Who does UK Grand Strategy?

Written evidence submitted by the Institute for Government and the Libra Advisory Group (GS 06)

Summary

· The Institute for Government and Libra Advisory Group convened a series of discussions amongst UK national security professionals from November 2009 to March 2010 to diagnose problems with the existing arrangements for the making and delivery of national security policy and to outline possible reforms ahead of a General Election.

· These discussions brought together key practitioners and thinkers from within and without Whitehall. This note summarises key findings and provides some early observations on progress made by the coalition G overnment on this agenda.

· The discussions identified problems with the strategy and with structures that support strategy-making; the budgeting and performance management systems ; and the generation of the appropriate talent and culture needed to instantiate change. Various proposals emerged for both incremental and more radical reform if the UK is to get better at delivering national security effect at home and abroad.

· A first look at the coalition G overnment’s reforms since the General Election indicate that some progress has been made in tidying up central structures and enhancing the FCO’s role in policy-making. However, it remains unclear how able the new structures are to take a truly strategic approach to cross-government priority-setting. We recommend that the PASC seek reassurance that three critical areas are being addressed:

o Doing strategy and planning. Are Ministers confident that the practices, processes and culture of thinking strategically about national security issues and adopting best practices in planning are being adopted and are informing key national security decisions? Is the adoption of risk management tools at the centre doing enough to drive risk-based planning within departments?

o Budgeting and performance management. Are budgeting systems being reformed so as to encourage integrated planning and delivery? Are cross-cutting results based management frameworks being put in place?

o Audit/evaluation and critical challenge. Are appropriate arrangements being put in place to generate sufficient internal and external challenge and evaluation so as to give Ministers confidence that policies are having the desired impacts?

Background

1. In late 2009, Principals from Libra Advisory Group, with extensive experience in Whitehall and national security reform overseas, and staff from the Institute for Government, with extensive experience of domestic policy reform in the UK, teamed up to tackle perceived failings in the way that HMG formulated and delivered foreign and national security strategy and policy.

2. The Institute for Government’s report, Shaping Up , published in January 2010 diagnosed three issues Whitehall needed to address in order to become more effective:

o The centre needed to move from micromanagement of outcomes and become the driving force behind strategy and capability – in particular the role of the Cabinet Office needed to change;

o Departments needed stronger internal governance to ensure that they delivered their objectives;

o Stronger mechanisms were needed to ensure better joining up where issues cut across departmental boundaries.

3. While Shaping Up was in preparation, Libra Advisory Group and the IFG convened a series of "strategic conversations" with key Whitehall departments, political advisors and external experts to look at how national security strategy is organised and implemented. The meetings took place in the period November 2009 to March 2010, under the Chairmanship of former Security and Intelligence Coordinator and Permanent Secretary at the Ministry of Defence, Sir Richard Mottram. Those meetings were supplemented by individual sessions in departments. The conclusions reached were those of the participants, neither of Libra, nor IFG – but they very strongly echoed many of the Shaping Up themes even though that was a thesis developed largely through the lens of domestic policy.

4. These discussions took place before the 2010 General Election. They reflected the interest shown in achieving a more strategic approach to these issues, both by the then G overnment, through the development of the UK’s National Security Strategy, and the ideas on how better to organise around national security issues in the Conservative Green Paper on national security. The discussions also built on the momentum for reform generated by earlier work such as that of the IPPR commission, chaired by Lords Ashdown and Robertson, and work in the UK’s overseas partners on national security reform, notably in the United States, Australia and France.

Diagnosis

5. The discussions focused on three big areas of concern. The first was on the development of strategy and the structures that were used both to decide strategy but also to make it happen. Participants felt that the arrangements for coordination on counter-terrorism, with the lead in the Office of Security and Counter-Terrorism, worked well, but that this degree of strategic focus and clear line to delivery did not exist in other areas. While the National Security Strategy was regarded as a significant advance in terms of a cross-Whitehall analysis of threats, it failed on two counts. It did not force prioritisation and lacked a clear link to resource allocation. Weak coordination at the centre was also mirrored in weak coordination in many cases on the ground. This reflected persistent uncertainty as to how much of an activist, agenda-setting role the Cabinet Office should have versus a more passive coordination role.

6. The second area of concern was on budgeting and performance management . The National Security Strategy had no real role on either of these and the Public Service Agreement arrangements, which seemed to work relatively well in some domestic policy areas, did not work in relation to key national security issues, such as international conflict, and were probably testing the limits of the PSA system. Current budgeting arrangements hindered joined up strategising and working, either at threat level or at country level where resource spend was determined by departmental, not HMG, priorities. Furthermore, there was a real lack of internal challenge on performance – with departments often very reluctant to challenge what other departments were doing.

7. The classic joined up budget in this area – the Conflict Prevention Pool – was small, managed ad hoc on a year by year basis and had tended to be diverted into funding immediate operations rather than address long-term prevention. In country operations were sometimes biased towards being done by people in uniform as MoD could access the Contingency reserve when civilian departments could not.

8. The final area for focus was on talent and culture . There was no "national security profession", though there was a de facto national security cadre emerging. The National School for Government offered no courses on national security, and current arrangements for providing training on strategy, planning and national security issues were ad hoc . Despite some progress, there was an absence of joint training and strong cultural and skills differences between departments, with relatively little movement between departments (and what movement there was, was at risk at a time when being outside your home department put you at risk of being cut). Compared to some other countries, the UK was much less porous, with less interchange between the outside world (think tanks, academia) and Whitehall.

Recommendations

9. Given the range of voices and interests represented at the meetings and Whitehall consultations, it proved surprisingly easy to reach a degree of consensus on some of the needed reforms.

10. On strategy and structure, th ere was wide agreement that the structure at the centre of government in relation to strategy development, the ability to prioritise, and the coordination of delivery, especially in complex environments on the ground was not working very well. The conclusion was that a new model was needed, involving a more powerful National Security Council/NSID underpinned by a strengthened secretariat and thematic hubs, drawing on the OSCT model. Those hubs would lead on the key identified threat and would be based in lead departments, overseen by cross-Whitehall boards. The FCO should lead the translation of these priorities into specific country strategies to ensure a coherent, collective approach. This would also mean a streamlining of the internal organisation of the Cabinet with the separation of the national security secretariat from the global issues secretariat. (This issue has been resolved post-election in the new Cabinet Office organisation.)

11. One of the particular implications of this recommendation was for a new and stronger role for the FCO as the leader of efforts on threat states and in developing prioritised country/thematic strategies which would drive departmental activity both in Whitehall but also overseas. Another implication, particularly given spending constraints, is that rather than departments having separate pools of analysts briefing individual Ministers, analysts should be pooled and their shared analysis should be presented to Ministers as a basis for making strategic decisions. One observation was the importance of ensuring that DFID’s significant investment in research needs to be more effectively tapped by analysts in the FCO and MoD.

12. The most pressing need to improve budgeting and performance management was to link it clearly to the national security strategy. There was reluctance to go as far as the IPPR in recommending a unified security budget which would have to be held in the Cabinet Office. But a strong case could be made for giving the NSC a role in overseeing the allocation of the national security resource envelope to make sure it aligns with strategic priorities. This could be done in part by an expansion of the virtual pooled budget approach, for instance by piloting further virtual pooled arrangements for "new" cross-cutting topics and priority countries. This would be in line with some domestic thinking about more area based approaches to budgeting (e.g. "Total Place" becomes "Total Pakistan"). Those pools need to run on a multi-year basis, rather than be set annually, and ideally should be top sliced from initial allocations rather than brought together by contributing departments.

13. The importance of being able to get a better handle on cross-cutting ways of measuring performance and impact, albeit recognising that demonstrating impact in foreign and national security policy may be harder than in domestic policy, was a strong theme of the discussions. With PSAs not being seen to have worked particularly well, a number of ideas were put forward to address assessment of impact. One missing tool in the UK system may be some form of "classified institute" akin to RAND in the US which is able to provide informed internal challenge and so provide Ministers with an independent source of advice.

14. In relation to talent and culture , the discussions recognised the efforts made by the leadership of FCO, DFID and MoD to inculcate a culture of "jointery" in places like Afghanistan. But participants concluded that further efforts along these lines would be required to make the structural and process changes take effect which would form the building blocks of creating a common culture and a more coherent approach to talent management across the national security area. The lead will have to come from Ministers and Permanent Secretaries to drive cultural change by clearly communicating the notion of "common endeavour". While some of the underlying systemic problems will take time to address, incremental changes could begin to address the issues. There are a number of tangible steps which could be taken straight away. These include creating clear career paths for people in the national security area and pump priming more joint educational activity. Recruitment practices and willingness to spend on training differ enormously between MoD (which invests heavily in education and training), DFID (which often expects new recruits to have masters’ degrees in directly applicable subjects), and the FCO (which still recruits largely based on ability and adaptability). A further step would be more encouragement of interchange within government, between departments, and with the external national security community.

15. Finally, as identified in the Shaping Up report, there are a lot of rather prosaic barriers to making joint working work better – lack of common IT systems, multiple terms and conditions, different appraisal systems which act to make the ambition of jointness unnecessarily hard to realise in practice. These may now be being addressed by the activities of the newly established Efficiency and Reform group but in the longer run may require the creation of a single civil service on common terms and conditions.

So is the coalition shaping up for national security?

16. The first answer is that it is too early to say.

17. Internal structures appear clearer with the creation of the National Security Adviser post and the new secretariat, integrating the global issues brief. But at the same time, there are still some issues which could straddle multiple interests in the Cabinet Office – for instance energy security could be an NSS issue, is certainly an EU issue and is also a key area of domestic policy. At the same time, the position of the Foreign Secretary, as a Cabinet big beast, is changing the internal dynamic between departments.

18. What is not so clear is whether some of the changes of policy emphasis (e.g. the creation of a special relationship with India, protecting the UK homeland, the commercial focus of the FCO) are being translated into real trade-offs, policy choices and hence priorities.  This should be being surfaced in the Security and Defence review – but the danger is that the coincidence with the very tight timetable for the CSR will mean that the big strategic choices are submerged in the more conventional interdepartmental budget haggling (there was already some evidence in our sessions that the October enthusiasm for joining up was eroding by March as the reality of the spending arithmetic began to dawn). The initial round of Structural Reform Plans has focused very much on departments rather than a collective HMG effort. In a perfect world, the spending position should be the catalyst for a much more radical look at effective joint working, elimination of duplication and cross-departmental prioritization.

19. Based on the Libra/IFG discussions and our experiences on the domestic and foreign policy sides of Whitehall, we think it would be worth exploring further three areas in which government could improve the preparation and execution of foreign and national security policy strategies:

"Doing" strategy and planning

20. By the end of the last administration, a community of foreign and national security policy "strategists" had begun to emerge across government. A number of strategy units existed which worked together on futures thinking, cross-cutting policy issues, and which helped each other to engender a culture of more forward-looking strategizing across departments. This embryonic strategy community had begun to develop a way of doing business and a series of quality products. In light of structural and personnel changes since the election, and based on early evidence from departmental SRPs, we are concerned that this community has not been built upon. Hence, the gains made towards inculcating a more strategic approach to foreign and national security policy may be being lost.

21. We have a similar concern at the next level down, turning strategy into plans (whether in relation to themes or countries). There has been progress in the past few years towards a more professional approach to planning, in a cross-departmental manner. There has been some progress towards inculcating a culture of planning professionalism, results based management and multi-year and integrated planning exercises. However, Whitehall still has very few instances of, for example, country plans that are truly based on robust analysis, clearly direct all HMG resources over multiple years, and are operated on the basis of good risk management principles. Making such approaches to planning the norm rather than the exception will take sustained leadership at Ministerial level.

22. Risk management tools such as risk registers are being embraced by the government as one means to capture and hence manage national security risks. As part of a best practice approach to corporate governance and planning, such tools are to be welcomed. However, such tools will only be effective if they go beyond the ways in which departments used risk registers under the last administration. To make risk management a useful driver for better strategy and policy-making, senior decision-makers need to be held to account for development of contingency and option plans tied to regular reviews of risks. There may be an important role here for the national security secretariat to provide a form of internal audit function to ensure risk management practices are being applied and to sponsor after action reviews where policies do not succeed.

Budgeting and planning processes

23. Initial indications, for instance the SRPs, demonstrate a worrying trend back towards departmental silos. An important conclusion of the Libra/IFG discussions was the vital role to be played by virtual "pooled funding" and more joined up resource allocation against common plans, with shared measurement systems. Without such tools in place for budget allocation and results based management, cross-government national security strategies are unlikely to have great success.  Furthermore, it is evident that the CSR pressures could act positively (catalysing joint working and real prioritisation) or negatively (prompting a retrenchment into departmental silos).

Audit/evaluation and critical challenge

24. The importance of such processes have been acknowledged by the new Government, for instance with the Office of Budget Responsibility and DFID’s accountability guarantee.  However, it remains unclear what plans exist for more systematic approaches to a combination of private and open challenges to cross-cutting national security policy issues and performance. The Libra/IFG discussions provided some examples of approaches that could be adopted to generate more robust challenge, and evaluation as well as improving the permeability of the UK’s national security decision-making cadre.

The Authors

The authors of this submission have drawn on the findings of the Libra/IFG strategic conversation but are responsible for the interpretations drawn, particularly of events since the election. The views expressed here do not reflect any corporate views of Libra Advisory Group, the Institute for Government, or the organisations with which Richard Mottram is associated.

Sir Richard Mottram is currently connected with a number of private sector, government, and third sector organisations and is a visiting Professor at the London School of Economics and Political Science (LSE). He was formerly a civil servant and for much of his career worked on defence strategy, defence policy, and the defence programme. He held a number of permanent secretary posts, including of the Ministry of Defence (1995-98) and, finally, in the Cabinet Office (2005-07) as permanent secretary for intelligence, security, and resilience and C hairman of the Joint Intelligence Committee.

Dr Andrew Rathmell is currently a Principal with Libra Advisory Group, a part of Coffey International Development. His most recent Whitehall posting was as a strategy project director with the Foreign Office Strategy Unit (2008/9), where he led cross-government strategy projects on conflict, South Asia and international institutions. Since 2003, his wor k, primarily for the UK and US G overnments, has concentrated on stabilisation, state-building and conflict management, notably in Iraq and Afghanistan. A former Research Director at RAND Europe, Senior Lecturer at King’s College London, and Research Fellow at Exeter University, his public policy work since the early 1990s has covered homeland security, national defence and a range of foreign policy issues. He is the author of numerous reports and articles on these topics, and a former special advisor to the House of Commons Defence Select Committee.

Jill Rutter is a Whitehall Fellow at the IfG. She was previously director of strategy and sustainable development at DEFRA. Earlier, she held a number of roles at Treasury, No 10 and BP.

August 2010