The UK faces complex, diverse and unpredictable domestic and global challenges. The process by which National Strategy is developed to tackle these challenges, and by which policy and the consequent tax and spending decisions are aligned with the nation's long-term interests, public values and identity is the process of 'emergent strategy'. Emergent strategy occurs inevitably and is to be discerned from the policy choices and decisions that the Government makes.
The challenges facing the UK cannot be tackled simply by the publication of a deterministic plan for Government but require strategic leadership. Such leadership is central to the process of National Strategy, or the emergent strategy will be incoherent and chaotic. When there is strategic leadership it can establish a virtuous circle, as strategic leadership develops effective policies and positive outcomes, which reinforce the public's values and aspirations and which in turn can inspire that leadership. Alternatively, the absence of strategic leadership or weak leadership will result in a vicious circle in which bad policy and failure in outcomes undermine the values and aspirations of the public and faith in their leaders.
We do not consider that the process of strategic thinking in Government currently reflects a virtuous circle of emergent strategy. We have little confidence that Government policies are informed by a clear, coherent strategic approach, itself informed by a coherent assessment of the public's aspirations and their perceptions of the national interest. The Cabinet and its committees are made accountable for decisions, but there remains a critical unfulfilled role at the centre of Government in coordinating and reconciling priorities, to ensure that long-term and short-term goals are coherent across departments. Policy decisions are made for short-term reasons, little reflecting the longer-term interests of the nation. This has led to mistakes which are becoming evident in such areas as the Strategic Defence and Security Review (carrier policy), energy (electricity generation and renewables) and climate change, and child poverty targets (which may not be achieved), and economic policy (lower economic growth than forecast).
We invite the government to publish an annual 'Statement of National Strategy' in Parliament which reflects the interests of all parts of the UK and the devolved policy agendas. This would be a snapshot of how National Strategy has developed providing an opportunity for reassessment and debate about how tax and spending decisions support the Government's national strategic aims. If published in late spring or early summer, this would mark the start of the new spending round.
The clearer expression of the nation's strategic aims would help to ensure that short-term decisions are made in the context of the long term national strategic framework. This would also improve the ability of the Government to communicate a coherent narrative. Poor strategic thinking militates against clear presentation, which was evident in the aftermath of the Budget and in response to the possibility of industrial action by tanker drivers. This report sets out our recommendations to overcome the barriers to working strategically in Government. The strategic aims of the Government, informed by public opinion, should drive individual policy decisions and align with financial decisions. The Budget process should provide clearer links between long-term objectives and specific budgetary measures. A focus on working strategically across departmental silos, driven by a strong centre of Government, will provide the Government with the capacity to deal with current issues, and the resilience and adaptability to react to the unknown and unpredictable problems of the future.
The challenges facing the UK mean that strategic thinking is both increasingly difficult to achieve, and more vital. Failing to do so in the long term undermines national self-confidence and in the short term could have catastrophic consequences.