6 The challenge for cross-departmental
strategic thinking
59. Our evidence set out a number of barriers
to strategic thinking within Whitehall. Below, we have identified
nine areas for action to ensure that short-term policy-decisions
are aligned with the UK's long-term strategic interests.
Promoting the capability of the
Civil Service
60. PASC's 2010 report contained the following
key conclusion -
It is essential to recruit, train and promote a community
of strategists from across Whitehall with different experiences
and expertise who can work collectively.[57]
We were encouraged to read in the Government's evidence
to our inquiry that there is now "an informal network of
strategists across Whitehall, which meets regularly to promote
information sharing and [to] identify opportunities for joint
work."[58] This
is a welcome step forward, but we still await the capability review
of National Strategy that we recommended. The Government inhibits
the development of such capability by insisting that strategic
plans must be "developed by Ministers through collective,
inter-Ministerial Cabinet discussion" and, moreover, that
they are based on a misplaced belief that "the UK's national
strategy is set out in the Coalition's Programme for Government,
which", they say, "captures the six strategic aims (see
para 25 above) to promote the welfare of our citizens", even
though these six aims were drafted long after they were "captured"
in the Coalition Programme for Government.
61. To invite suggestions about how to change
the culture of Whitehall to strengthen strategic thinking capability,
we held a seminar with strategy officials in the Civil Service
and held meetings with strategic thinkers and officials in Ottawa
and Washington DC. Attendees at our Civil Service seminar told
us that it was necessary to change the culture in Whitehall to
empower civil servants to take more risks. This approach recognises
the distinction between risk-taking and recklessness: we heard
that Google, for example, supports staff who take risks, even
if they go wrong, but it does not support reckless and ill-informed
decisions.[59]
62. We heard contrasting views on the use of
outside strategists. While the benefits of bringing into Whitehall
greater numbers of people from academia, the voluntary sector
and the private sector, who may be more open to new ideas were
highlighted;[60] a note
of caution was offered that external input into strategy making
in the Civil Service has value because it provides an external
challenge function, and as such, should not be absorbed into the
Service.[61]
63. The Cabinet Office evidence to this inquiry
stated that strategic thinking was "a core part of the learning
and development programme for Civil Servants" in central
government.[62] Julian
McCrae from the Institute for Government questioned whether this
was achieved in practice. Mr McCrae accepted that strategic thinking
was a "reasonably valued skill" but believed that the
records of those who have been promoted suggest that it was not
valued as highly as other skills.[63]
64. Professor Nick Butler, a former Senior Civil
Servant, believed that strategy skills were present in the Civil
Service, but not valued. He argued that:
the gap is actually among the politicians and the
leadership in setting the strategic questions, in defining the
direction and then asking the right questions to these very able
people. I am sure many Civil Servants would love to do more strategic
work than they do, but they are not asked to, particularly across
Government, and I think that is where capability lies: how to
ask the right question.[64]
65. Geoff Mulgan agreed that the role of Ministers
must be addressed, warning that improving strategic skills in
the Civil Service was futile if Ministers did not utilise and
foster these skills.[65]
66. We believe that there is
considerable unused capacity for strategic thinking in Whitehall
departments which should be allowed to grow and flourish. This
cannot be achieved if Ministers continue to insist that strategic
thinking should be largely the preserve of Ministers. We reiterate
our recommendation for a capability review of strategic thinking
capacity in Whitehall, the objective being not that Ministers
should give up their strategic role (which seems to be their fear),
but that their deliberations and decisions should be better informed.
67. We are also concerned that
the abolition of the National School for Government (NSG) will
remove the last remaining elements of training in strategic thinking
for the Civil Service. To ensure that this capacity is better
valued and promoted in future, we invite the Government to set
out how Civil Service Learning (which takes over from the NSG)
will promote the training and embedding of effective strategic
thinking skills.
68. We heard that turnover in the Civil Service
was another factor against strategic working in Whitehall and
across departments. Matt Cavanagh argued that:
you have people cycling through posts in two years,
and they themselves have no incentive to think, "Well, actually,
am I prepared to do something that is about me investing for a
result that is going to pay off in three or four years' time?"
They do not stay in post long enough and their career structure
again does not incentivise them to work across Whitehall.[66]
69. It is axiomatic that politics is increasingly
driven by the news media agenda, and that it is harder than ever
for Ministers to spend time considering the longer term. On our
visit to Ottawa we heard that the Canadian Public Service has
a recognised responsibility to look beyond short-term factors
and work towards the long-term national interest. The
Government's
response to this Report must address the question of whether there
should be a stronger, perhaps constitutional, role for the Civil
Service in promoting the long-term national interest, to help
counteract the negative, short-term pressures on Ministers.
Strengthening the centre of Government
70. A recurrent theme of PASC reports in this
Parliament has been to call for a stronger centre of Government
to promote coherent cross-departmental working and better implementation
of the Government's reform programmes.[67]
The Government routinely rejects such recommendations. However,
several witnesses shared PASC's view that a stronger centre of
Government would improve the capacity for strategic thinking and
ensure a coherent approach across departments. Lord Burns argued
for a stronger centre, noting that the Cabinet Office served the
Cabinet as a whole, and not the Prime Minister.[68]
He highlighted the contrast between the Government and his business
experience, adding that "the centres of companies have much
more strategic power than I feel is the case with Government".[69]
71. Julian McCrae from the Institute for Government
reported research by the IfG that found that, in comparison to
international examples, the UK had:
a very light function at the centre that was capable
of questioning departmental policy and the work that was emerging
from Departments, and asking, "Does this fit with a cross-government
view?"[70]
He added:
Compared with a lot of other countries, it is light
in the ability to question the content of what is coming to it
as opposed to creating the processes that ensure that paper flows
through the machine.[71]
72. Sir David King stressed that strategic thinking
would not improve "until we see leadership from the top saying,
'we need strategies and this is how we do it'."[72]
There were differing views on how this could be achieved. Jill
Rutter from the Institute for Government advocated a stronger
role for the Cabinet Office,[73]
while Lord Carter spoke of the possibility of introducing
a "chief operating officer of the Government".[74]
73. The Minister was once again a lone voice
amongst our witnesses in his rejecting the suggestion that that
the centre of Government needed strengthening, arguing that the
power held by the Prime Minister and Deputy Prime Minister demonstrated
that "there is quite a strong centre of Government".[75]
He argued that this strong centre should, however, be balanced
against the danger of "disempowering" individual departments
who should retain "their considerable degree of autonomy".[76]
The right role for the centre of Government was therefore not
to tell departments what to do, but to have a coordinating role.[77]
74. We have set out in previous
reports our call for a stronger centre of Government to lead Civil
Service reform. Ministers and the Senior Civil Service are alone
in their complacency that that cross-departmental working is adequate.
We therefore reiterate our recommendation for the Cabinet Office
to be given the means and influence to act as an effective headquarters
of Government, on behalf of the Prime Minister and Cabinet as
a whole, or to explain how else the Government will address the
endemic problem of failed cross departmental working. We believe
that this stronger centre of Government is the only way to promote
coherent National Strategy which is supported across all departments.
We will return to this topic in future reports.
Address longer-term context as
well as short-term problems
75. Geoff Mulgan argued that strategic thinking
was about:
promoting a way of thinking or a culture in senior
Ministers and officials that is always looking at not just next
two or three months, or the next couple of years of policy implementation,
but also at the further horizon. [78]
He argued that, when Prime Minister, Tony Blair
"regularly spent significant chunks of time with his
colleagues, officials and outsiders looking at the UK's interest
10, 20 or 30 years ahead."[79]
Sir David King, in his time as Chief Scientific Adviser also reported
that the Strategy Unit in Number 10 carried out 'futures work'
looking 10-100 years in the future, bringing in an expert community
of "scientists, economists social scientists and technologists
[to] advise on future trends, opportunities and risks".[80]
76. The evidence we received was that such long-term
thinking did not occur across Whitehall.[81]
Sir David cautioned that long-term issues were pushed to the side
while governments focused on urgent short-term problems. Lord
Carter of Coles noted that "the urgent tends to trump the
important".[82]
77. The Minister told us that for the Government
looking far ahead is exactly what does take place;
that is to say that we are sitting there and asking ourselves
the question, "If we adopt this policy, will it achieve our
long-term goals? What long-term effect will it have? That is the
discussion that does happen in Cabinet Committees and happens
well in Cabinet Committees.[83]
He also stated that
this Government have been peculiarly good at not
allowing the day's headlines to deflect them from long-term activity,
whether you happen to agree with the activity or not.[84]
78. We welcome the Minister's
assurance that the Government does consider the long-term impact
of policies. However, we remain concerned that, in practice, decisions
are made for short-term reasons, little reflecting the evidence
or the longer-term interests of the nation. 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.
79. Where some departments did work to longer-term
timescales, this was not replicated across Government, causing
conflict. Former Special Adviser Matt Cavanagh told the Committee
that individual departments planned their own strategy, and operated
on differing timescales. He cited the example of Afghanistan,
where he described DfID as working to a ten year timescale, Ministry
of Defence as operating on a six-month timescale (the same as
tours of operation), and the Foreign Office, in contrast, working
on what felt like "a oneweek time scale". [85]Mr
Cavanagh argued that having differing timescales for each department
did not pose a problem of itself, but that the departments involved
"all needed to get together and agree on a strategic time-scale,
in which they would have a conversation about what was going to
happen in the next two or two and a half years", which at
present did not happen.[86]
80. The Minister accepted that such different
timescales existed, describing it as one of the "great complexities
of government". It was not, he believed possible to "obliterate
these differences" but the work of Cabinet Committees and
the National Security Council was to:
be conscious of them, and to try to make what we
are doing for the very short term coherent with what we are doing
for a slightly longer term, and, in turn, coherent with things
for longer than that. That is a very difficult juggling act all
the time.[87]
81. The Cabinet and its committees
are capable of carrying out little more than a patch-and-mend
to the policies which reflect differing departmental strategies
and timescales. The system makes ministers accountable for decisions,
but makes it hard for individual Ministers or the ministerial
team to determine how decisions are considered from the outset.
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. Only a clear
national strategic framework can place day-to-day decisions in
the long-term context, or emergent strategy is more likely to
throw up unanticipated problems, such as the need to revisit carrier
aviation policy, to revise feed-in tariff rates for micro-renewables
or the over-optimism of the government's initial economic forecasts.
Improve the proper use of Scenario
Planning in managing uncertainty
82. When considering strategy over a long timescale,
many witnesses recommended that to work strategically, governments
should undertake scenario planning. In meetings in Washington
DC we were told that it was critical that scenario planning is
tied into a wider strategic framework through the willingness
of senior officials and politicians to act on the findings.[88]
83. Dr Mulgan highlighted the example of Singapore,
where, he said, "officials and Ministers are regularly taken
through scenario exercises to game play or role play bad things
happening". He argued that if such exercises had been carried
out by the Treasury in recent years, the Government would have
been better prepared for the economic downturn in 2008.[89]
However, the Treasury was unwilling "to think through negative
scenarios" such as to consider "a slowdown of the world
economy, the credit crunch and
rises in unemployment".
The reason for this unwillingness was how it would be interpreted
in the media if it were to leak.[90]
Professor Kay agreed, arguing that in addition to the fears of
leaking, the Treasury was also unwilling to undertake scenario
planning because "the people at the top do not welcome challenge".[91]
This evidence echoes the findings of our 2010 inquiry .
84. Lord Burns expressed his doubts about the
use of scenario planning involving "people trying to paint
big pictures of all kinds of different things that might happen
in the world and to devise a series of policies to suit each of
them".[92] Instead
he highlighted his belief in 'stress-testing' policies, a process
which was used during his time in the Treasury "to identify
some ways in which the external world may come to impact upon
what the policy was doing or where things may turn out differently
from expectations, and then trying to see how robust the policy
was."[93]
85. Geoff Mulgan argued that carrying out such
scenario planning "would require a very different mode of
thinking from what is normal in Government ... [who] are repeatedly
victims of essentially wishful thinking and believing that growth
will continue".[94]
Lord Burns agreed:
Government have never been very good, in my experience,
at what you might describe as looking at plan B, because Government
do not like to think that plan A is not going to work. They fear
that, by looking at plan B, there will be a loss of confidence
in plan A. Of course, when plan Bs have been looked at, they never
turn out to be a plan B, because by the time there is a problem
with plan A, there are usually a lot of other factors that by
then have changed as well.[95]
86. Professor Gwyn Prins from the London School
of Economics highlighted the danger of 'wicked' problems: "open
system issues, incompletely understood with no bounded data set,
no stopping rule for research, no possibility for iterative experimentation
and notorious for producing perverse, unintended consequences
when governments try to act on them."[96]
By their very nature such
problems cannot be detected by horizon scanning processes. He
directed our attention to two countries, Australia and Sweden,
who have already embraced this challenge and have developed and
fielded techniques of strategic analysis which make a virtue of
acknowledgment of doubt. These techniques permit open recognition
of what is and is not known and knowable. He recommended that
benefit might be drawn from study of such methods which do not
commit the errors of horizon-scanning to which several witnesses,
as well as Professor Prins, drew attention.
87. The Minister recognised the limitations of
planning for the future citing the very recent example of the
failure to predict the Arab Spring:
In the National Security Council we have gathered
with us the heads of the intelligence agencies [...] We get a
lot of information from them, from the Foreign Office, which is
also represented, and from the military, which is one of the points
of the committeethat it is not just politicians discussing
it. There is also a vibrant intelligence community that is connected
with ours around the world, and all the newspapers and other media
of the world, and the commentators, and the many consultants,
and so on. Using the whole of that collective wisdom, not a single
suggestion was made to us, or indeed I believe to any of the other
equivalent bodies around the world, that there was going to be
an Arab Spring. Nobody guessed it. It happened quite contrary
to anyone's predictions.
88. The Minister stressed that failures to predict
events in this way did not occur because the officials or strategists
"were stupid or ill-informed. It is because they were human
beings. We just do not know very much about the future."[97]
89. For this reason, the Minister believed that
the "only rational approach" is the Government's current
position of "trying to be clear-minded about our aims and
trying to adopt policies that we think will go there but trying
to maintain flexibility in the face of changing circumstances".[98]
In this way, the Minister argued:
it does make sense to spend time and effort looking
at the future, as long as you remember that you will probably
get it wrong. The reason why it makes sense to continue looking
at the future is that at least you can try to identify as many
of the very large risks as you can. Having a policy structure
that is as resilient as you can make it in the light of an analysis
of the very large risks and the uncertainties is a good thing
to have. It is worth trying to chart what the very large risks
are.[99]
90. We are concerned that the
increase of horizon scanning gives politicians and officials a
false sense of security that they are prepared for all eventualities.
We advocate a greater recognition of the unpredictable nature
of the issues which face us as a nation. We recommend a review
of the use of horizon scanning and its purpose. This should be
undertaken on the grounds that speculative study of alternative
futures is necessary but on the understanding that strategic assessment
must also consider unknown future challenges and be prepared to
respond to uncertainty.
91. We very much welcome the
Minister's advocacy of analysis and policy which takes account
of risks and uncertainties. However this must be reflected in
the Government's emergent National Strategy and in the policy-making
process, and to do so requires the Government to have the skills
and capacity for such assessment and analysis across Whitehall.
This underlines the need for a capability review of strategic
thinking capacity.
Ensuring the proper use of science
92. There are differing views on how useful evidence
from science can be in determining strategy in an uncertain world.
Professor Gwyn Prins of the London School of Economics emphasised
the need for National or 'Grand' Strategy to take into account
the need to distinguish between, and to employ consciously, four
different types of knowledge (as defined by Aristotle in the Nicomachean
Ethics).[100] These
are firstly 'masterful know how' knowledge which changes things;
secondly reproducible, theoretical knowledge which is rule
setting. These two are the fundamentals of what is popularly called
'scientific' knowledge appropriate for fields of knowledge with
clear boundaries. But the third type of knowledge is essential
for human affairs (says Aristotle), as well as for all 'wicked'
problems. This is 'practical wisdom' which must guide us when
we face the unknown for which we have no rules. To it is joined
'conjectural knowledge': the learned capacity for handling complexity
that combines flair, wisdom, forethought, subtlety of mind, deception,
resourcefulness, vigilance, and opportunism. It can provide the
ability to anticipate, modify and influence the shape of events.
It makes one comfortable with the absence of precision in a 'wicked'
world and skill to deploy human ingenuity. The third and fourth
forms are not rule-giving and are not 'scientific' in the popular
sense. Professor Prins suggested that it is essential to choose
the correct form of knowledge for the type of problem. In this
way we can "make choices in the face of uncertainty".[101]
Such choosing underlies the Swedish and Australian strategic
assessment methodologies to which he had earlier referred. He
suggested that mismatch, and particularly the view that the first
two types of knowledge are best applied to bounded, understood
fields, can be universally applied, is a common error.[102]
93. Professor Prins argued that the belief that
there is a scientific solution to all significant problems has
made "it appear shameful for civil servants to admit to ignorance
or to say that nothing can be done (or should be done) by Government".
[103]
94. Simon Anholt shared this view, arguing that:
Britain's failure in strategy is precisely our refusal
to acknowledge the importance of imagination and creativity in
the game - our determination to believe that national strategy
can be a purely ratiocinative process, informed by pseudo-scientific
approaches such as 'horizon scanning'. This criticism has often
been repeated throughout this enquiry, but it is a criticism we
should test against ourselves too, for strategy is more art than
science, so to exclude the artistic from the game is surely an
error.[104]
95. The Minister argued that the Civil Service
did have "a great deal of practical wisdom", but that
when he "was teaching Aristotle in Cambridge [I] used to
warn my students against trying to use these categories exactly,
because I do not think that they work terribly well."[105]
96. The evidence we received from leading scientists
stressed that Professor Prins' concerns about uncertainty in science
were recognised and managed. Lord Rees stressed the importance
of using scientific knowledge, saying that "we got on better
with it than without it" once its limitations were accepted.[106]
He emphasised that as "a larger proportion of the long-term
issues confronting us as a nation have a scientific dimension",
decisions on these issues require scientific input, alongside
public opinion.[107]
This input however, did not mean setting policy but giving politicians
"a best estimate of what the scientific consensus is and
the balance of probabilities". Lord Rees added that:
What is even more important is that scientists should
realise that, even if the science is certain and fully worked
out, there can be a range of policy responses.[108]
97. We also heard that the scientific advice
offered to governments went far beyond strict physical or chemical
science. Sir David King, the former Government Chief Scientific
Adviser told us:
when I was advising Government, I would bring in
the appropriate physicists or engineers but also appropriate economists
and social scientists to tackle the problem with me before giving
advice. I think the way in which I can answer that question best
is in the old Latin meaning of the word "science", from
scientiain other words, use the knowledge base as a means
of advising Government. That formed the basis of my position in
Government.[109]
98. Sir David King struck a note of caution about
the political ramifications of accepting uncertainty:
It is part of the job of training a scientist to
make sure that they understand the uncertainties in what they
are dealing with. The difficulty is, as Lord Rees says, that when
scientists discuss uncertainties, it can be picked up by the Daily
Mail and others as indicating that the scientists do not know
what they are talking about.
99. Any emergent strategy must
address uncertainty: the 'wicked' problems we cannot define or
predict. There are limits on the use of scientific knowledge in
strategic thinking and the management of uncertainty must be embedded
into the strategy process. The Government should not be afraid
to acknowledge that this uncertainty exists and to promote an
open discussion about risk and uncertainty in policy-making and
development of National Strategy.
Breaking down departmental silos
100. The barriers between government departments
can prevent Civil Servants from working strategically, and across
departments, creating incentives to defend their departmental
territory at the expense of the good of the whole.[110]
This produces particular problems for working strategically on
issues which cover a range of government departments, often without
clear agreement on the lead department. Our witness Nick Butler
spoke of a policy initiative for which five different departments
felt they had the lead role.[111]
For many of these cross-government issues we heard that there
was no system currently for bringing together different departmental
strategies, which in turn encouraged turf wars.[112]
101. In a seminar with a number of Whitehall
strategists, held under the Chatham House rule, we heard that
the presence of silos in Government meant that where strategic
thinking does occur, it is dispersed throughout government, with
strategists placed in a range of uncoordinated positions in individual
departments including as part of private offices and 'insight
teams'.[113] Central
strategy units were therefore useful in ensuring coherence between
individual departmental strategies, but the trade-off was a lack
of ownership by departments and ministers of the resulting strategic
thinking.[114]
102. This was, Geoff Mulgan told us, because
of the constitutional position of the Secretary of State in terms
of accountability to Parliament which, he said, "really locks
in the department as the key unit". Lord Carter of Coles
agreed that breaking down government silos to enable strategic
thinking would require a change to the current mechanisms of accountability:
It seems to me that nobody has found a better way
than silos. We talk about it, but if you want accountability and
roles and responsibilities that are actually well defined, then,
sadly, silos seem to have been the best way to achieve that so
far.[115]
103. We heard suggestions that an 'ecosystem'
was needed which would build the connections between the departments
and all the stakeholders that are required to work strategically.
We understand
that there are procedures in place in Canada to enable strategic
work across government, and to collectively work to a longer timeframe
than individual departments. This is achieved through a semi-formal
system which brings together Permanent Secretaries in a series
of topic-based committees, such as economic, social, climate change
and global trends). Committees are required to look at least
five years ahead, but can choose the issues to address within
this timeframe, and periodically these committees are brought
together to share and realign thinking and disseminate this thinking
across departments.[116]
104. Unless National Strategy
involves the whole of government and is embedded in the thinking
and operations of all departments it not strategic. The Whitehall
silos act as a roadblock to National Strategy. To break down these
silos we recommend the introduction of thematic committees of
Permanent Secretaries for the purpose as in the Canadian public
service, to underpin the combined work of their Ministers.
Aligning financial resources with
strategic thinking:
105. Several witnesses have argued that strategic
thinking in Government is driven by the spending round. Peter
Riddell, Director of the Institute for Government, said:
what is inherent in the whole discussion we have
had this morning is the role of the Treasury. If you look at what
happened with defence, instead of things being sequential between
having a national security strategy and then the review, they
were coincidental. But, it was quite clear what was driving the
process. If you look at the evolution of the business plans, the
connection with the CSR of that year was clear. The very interesting
question is how much of the spending round comes prior to any
strategic consideration of what the priorities are for any department.[117]
106. Former Permanent Secretary to the Treasury,
Lord Burns, agreed, saying:
I find it very difficult to imagine that one can
really think about making strategy without taking into account
financial considerations.[118]
He added:
Strategy has to drive finance, and finance has to
be, it seems to me, a very important aspect in any strategic thinking.
[119]
It was, Lord Burns said, the role of the Treasury
to make sure that the strategies of individual departments "are
being brought together in a way that is affordable and fits in
with the economic strategy".[120]
107. It is not apparent that spending is linked
to strategic aims at present. As the Joint Committee on the National
Security Strategy has pointed out, the National Security Strategy
[NSS] was published on 18 October 2010, the Strategic Defence
and Security Review [SDSR] on 19 October 2010 and the Spending
Review on 20 October 2010. The Committee concluded that "it
is significant that the NSS and SDSR were produced in parallel
with the Spending Reviewrather than guiding or following
it".[121]
108. Nick Butler argued that the Treasury was
not a strategic department, suggesting that in his experience:
the Treasury concentrates on that side of the economy
[controlling the budget] at the expense of the other side, which
is growth and development for the future, and the role of both
public and private policy in achieving that growth. I think that
is now an imperative and I still do not see it happening in the
Treasury, which is regrettable.[122]
109. The Minister denied that policy was driven
by the Treasury, stating that the Treasury is "a participantan
enormously important participant, of course, but just a participant,
neverthelessin the discussions of policy." He argued
there was instead a "constant dialogue between what we seek
to achieve and what it is possible to achieve in the light of
the financial constraints".[123]
110. Attempts to work strategically
without considering tax and spending considerations cannot be
properly termed 'strategic thinking'. The strategic goals and
ambitions of the country, informed by the public's perceptions
of the national interest and by their values and aspirations,
should be the basis of the Spending Review and Budget processes.
It should be possible to see how the key strategic aims are reflected
in the business plans and spending estimates for each department,
and also in individual policy decisions.
111. Geoff Mulgan suggested that the Australian
Treasury was a good example of strategic thinking as it "has
seen itself as a guardian of linking budget allocations to a sense
of where the economy is going and where society is going",
carrying out detailed studies for example on issues like ageing.[124]
On our visit to Washington DC we discussed the similar work of
Singapore, which aligns resources with the strategic plan over
a lengthy timescale.[125]
112. In Canada, as in the UK, the Cabinet is
responsible for setting overall strategic policy direction, based
on input from stakeholders. There, the annual budget process begins
with a structured review by Ministers of financial commitments,
emerging pressures, political priorities, and economic and fiscal
developments since the last Budget. This review provides departments
with a broad strategic direction to help shape their bids for
discretionary spending. This is followed by a Fall Statement,
which sets out economic and fiscal forecasts for the five years
ahead as well as policy priorities and issues to be addressed
in the Budget. A broad public consultation is then launched on
how the available money should be allocated within these parameters.
Members of the public are able to contribute to separate consultations
run by the Canadian House of Commons Standing Committee on Finance,
and the Finance Department itself, and Ministers are held accountable
for their responses to points raised in these consultations. Departmental
Ministers then present their discretionary spending proposals
for consideration by their colleagues in three cross-cutting policy
Committees which focus on Economic Prosperity and Sustainable
Growth; Foreign Affairs and Defence; and Social Affairs. The Finance
Department then reconciles the spending agreed by these Committees
with updated economic forecasts and prepares the Budget.[126]
113. On our visit to Washington DC we heard about
the importance of a more open discussion of how public spending
is divided between entitlement and investment. Increasing entitlement
claims and burdens often do not form part of a discussion about
spending despite the danger of compromising investment in current
and future capabilities that secure our prosperity, wellbeing
and security.[127]
114. In Canada, the Fall Statement
sets out a framework for departments to make spending decisions.
The decisions are in line with political priorities and long-term
considerations, as defined by the Cabinet and informed by independent
fiscal forecasting. Specific departmental proposals are then subject
to a public consultation on how spending should be allocated.
We recommend that the Government, in its response to this report,
considers the benefits of opening up the Budget process in this
way and drawing clearer links between long-term objectives and
specific budgetary measures.
Promote Ministerial Leadership
on National Strategy
115. Several witnesses argued that it is critical
for Ministers to set the right conditions for strategic working.
Geoff Mulgan stressed that "it is key for Ministers to be
involved" in strategy work.[128]
Jill Rutter from the Institute for Government and formerly of
the Prime Minister's Strategy Unit warned that "there is
only any point in working in a strategy unit if there is demand
for strategy".[129]
116. The reality, however, is that short-term
and media pressure means that Ministers have little time to work
strategically. On our study visit to Washington DC we found that
short-termism was a common problem in other legislatures, with
foresight extending only as far as the next election.[130]
117. A further factor against strategic thinking
for Ministers was that, similar to Civil Servants, they face incentives
and career structures that are linked to departmental objectives.
Geoff Mulgan told us that, "unless you align the politics,
the career incentives of your Ministers and the political kudos",
strategic thinking would not occur.[131]
118. While our 2010 report has
provoked some positive thinking in Whitehall about National Strategy
and strategic thinking, we find that Ministers remain largely
complacent about the way things are, and that there has been little
overall improvement in the value which ministers place on National
Strategy and on those who could contribute to strategic thinking.
We also hear consistent reports, as we reported in 2010, of Ministers'
frustration with the machinery of government that is failing to
deliver their ambitions. Strategic thinking in the Civil Service
and in Government depends upon leadership from Ministers and is
an act of leadership. Greater demand for the essential task of
National Strategy should be promoted through, for example, the
use of quarterly Cabinet meetings to focus solely on long-term
strategic issues. Clearer National Strategy will help give direction
to the whole administration.
119. Jill Rutter suggested that being held to
account by Parliament for thinking strategically would elevate
strategic working to a higher level of importance:
perhaps one of the reasons why politicians do not
see the need to be so strategic is that their peers do not hold
them to account in quite the same way by asking whether they are
being strategically consistent. If they felt it was necessary
to have an underpinning clear narrative that they were judged
by over the longer term, there might be more demand to think in
that way in Government.[132]
120. International examples indicate that
Parliament, through the Select Committee process, could take a
greater role in leading a politically neutral conversation with
the public about longer-term issues such as membership of international
institutions, energy assets/infrastructure, and the referenda
on the state of the Union. This role cannot be carried out simply
through general elections, which are both too infrequent, and
too partisan in nature for an informed discussion about major
strategic issues. Elections are both insufficient and the wrong
environment (as a partisan fight) to discuss issues that are of
national strategic concern.
121. Parliament has a role in
helping to promote, and challenge, National Strategy. PASC will
continue to scrutinise National Strategy. 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. This would reflect the Canadian practice
of a structured review of financial commitments, emerging pressures,
political priorities, and economic and fiscal developments since
the last Budget. If published in late spring or early summer,
this would mark the start of the new spending round and be a precursor
to the Autumn Statement. This would be consistent with making
the annual spending and budget round more transparent. It would
also give Select Committees and Parliament as a whole the opportunity
to scrutinise National Strategy and to contribute to the formation
of future policy.
Broadening the role of the National
Security Council (NSC)
122. In our first report we pressed for the remit
of the National Security Council (NSC) to be extended beyond narrow
definition of security to cover key strategic issues such as the
economy. We followed up this recommendation in this inquiry and
received considerable evidence that the narrow view of the NSC
remained an area of concern. Nick Butler described the NSC as
"a most disappointing body" arguing that:
I do not think it takes into account whether we have
the capabilities to sustain the commitments that we are making.
We make a lot of commitments and we seem to keep making them,
but I do not think it pays attention, not just to skills, but
to the economic strength that is required to spend sufficiently
on defence and security to achieve what you say you want to achieve.
I do not think it has paid any attention to the industrial base,
which is being weakened by decisions being taken, rightly or wrongly,
and which once weakened is very hard to replace.[133]
Geoff Mulgan pressed for the NSC to consider wider
strategic issues such as skills, migration, drugs policy and energy,
as "the biggest source of security for any nation is having
its overall strategic stance right".[134]
123. The Joint Committee on the National Security
Strategy concluded along similar lines, that:
We are not convinced that the Government gave sufficient
attention in the NSS to the potential risks that future international
economic instability might pose for UK security. These go beyond
the UK being unable to afford to defend itself. International
economic problems could lead to our allies having to make considerable
cuts to their defence spending, and to an increase in economic
migrants between EU member states, and to domestic social or political
unrest. The NSC needs to take all of this into account.[135]
124. Witnesses also pressed for greater analytical
support for the National Security Council. Matt Cavanagh recommended
that "the Secretariat needs to be beefed up if the NSC is
really to play a role in terms of co-ordinating the different
Departments".[136]
125. The work of the National
Security Council (NSC) demonstrates unfulfilled potential for
driving strategic thinking across Government. It needs to avail
itself of greater capacity of the analysis and assessment of departmental
papers in the light of its own independent research, so NSC members
are better able to challenge orthodoxy and think outside their
departmental brief. We also recommend again that the NSC and its
secretariat should take a wider view than just the security issues
facing this country and should oversee National Strategy: the
UK's long term security is dependent on far more than simply military
and terror issues.
57 Public Administration Select Committee, Who Does
UK National Strategy?, para 72 Back
58
Ev 72 Back
59
Seminar with Whitehall strategists, February 2012 Back
60
Ibid. Back
61
Meetings with strategists in Washington DC, February 2012 Back
62
Ev 72 Back
63
Q 98 [Julian McCrae] Back
64
Q 49 [Nick Butler] Back
65
Q 49 {Geoff Mulgan] Back
66
Q 11 [Matt Cavanagh] Back
67
Public Administration Select Committee, Nineteenth Report of Session
2010-12, Leadership of change: new arrangements for the
roles of the Head of the Civil Service and the Cabinet Secretary,
HC 1582 Back
68
Q 197 Back
69
Q 198 [Lord Burns] Back
70
Q 81 Back
71
Q 83 Back
72
Q 258 [Sir David King] Back
73
Q 108 Back
74
Q 198 [Lord Carter] Back
75
Q 317 Back
76
Ibid. Back
77
Qq 317, 320 Back
78
Q 13 Back
79
Q 13 Back
80
Q 251 [Sir David King] Back
81
Q 5 Back
82
Qq 258 [Sir David King], 247 Back
83
Q 316 Back
84
Q 298 Back
85
Q 11 [Matt Cavanagh] Back
86
Ibid. Back
87
Q 296 Back
88
Meetings with strategists in Washington DC, February 2012 Back
89
Q 13 Back
90
Ibid. Back
91
Q 143 Back
92
Q 210 Back
93
Q 24 Back
94
Q 13 Back
95
Q 203 Back
96
Ev w35 Back
97
Q 306 Back
98
Q 206 Back
99
Q 311 Back
100
Ev w35 Back
101
Ev w35 Back
102
Ibid. Back
103
Ibid. Back
104
Ev w63 Back
105
Q 313 Back
106
Q 47 Back
107
Qq 74 [Lord Rees], Q 221 Back
108
Q 74[Lord Rees] Back
109
Q 221 [Sir David King] Back
110
Qq 70, 12 [Nick Butler] Back
111
Q 11 [Nick Butler] Back
112
Seminar with Whitehall strategists, February 2012 Back
113
Seminar with Whitehall strategists, February 2012 Back
114
Ibid. Back
115
Q 195 [Lord Carter] Back
116
Meetings with strategists in Ottawa, February 2012 Back
117
Q 104 [Peter Riddell] Back
118
Q 180 [Lord Burns] Back
119
Ibid. Back
120
Q 182 Back
121
Joint Committee on National Security Strategy, First review
of the National Security Strategy 2010, para 6 Back
122
Q 7 Back
123
Q 321 Back
124
Q 6 [Geoff Mulgan] Back
125
Meetings with strategists in Washington DC, February 2012 Back
126
Meetings with strategists in Ottawa, February 2012 Back
127
Meetings with strategists in Washington DC, February 2012 Back
128
Q 39 Back
129
Q 84 Back
130
Meetings with strategists in Washington DC, February 2012 Back
131
Q 10 Back
132
Q 91 Back
133
Q 23 Back
134
Q 20 Back
135
Joint Committee on National Security Strategy, First review
of the National Security Strategy 2010, para67 Back
136
Q 19 [Matt Cavanagh] Back
|