great success
stories, the improvement in our online services.
Q56 Jenny Willott: Are you also evaluating
which units are in the Cabinet Office already that make sense
and which ones do not, and then will you be making recommendations
to the Prime Minister?
Sir Gus O'Donnell: As you can
imagine, with a department which is faced with minus five real,
and I think you will find this is true of all us, we are looking
very closely at prioritisation, so what are the things we need
to devote more resources to and, given that overall it is going
to be minus five real every single year, what are the things we
are going to stop doing. That is an active process. I am not clear
there are any specific things we are doing in the Cabinet Office
that we will be able to stop completely, but we may need to reallocate
resources across the different areas.
Q57 Jenny Willott: Do you find that
ministers are now receptive to suggestions about moving units
across Government?
Sir Gus O'Donnell: It is always
an interesting conversation about areas you are going to do less
of. We have an extremely engaged set of ministers in the Cabinet
Office and that process is working very well. We met with them
recently when they came down and told us about their strategic
priorities and we fed back to them about the issues we had on
budgets and the like and what the implications of those were.
That is a process where I think it is really important you get
ministers and the senior board of the department together to work
through those issues.
Q58 Chairman: Can I ask you a question
on the back of what Jenny has asked. I remember Michael Heseltine
years ago describing the Cabinet Office as a "bran tub".
When you look at it, it gets units moved in, it gets units moved
out, and it is not surprising when we have a Capability Review
it talks about a lack of central focus because historically there
has not been a central focus. What I would like to ask you, because
you have been all round the system, you have been in the Treasury,
in Number 10 and now the Cabinet Office, is whether you think
we have now got the centre of Government right or whether you
think there is a case for something still more radical?
Sir Gus O'Donnell: I would use
the unifying theme of what I said for the Cabinet Office, that
I think a good test would be is it about supporting the Prime
Minster or supporting the Cabinet or strengthening the whole of
the Civil Service? If it fits those three then it is prima
facie a good thing to put in the Cabinet Office. We will always
have particular issues that prime ministers of the day feel are
so important they want them to be run from the centre and in those
cases we have to be ready to accept for a while that we will have
areas like that. For example, the Office of the Third Sector is
a classic example of that where the Prime Minister decides that
is a really high priority and wants it driven from the centre
because he wants to get Third Sector involvement across a whole
range of public services. The centre will always have to have
that element but it is really important that the core part is
large relative to those other parts.
Q59 Chairman: Is there a case for
a Prime Minister's Department in the way that Michael Barber has
been advocating?
Sir Gus O'Donnell: There is certainly
a case. At the moment there is some confusion. Number 10 is a
part of the Cabinet Office, as I say. It is important that those
two parts work very closely together. We have made a significant
step forward in improving the cohesiveness of Number 10 and the
Cabinet Office by having the key policy people: Simon McDonald,
Jeremy Hayward, Jon Cunliffe, and Robert Hannigan. All are located
in the Cabinet Office and that is quite a strength that brings
them together, the Prime Minister interacts with them very closely,
and now the links between the Cabinet Office and Number 10 are
really very strong.
6 Office of National Statistics Back
7
Comprehensive Spending Review Back
8
Department for Business, Enterprise and Regulatory Reform Back
9
Department for Work and Pensions Back
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