The State of Government - Public Administration Committee Contents

Examination of Witnesses (Questions 1-61)

LORD SAINSBURY OF TURVILLE, SIR RICHARD MOTTRAM GCB AND MR JONATHAN BAUME

11 MARCH 2010

  Q1  Chair: First of all, could I apologise to our witnesses for keeping you waiting. I am afraid we had some business to do beforehand and, I am sorry, it ran on a little bit. Let me extend a warm welcome to you. We are delighted to have Lord Sainsbury with us, Sir Richard Mottram and Jonathan Baume. I see our session is called "The State of Government". I do not think it means the state of the Government; I think it means some rather more high-minded issues to do with how we govern in this country, and you have all made important contributions to that, which is why we wanted to ask you to come along. We have recently had these major reports done by, Lord Sainsbury, your Institute for Government and by The Better Government Initiative, so there are lots of ideas and arguments circulating at the moment. I want to pick up on some of those for a finale session at the end of this period. That is what we are doing. Would any of you like to say something by way of introduction? Lord Sainsbury.

  Lord Sainsbury of Turville: Could I very briefly say something? I think it would be best if I speak on a personal basis rather than as a spokesman for the Institute for Government. The Institute is developing its own views and I think if you want to hear them it is probably best to ask them directly. Also, no longer having to speak on behalf of the Government, I refuse to be tied down speaking for another body, as opposed to giving my own views. Can I also put it on the record that the Institute for Government is a strictly non-political body. We have representatives from the Liberal Democrats and the Conservative Party on the governing body and, of course, the Director is Michael Bichard, who is, I think, respected by all political parties. Given where we are, in fact, in the political cycle, quite a bit of our work recently has been with opposition spokesmen from both the opposition parties in order to prepare them in case they do actually become the Government. Having said that, can I say how much I appreciate the opportunity to come before this Committee because, as you will understand from the fact that I have been involved setting up the Institute for Government, I am extremely interested and concerned about the very important issues which, I think, this Committee covers.

  Q2  Chair: Thank you very much. Richard? No? You have said it all to us before, have you?

  Sir Richard Mottram: No, I am very happy to follow your questions.

  Mr Baume: Can I say (and I do not know whether this breaches any protocol) on behalf of the FDA, thank you, Chair, for all your work over recent years on this Committee. Obviously, you are standing down at the election and I would pay tribute to the contribution you have made, obviously with other colleagues, to better government in the round. I think you will be a hard act to follow.

  Q3  Chair: That is very kind of you. I still live in hope that we are going to get our Civil Service Act that we have campaigned on these many years before we are done. I think Lord Sainsbury would be the place to start. In a way, you are the person who came into government from the outside and looked at it freshly and realised that it had some difficulties with it, and I have been reading various things that you said. When you opened the Institute for Government a couple of years ago and you talked about coming into government at that time, you said, "Over the years I gradually came to feel that all of us, politicians and civil servants alike, were being asked to run a machine that had been designed for a simpler, slower world, and this led to a poor performance and a great deal of frustration". I think it would be nice for you to tell us about that sense of frustration that you felt coming into government.

  Lord Sainsbury of Turville: Yes. Let me say, I came into government very much thinking that the biggest mistake you could make was to think that you could take a lot of ideas from one's business career and apply them to government. It seemed to me people had tried to do that before and that had been a mistake, because there are very obvious differences between running a large commercial organisation and being involved in government. For example, in business you have very clear measures of performance and it is then very easy to cascade these down an organisation for people to meet those targets. I spent all my working life in a company where you came into the office every morning and there was a sheet of paper on your desk which told you what business you had done the day before, how that compared with the previous year, and so on, so you knew absolutely how well you were doing. Of course, government is not like that; the measures of output are rather more difficult. I think, initially, when you come into government you are taken over by the machine, you immediately have a lot of things to do, and it is only gradually that you begin to realise that the thing is operating in a completely different way from what you are used to. I suppose the thing that I found most curious as one went on was how unclear responsibilities—who was responsible for what—were in government. It was very unclear as between ministers and civil servants who was responsible for what; there was confusion in my mind. I think the second issue was the role between the centre of government and departments was extraordinary, in my view, so that you gradually began to understand why government could make decisions at the centre and then they simply were not implemented: because there was no mechanism for doing this. I thought that the relationship between government departments and NDPBs was, again, incredibly confused. It was not clear what the minister was responsible for, what the NDPB was responsible for, who set budgets and who set policy. There seemed to me some very basic things of running big organisations which just were not well understood. I guess the final issue, which I was very surprised about, was that I have always been brought up to think that the machine was enormously good at policy-making, rather bad at delivery. It seemed to me that the processes of developing policy were really chaotic and it was not surprising that the sort of basic principles of good policy-making were not followed.

  Q4  Chair: I think what is interesting about this is that you are not just a normal businessman who comes from the private sector and gets irritated by the fact that government is tiresome compared with the private sector. It was a far more subtle analysis than that as an organisation, and you were pretty damning, and what you are describing now is a pretty comprehensive indictment of the way we do it. You have described it as "dysfunctional", "the way it is organised and managed is out of date". Jonathan, I see in something that you gave to The Guardian not long ago, you talked about government being—and I am not sure whether you meant government or the Government—"utterly dysfunctional". You can come to that in a minute, but, Sir Richard, you have got these people telling you that the system you have been working in all your life is dysfunctional, is that a description you recognise?

  Sir Richard Mottram: I think, Chair, the answer to that is not the departments I was running, by which I mean that when one listens to the description of Lord Sainsbury, I have seen all of that and actually, I have been involved on occasions in odd little events which were slightly awkward, as we have discussed in this Committee, but I think some aspects of government are a big problem and need a lot of attention. I have not myself run departments where they could not, for instance, make good policy. I have run departments where the delivery was patchy, and I have been involved in a system of government where I think there was insufficient focus, and there still is insufficient focus, on how you make strategy, on real choices between alternatives in developing strategy, on the proper focus on financial management at the heart of what you do—very much Lord Sainsbury's point about how he could see the results from the previous day the next day, and so on—how many government departments focus on money in that sort of way? All those problems are issues that I have seen, but I would not say government was dysfunctional. What I would say, if I could make an introductory point about The Better Government Initiative, is what I think The Better Government Initiative has been about is trying very much to tackle some of these issues—some of the ones, indeed, that Lord Sainsbury described are discussed in our latest report—so to take the key components of government, Parliament, the relationship between ministers and civil servants, the way the executive works, a proper accountability challenge—all those things—and think about how they could be systematically altered, particularly by focusing on process (which is often thought about as a rather dull subject), a strong overall consistent focus on process, to produce a better result. What we have been trying to do in the context of The Better Government Initiative in a sense is to provide a set of prescriptions, and we hope the next government, of whichever persuasion it is, will take them and apply them. They are not revolutionary; they are not amazing; they are not new. Many of them have been discussed, for instance, in this Committee before. If they were consistently applied, we would have better government and we would deal with some of the problems that Lord Sainsbury has raised.

  Q5  Chair: We will come back to that. Jonathan.

  Mr Baume: Firstly, the quote that you gave a few moments ago from The Guardian, I think was a slightly more lurid take on what was a much longer piece, but, again, I should know better than talking to journalists in depth on these issues. I was, to be frank, talking about the political process. This was at the turn of the year when I did feel that the Cabinet was on the verge of falling apart, but I do not want to get sucked too much into the politics today. I am very conscious of where we are in the cycle. I agree with what Richard has said. What is very interesting about The Better Government Initiative and the work from the Institute for Government is people are now standing back and taking stock. I think one of the problems, if you go back over the lifetime of this Government to 1997, was the Labour Party came into office not having really thought seriously about how government works, certainly not seriously enough about how government works, and with something of a year-zero mentality where all that had happened in the past was somehow not quite right, old-fashioned, not quite cool Britannia, et cetera, et cetera, and it took quite a long time for the Government in the round, politicians and civil servants, to recover from that. There were lots of mistakes, which were highlighted in Lord Butler's report, about the process at the centre, and you can go down into individual departments. I think if we are now saying: "How do we move forward? How can we deal with some of the flaws and problems that The Better Government Initiative highlighted?", that Lord Sainsbury has just mentioned, it is, whoever forms the next government, having the humility to learn the lessons and recognise that there is a machine, if you want, and a process there which is as it is because of the lessons of history. Without sounding too grandiose, it is being willing to stand back and learn through what has happened through the lifetime of this Government and how can you apply those lessons to make government work better in the future. I have argued in the past before this Committee that the interface between the political process and the Civil Service process often can be a point of severe weakness. I think that there has been, as The Better Government report sets out (and one does not have to agree every single recommendation to recognise it), a very coherent picture of how we could work better—all of the issues around the emphasis on presentation and focus on the media, the overwhelming volume of legislation, not always at all well thought through—and the consequence, if you bring all that together, has been government that has not worked as effectively as it could have done. I think the step now is how do we learn the lessons, how do we take advantage of all of the excellent work that has been done in different places, including in the House of Lords with their report on the Cabinet Office and centre of government, and how can we build from that, but the lessons are there to be learned.

  Q6  Chair: I want to ask one question and then hand over to colleagues, and this is about the substance of these things rather than talking more generally. I am not sure, you see, that you are saying the same thing in these reports that are now being produced. I do not want to get people confused by these things, but The Better Government Initiative, Richard, which is your lot, if I can call it that, someone reading that might think the problem is the politicians: politicians have got in the way and they have started all these sloppy processes that have stopped the process happening in the way that it used to when we ran the show. One might think that. Whereas if you look at the Institute for Government report, they are, I think, far more concerned about the infirmities of Whitehall, which are not much talked about in your report. Indeed, I am struck by the fact that the Institute for Government focuses on what it calls the "strategic gap at the heart of British Government", and Lord Sainsbury was talking about this a moment ago, the idea that there is not a very strong corporate centre; whereas the emphasis, Richard, of your people is talking about reducing the involvement at the centre of government in departments' operations to the necessary minimum. We have got one lot saying the problem with British government is that the centre is too weak and we have got to beef it up and give it this big strategic capacity to run the system, and we have got the other lot saying the problem with British government is the centre is too overbearing and screws up departments. Which of these is true?

  Lord Sainsbury of Turville: Can I also clarify the statement I made at the beginning, because I think it is very relevant to this point? You will observe it is called the Institute for Government, it is not called the Institute for the Civil Service, and that is because, it seems to me, these problems are not a question of the Civil Service doing things wrong, it is not a question of the politicians doing things wrong, it is that we do have a system which both politicians and civil servants operate which is in this sense dysfunctional, and it goes back into history. We have a constitutional system. It is a thing you do not understand at the beginning, I think, when you become a minister. If you come from business you think the Head of the Civil Service runs the Civil Service. It seems a rather obvious kind of assumption to make. Then you gradually realise that he does not, that actually the constitutional position is civil servants have their power as servants of the minister and then he reports to Parliament, and the role of the cabinet secretary is rather like that of a senior partner in a law firm. He deals with those sorts of things that someone has to deal with, but he has no kind of line responsibility over the different departments. The answer to the question, "Why is not government joined up?", is because there is no-one whose job it is to join it up. Equally, if you take the issue of the role of ministers and civil servants, theoretically, constitutionally, we still have a position where the minister is responsible for everything. There might have been a period when that was tenable as an idea, but today none of us think that is realistic; that a minister who has been there three months can be held responsible for the fact that the department, once again, loses all its computer files. It is a nonsense, we do not really believe that either, and the end result is that neither the minister nor the permanent secretary is clearly responsible for particular things. That is not the fault of either of these, this is deeply embedded in the system, and we need to think rather carefully about whether that system is appropriate for today's world. I think to either say it is these frivolous politicians who come in and do not abide by this wonderful system which we had in the golden age or, equally, to say the civil servants are in some way running an incompetent system is to miss the point that this is rather deeply embedded in our particular system of government, and we can either begin to think about how we change that or we can go on tinkering with bits of the system but it would be quite dysfunctional for the modern age.

  Q7  Chair: Thank you for that. Richard.

  Sir Richard Mottram: My answer, Chairman, would be that there is no contradiction between these two things, for reasons that I will explain. Perhaps I can just make a preliminary point. I think one of the problems we have had with the way in which The Better Government Initiative has been reported in newspapers, and so on, although it has got a lot more publicity than I certainly had expected and has been received very positively, is that because it was basically signed by a lot of ex-mandarins and one or two others, like Sir Christopher Foster, it has been presented as a Civil Service report, but actually it was generated by a long process of consultation with ministers, former ministers, senior politicians in all three parties. They did not sign it because, as I have explained on previous occasions, it is quite difficult to get everyone in a room and get them to agree, and it would have taken us ages, but The Better Government Initiative is not about the Civil Service or the ex-Civil Service describing a world in which it would all be absolutely marvellous if these nuisance people called politicians did not exist, because the fundamental value of the Civil Service, the thing that kept me in the Civil Service for more years than I care to admit to, was precisely that it offered you the chance to serve sophisticated, effective, if you could do this, democratic government based upon ministerial accountability. There are all the issues about ministerial accountability that Lord Sainsbury described, but that is why many civil servants do the job. It is because they serve a democratic society through what they do. Politicians are not the problem, and the report does not say that politicians are the problem. Secondly, what the report says is the centre should be reduced to the necessary minimum. The necessary minimum for the centre of government is to be effective in thinking about those things which only the centre of government can effectively think about, and those things include strategy. I absolutely think there is no contradiction between saying we should strip out a lot of the things that the centre and the Cabinet Office, for instance, currently does and either stop doing them or give them to other bits of government, and then we should concentrate, in the case of certainly the Cabinet Office, on is there an effective strategy for government and are there means of joining up the various policies of government, and are there mechanisms through which, if the Government actually decides things, they get implemented, they get evaluated, they get reviewed and we adapt to a changing world?" That is what the centre of government should do. That is not currently what it focuses on. It focuses on a very wide range of things, for all sorts of reasons. It should stop doing them, it should concentrate on the things which only the people at the top of an organisation can do.

  Q8  Chair: Your report does not say, and I have read it again this morning, there is a lack of power at the centre of British government. You do not say there is lack of strategic clout inside British government which needs to be sorted out as the central problem, which is really what Lord Sainsbury is telling us. Your concern is with the centre fiddling with departments.

  Sir Richard Mottram: I think, when we say "my report", we should recognise that I was just one of the people who worked on this. It is, however, many pages—it is 30 something pages—and it cannot deal with everything.

  Q9  Chair: I have just read the section called "The Centre of Government".

  Sir Richard Mottram: Which is pretty short, actually.

  Q10  Chair: It does not say what Lord Sainsbury has told us the problem is.

  Sir Richard Mottram: No, but I am here as a member of The Better Government Initiative. If I can speak for myself, which I quite like doing, I was also involved in the development of the Shaping Up report by the Institute for Government. They kindly consulted me about it. I think it has got lots of things in it which are really worthy of careful thought. I do not agree with them all—why should I: it is not my report—but I think if you got a group of people in The Better Government Initiative round this table and said to them do they think that government does strategy well or it could learn lessons from the Shaping Up report, they would say it can learn lessons from the Shaping Up report.

  Q11  Chair: Jonathan, do you want to come in?

  Mr Baume: I agree with that, although I will say I think the centre is now working better than it was maybe five or six years ago. I think there was a period when actually the centre was extremely dysfunctional and, frankly, some of that was part of the political process. It has been documented to death, in a sense, the tensions between the Treasury and the Prime Minister's office during that period for the first part of this past decade, and that caused great difficulties for civil servants trying to bring issues together. I still remember, as you might, the famous organogram that Sir Richard Wilson prepared when he was Cabinet Secretary for you which had all of these different boxes and units, none of which had any lines joining them. That may have been Richard's idea of a joke, but there was very substantial truth behind this.

  Sir Richard Mottram: If you look at the present organisation chart, it is no better. These are serious issues.

  Mr Baume: These are very serious issues. It is partly about having a healthy political relationship at the heart and being clear about what the appropriate role of the Treasury should be in terms of its relationships with departments, and that has, I think, been refocused over the past couple of years and will continue to be the case, and also being clear what is actually appropriate for the role of the Prime Minister and the role of the Cabinet Office in having that strategic overview. You can argue that some of this will happen, I think, almost by default, in the sense that if the next government is either some form of hung Parliament or actually it is very small majority, in other words there is a political pressure on the Cabinet to draw together—because you can get very different political links to that of a Prime Minister with a majority of 150, which creates very, very different dynamics and tensions at a political level—then there is an incentive there to make that work, but the idea that you need to draw together at the centre basically the effective oversight of the work of departments. Kept to the minimum, the words are "what is appropriate" but, at the same time, having the facility at the centre to deal with and facilitate that cross-cutting, the issues where you really do have to bring people together because there is no way that any single department is going to be able to take forward an initiative. Again, that is a judgment, but that is what the centre should be playing a critical role in. It is not about monitoring every decision that every department is taking that you might go anywhere near the media, if I can be a bit crude about it.

  Q12  Julie Morgan: Following up on that point to begin with, I am interested in what you say that you think a hung Parliament will make the centre operate differently. I wonder if you could expand on that a bit, and perhaps the others could give their views about how the centre of government would operate if we had a hung Parliament.

  Mr Baume: I do not want to get too much into the hung Parliament. Other committees have taken evidence from a number of cabinet secretaries and others about that and the Institute for Government has done some very good work in their report, but the political dynamics of the role of the centre change because the role of the Prime Minister changes, I would argue, in a situation where, in effect, you have a minority government or a government with a very small majority because you need a collectivity that is not as necessary, or did not appear to be as necessary, when a party has large majorities. If you look at the experience of the Scottish Government, where you have had a period for the last couple of years or so since 2007 with the SNP forming a government with no working majority in the Parliament and, therefore, each decision is one that is a process of political negotiation, there has also been a process where you can argue that the Scottish Government as a machine is working more effectively and is more focused now because there is a more limited agenda focused around what are perceived as priorities for the decisions of the Government. I think that has actually been quite positive and, whatever happens after the next elections in Scotland, I think the Civil Service machine in working for the Scottish Government has been enhanced and improved by working in that environment, but there has been a much more strategic view taken, and that is partly maybe a reflection of the SNP's politics. You do not have to agree with the politics to accept that the work of the Government as a machine has been better than it was in the past.

  Q13  Chair: Have you any views on that?

  Sir Richard Mottram: I suppose what we are saying, which I think I am slightly uncomfortable about actually, is if there is a hung parliament and there might be a coalition government or a minority government, they will have to be rather more careful about their agenda and their relationships with Parliament. This is slightly worrying because I think Jonathan paints an accurate picture of how, on occasion, the present Government has behaved where there was, certainly in my own personal experience, sometimes a lack of consideration either about the importance of the roles of some secretaries of states in departments who were not regarded, necessarily, as a very important part of the constitution compared with the people at the heart of the Government, and there was not great respect for Parliament. I would not myself deduce from that that, therefore, it is desirable that we have a hung Parliament or a coalition government, because I think that would bring with it all sorts of potential other difficulties given the problems the country faces. As this Committee itself has commented on a number of times, what is interesting about the way in which government works is that there are codes of behaviour in terms of propriety that have been honed over the years—the Ministerial Code, the Civil Service Code, the Special Advisers Code—there is not a code of government. What I am very keen on is that there should be a code of good government, in a sense a set of processes that are accepted as the way to run a government, and that is some of what we have done and some of what you did in your Committee on "good government", and so on, and the next government, regardless of whether it is a minority or not, applies those principles. I would prefer a majority government, frankly, applying those principles.

  Q14  Chair: I do not think anybody is looking for a hung Parliament, but it is the dynamics and what it produces in the context of this discussion.

  Sir Richard Mottram: I think the dynamics are interesting.

  Q15  Chair: Did you have anything to say on that, Lord Sainsbury?

  Lord Sainsbury of Turville: I am not saying I have anything in particular to offer on this, I think there are particular issues of hung parliaments. Just to keep on this issue of the centre of government's relationship with departments, it seems to me people keep debating this in a very kind of abstract way, whereas you just want to think of it a bit in terms of actually what happens, what the processes are in getting things done. Let me give you a couple of examples of this. I was very interested in government in the question of procurement and its relationship with encouraging innovation. While I was a minister we had at least three reports which set out ideas about how this process of procurement should be done, all of which were accepted by the Government. Then I followed up, a year later, or a couple of years later, and said, "What has changed?" The answer was absolutely nothing. The Government had accepted it, but nothing that happened. Quite beyond my authority as a junior minister, I got hold of the cabinet secretary and some other senior civil servants, people at Downing Street, and got them together and said, "Look, nothing has happened", and we all agreed then that something should happen. The proposition was then put forward that what we should then do is go and have discussions and negotiations with each department about implementing this, which I think then did take place but, again, very little happened. I found this quite extraordinary because I came from a world where if the organisation decided to do something the head, the CEO, got hold of the relevant people and said, "We are going to do this and please produce a plan of how we are going to do it, and you will then do it and I will monitor your performance, and if at the end of the year you have not performed in line with what we have decided to do, that will be one of the things which will be taken account of in your performance review and your salary". If you are not interested in efficiency in government and delivery and carrying things out, ignore all that I say, but if you are interested in it, you have to come to a system whereby, if decisions are taken, there is some process by which that is implemented, and that requires you to give authority to someone at the centre of government to implement that and bring people in line. If you say it is all a matter of "club government"—we will just get together, discuss it and you can then do what you like—then you will not get things properly implemented, it is as simple as that. This is not a kind of abstract thing about bigger or less centre; it is what authority does it have to implement things across government?

  Q16  Chair: There is no system to do that, you are saying? There is no system to deliver.

  Lord Sainsbury of Turville: No, no, because, as always, good people make the system work better than it is, so the cabinet secretary does have the means of talking to people, and so on, but he has no authority to do that because that is what our constitutional position is.

  Q17  Chair: What about previous efforts to do this, such as the Prime Minister's Delivery Unit and other efforts like that? There have been attempts to do this. Why have they not succeeded, do you think?

  Lord Sainsbury of Turville: That was because, I think, Prime Ministers at some point gradually realise that they have a series of rubber levers. They say, "We have decided to do this", and assume that it happens. After a certain period, they begin to realise that it does not, at which point they personally start intervening in the process through the Strategy Delivery Unit and, of course, if the Prime Minister puts his authority behind a particular thing like that, then, of course, it will happen, but the Prime Minister cannot get involved in doing that cross-government, he has to have a machine that will do that, essentially, for him. Otherwise you get the Prime Minister having to get involved in the implementation of a policy on waiting times in hospitals. Actually, that turns out usually to be a rather dysfunctional thing because then all the effort goes into one thing because the Prime Minister is interested in it, which will not necessarily produce good government across the whole system. That would be my view.

  Sir Richard Mottram: Could I add a point? I think there are ways of doing this and actually it does on occasion happen. For instance, when I was a permanent secretary, I absolutely accepted that the Cabinet Secretary, the Head of the Home Civil Service, had authority over me. What I could not accept was that he could order me to do something which my secretary of state did not agree was the thing that had been decided by the Government. I imagine that is a rather unusual and improbable thing, but if you thought about it in terms of how difficult would it be to organise a system of this kind—I think that if we asked Lord Sainsbury to do it he could probably do it in a morning—you would have to have aligned accountability between, on the one hand, the secretary of state and the Prime Minister and, on the other hand, the permanent secretary and the head of the Civil Service and the cabinet secretary, if you keep those two posts together, and you could do this. For example, as I have previously argued (and perhaps the next government should think about this), when the Government comes in, the Prime Minister agrees with the secretary of state a series of key objectives for the next year, which is precisely what would have happened in a business, and those objectives are signed up to both by the secretary of state and by the permanent secretary. The remuneration of the permanent secretary can be influenced by whether those things are or are not delivered, and you can have, as we could come on to discuss, frameworks inside departments to make sure that things are delivered. All of this is possible to do. It is not rocket science, it just requires a much more careful focus on process and an acceptance that a group of people are going to be in charge of making these processes work, and they will be identified people. I think, personally, they should be civil servants who are trained up and required to run the system, but actually it suits some politicians, including some Prime Ministers, and it suits some officials, to run a system which is, frankly, a variation on anarchy, and when you have a variation on anarchy, funnily enough, things do not get decided and implemented in a structured, process driven way; but it is not beyond us to do it and we could do it, I think—I am slightly disagreeing with Lord Sainsbury—within our framework of the constitution. We could still do it if ministers took collective decisions which were clear, if there were a limited number of priorities, if Prime Ministers had a relationship with their secretary of state and the system tucked in behind that relationship to make it happen, and then you held both the secretary of state and the permanent secretary to account for whether they did or did not deliver.

  Lord Sainsbury of Turville: I should just say, the expression "variation of anarchy" was Sir Richard's expression, not mine.

  Q18  Chair: Someone listening to this would be both enthused but also depressed, because they would think we discuss all this, year in, year out, and we have had endless reports, and every new cabinet secretary who comes in is going to sort the system out, and here we are: we are still saying we have now discovered the way to do it. We talk about this endlessly, but do we ever do anything?

  Sir Richard Mottram: I think we do do things, yes. If you look at the evolution of the relationship between Gus O'Donnell, as the Cabinet Secretary and head of the Civil Service, and the individual permanent secretaries and the extent to which he is holding them to account for performance on various aspects of the way their departments run, I would say that had improved. Could it go further? Absolutely. What I think it requires is something which, again, I think is so obvious but is not necessarily what one finds, which is that senior ministers, including the Prime Minister, have to see their role as being managerial as well as political, in the sense in which I think Lord Sainsbury was describing it. The Prime Minister, when he appoints ministers, has to have a proper conversation with them about what he wants from them, just as any of us would in other walks of life if we were involved in organisations, and then the Prime Minister has to listen to how they are getting on and there has to be a basis for mutual respect, and there has to be a single framework of accountability and not two run by two separate members of a government, and so on. We could improve it actually when the new government comes in just by a series of fairly simple things, I think.

  Mr Baume: The point I was making about if you want a minority or small majorities—I was not arguing for a hung Parliament or anything like that—was I was saying that if you have a relatively small majority, there is a political collective necessity to operate coherently and collectively, and if you do not have that political will to operate collectively then the model that I think Richard is setting out, which I completely agree with, is much more difficult to put into practice. It is a political discipline as much as about the machinery, and I think it is keeping that in perspective that is important, but I do not think it is actually about overturning constitutional understandings, it is about having that will to operate in that coherent fashion.

  Q19  Kelvin Hopkins: It strikes me that we are all thrashing around at the moment trying to find a solution to a problem. It is certainly my view that we used to have a system which worked much better than it does now, in the political field and also in the Civil Service. I was taught economics a long time ago by a former Treasury economist who told me that the Treasury is full of highly intelligent people with a range of views and that policies were decided by civil servants essentially but with a degree of debate and consensus. Since then opposition has been stripped out, a particular economic model has been driven into government at every level and things have gone wrong. The way the devaluation in 1967 was handled compared with the chaos after the ERM collapse in 1997 is an example. I understand—I was told—that a decision on the 1967 devaluation was taken by civil servants on D-Day minus 40, and the Chancellor was told on D-Day minus 22, I think. It all happened, it worked well and the economy improved. I was opposed to ERM entry, so I took a dissenting view, but it was amazing there was not a single voice anywhere in government saying this was going to be a terrible mistake. Something has gone wrong in the way we run government.

  Lord Sainsbury of Turville: I do not agree, I am afraid. I think the idea that there was a golden age at some time when we did this all brilliantly and we have just fallen away from that because of either malign civil servants or appalling politicians is one of those myths which we have in various aspects of British life. Education is another one. They are simply not true. If I think back to when I was a young man and watching British government in the seventies and eighties, I cannot say that I thought that was a model of efficiency, competence or anything else. I think somehow feeling there was a golden age that we have come away from is unhelpful because it suggests that the system is absolutely fine and that if we just sorted the people out then it would all come right. I think we have to take a rather deeper view and see there are some things which need to be put right, they do require a quite systematic look at the system and why it is so difficult to operate and we go on from there, but I do not think there was a golden age.

  Sir Richard Mottram: Some people argue that The Better Government Initiative is a golden ageist approach and a golden ageist document. Perhaps I could just associate myself 100%, or more, with what Lord Sainsbury said. I worked in the government from 1968 onwards, and I certainly do not look back on my early days in government and think, "Wow, it really worked very well then because of these set of processes", blah, blah, blah, "and it was all marvellous". I used to be slightly more convincing on this line in the days when our economy was racing ahead, but leave that to one side. What I do think might be true, I do not know, but this could be golden ageist, is when I look back on relationships between ministers and civil servants—I think this is one of the points that you were raising—and the capacity to have open debate about issues and positively to go about trying to create dissent and look at alternative views and focus on alternative ways of thinking about things, based on a lot of mutual confidence, mutual trust and mutual respect, if I was golden ageist I would say I think there was more of that in the past than I have seen in some places in the last few years, and that could be for all sort of reasons. I am certainly not drawing a distinction between civil servants and ministers here, because it requires two to tango and it requires the Civil Service to have the professional skill, the knowledge and the confidence to deploy its arguments well and it requires ministers to have an interest in thinking about issues in a wide range of ways and also have the mutual confidence to debate. If there was a bit of golden ageism, it might be that there was more of that, but this might just be that I am now old.

  Q20  Kelvin Hopkins: Rather than a golden age, perhaps a silver age, but we are certainly rusty iron now!

  Sir Richard Mottram: I do not think we are.

  Q21  Kelvin Hopkins: In politics there is a reluctance always to admit that somehow we get things wrong, to admit mea culpa. The establishment has been so associated with what has happened over the last 30 years they are not going to turn round and say, with great respect, and you are all part of the establishment of the last 30 years, "Yes, I got it terribly wrong. Actually we should have done this." I will put that to one side. That was the Civil Service. On the political side, and I have said this many times in here, we used to have Cabinet government. Now we have wilful Prime Ministers driving things from Number Ten The business model that Lord Sainsbury described is fine if you get the decision right every time. Hitler and Napoleon were destroyed because they decided, personally, to invade Russia, and both lost as a result. It was a terrible mistake. If these wilful leaders make these decisions and they are wrong, but they have the power to make sure everything happens all the way down the system, it does not necessarily bring success. The alternative is to have a discussion, to get policy decisions right on a consensual basis, with all the intelligence at one's command in terms of Cabinet members, and so on. Indeed, civil servants can promote better decisions in the first place by consensus, by having people who perhaps take a different view, having a range of views, and coming to sensible decisions rather than a wilful, powerful decision-maker driving things through.

  Lord Sainsbury of Turville: This is, if I may say so, the great British defence against efficiency. It is that a variation of anarchy and inefficiency is an enormous defence against fascism and these other things. I think there is a more nuanced approach that you can to take this. If it is on decisions like whether you do procurement properly against government, I do not think doing it inefficiently is a defence against anything. As I say, that debate is a very old one. I should also say, if you look back at the history of this you will find these debates about how government functions were all going on in the seventies and eighties. There was the Fulton Report, and so on, which were debating exactly these same issues. You might conclude, therefore, that this is hopeless. I do not think it is. If we look at this systematically, we can actually produce something that is more efficient.

  Mr Baume: The next government, whoever that is, is going to face two enormous challenges. One is dealing with the fiscal crisis, which is going to place enormous pressure on government as well as the rest of the public services. The second is restoring trust in the political class. I think, to be blunt, the political class across the parties over recent years has been extremely arrogant and has led to some of the problems we are seeing. I used the word earlier on "humility". Hopefully the next government will have the humility to recognise the importance of the approach that Richard was describing where you have to work, you have to take an objective view and you have to be willing, as you said yourself, Kelvin, to stand up to the problems that we face. Will any of this happen? I think it has to happen, because that is the only way the next government can work its way through the lifetime of a Parliament, so there is almost an objective imperative on us. I share the view that there was never a golden age and we are all under these pressures. Just an aside on the ERM: if I recall rightly, all of the major parties were committed to the ERM. If you want, the entire establishment was committed to it.

  Q22  Kelvin Hopkins: Not me.

  Mr Baume: Apart from yourself, perhaps. The situation the country is in means that there will be a very strong imperative to drive forward the changes that are going to be necessary, but I do not think the model is at all broken; I think the model could learn lessons and be a lot more successful.

  Q23  Kelvin Hopkins: Just to take that example, there seems to be a consensus that somehow this fiscal crisis must be overcome by savage cuts, which would merely drive us deeper into recession. There are some of us putting the case that the deficit in the short-term need not be addressed because it will come right when we get unemployment down—reducing unemployment will solve the problem. Driving public spending into the labour intensive areas of the public sector will actually help bring down the deficit more than savaging public spending programmes. That is just an example, but this is a consensual view. If it is from a particular rigid ideological standpoint, that it can cause disaster if it is pursued. I hope, whatever government comes into office after 6 May, things will be different and they will take a more sensible view. I am optimistic, as always. This idea of politics being driven from the centre contrasts with Cabinet government. We are told by some of Sir Richard's former colleagues that up to 200 papers a year used to be discussed in Cabinet. There was a range of views within Cabinet. Now there are almost no papers discussed. They have short Cabinet meetings where the Prime Minister tells them what the decisions of the week are. That is a very different world. I would think decision-making is much better based on papers from civil servants and, indeed, ministers, and discussed in a consensual way and coming to a sound conclusion, so if something is wrong someone will spot it and say, "I am sorry, Prime Minister, this will not work."

  Sir Richard Mottram: Can I make two points? I do not think Cabinet has sat around and discussed papers for really quite a long time, and one of the reasons why it has not done that is actually a body which has 23 members, or however many it has—the present Cabinet, I think, has a number of others who sit in and so on—is not a decision-making body, it is a body which is basically about reinforcing symbolically the cohesion of government and then, underneath Cabinet providing that overarching sense of cohesion, you should have effective bodies with all of the ministers and, potentially, those who wish to dissent in the room, and you can get a more manageable number. I do not think it is an indicator of whether collective government works well how many times the Cabinet meets and whether it is taking papers. I can remember in the past cabinets having interminable public expenditure discussions, and I never felt myself, "Wow, this means we are really running the country well". Could I make a second point which picks up on something you said earlier, which I think is a very interesting and a very difficult issue? For example, The Better Government Initiative extols the virtues of evaluation—evaluation of the effectiveness of legislation, evaluation of the effectiveness of policies—and the willingness of government essentially to put into the public domain debates and discussions of whether the decisions two or three years ago were or were not right and to be willing to change its mind, so to be open about, "We thought we were going to do this for this reason, that reason and the other reason. We did it in good faith. Lo and behold, it has turned out not to have worked, so now we are going to do something else." This is what, for instance, The Better Government Initiative is advocating and is impeccable as a way of thinking about how government should work. One of the fascinating things about government is it operates in a very political environment—that is a good thing, not a bad thing—and one can imagine it is quite hard for government to really whole-heartedly sign up to washing its dirty linen in public in a political environment and a media environment which is unlikely to say, "Thank you very much, government. We are really pleased that you followed that recommendation in The Better Government Initiative and have improved the way in which government works". I think one of the challenges is (and I do not know the answer to this, the Chair has spent more time thinking about this than I) could you create a political culture which is somewhat different to the culture we have now (and that would involve the media as well as Parliament, and so on) which is more supportive of government doing those sorts of things, the capacity of government to admit, "We made a mistake"? What minister can stand up now and say, "Yes, we made a mistake", without people saying he must resign? These are very difficult things because the nature of politics—I am not arguing, I know how we can change it—is going to be "resign", but while there is that culture it is then going to be very difficult for some of these things which are very sensible to actually be pursued.

  Q24  Chair: That is an interesting point, is it not, and it goes back to Lord Sainsbury and where you came from, and we have had this discussion many times with senior business people here over the years. I remember Lord Browne saying, quite forcefully, "Of course, in business we make mistakes all the time, and we see mistakes as part of a learning organisation and we become better because of them, and we do it in a way that everybody understands." In government, as Richard says, it is quite impossible for ministers to get up and say, "Yes, of course, we make mistakes; that is what governing is essentially about, but we are a learning government. The context in which it operates is entirely different, is it not? It cannot operate in that way.

  Lord Sainsbury of Turville: I have to say, I do not remember very many senior executives of the company getting up publicly and saying, "We have made a mistake." That may be the learning culture within BP, but it is not their relationship with the external world. I think you have the same issues.

  Q25  Kelvin Hopkins: Is it not important, getting the decision right in the first place? I can list dozens of decisions made indeed the last 13 years and in the last 30 years which I think were wrong and have been demonstrably wrong. The PPP for the Tube has proved to be a disaster. First Metronet collapsed and now Tube Lines is going down the tube, as they say. It was a decision which many of us thought was crazy from the beginning and it has proved to be an absolute disaster. But I am sure that the ideology that drove it is going to stay in place and they are going to make more PPPs and more PFIs and it going to cost the public purse a vast amount of money. By getting the decision right in the first place, rather than being driven from the centre by a wilful leader, we might avoid those kind of traps. One final point. I understand (and this is from speaking with people) inside the Civil Service when evidence based conclusions are put forward as a basis for policy but the policy does not fit with the ruling ideology, they are told, "Go and do it again. Whatever the evidence says, you cannot have that policy." A policy, for example, of reintegrating the railways into a publicly owned nationalised national railway system again might be sensible, but I understand that Tony Blair said when they were discussing the failure of Railtrack, "Whatever you do, no nationalisation." So the decision was anti-nationalisation, not evidence-based, not what was right, but what the ideology at the time was telling us. That is not a basis for sensible, good government that works, is it?

  Chair: I am quite keen not to re-run the policies of the last 30 years.

  Q26  Kelvin Hopkins: I have finished.

  Lord Sainsbury of Turville: Can I make a comment about policy-making. As I said, when I came into Government I was always brought up to believe that there is a very good policy-making machine in government. I did not find this at all. I thought what you would find in government is that there are within departments good policy units which had the evidence, collected the evidence, that are looking for where there are opportunities to do better or problem areas, and then, bringing to bear on that, their knowledge of what had happened before, of what was done in other countries, would have links with research institutes which look at these issues. What I found in the DTI—and the only other department I had much experience of was (as it was then) DfES—was that it was very unclear as to what the process was by which a minister actually said what his priorities were or problems were. There were usually no bodies which were permanently looking at policy issues, collecting evidence, and so on, and there was almost a random process by which problems would come to the surface, at which point a team, or individuals, would produce a submission on this and, of course, because it was produced rather rapidly and not as part of an overall process, often it was in no way informed by previous initiatives, let alone experience elsewhere or what had happened in other countries. It just seemed to me that the basic processes and often the evidence was not there. I remember an example. There was a lot of concern about numbers of people doing science and technology at university and also at A level, and there would be various responses from government that it was better than last year, worse than last year, and so on. There came a point when it seemed to me what we were saying was very unclear, it was not clear whether we knew what was happening long-term, so I asked to see the figures over a ten-year period of what was happening. It took three or four months and a lot of harassing of people to get those figures, which at that point showed that actually the number of people doing science and technology at university was going up quite steeply. It was clear there were problems that people were doing the wrong subjects; that a lot of people were doing psychology. This is not prejudice about forensic science and psychology, but we were not getting enough engineers, and so on, but we were getting a lot of people doing sports science. There was nowhere where that evidence had been collected or asked for and, therefore, statements of initiatives were inappropriate. No-one knew what the basic facts were, and the same on A level science, where it turned out there was a major problem on physics which went back for 20 years. No-one said, "Look, physics is the area where there is a problem and we must do something about that." I felt then, and I feel now very strongly, we must have proper policy-making processes in which the minister makes clear what his priorities are, and gets proper work done, and it is in a timeframe which enables those policies to be put together in a proper way, and unless you insist that that is a policy across the Civil Service, that that is the way policy is made and that is what is the responsibility of departments—it is not the Prime Minister's Strategy Unit, they look at things across the board—you will never get good policy-making made.

  Sir Richard Mottram: Can I make two points, Chairman. I am appearing here as a former permanent secretary, but I should declare an interest in that I am the Chairman of Amey, which is the majority shareholder in Tube Lines. So, for the record, without getting into whether the PPP is or is not a good thing, I think I should say as the Chairman of Amey, I do not necessarily agree with Mr Hopkins. The second point, to get back to the role in which I am appearing here, I think that Lord Sainsbury makes a really important point, which goes to the point we have all been discussing, about whether this is a problem with politicians or a problem with officials. I can think of very good examples of strategy development and policy development in government; I can also think of very bad examples; but one of the things which I think is very, very important (and obviously he has a lot of experience of what does not sound very good) is for the Civil Service to take much more seriously as a profession, if it is going to aspire to be managing the process of decision-making, including the process of policy development and being one voice in that process, but just one voice in it, it must have the professional competence to do it properly. Having the professional competence to do it properly usually means actually people are trained, they have continuous professional development, there are expectations about how they go about managing research, creating networks, understanding what is and is not evidence and all these things. I worked on some of these things in relation to the Professional Skills for Government Initiative. What is quite clear is that the Civil Service finds it very difficult consistently to embed change of that kind and to sustain it, and that is what it needs to do. If you, for example, were sympathetic to what we are saying here in the Better Government Initiative's proposals, they are very demanding of the Civil Service going forward. They are not saying it is all great, it is all absolutely fine, because quite clearly from one voice, which is just one example, it is not great and it requires more professionalism, and we need to think about how it feeds into how we recruit people, educate them, train them and continuously develop them.

  Q27  Chair: It is slightly depressing again, is it not? The amount of attention we have had to evidence-based policy-making, and it has been the leitmotif of this Government. It came in with all these new ways of making sure that was the basis of policy. To be told at the end of all this that our problem is still making evidence work for you in policy terms is depressing.

  Lord Sainsbury of Turville: Just going back to what I said about the ability of the system to implement anything across the system, what happens is everyone talks about evidence-based policy: "Great thing. We are all for it. What happens next?" Well, "Nothing", is the answer. There is no system which then says, "This is what we have agreed. What this implies is that we will have within departments proper policy units or a group of civil servants who will implement this by making certain that the department has a proper evidence base and people who will consider this", and I would refer back to Richard's point. Policy-making, it seems to me, is not simply an art which you would have by definition because you have been to a good university and studied some subjects there. It is like any other subject: you can be trained in it, you can learn about it. You want within departments people who say, "Actually, a period of life, I am really interested in policy development," who will go and get some training in this and will then spend some time doing it, but if you just talk about it as, "We want evidence-based policy", nothing happens. We all just agree it is a great thing and that is the end of it.

  Mr Baume: Just a quick point on this. Evidence-based policy is all very well, and I do not agree with everything Kelvin was saying, but, frankly, that does not necessarily deliver something that is politically desirable, and ministers clearly take decisions where the evidence may point in one direction but the decision is taken for a political reason, because of public opinion and all the rest of it, and we have seen that over drugs policies and over a lot of other policies. You have got to be clear about what we mean by evidence. The more substantive part is your own report a couple of months ago on the Senior Civil Service did draw attention to some of the weaknesses in taking forward what Richard was saying about how you train and develop people when two out of five director generals have never worked in the Civil Service before taking up their posts, where an ability to manage change was in some ways much more important than actually understanding the core functions of the department and the very high turnover of civil servants—2.7 years in post—as well as the very high turnover of ministers. All of these weaken the ability of the service to develop the professionalism and skills base that we need, and I think there needs to be within the Civil Service a recognition to take on board some of those lessons about how we get greater continuity, develop our own people more effectively and give them the time and experience to focus on areas of policy. The fact that you are very good on one area of policy in one department does not mean you can simply transfer that over to a completely different role in a completely different department. It has weakened over a period the capacity of departments to cope with all of the pressures that government faces.

  Q28  Paul Flynn: Has devolved government in Wales and Scotland produced better government? You described government as this very huge organisation with rubber levers and no links to ensure that things are joined up. If you reduce it in scale, certainly in Wales and Scotland, has that produced better government?

  Lord Sainsbury of Turville: I do not think I have enough knowledge or experience really to say on Scotland and Wales. What I would just say is there is an aspect of this, which is the question of NDPBs and the whole issue of delegation or decentralisation, where I think there are big issues which need to be tackled because I think the system is very unsophisticated about the idea of decentralisation or delegation. Essentially, when people think of it (and I would include in this both politicians and civil servants, perhaps even worse for the politician) they only think there are two things: either you do it centrally or you throw it over the wall to someone else and let them get on with it; whereas actually, I think, if you are going to have effective decentralisation, it is absolutely key you think through exactly what decisions you do delegate and what is the framework and system of accountability that this operates in. Let me give you an example of this. The Regional Development Agencies were set up. It was very unclear who they are accountable to, and then, when things are handed over to them, it is very much: we throw it over the wall and you get on with it and that is it. I will give you, again, a practical example, because I think these are important. In the DTI we had an enormous campaign to cut down the 120 different industry support schemes to about ten. It was extremely important because they were utterly confusing and industry hated them and so on. We then made a decision that we would hand this over to the RDAs, so we handed it over to them. Having got it down, with great effort, to ten, we said, "It is over to you now." A year or two later we had 200 schemes. Every RDA wanted to invent its own schemes and develop them. What we should have said is: "We will hand over these schemes to them. You must operate these schemes on the basis they are. If you want to put more money behind one scheme over another, that seems appropriate in different parts of the country, but there is no reason to have a different R&D grant in the North West as a scheme from in the South West. The decision you can make is what money you put behind different schemes, but you have to operate the scheme, and because people did not think through any of those sorts of issues, it was worse than the original state. I agree all of this is rather boring management stuff, but if you do not do it you can get carried away with these great enthusiasms for, "We are going to decentralise everything", and then ten minutes later you will say, "We cannot have postcode allocation of resources." So you have got to say, "No, if we decentralise this, then we accept there will be different levels of service in different places." We need to think these things through.

  Q29  Paul Flynn: This initiative-itis is the plague of politicians, I am afraid—we are very guilty of this—and the year-zero mentality that everything has to be changed. The point was made, helpfully, by Jonathan on a subject I am not allowed to mention because members of this Committee are involved, of policies that are evidence free, that are based on bad science, based on flat-earth theories. The drugs policy is one which is completely evidence free. Nobody looks at it rationally to find out what is working and what is not working: does it work in Portugal, does it work in Holland? It is entirely prejudicial by all parties. But we have other examples of bad science. The reaction, influenced by the media, on the MMR vaccine, on swine flu at the moment, again a wholly ridiculous reaction to that, not because of the Government but because of the World Health Organisation. There are many other examples in which the Government have trimmed their policy on the basis of media pressure and media hysteria. Do you think this is a malign effect compared to what happened when we look back at Prime Ministers like Clement Attlee and Margaret Thatcher, who did not believe in consensus at all and believed that they had a certain amount of truth and perceived wisdom and they were indifferent to pressure of bad science from the media?

  Lord Sainsbury of Turville: One of the things that clearly has changed, which I think actually makes the job of government much more difficult, is 24/7 media coverage. It is not fair to say to politicians that they spend too much time on media issues or are dominated by it. There is nothing else you can do, and it means you do have to spend a lot of time dealing with these issues, and that is why I believe people have special advisers. They are not special advisers, they are usually handling media issues, which is now a permanent feature, and it made government easier and, I think, better. Apparently there was a period when the BBC in the early day of television would say, "There is no news tonight"! That did make certain things easier.

  Sir Richard Mottram: That was the golden age!

  Q30  Paul Flynn: You were what would have been called a Goat at the time, but we have produced a report this morning about Goats and Tsars. Tsars seem to have gone the way of all Tsars, happily. You came in with great expertise in your business life and this was regarded as one of the great panaceas of a reformed government, and so on. Looking back on this alien world that you came into, do you think that your office has resulted in any improvement?

  Lord Sainsbury of Turville: Within the field of science?

  Q31  Paul Flynn: Yes, I mean the field of government, the way that government operated.

  Lord Sainsbury of Turville: Yes, I think there have been some moves and attempts to improve things. There was a lot of effort in various ways—the Strategy Delivery Unit, and so on. Do I think they really tackled the basic issues? Probably not. That is why, clearly, I wanted to set up the Institute for Government. This comes back to a point. This is not a question of, as I say, either politicians or civil servants being incompetent, malign, civil servants not carrying out the wishes of politicians. This is about the system historically. It may well have worked well for 50 years, but we are in this different world. We are in a world where the media is much more prevalent; there is much more scrutiny of government. It is much more complicated. You have to have departments working much more closely together, and I do not think the system has been redesigned to take account of this different kind of world.

  Q32  Paul Flynn: Do you share the view of this Committee that there is a danger in the revolving door in that the top jobs in the Civil Service, in the military, in government, including the Prime Minister's job, are not now seen necessarily as the pinnacle of anyone's ambition or power but possibly as a stepping stone to a better paid job when they stand down from these top jobs? Our concern with this is that it might well distort the decisions they are taking when they are holding these top jobs. They might have an eye, when they decide on contracts for company A, B and C, on what rewards might come when they are no longer holding those top jobs. This is something that is fairly recent. An example was given to us by a previous witness, who said it does not matter that a Prime Minister is only 194th on the table of those in remuneration—194 people get more money than the Prime Minister—if you stand down as the Prime Minister, you often earn millions of pounds afterwards, and this applies to ministers as well. Is this a danger that you see?

  Lord Sainsbury of Turville: I personally do not thing that as a danger. I do think that the ever shorter terms which ministers have in their jobs is mirrored by this incredibly fast turnover of civil servants. While I was within government there was this kind of edict which said you should not, as a whole, stay in a job more than four years as a civil servant because you will get stale. That, combined with the fact that the ministerial terms of office were coming down was bad news. It was bad news because of corporate memory. Any job I have ever done, it takes at least a year before you really understand what the nature of the problems are, who are the good people, whose judgment you can rely on, and so on. By the time I had been in the job eight years, in the last few years I used to brief my civil servants about how things worked. I would say to them, "And this is how a European Council meeting works", because the guy had come from running a Regional Development Agency and he would have been handed over the job from someone, almost always with a three-month gap, so there was no kind of continuity of knowledge. This is no way to run things. You should have people much longer in their jobs, both ministers and civil servants.

  Chair: Thank you very much for that.

  Q33  Mr Prentice: We were talking earlier about failures of process and you, Richard, said it takes two to tango—the politicians and the civil servants—but is it not the case (and there are lots of examples) there are mandarins out there with absolutely no backbone whatsoever? There was serious failure of process, but no-one said anything. The notes that were not taken, the sofa government that we are all completely familiar with, the way in which the machinery of government was changed all the time, and yet no-one at the top spoke out.

  Sir Richard Mottram: If you are a serving civil servant you cannot really speak out. You can resign and in extremis, if you are deeply unhappy about something, you should resign. Even then, I think, you would not comfortably go and speak out. That is not your role.

  Q34  Mr Prentice: But senior civil servants owe a duty to Parliament. I do not want to get prissy about this, but the Civil Service Code talks about how civil servants owe a duty to Parliament. Surely when mandarins come before us and talk about these issues, they can go a bit further than simply say, "Oh, Cabinet meetings—they have always been like that. There is nothing really to worry about. Yes, there have been a few hiccups in the press." You understand what I am saying. Let me give you a concrete example: the abolition of the office of Lord Chancellor, the creation of the Ministry of Justice. Lord Chief Justice Woolf went on the record and said he had heard about the creation of the Ministry of Justice by reading a piece in The Daily Telegraph. That was scandalous, was it not?

  Sir Richard Mottram: This has been gone through in great detail, I think, in a committee in another part of Parliament. I think you are trying to get an ex-mandarin to use the word "scandalous" and he can hardly get it out of his mouth. What was completely unacceptable, and may, therefore, have been scandalous, was that the Lord Chief Justice found out about this in the way he found out about it. What is interesting about that case is that is a machinery of government change which was done in certain difficult circumstances in relation to the then Lord Chancellor. It was obviously not very well handled. There was a misunderstanding, I think, about some of the detail. Underlying the decision, I thought, was a series of impeccable choices that were made by those who wished to bring about those changes. From my personal perspective, it did not make a lot of sense to have the same person as the head of judiciary, sitting on the Woolsack and a member of the Cabinet, and what we have now is better—the process is in fact a lot better from a constitutional point of view. The process was inadequate, for all sorts of reasons, and some of those were specific to the difficult handling, in a personal sense, and some of those were specific to a style of government.

  Q35  Mr Prentice: Although I use that as an example, I do not want to get sucked into that. What I am trying to get you to accept is that there are mechanisms there for the Senior Civil Service to register a concern. If the Government is adopting a policy which flies in the face of reason, is not evidence based, then the permanent secretary is the accounting officer, the permanent secretary can register a note of dissent, and I just wonder how many times in the last 13 years that has happened. Probably you could count it on the fingers of one hand, and yet we read about all these policy disasters in the Better Government Initiative report?

  Sir Richard Mottram: I would make two points. Point one is if you are asking me should civil servants, as part of "it takes two to tango", including permanent secretaries, have a stronger sense of their obligations in relation to ensuring that government is well run, my answer to that is, yes, they should. I do not think that means standing up and dissenting from ministers in public. I personally am very traditional in my view that permanent secretaries and all civil servants, apart from the specific case of an accounting officer, should essentially account to Parliament through ministers, for all the reasons we have all discussed interminably. I would be cautious about that. I am very cautious about the idea, "I do not like this policy, it is not evidence-based, so I will leak that I do not like it." That is not the basis on which you can conduct a relationship with ministers, which should be a basis of mutual trust. What we absolutely should be saying to ministers (and I have said this on many occasions myself in various forums, sometimes strictly in private between us) is there is no basis for this decision, there is no evidence for it, it is not a proper way to do things, you really should not do it. If, ultimately, they decide to do it, unless it is not value for money in a clear sense, you are in a difficult position. The second point I would make is the fact that there are not that many examples we can all quote of civil servants being given directions does not mean that the process of the clear responsibility of the permanent secretary for value for money and his or her accountability to Parliament for that does not work. I have worked with a number of ministers who have said to me, "Oh, God, you are not going to say again, if I do this, you will have to have a direction, are you?" and I have said, "Yes, that is what I am going to say", and, generally speaking, they are rather cautious about doing something which is not very sensible But obviously you cannot have a relationship with ministers where you spend all your time saying, "If you do this, I think I will seek a direction", because I am saying you are supposed to be building a partnership and a relationship. That is what I am feeling for—how you build that partnership. I am completely not convincing you.

  Q36  Mr Prentice: But senior civil servants can say, "Minister, there is going to be a note-taker at meetings, it is going to be recorded", that certain people ought to attend the meeting—that is what they should have said—and we know from what has happened in recent years that that was not always the case.

  Sir Richard Mottram: You can only say that for meetings you know about, if you see what I mean.

  Mr Baume: Can I add to that? If we are taking now as examples around, "If you want the minutes with no note-takers", et cetera, all the evidence that has now come out in books and in the various tribunals that were heard around that, actually most members of the Cabinet were not saying, "I want to be there." There was a collective failure around some of these decisions. It was not happening on most of the work of government, but it was happening around some very critical issues taken at the centre, but there was a political failure in as much as everybody could stand back and learn great lessons from that.

  Q37  Mr Prentice: Maybe that is why ministers ought to be properly educated that it is a huge privilege to be a member of the Cabinet, and there are responsibilities attached to it and that you brief yourself on the issues of the day and you do not allow one or two people to decide things on your behalf. There is a responsibility that comes with the job, which brings me on to Digby Jones.

  Sir Richard Mottram: To whom is this question going to be addressed!

  Q38  Mr Prentice: I suppose anyone who wants it. Digby Jones, I suppose, slapped the face of the man who gave him the job. Digby Jones has said some very cutting and caustic things about civil servants, and I kind of resent that. I suppose I am looking at you again, Richard.

  Sir Richard Mottram: Yes, I thought you were.

  Q39  Mr Prentice: Have you said cutting and caustic things about ministers? We are just about to produce a report that there are too many ministers in the Government. We produced one on Goats. Is there a kind of informal communication between the permanent secretary, the head of the Home Civil Service up to the Prime Minister to say, "This person that you appointed to a job in my department is totally useless"?

  Sir Richard Mottram: Is there such a system?

  Q40  Mr Prentice: Yes, a kind of report card?

  Sir Richard Mottram: Yes.

  Q41  Mr Prentice: Does it make any difference?

  Sir Richard Mottram: Yes.

  Q42  Mr Prentice: So when people lose their jobs, very often it is because the mandarins have whispered into the Prime Minister's ear.

  Sir Richard Mottram: No. This is obviously a very delicate issue. The way in which Prime Ministers conduct reshuffles is they consult a number of people, and it is perfectly normal as part of that—I do not know what happens now but certainly when I was in government—for you, on occasion, as the permanent secretary, to be asked privately what is the contribution of minister A or minister B to the effective working of your department. In my case I always tried to give very careful and honest feed back about this. A minister who "caused trouble" in the department by pressing the civil servants hard, by having strong views about things, by pushing for certain things—those are always plusses in my mind. For me this was not, "Oh, you know, this person is being rather ministerial like and is a bit of a nuisance because he is getting in the way of the mandarins, so we will try and put the black spot on him", but there can be that process. What I would, secondly, say, however, is I never understood when I watched the reshuffles how they related to the feedback I had given. In particular this was because, on occasion, I have been the Permanent Secretary of departments where all the ministers were simultaneously reshuffled, and on the day after this I have sat there and said to myself: how could a system of government that was being properly run produce this result?

  Q43  Mr Prentice: Did you raise these concerns with the head of the Home Civil Service?

  Sir Richard Mottram: I did.

  Q44  Mr Prentice: Did he raise them with the Prime Minister?

  Sir Richard Mottram: I suspect he might have done. Does the system change? Answer: it does not. The reason why the system does not change is because a smallish group of people that never included me sits round and decides these things, and they do not decide them, as we would all decide them in the context of the organisations we are involved in, on the basis of where is this organisation, thought of coherently, going to be tomorrow if I do all these various things? They actually even decide them sequentially. So I have known, first, they do the Cabinet ministers, then they think, "Where shall we reshuffle the ministers of state for career development purposes?" and then they think, "Where should we reshuffle the junior ministers?" and you are told about these things after they have been decided. You would put your hand up and say, "Do you realise what you just did?" and then there will be a sense of, "Yeah, but it was a ministerial reshuffle", because it is a political act. These people are in charge of something. They have relationships with people; they have knowledge; they have contribution. It is very, very, by and large, political. You know me, I always exaggerate.

  Q45  Mr Prentice: You do?

  Sir Richard Mottram: But that was the flavour. Not always: on occasion.

  Mr Prentice: My friends are straining at the leash here.

  Chair: I do not want them to strain too much though. Could you strain briefly?

  Q46  Kelvin Hopkins: Is not this a style of permanent revolution because people want control, so they shuffle people. They do not want people in positions too long because they might get too clever; they might get powerful?

  Sir Richard Mottram: No, I do not think it is that actually. I think it is not a sufficient focus. To make a more serious point, because I have exaggerated for effect, not only would you expect there to be a process through which actually there was confidential consultation about the performance of people, but you would expect (and this does not actually happen during reshuffles) for you to be asked, "If I move person A and I move person C and I leave person B and person D and we bring in A and F, X and Y, or whatever, will this produce a team that can work?" and that would be a process that you might hope could happen, but if you think about how the pressure is on the Prime Minister and on Number Ten during a reshuffle, again politics and people and personalities never quite work out as they think. I am not being too hard on them. Again, it would require a slower tempo and somebody that was less political and more respectful of the fact that these are serious people in serious positions.

  Q47  Chair: Despite your protestations, it is the politicians who screw up, is it not, really?

  Sir Richard Mottram: No.

  Q48  Chair: You have told us eloquently.

  Sir Richard Mottram: No, because, if you think about this, this is a process in which there are lots of officials involved. Going back to Gordon Prentice's point, do we as officials sufficiently press upon Prime Ministers the importance of doing these things differently? I have never been the Secretary of the Cabinet. I have been involved in lots of these processes. I think we do not necessarily press these things enough, and, insofar as I think Gordon Prentice is saying to me, "Why did you not say all these things when you were in government?", well, I sort of did, but I perhaps should have said them a bit more.

  Q49  Paul Flynn: We do permanently have a system that is a variation on anarchy.

  Sir Richard Mottram: I wish I had not said that.

  Q50  Paul Flynn: I am sure it is a very telling phrase. Nearly 40 years ago someone complained that the abiding philosophy in the Civil Service was the unimportance of being right, and the examples he gave were on the policy on the Gazco advanced nuclear reactor and on Concorde. The point he was making was that these were two virility symbols and they were not going anywhere, and there were technological blind alleys and there were strong-minded civil servants who opposed them. Their careers withered. The ones who supported them and agreed with the politicians, their careers prospered. Is that still the situation?

  Lord Sainsbury of Turville: I think these do relate to one of the earlier points I made about what is the responsibility of ministers and what is the responsibility of civil servants. One of the things that means this constant turnover is very unhelpful is because there is the kind of myth that the minister is supposed to be running the department, and I think it is about time we queried this as a doctrine. It is simply not sensible to say that you have ministers who, in most cases, almost universally, have never run a big organisation and, in most cases, have never run any organisation at all coming into a department and it being thought that they will then run that department and then they disappear off the screen two years later. I think we do need to start saying there is a division of responsibilities. Politicians are there, ministers are there to do the political aspects, the policy aspects, and the civil servants, permanent secretaries are there to run departments, and there should be a line of accountability between the permanent secretaries and the Head of the Civil Service which is actually about running things and that people doing that have lengthy periods in a job and are held accountable for the performance. I do not think we do have to accept this situation, but you have to make a quite conscious decision to say we will have a proper division of responsibilities between ministers and civil servants.

  Q51  Chair: On this, Richard just defended himself. He said he was a defender of the traditional doctrines of accountability in this respect. You are saying something radically different. On your view, presumably, a minister gets up in the Commons and says, "I am afraid this went wrong. It went wrong because of my civil servants, because they are responsible for these kinds of things. I could not possibly be responsible for all this." That is not politically possible under our system at the moment. That is a radical change, is it not?

  Lord Sainsbury of Turville: No, it is clearly a radical change. You then have to have a process by which civil servants can be held clearly accountable both to the Head of the Civil Service and to Parliament.

  Q52  Chair: If that happens, the argument goes, you will destroy the partnership that Richard is advancing is crucial for good government?

  Lord Sainsbury of Turville: Yes, I think it would be a better relationship if it was clear who was responsible for what, because while you muddy that we have a system where neither is really responsible because it is not credible to hold ministers responsible for failures in their departments in the current circumstances. Everyone knows a minister has been there for three months, he has never run a big organisation and suddenly you say to him, "The fact that your department lost these files is your responsibility", and because it is simply not credible, the minister is not really held responsible and the permanent secretary is not really held responsible. In my system it would be, clearly, that was a minister's job and the civil servant, the permanent secretary, was held responsible.

  Q53  Chair: I fear we are opening up big territory here which we have been over many times over the years. We are getting towards the end, and I really would not like to go too far down this road.

  Sir Richard Mottram: I was just going to make a very quick point. I have tried to draw a distinction between the strategy and the policies of the department, where it is the duty of the civil servants to provide evidence-based advice to ministers and to have a system which enables ministers to makes decisions about those things and, then, ministers will be held to account to those and the civil servants account to Parliament through the minister. That is what you should do as a permanent secretary: you should create an environment in which the minister can decide all those key things. The minister cannot run the department, and nor should he or she try to run the department, and so we need to find ways of identifying whole categories of things where ministers can be accountable but they are not, in the old phrase, responsible, they are not supposed to resign and officials are held responsible and, above all, the permanent secretary is held responsible for the way the department conducts its business, uses its money, whether it has a machinery for policy-making. These are all the responsibilities of the permanent secretary: the strategy and the big policies are matters for ministers. It is the responsibility of the permanent secretary to make sure that we had a system which enabled the minister to decide those things, and you can draw some of this out.

  Mr Baume: I should add, I hope you are recommending that there should be far fewer junior ministers! I think there is a danger of trying to be too simplistic. I think Richard is right, you can clearly identify areas, but there is a lot of grey. If you take the case of the Revenue & Customs, which may have been the one Lord Sainsbury was referring to with the classic issue of the disks, yes, the Permanent Secretary, Paul Gray, resigned. He took the responsibility for that, but the reason that the Revenue & Customs was in such a poor state at that point that allowed it to happen was because of not a very good appointment of his predecessor, David Varney—I think that was a poor appointment—and the fact that consultants came in (McKinsey's) and recommended and implemented a structure within Revenue & Customs that was completely inoperable, and what Paul Gray had been doing was restoring the damage to the functioning of the department. If you look back at the Home Office at some of the problems around the middle part of the decade, actually the political decisions changing priorities at short notice, partly media driven, compounded administrative problems and made it much harder for the department to focus its attention on dealing with some underlying administrative problems that everybody accepted were there. There is a lot of grey in the middle of this where the political decisions have an impact on the ability of a department to manage its affairs. Part of this links to the scrutiny by Parliament of departments and the Executive, and, hopefully, some of the reforms that have been looked at will allow better continuing scrutiny of the work of the department by the House of Commons which, in turn, should add to that process of accountability, which should still be, I think, as Richard has said, through the political process, but actually Parliament has a job to do here as well, which is not always done very effectively.

  Q54  Mr Prentice: I am very conscious that we are two months away from a General Election and you will not want to be drawn into making controversial statements, and I do not know if this is the current Conservative policy because it does change all the time, but last year Francis Maude, he is a shadow Cabinet Office minister, drafted proposals (and I am reading from a piece by Jill Sherman, the Whitehall editor of The Times, highly respected, who rarely gets things wrong) to let ministers, rather than the 28 permanent secretaries, chair boards in Whitehall departments if the Tories win power. Mr Maude is planning to fill these boards with non-executive members from the private sector and, for the first time, give them powers to recommend firing permanent secretaries. The Conservatives may be running the administration in two months' time. Jonathan, what do you think about that proposal?

  Mr Baume: I am aware of it. I have discussed it with Francis Maude. Some of that already happens. I think there is a legitimate issue about what is the role of departmental management boards, how should those best function? Some of them are chaired by ministers but not every meeting. I think what I understand of what Francis Maude has suggested is, in effect, you have, every three or four months, if you want, that strategic overview of the full board and then, in the meantime, the permanent secretary and the civil servants follow through and meet and discuss all the detail, and some of that happens already, but you can make it more coherent across the department, and, secondly, there are big inconsistencies about the role of non-executive directors on boards. This is something that emerged without a coherent pattern, so, again, I do not think anyone is arguing that there could not be a positive role for people coming from outside sitting in on meetings three times a year—I am not trying to pin down a number—looking at some of the strategic overviews of the department and, I think, advice, if that is the way a new government goes. The area I am concerned about is the accountability lines. To whom does the permanent secretary report? It goes back to a discussion much earlier in the meeting. Is this to the Cabinet Secretary and thereby to the Prime minister, or is the accountability to the secretary of state? I think Francis Maude is questioning the relationship to the secretary of state.

  Sir Richard Mottram: I do not think he is.

  Mr Baume: It may be. This is not all detailed out. If, in the end, a relationship has broken down between a permanent secretary and a secretary of state, the permanent secretary goes. There are examples of this. It is done discreetly. I see the headline about sacking the permanent secretary more about media effect or managing the Conservative Party's own thinking than actually about practical politics, but in fact permanent secretaries, where relationships break down, do move or do leave the Service. It has happened over the years, it is done discreetly and quietly, but that is what you would expect at senior levels. I think the Civil Service will wait and see how this emerges, but there is a genuine question to be asked about the role of the management board, how can they best add value to the work of the department and what role do we see for non-executives given that they are now a part of the system?

  Kelvin Hopkins: Everything you have said to me this morning confirms my prejudice that it is the politicians that screw things up, not the Civil Service, and I agree with the Chairman.

  Q55  Chair: Very quickly as we end, a quick question and quick answers. Richard, you were advancing the Good Governance Code and the Better Government Initiative has advanced that. Tell us in a nutshell how on earth that would ever be enforced?

  Sir Richard Mottram: I think it could be enforced in relation to departments. I think it would be enforced partly by Parliament, so the BGI has got lots of ideas about making this more transparent and requiring people to sign things off and Parliament holding government to account, and then it can be enforced inside the executive if the Prime Minister of the day and the Head of the Civil Service of the day want it to be enforced. The problem arises where it is the Prime Minister who wants to step outside the process or the Head of the Civil Service wants to step outside the process, but there are plenty of ways in which you could enforce this.

  Q56  Chair: It might stiffen the resolve of various people inside the system to say, actually, you are not doing it in the way that you should do.

  Sir Richard Mottram: Yes, and also it would raise the expectations, I think, on individual departmental ministers and individual departmental permanent secretaries, going back to a point Gordon Prentice made, about what is expected of them. If on day one they have read, "This is how the Government is supposed to work; you have a big role to play in it; you are supposed to be collegiate; you are supposed to join up; you are supposed to do all these things", we then have a basis for a dialogue which could be more powerful, I think.

  Q57  Chair: Can I ask you to answer the question that Paul tried on you a little while ago? Do you think Goats are part of the answer?

  Lord Sainsbury of Turville: I think there is a need to bring into government people who have experience of other fields of activity. Different political systems do it in different ways. You have secretaries of state in America almost all of whom come in from the world outside politics. If you have no room to do that in a political system and you have a system where increasingly politicians are people who spend most of their life in politics, that rather does narrow down the pools of people to run things; and there are very specific examples. For example, attorneys general, where it is now very difficult to find, within the House of Commons people who have the right background to do that. Obviously, I am likely to say that because I came in from outside, but I think there is an important role for this and it is one of the ways that you have some people within the system who have come from outside and occasionally point out that perhaps the system is not perfect. My impression, partly, of coming into government was how like a kind of family business 40, 50 years ago it was, where everyone came in post university or post school and spent their whole life in the organisation and, then, when you asked them what was the best way to do things, they would say, "The way we do it", because they know of no other. In the company I worked for, for years, that was the situation when I first went there. By the time I left we had lots of people, some of whom had been recruited from Tesco and other places, who went round and said, "Why on earth are you doing this? Do you not know that there is better way to do it, another way to do." I think within systems you need some people who have experience of other things, who can come in and say, "Hang on a moment, this is crazy." I am rather in favour of that, but I guess my own case was slightly different because I had a long-term interest in politics, and so, as well as being a business man, I had been involved in political parties for a long time, so I think it was easier. If you have been only in business and you have never had any contact with the political world, I think it is a bit more difficult.

  Q58  Chair: You were a special kind of Goat, were you not?

  Lord Sainsbury of Turville: Yes, I was the kind of Goat with a bit of a politician mixed in somewhere there.

  Q59  Chair: Let us finally do the hung Parliament point again, because there is a feeling that this is not a good thing. I suspect a lot of people out there think it is a rather good thing, probably, if it involves hanging a few politicians, but we are told the City is very anxious about the prospect of a hung Parliament. What I would like to know is, Jonathan, are your members, the senior civil servants, sitting there with relish or trepidation at this prospect?

  Mr Baume: I think people are conscious of the pressures that a hung Parliament would bring to bear and the practical difficulties. It is not that it is not doable, as Robert Hazell's report set out, and there is experience, clearly, in Scotland and Wales that can be learned—much smaller administrations in many ways—about handling the complexity where a government has no working majority and, therefore, there has to be a process of negotiation on key measures. In one sense it will bring Civil Service skills absolutely to the fore, but it will be a very testing time, and, of course, there are lessons, if you are going back 30 years or more, as Robert Hazell pointed out. I think it is a matter for the electorate, and I do not think any of us can be exactly sure what could happen. It is not inconceivable, were you to have a hung Parliament, that you could end up with a hung Parliament for quite a number of years if you now look at the political geography of the UK. When a hung Parliament operated before, the Conservatives still had a very big base in Scotland, which in effect swung the balance then, and that is not the case at the moment, so if it happened it might not necessarily be a short-term, but it will be stressful on the work of government in the round. It will be more difficult and people will need to think about some of the ways of working. It will be, I think, an interesting experience, if it happens, for all of us.

  Q60  Chair: I think it is entirely appropriate that we finish on words like "testing" and "interesting". These are great Civil Service words—

  Sir Richard Mottram: Challenging; courageous!

  Q61  Chair: --- to describe what is ahead. May I say, you have been a terrific panel; you really have. I hope you have enjoyed it as much as we have. It has really been stimulating and really useful. Thank you very much indeed. The promise I can give you is that this Committee will never have to call upon you again, but we are glad we did this morning and thank you very much indeed for your time.

  Sir Richard Mottram: Thank you.

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Prepared 8 April 2010