Good Governance and Civil Service Reform

Written evidence submitted by Newbridge Partners (GG 09)

Summary

· The traditional bureaucratic model of organisation is no longer fit for purpose to cope with the challenges of rapid change, severe budget reductions and heightened citizens’ expectations.

· Moving to a "post-bureaucratic" model will necessitate less hierarchical management structures within organisations and between central Whitehall departments and other public bodies.

· One of the most important requirements and mechanisms for adaptation will be the use and publication of public value outcomes and cost-effectiveness measures.

· The aim of civil service reform at this time of significant change and reducing budgets should be a deliberate and planned transformation of the public sector and the public sector organisations within it to the new organisational model envisaged.

· Reform should aim to balance the need of maintaining the continuity of delivery of current day-to-day services with the transformation of the mechanisms of delivery.

· The skills required to lead an organisation undergoing incremental change are very different from those of a transformation leader.

· Accordingly, in most cases a transformation leader will need to be brought in from outside the organisation and quite possibly from outside the public sector, where the experience and expertise is more immediately accessible.

1. Introduction

1.1 This paper is submitted by NewBridge Partners Limited, an organisation with over 20 years’ experience of leading organisations (private and public) through periods of critical change - offering transformation executives, specialist resources and battle- tested methodologies to enable organisations to transform themselves cost-effectively.

1.2 This paper deals with the following aspects of the Committee’s Inquiry:

· How should the civil service adapt to a "post-bureaucratic age"?

· What should the aim of civil service reform be at a time of significant change and reducing administrative budgets?

· How can such reform be realised?

· How could the proposed principles be made useful for the measurement and assessment of good governance?

2. How should the civil service adapt to a "post-bureaucratic age"?

2.1 The bureaucratic form of organisation is a strict hierarchical structure and is perceived almost as a machine to produce routine products or services in an environment that does not change in any unexpected manner. Most management theorists today accept the view that there is no single best form of organisation for all contexts, but that the traditional bureaucratic form is best suited to environments where there is little relevant external change and where there is little need for much worker autonomy and discretion. However, today’s civil service is facing dramatic change and the government is placing strong emphasis on services being made more responsive to citizens, which in turn requires empowerment of front-line workers. This implies that tomorrow’s civil service will need to go beyond the traditional bureaucratic model.

2.2 However, the challenges of shifting from a bureaucratic to a ‘post-bureaucratic’ form of organisation should not be underestimated, especially for a very large organisation that has successfully managed the business of government for a long period.

2.3 The immediate requirement would therefore be for all members of staff involved to recognise the nature of this shift and of the increased freedoms and responsibilities this will confer. Great care needs to be exercised to provide sufficient training, induction and support to workers in particular to ensure that they can cope with these increased powers. Managers will need to evolve towards a more supportive and coaching style of management while at the same time developing overall 'control' systems and measures that quickly alert them to unexpected or unsatisfactory outcomes. Additionally, managers will need to see themselves as having greater entrepreneurial and leadership responsibility than before; and they in turn will require the navigational framework of broad outcome and cost-effectiveness measures to help clarify challenging choices and decisions (see below).

2.4 Whitehall Departments will increasingly see themselves as the central policy actors of a network of organisations charged with the delivery of public value outcomes and cost-effectiveness. The relationships between these departments and the wider Civil Service and other public bodies would be expected also to become more collegiate and more in the spirit of 'partners' working towards shared objectives than hierarchically-based subordinate organisations. This will help in particular to address the need for more 'horizontal/joined up/ whole of government' approaches, as opposed to the previous tendency towards 'vertical management'. All these shifts are probably already taking place to different degrees in different parts of the whole organisation, but the full shift will require careful orchestration and will undoubtedly throw up new challenges.

2.5 One of the most important requirements and mechanisms for adaptation will be the use and publication of public value outcomes and cost-effectiveness measures. These will help different organisational units within and across different sectors (public, private, voluntary) communicate with each other and work together towards clearly stated and shared public value outcome and cost-effectiveness objectives and measures.

2.6 The ultimate rationale for the decentralisation agenda is that this should enable the best overall performance in terms of public value outcomes and cost-effectiveness. Most organisational theorists would agree with this view but the challenge of successful transition is significant and there is the constant danger that any individual setback could 'derail' the overall drive. Public value outcome and cost-effectiveness measures would help both monitor and inform the progress of the decentralisation agenda.

3. What should the aim of civil service reform be at a time of significant change and reducing administrative budgets?

3.1 The aim of civil service reform at this time of significant change and reducing budgets should be a deliberate and planned transformation of the public sector and the public sector organisations within it to the new organisational model envisaged.

3.2 Simply reducing administrative budgets without such deliberate transformations would inevitably lead to a reduction in the quality of public services and/or service levels. However, by using the necessity of severe cost reduction as a spur for transformation, there should be the potential to deliver relatively better outcomes and cost-effectiveness than otherwise.

3.3 The opportunity to deliver these relatively better outcomes and greater cost-effectiveness is a consequence in part of the proposed shift from the bureaucratic to the post-bureaucratic organisational model. Several commentators have criticised the so-called 'waste' of the current system, which is claimed to emanate from, in effect, the bureaucratic model. The theory is that, by adopting the post-bureaucratic model, many of the sources of wasted effort would be eliminated and the managers and workers within the organisations would be freed up to be more productive in terms of producing the services and service levels desired by the citizen.

3.4 The plethora of micro-management targets that were in use until at least 2008 is an illustration of the kind of micro-management control measures associated with the bureaucratic model resulting in wasted effort. Whether or not such control measures are inextricably linked to the bureaucratic model is a moot point. However, simply discarding the micro-management measures does not in itself transform the organisation to a post-bureaucratic model. Rather the post-bureaucratic model relies more heavily on other controls such as: overall public value outcomes and cost-effectiveness measures; recruitment, selection, training and career advancement that reinforces a public sector ethos; and the new organisational working culture of a post-bureaucratic model.

3.5 Most importantly, the civil service approach to reform should aim to balance the need of maintaining the continuity of delivery of current day-to-day services with the transformation of the mechanisms of delivery. This balance is difficult to achieve in practice, and typically requires a deliberately planned twin focus with designated leadership on the two separate objectives.

4. How can such reform be realised and sustained?

4.1 It is essential that the transformation envisaged is recognised as a deliberate transformation with a clear vision at the end of it, and not the random and chaotic outcome of budget cuts. The Cabinet Office should accordingly publish a white paper providing a guiding framework for public sector organisations to consider and use, as they think fit, to transform themselves as appropriate towards the post-bureaucratic model to the degree that they think appropriate in their unique circumstances.

4.2 The framework should in particular clarify the overall vision for the public sector as a whole so that each public sector organisation can more quickly develop its own unique vision. In addition, the framework should clarify the corporate models that might be employed; access to special funding for exceptional transformation costs; and a public value outcomes and cost-effectiveness perspective that can be used to help guide and monitor performance and progress.

4.3 Armed with such a framework, the senior management of each public sector organisation would be in a better position to anticipate the transformation process, the transformation leadership challenge, and the designation of an appropriately experienced transformation leader from any available source. Designated transformation leaders will be essential to the realisation of most major organisational reforms and transformations.

4.4 Some current leaders of public sector organisations may feel that they already have the necessary experience and skill to transform their organisations while simultaneously running the day-to-day operations. Some may feel tempted to appoint one of their managers to the role. However, the skills required to lead an organisation undergoing incremental change are generally very different from those of a transformation leader. Accordingly, in most, though not all, cases the transformation leader will need to be brought in from outside the organisation and quite possibly from outside the public sector, where the experience and expertise is more immediately accessible.

5. How could the proposed principles be made useful for the measurement and assessment of good governance?

5.1 In terms of measures, the key measure that needs to be added to the performance element is 'public value outcomes and cost-effectiveness'. This measure should be in addition to any 'value for money' measure.

5.2 The public value outcomes and cost-effectiveness perspective will be particularly important to sustaining such reform for it can be used to clarify and communicate both the vision and the strategy and the subsequent performance and progress in terms of both effectiveness and efficiency.

January 2011