Good Governance and Civil Service Reform

Written evidence submitted by Reform (GG 13)

1. What is meant by the term, "post-bureaucratic age" and what are its implications for good governance, for Whitehall Departments and for the wider civil service?

The "post-bureaucratic age" (PBA) seeks to change the role of the State in three ways:

§ by decentralising power from Whitehall to local communities

§ by increasing the accountability of the government to the citizen through transparency; and

§ by driving up the responsiveness of public services.

In his speech describing the PBA on 22 February 2010, David Cameron has described the shift as being "all about people power, not big government". [1] It is tied closely to the Government’s theme of the "Big Society".

Its implications can be summarised as follows:

§ For good governance: for changing the role of government from the funder and manager of public services to the funder alone. This would prevent conflicts of interest and increase value for money and performance.

§ For Whitehall departments: a radical change in focus away from direct responsibility for "delivery" towards the creation of economic frameworks for delivery of public services. This would require much stronger abilities in economics, law and financial management.

§ For the wider civil service: for public servants, a shift from traditional employment in the public sector to employment in new kind of organisations, whether for-profit, charitable, joint ventures, social enterprises and so on.

2. Can the traditional ‘Whitehall’ model of civil service governance and accountability continue to function effectively in the post-bureaucratic age?

No. The traditional Whitehall model is contradictory to the themes of the post-bureaucratic age.

Ministers of the previous Government came to the conclusion that reform of Whitehall was necessary to support the wider reform agenda. In 2007, for example, Alan Milburn, the former Secretary of State for Health, said:

"Whitehall is the one part of the public services that has largely escaped Tony Blair’s reforming zeal. It should do so no longer. The same disciplines that nowadays apply to other parts of the public services should finally and equally be applied here. Departments should work to transparent outcome-based contracts agreed with No 10. Senior civil servants pay should be made more dependent on performance against such contracts. Where Whitehall functions (aside from those covering vital constitutional and propriety matters) can be subject to periodic external competition they should be." [2]

These Ministers’ conclusions were based on the following ideas:

§ Where the PBA aims to decentralise, the traditional Whitehall model is highly centralising. The doctrine of Ministerial responsibility pulls decision-making to the heart of Government and compels Ministers to extend their interest into the activity of civil society. The traditional Whitehall model has sought to give Ministers powers of direct intervention into the economy and the public sector. The PBA has exactly the opposite ambition.

§ Where the PBA aims to create accountability, the traditional Whitehall model obscures accountability. The doctrine of Ministerial responsibility, again, is used as the defence of a model that keeps the contribution of individual civil servants invisible. The PBA seeks to make public servants personally accountable through transparency.

§ Where the PBA seeks to create public services responsive to the user, the traditional Whitehall model seeks to impose central will on public services through targets, national standards, national pay and labour agreements and so on. The PBA would see an end to these expressions of central will.

It is interesting to see the development in the thinking of another Prime Minister with reforming ambitions, Tony Blair. He made two speeches on the Civil Service. In 1998, he praised the Whitehall model. By 2004, his praise was modified by a call for Whitehall to change radically. [3] Some of his ideas prefigured the PBA, in particular the idea that government should become "an instrument of empowerment" and should become accountable for outcomes:

§ "Government has to become an instrument of empowerment, quick to adapt to new times, working in partnership with others, to deliver clear outcomes so that the public sees a return on its investment through taxation. It has to go through exactly the same process of change as virtually every other functioning institution in Britain... What does it mean in practical terms? It means the following:

§ a smaller, strategic centre;

§ a Civil Service with professional and specialist skills;

§ a Civil Service open to the public, private and voluntary sector and encouraging interchange among them;

§ more rapid promotion within the Civil Service and an end to tenure for senior posts;

§ a Civil Service equipped to lead, with proven leadership in management and project delivery;

§ a more strategic and innovative approach to policy;

§ government organised around problems, not problems around Government."

In passing, it should be noted that the current Government’s policies on governance are therefore inconsistent. On the one hand, it espouses the post-bureaucratic age. On the other, it supports the traditional Whitehall model ("reforms" very minor variations such as new kinds of Departmental Boards leave the traditional model in place). In fact, as Francis Maude explained to the Reform conference on good governance in July 2010, he has sought to strengthen the traditional Whitehall model, for example by reducing the number of political advisers and consultancy advice. [4] The Government is therefore trying to delivering the post-bureaucratic age through the traditional bureaucracy. This is not easy and not likely to succeed.

3. In what ways do civil service departments need to adapt to a post bureaucratic age, and in particular to the current Coalition Government’s decentralisation agenda?

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

5. How can such reform be realised and sustained?

In March 2009, the Reform report Fit for purpose set out the following agenda for a thorough reform of Whitehall that would support a wider, decentralising programme of government: [5]

"An effective Civil Service must have:

§ "Effective performance management. This would need a clear "failure regime" so that unacceptable performance is tackled and remedied. Managers need to be more effectively supported in managing out poor performers within their team, and rewarding those who perform well. This will necessitate a change in the role of HR and legal teams so that they support and assist managers and staff, rather than seeking to control the process as is more usual at present, and a revision of the Management Code that prescribes the dismissal processes of the Civil Service.

§ "Open and flexible recruitment. This would enable the best people to be recruited to do the jobs that are needed, for as long as they are needed to do the job. This is not an argument for abandoning the Civil Service commitment to generous pension provision, but in fact an argument for making it more flexible so as those who are not "lifers" can benefit as well. Indeed, the concept of "lifers" would need to end. The role of the Civil Service Commissioners would need to be modernised to become one of facilitating the opening up of the Civil Service and bringing real expertise in appointment. The top of the Civil Service would also need to require a more facilitative approach from HR to frontline managers. Promotion on merit and reward for expertise and aptitude. This would necessitate the reform of the promotion and recruitment system so that high-performing individuals could be better rewarded in post without having to move jobs.

§ "Effective contractual management. This would require a recognition that "contracting out" services is not an effective alternative to tackling the systemic inadequacies that the Capability Reviews reveal pervade the Civil Service. Specifically, if a service is contracted out, the quality of service that the public can expect will be substantively dependent upon the effectiveness of civil servants in managing the contracts. Redefining the role of the Civil Service "centre" as that of commissioner, rather than provider, can be part of a virtuous cycle of performance improvement, or a vicious circle of inadequate performance and a growing accountability deficit. The Civil Service needs to be reorganised to ensure it is the former. This would entail greater emphasis on effective contract management as a specialist skill with greater reward.

§ "Effective policymaking. Ministers need policy advice rooted in a detailed understanding of issues, both in breadth and depth. Policymakers need advisers who stay in a brief long enough to understand it, who have sufficient experience to place it in context, and who have sufficient insight into the front line to be able to advise on feasibility. These may not all be the same people. Ministers need an effective "challenge" mechanism to the "departmental view" of vested interests, to be able to get the best advice – whether it happens to be in the department or not – and to foster, capture and harness best practice. Innovation needs to be championed and embraced, from outside the system as well as from inside.

§ "Real rather than rhetorical localism. Whitehall is overloaded and often lacks suffi cient local knowledge and insight to give effective advice to Ministers so that informed decisions on local projects can be taken at national level. Devolution of decision-making has been much touted by politicians of all parties, but Whitehall caution, fuelled by examples such as the disastrous failings that allowed the tragic death of "Baby P", mean that Ministers are usually persuaded of the need to "supervise" and "scrutinise". The result is a "Russian doll" of competing bureaucracies scrutinising each other and a failure to tackle the lack of power that voters have to elect local politicians with the power to deliver real change at a local level. For localism to work more effectively, local authorities will need to address many of the same challenges that the Capability Reviews reveal to afflict Whitehall. If they succeed, Whitehall’s ingrained scepticism of the capacity of local authorities to deliver as effective services as can central government, will be all the harder to justify.

"An empowered Civil Service requires:

§ "Clear and effective processes for management and accountability. There must be an end to the management opacity within the public sector whereby it is not clear who is responsible for what, who is accountable for what, and who is empowered to decide what. If Ministers are responsible, they should be empowered to decide. If officials decide, there needs to be a clear process of accountability.

§ "Effective prioritisation and coherent decision-making. It must be clear who can decide what at which level of government. Those making decisions should be able to call on whomsoever they want to seek advice and should be empowered to take decisions by a briefing process that provides sufficient insight and robust detail to enable effective decision-making. The relationships between and differing roles of Ministers, perm-secretaries, departmental boards and senior officials need to be clarified. A process needs to be agreed with Parliament so that departmental priorities can be clearly understood, monitored, scrutinised and held to account.

§ "Tackling "quangocracy". The creation of non-departmental public bodies and other agencies has in itself been assumed to improve effectiveness and efficiency. The fiascos that have bedeviled the Rural Payments Agency, Children and Family Court Advisory Support Service and the National Assessment Agency’s handling of SATs show that setting up a public body at one remove from Ministerial meddling is not in itself sufficient to deliver adequate performance. Too often, "stakeholder consultation" has become a process of reaching accommodations with that apparat, rather than a process of gaining the insights of the frontline workforce and adapting proposals to better meet the needs of the consumer, customer, voter or taxpayer.

"An accountable Civil Service needs:

§ "Political honesty. The canard of objectivity needs to be ditched. The voting and taxpaying public have a right to expect that Ministers are given effective advice. No human being who cares about public service is "a-political", though they may well be "a-Political". Ministers should be able to choose and appoint their own advisers and private offices. The posts in private office need to be seen as jobs in themselves rather than merely as stepping stones in a career progression and should be recruited and appointed as such.

§ "Checks, balances and effective democratic scrutiny. Parliament should have greater scrutiny powers, with greater resources given to Select Committees to hold government to account and to enable them to investigate issues in greater depth so as to provide a counterweight to the official government view. It is simply undemocratic to suggest that civil servants themselves should somehow be a "check" on Ministers and block Ministerial ideas of which the media or public disapprove. The argument that Ministers need to be stopped from pursuing stupid ideas is an argument for greater parliamentary scrutiny and greater democratic safeguards, not for a limitation on Ministerial involvement in appointments.

§ "Transparency. The public fund the Civil Service yet they have no way of scrutinising the way it operates and determining if they are getting value for their money. Real accountability would be more possible with greater public access to the processes of the Civil Service, so that civil servants could be held directly accountable to the people."

6. Is it possible to establish a set of key principles of good governance?

Good governance will be achieved when all those involved in government are accountable for their performance. It is worth emphasising that other countries routinely hold civil servants personally accountable for performance, as the Reform report Fit for purpose set out:

§ "The UK has one of the most autonomous Civil Service systems in the world. Ministers are unable to appoint their own advisers and private secretaries in their offices, or to make Senior Civil Service appointments. As such, there is a lack of accountability at the senior level and the result is a lack of accountability down the line through a clear chain of command.

§ "Most countries have been evolving their Civil Service structures to modern times, moving towards systems with greater democratic accountability. In Australia , the Prime Minister appoints permanent secretaries after receiving a report from the Secretary of the Department of the Prime Minister and Cabinet (PM&C) who must first consult the relevant Minister. In the case of the appointment of the Permanent Secretary to the Prime Minister’s Department, the Public Service Commissioner (a similar body to the Civil Service Commissioners in the UK ) provides a report to the Prime Minister. Below senior level appointments are made by Civil Service managers.

§ "Most Australian permanent secretaries are career public servants, and are promoted from a pool of deputy secretaries and other senior civil servants. Though not prescribed, appointment generally involves extensive discussions between Ministers and existing permanent secretaries, and between the Prime Minister and Cabinet Ministers, building up a high level of understanding of the possible candidates for promotion among the top level of the senior Civil Service. They are appointed for flexible three- or five-year terms.

§ "This approach leads to a system where, according to Peter Shergold, former Secretary of the Department of the Prime Minister and Cabinet: "Secretaries are answerable, responsible and accountable (under their Ministers) for their departments. If there is organisational – as opposed to political – failure the buck stops with them. It is often tough but not unfair."

§ "In New Zealand , permanent secretaries are employed by the State Services Commissioner who appoints them after an independent merit process. They are employed under a contractual system whereby politicians set out contracts with civil servants to deliver according to manifesto commitments and staff are held individually accountable for results.

§ "Under the current British system, tenure is guaranteed rather than refl ective of performance. The system of across-the-board horizontal grades acts to preclude talented civil servants to be promoted in post (the post would have to be re-graded and then re-advertised).

§ "Attempts at Civil Service reform have often been frustrated due to fears around ‘politicisation’. It is crucially important to understand that the Senior Civil Service is already politicised. In the current system, the line between Permanent Secretaries and Ministers can be non-existent. Permanent Secretaries conspire with Ministers to achieve media coverage and attention through spending commitments and eye-catching initiatives. Ministers privately influence the appointment of senior officials. There is a glaring lack of transparency, which in turn limits accountability."

7. Are these the right principles?

The danger with any set of principles for Whitehall is that they entrench the existing model, however inadvertently.

The suggested principle 1) is clearly right. The suggested principles 2), 3) and 4) are wrong in that they would impose a particular style of operation on Whitehall which would inevitably conflict with its obligation to be accountable to its leaders and, through them, to Ministers. The new deal for Whitehall should be accountability for performance with the freedom to innovate in order to deliver better performance.

January 2011