House of Commons - Outsiders and Insiders: External Appointments to the Senior Civil Service

Outsiders and Insiders: External Appointments to the Senior Civil Service - Public Administration Committee Contents

4 Managing levels of external recruitment

57. So far, we have not considered directly what an appropriate level of external recruitment at senior civil service level might be. Part of that judgement involves assessing the effects of past outside appointments, as the previous chapter has attempted to do. Determining an appropriate level of external recruitment also needs to take into account broader issues about the composition of the SCS and of the wider civil service, the people and skills needed to carry out the work of government, and how effectively the civil service is planning for its future workforce needs. We examine these issues in this part of the report.

A cap on external recruitment to the SCS?

58. Up until now, our analysis has taken as given that external recruitment to the senior civil service will continue. The evidence we received accepted the need for some level of recruitment from outside the civil service, at minimum to fill skills gaps (leaving aside other possible benefits such as bringing new perspectives and insights to the way government works).

59. Nonetheless, there is a growing sense within government and beyond that the number of external appointments has been too high in recent years. In particular, outside appointments to the Top 200 civil servants have outnumbered internal promotions for several years now (as Table 2 indicated). A wide variety of witnesses, from trade unions to management consultants, told us in the course of our inquiry that there had been too much external recruitment.[62] Sir David Normington's review of the SCS workforce summed up the feeling within the civil service itself:

There will always be a need for the senior leadership to be drawn from a mix of internal and external appointees. There will never be a time when all the skills and capabilities needed in the Senior Civil Service can be drawn from inside…But we do not believe that it can or should be a long term strategy to rely so heavily on external recruitment at senior levels. Individuals in the lower grades can become demotivated by a perceived lack of opportunity. Extensive external recruitment competitions can take significant periods of time to complete, leaving critical business roles vacant or inadequately covered. To some extent the Civil Service is suffering now from previous lack of investment in professional skills at lower levels, and a lack of pace in defining and developing leadership capabilities.[63]

60. While most agree that the current level of external recruitment is too high, it is more difficult to identify what would be an ideal level of external recruitment. We heard instead that it would be undesirable to set a cap or upper limit on outside appointments, as this would in all likelihood be arbitrary and inflexible. Sir David Normington, David Bell and Gill Rider all believed setting an upper limit was the wrong approach, since the optimal level of external recruitment would depend on the circumstances.[64] This is consistent with the previous conclusion of our inquiry into Skills for Government: "The Civil Service does not have a target for the number of external appointments to senior posts. We believe it would not be appropriate for it to do so".[65] Similarly, Janet Paraskeva told us that:

...it is not a question of whether you have this percentage or that percentage of home-grown or external recruits, it is a question of getting the best people for the job with the skills that you actually need and for their appointment to be on merit. I think that to set a target that we must not have more than, say, 30% of people drawn from the private sector might be setting ourselves a bit of a straitjacket.[66]

61. There appears to be a consensus that setting an external recruitment ceiling would be the wrong approach. Yet there does seem to be a need for some part of government to keep an eye on external SCS recruitment, in order to raise any concerns about the extent of such recruitment and its effects. In turn, this should help the Government develop appropriate recruitment policy responses if needed. As the Civil Service Commissioners have de facto undertaken this role over the last few years, we propose formalising this by including a senior recruitment monitoring function for them in their Recruitment Principles.

62. It would be inappropriate to set a hard and fast cap on external recruitment, since government needs the flexibility to draw on outside talent when necessary. Nevertheless, there is a clear sense that in the recent past there has been too much external recruitment, particularly at the highest levels of the senior civil service. What is needed is not an arbitrary limit, but a more coherent system for monitoring the extent of external recruitment to the SCS across employing departments and its effects. We recommend giving the Civil Service Commissioners a formal role in this area by making specific provision in the Commissioners' Recruitment Principles for them to take on a monitoring function of this kind.

External recruitment below SCS level

63. Some of the pitfalls of recruiting externally might be avoided by concentrating external recruitment at levels of the civil service below the SCS and at the lower levels of the SCS (e.g. Deputy Director positions). The argument for doing so is that it would retain the benefits of bringing in people from outside, but would also allow those individuals to adjust to the civil service and develop the skills needed to operate effectively if they are promoted to a more senior level. (Such skills might, for example, include becoming attuned to the political context, as David Bell pointed out.) Janet Paraskeva and Sir David Normington agreed on the advantages of this approach:

...we need to look not just at the most senior jobs in terms of open competition, but it may be that we need to be bringing people in mid-career, so that they and the Civil Service itself can get a better feel for whether these are the people who want to stay longer in the Civil Service and develop the next part of their career there.[67] [Janet Paraskeva]

We should recruit people at middle levels so that they have a career in the Civil Service, one where they also bring expertise from outside but then have time to develop. This is one way of dealing with this issue of building values as well so that before they get into the very senior levels they have had a chance at middle management levels to develop not just their skills but their understanding of the culture and values of the Civil Service and of the public service.[68] [Sir David Normington]

64. We heard similar arguments in favour of external recruitment to levels below the SCS during our inquiry into Skills for Government, from former Permanent Secretary Sir Robin Mountfield and others. That report concluded that:

We believe there are difficulties with the current practice of recruiting directly to very senior posts. The current pay differentials may serve to demotivate 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.[69]

65. Sir David Normington agreed with this conclusion. His own report on SCS workforce issues recommended that:

…the Civil Service should be more open to recruitment at other levels, particularly where the aim is to recruit professional skills. In particular there should be more opportunities for external recruitment at Grades 7, 6, and Deputy Director, so that these recruits can be developed into more senior posts.[70]

66. One of the difficulties in formulating a coherent policy on external recruitment below SCS level, however, is that information about non-SCS external recruitment trends is not collected centrally. We requested data from the Cabinet Office on the numbers of outside appointments in grades 6 and 7, but were told that "source information on feeder grades to the SCS is not centrally available".[71] This lack of information about civil service recruitment hinders the development of a coordinated, long-term strategy on external appointments.

67. We maintain that external recruitment is likely to be more effective if it is directed mainly at positions below the most senior levels of the SCS. This approach seems to us to increase the likelihood that external recruits will develop the necessary skills to perform effectively at more senior levels if they are promoted. We are, however, concerned that the Government does not appear to be monitoring levels of external recruitment to grades below the SCS. We urge the Government to consider how it could implement an approach to lower-level external recruitment which combines the ability to bring in fresh talent from outside while also developing that talent to undertake senior responsibilities.

"Growing" civil service talent

68. Our conclusion about external recruitment below SCS level raises a wider point: that the civil service needs to improve its ability to develop its own talent, rather than simply relying on importing it from outside. This is not a new observation, but is a point that is still made about the contemporary civil service, as our witnesses showed:

...we need to do better at growing our own. If you do not grow your own you get into a situation we are in now which is that we have to go into the marketplace to compete for the kind of skills which a Civil Service of 500,000 people ought to be able to do better in training for itself...We need to do better at developing some of the professional and leadership skills which a big employer ought to be able to develop. I do not think that invalidates the need sometimes to recruit from outside.[72] [Sir David Normington]

I think you will find that…the consensus now in the Civil Service [is] that we have gone too far in terms of direct entry into senior posts and we need to develop internal talent more effectively and internal skills more effectively.[73] [Jonathan Baume]

69. The graduate Fast Stream programme is often cited as an example of how the civil service develops its own talent. According to the Cabinet Office, a quarter of all senior civil servants come from a Fast Stream background, a statistic which rises with the seniority of the post: 33 per cent of Directors General and 31 per cent of Directors originally started off on the Fast Stream scheme, compared to 23 per cent of Deputy Directors.[74] The Cabinet Office also reports that former Fast Stream civil servants at grade 6/7 level appear more likely to progress to the SCS than their equivalents at the same grade who have not been in the Fast Stream.[75] This suggests a pay-off for the individuals concerned, and for the civil service as a whole, from initial investment in the Fast Stream scheme.

70. Our Skills for Government report examined other measures that have been introduced in recent years to identify and meet civil servants' skills needs, such as the Professional Skills for Government programme and departmental capability reviews. That report concluded that such measures were valuable, but would need time to produce results.[76] Initiatives such as the departmental capability reviews and increased professionalisation of the civil service HR function indicate that government is taking the point about developing internal talent seriously. Measures to grow talent internally need to be maintained and supported, and in particular protected from fiscal pressures, if the civil service is to develop the capability it needs to meet current and future skills needs. As well as the benefits of developing the civil service's own skills base, this type of approach is likely to reap long-term savings by reducing the need for more costly external recruitment.

Planning for future civil service skills needs

71. External recruitment and the civil service's ability to "grow its own talent" are part of a broader concern about how effective the civil service is at identifying and preparing to meet its skills needs, both now and in the future. Sir David Normington's review of the SCS workforce put external recruitment in this wider context. The review was prompted by a Senior Salaries Review Body recommendation in 2007 calling for a long-term workforce strategy for the SCS.[77] The Normington review was consequently established with the remit of considering senior civil service workforce and reward issues. It concluded that the weaknesses of SCS employment practice had been:

…a lack of forward planning for the recruitment, development and retention of the SCS despite a pressing need to ensure that the Civil Service has the leadership talent to deliver its future challenges; a SCS pay system that has been developed in a piecemeal way with insufficient clarity about the link between performance and reward and little rigour about the market premium that should be paid when recruiting externally; and, a weak job evaluation system.[78]

72. The Normington review's recommended approach was for the Cabinet Office to draw up a plan for the SCS and the wider civil service to cover recruitment and retention issues, including that of pay:

Work should urgently be put in hand to look at how we can grow more of our own talent in both the short and long term…We need a workforce and reward strategy that ensures the Civil Service recruits, develops, and retains the best, now and in the future.[79]

73. The possible elements of such a civil service plan would include:

a. An objective to supply a greater proportion of senior professionals from within the service;

b. An aim to drive up leadership capabilities so that internal candidates are better able to compete for the most senior jobs; and

c. A reduction in dependency and spend on contingent workers.[80]

74. Janet Paraskeva agreed that there was a need for a proper workforce strategy—one that would enable government to determine its recruitment needs and the best way of meeting them in the long term:

I think that it is for the Cabinet Office through line management to assess whether what we are trying to do in opening up recruitment at the top to people with skills from the private or wider public sector has benefited the Civil Service and, once we know that, to address that alongside the talent management and succession planning policies that have been developed there.[81]

75. Sir David Normington said that a workforce strategy should be "delivered" by September 2009. According to Sir David and to the Civil Service Commissioners, the Cabinet Office is currently working on developing a civil service workforce strategy, as well as a project aimed at reducing the Government's reliance on consultants and other temporary labour.[82] We endorse Sir David Normington's call for the Cabinet Office to publish a civil service workforce plan setting out how government intends to identify and plan for its future workforce needs. A workforce plan is now overdue; indeed, it is extraordinary that such a plan did not already exist. We further note that the public expenditure context for the workforce plan has altered with the onset of tighter economic times. We therefore recommend that the plan include details about the likely impact of recent announcements on reducing the size of the senior civil service and possibly the wider civil service.

62 Oral evidence taken before the Public Administration Select Committee on 12 March 2009, Civil and Public Service Issues, HC 352-i, Session 2008-09, Q 8; Ev 36 Back

63 Normington report, pp 10-11 Back

64 Qq 104-105 Back

65 Public Administration Select Committee, Skills for Government, para 83 Back

66 Q 51 Back

67 Q 54 Back

68 Q 126 Back

69 Public Administration Select Committee, Skills for Government, para 89 Back

70 Normington report, p 11 Back

71 Ev 48-49 Back

72 Q 60 Back

73 Oral evidence taken before the Public Administration Select Committee on 12 March 2009, Civil and Public Service Issues, HC 352-i, Session 2008-09, Q 8 Back