Strategic thinking in Government: without National Strategy, can viable Government strategy emerge? - Public Administration Committee Contents

Conclusions and recommendations

What do we mean by 'strategic thinking' and why is it important?

1.  The UK faces a number of complex and unpredictable challenges in a globalised world. Such challenges make the need for the capacity for flexible and resilient processes of strategic thinking more urgent, but in turn they also make this goal harder to achieve. We urge the Government to acknowledge in their response the importance of National Strategy and why it is so vital. We can see no purpose in defining national strategic aims unless they are part of a coherent National Strategy which is regarded by the whole of the Government in the same way. (Paragraph 20)

Emergent Strategy

2.  That strategy emerges is an inevitable fact of life, but it can be coherent: creating a virtuous circle, as positive leadership (i.e National Strategy) leads to effective policies and positive outcomes, which reinforce the public's values and aspirations which inspired that leadership. Alternatively chaotic strategy ('muddling through') and wrong or weak leadership will result in bad policy and failure in outcomes, which undermine the values and aspirations of the public and faith in their leaders. Emergent strategy therefore requires a coherent directing mind, individual or collective, to drive the process. The driving force of emergent strategy is what will determine whether the momentum generated results in a virtuous or vicious circle. (Paragraph 25)

Emergent strategy: how does the Government define the UK's national interests

3.  The six aims outlined by the Government in the Coalition Agreement may be well-meaning but are too meaningless to serve any useful purpose, because they provide no indication of what policies the Government might pursue as a consequence. They do not define how UK national character, assets, capabilities, interests and values are distinctive in any way whatsoever, or define the particular risks and challenges we face. Nor do they define what sort of country we aspire to be beyond the most general terms. To support National Strategy, strategic aims should be defined which identify and reinforce national identity and national capability, which includes the identities and capabilities of the UK's component parts, and give a clear indication of the overall direction of policy. (Paragraph 31)

4.  We do not advocate any particular strategic aims but we do invite the Government to consider how to express its strategic aims in terms which provide an indication of the objectives which policies must achieve. The Government's inability to express coherent and relevant strategic aims is one of the factors leading to mistakes which are becoming evident in such areas as the Strategic Defence and Security Review (carrier policy), airport policy, energy (electricity generation, nuclear new-build programme and renewables) and climate change, and child poverty targets (which may not be achieved), welfare spending and economic policy (lower economic growth than forecast). This factor also militates against clear thinking about presentation, which was evident in the aftermath of the Budget and in response to the possibility of industrial action by tanker drivers. (Paragraph 34)

Public opinion in defining national interests

5.  The process of emergent strategy demonstrates how public opinion, policies and strategic aims can work together in a 'virtuous' or 'vicious circle'. This is not to abdicate the role of leadership to public opinion, which is what tends to occur without effective National Strategy. Indeed, strong leadership is all the more vital to make rational choices when reconciling public opinion and long-term goals. (Paragraph 42)

6.  The challenge of National Strategy is to ensure the public is involved in its involvement. A general election provides voters with an opportunity to determine who governs, and this can define the strategic direction of the nation, but elections are only a small part of the conversation on the fundamental questions which determine the future of the country. Government, and Parliament as a whole, need a deeper understanding both of how the public perceives our national interests and of what sort of country the public aspires for the UK to be. This must take place on a much longer and continuous timescale than the once-every-five years allotted to a Parliamentary term. (Paragraph 44)

Emergent strategy: advancing national interests

7.  The choice of strategic direction for the country is both determined and limited by economic conditions and interests. Government has a proven role 'incubating' new core technologies, notably through the defence, engineering and pharmaceutical industries. We view the role of Government in supporting strategic assets, without 'picking winners' in the form of individual companies or technologies, as a vital part of our strategic framework. We therefore welcomed the Minister's evidence on this point, commend the Government's commitment to sustain the science budget and endorse the support for the sectors of industry in which Britain is competitive. (Paragraph 52)

Assessment of current strategic thinking in Government

8.  We urge the government to take note of the conclusions of the report by the Joint Committee on National Security which advocated an 'overarching strategy'. We share the concerns raised by our witnesses about the poor quality of National Strategy in Government. The evidence from the Minister and the Cabinet Office did not allay or address our concerns. We have little confidence that policies are informed by a clear, coherent strategic approach, informed by an assessment of the public's aspirations and their perceptions of the national interest. (Paragraph 58)

Promoting the capability of the Civil Service

9.  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. (Paragraph 66)

10.  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. (Paragraph 67)

11.  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. (Paragraph 69)

Strengthening the centre of Government

12.  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. (Paragraph 74)

Address longer-term context as well as short-term problems

13.  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. (Paragraph 78)

14.  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. (Paragraph 81)

Improve the proper use of Scenario Planning in managing uncertainty

15.  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. (Paragraph 90)

16.  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. (Paragraph 91)

Ensuring the proper use of Science

17.  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. (Paragraph 99)

Breaking down departmental silos

18.  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. (Paragraph 104)

Aligning financial resources with strategic thinking:

19.  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. (Paragraph 110)

20.  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. (Paragraph 114)

Promote Ministerial Leadership on National Strategy

21.  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. (Paragraph 118)

22.  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. (Paragraph 121)

Broadening the role of the National Security Council (NSC)

23.  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. (Paragraph 125)

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Prepared 24 April 2012