House of Commons - Change in Government: the agenda for leadership

Change in Government: the agenda for leadership - Public Administration Committee Contents

2 Reforming Whitehall and the Civil Service

A reform industry

8. Many attempts to reform Whitehall and the Civil Service have ended in failure or have simply petered out. We sought to consider what factors are essential in ensuring that this pattern is not repeated.

9. The Northcote-Trevelyan report of 1854 established the modern, permanent Civil Service. It took another nearly 160 years to enshrine in legislation its four core values of integrity, honesty, objectivity, and impartiality.[11] Between these two landmarks the Civil Service has been subject to frequent reform initiatives of limited success under successive governments (a selected chronology is at the Annex). The intention behind these reforms has been to 'modernise' the Civil Service in terms of greater efficiency, better service delivery and improved capacity. The 1968 Fulton Committee, for example believed that:

The Home Civil Service today is still fundamentally the product of the nineteenth-century philosophy of the Northcote-Trevelyan Report. The tasks it faces are those of the second half of the twentieth century ...

In our view the structure and practices of the Service have not kept up with the changing tasks.[12]

10. More recently the Civil Service has undergone smaller-scale reforms aimed at professionalising and increasing the skills of staff. The Modernising Government initiative sought to join up policy making and improve public services by placing the user at the centre of delivery.[13] Another long-term change initiative is the Professional Skills for Government programme, which sets out the six core skills all senior civil servants should have, and aims to "move away from the concepts of "generalist" and "specialist", and create a Civil Service where all staff are specialists of one form or another".[14]

11. The chronology of Civil Service reform demonstrates that although the way reform is undertaken has changed, with less use of formal commissions or independent committees, there is nothing new about the belief that Whitehall needs to change and modernise and the use of reform initiatives to achieve this change.[15] In fact the frequency of such initiatives led one of our witnesses, Professor Christopher Hood, to describe it as "a reform industry".[16]

12. Professor Andrew Kakabadse described the need for reform by each incoming government as:

exactly the same in the private sector [where] the need or urge for reform is really very prominent when there is a change of chairman or chief executive.[17]

Another witness, Professor Martin Smith, suggested it was because:

... the world is a difficult place to control. Government therefore intend to do one thing, but often there is another outcome and the Civil Service is blamed. The reforms keep continuing partly because of that frustration.[18]

Dr Martin Lodge listed a third reason: reform as a reaction to previous changes which had led to unintended consequences.[19] A number of former ministers we spoke to privately presented a further reason for continued reform: that Whitehall departments were faced with situations, such as global terrorism and cyber crime, which changed faster than institutional reform could keep pace with.[20] A similar point was made by the former Prime Minister, Tony Blair, in his memoirs:

This Civil Service had and has some great strengths .... it was simply, like so much else, out of date. Faced with big challenges, it thought small thoughts.[21]

13. In contrast, former heads of the Civil Service as well as the current one portrayed the various reforms as incremental improvements. Lord Armstrong of Ilminster (Cabinet Secretary and Head of the Civil Service, 1979—1987) explained how:

Yesterday's reform does one thing, then you find some other need and you have to modify and go to that, and that is a new form of Civil Service reform ... It is a process of constant adaptation within the general principles of the Civil Service's responsibility to Ministers, and Ministers' accountability to Parliament.[22]

For one of his successors, Lord Wilson of Dinton (1998—2002):

Each wave follows the previous wave and moves the service on, and that is how these things are bound to work. Every Government needs something a bit different from the previous Government ... It is bound to be a process of constant adaptation and development, rather than a big once-and-for-all change that alters it.[23]

Lord Turnbull (2002—2005) told us that "very few [reforms] get reversed; they get built on."[24]

14. The current Cabinet Secretary, Sir Gus O'Donnell cited increased diversity and professionalism as a good example of this incremental improvement:

When I joined in 1979 there was a Sir Humphrey element to [the Civil Service]. I looked up and I saw all male permanent secretaries; there were no professionally qualified finance directors. You ended up in HR if you could not do policy. People that did operational work were third-class citizens; they were not even second-class citizens. That has changed radically and I think that we are changing that world where people who do operational issues are really given equality of esteem. Those things have changed.[25]

15. It is argued that in the last decade there has been a measurable and objective improvement in the performance of the Civil Service. In 2009, the Institute for Government described the UK as "among the world's highest performing governments" and cited evidence from the World Bank that in 2008 the UK was "the 10th most effective government in the OECD", compared to 14th in 2003".[26] The Capability Review process, introduced by Sir Gus in 2006, first benchmarked capability in Whitehall departments and then measured progress. By the end of 2009, all major departments were re-reviewed and it was reported that 95% of areas that were assessed in the baseline reviews as needing urgent development had been addressed.[27] In particular, progress was reported in terms of leadership, most notably in the capability and effectiveness of top leadership teams, and in strategy, with departments improving how they used evidence and analysis in policy making.[28] Sir Gus argued that the reviews had "resulted in big improvements in capability in departments".[29]

16. Despite this, we heard from the think-tank Reform that former ministers still believe that large-scale reform of the Civil Service is necessary.[30] It is important to understand why this is so. There is also widespread frustration about Civil Service inertia, even obstruction to new policies, in some parts of Whitehall and a concern that the Civil Service has lost specialist expertise, professionalism and respect.

Aims of Civil Service reform

17. One possible reason why it is believed that the Civil Service needs further reform is that there is an over-expectation of what the Civil Service can deliver. Today, the Government is expecting the Civil Service to reform itself and to downsize at the same time. This is a massive challenge. In the aftermath of John Reid's description that part of the Home Office was not "fit for purpose"[31], Lord Wilson wrote:

The real question is whether reform of the Civil Service alone will ever be enough, or whether we must take a more fundamental look at what we can realistically expect from central government.[32]

18. Matthew Taylor, former adviser to the then Prime Minister Tony Blair and now head of the RSA, concurred:

The question should not simply be 'has the department delivered what it was supposed to' but also 'was it ever reasonable to expect the department to deliver what was asked of it'.[33]

Professor Matthew Flinders made a similar point:

One unfortunate element of the public service reform agenda in recent years has been a tendency for ministers to encourage members of the public to expect and demand the same levels of service that they would expect from the private sector. This risks raising public expectations to a level that the public sector has never been expected or resourced to deliver.[34]

19. This divergence in perceptions about the Civil Service goes to the heart of the problem. Too often Civil Service reforms seem to have become an end in itself for Whitehall, instead of a means of delivering a wider public service reform agenda. As our witness Professor Martin Smith observed:

Without thinking very clearly about what the Civil Service is, what it should do and what a good Civil Service would look like, it is very difficult to work out how to reform it.[35]

20. Indeed, Tony Blair has acknowledged that the Civil Service could not themselves be held responsible for not knowing what vision the Government had in mind for them and consequently not being as radical as the Government wished. He wrote in his autobiography:

In 1998, I began with Sir Richard Wilson the new Cabinet Secretary, the first stage of Civil Service reform. And to be fair he got behind them thoroughly. But - and this is a criticism of me, not of him or the Civil Service - they were like many of the other reforms: talking the right language but shying away from the really radical measures.[36]

21. The need for frequent Civil Service reform programmes over the years can be attributed to failure to consider what the Civil Service is for, what it should do and what it can reasonably be expected to deliver. Government needs to articulate a clear view of what it wants from the Civil Service and how it intends to achieve it. This must be articulated with greater clarity in departmental business plans. The Civil Service should be more rigorous in demanding this clarity from Government.

What do ministers want from the Civil Service?

22. We spoke to a number of former ministers about how Whitehall had operated and changed during their time in office.[37] They mostly praised the quality and professionalism of the officials working in their departments, but told us that Civil Service reform was rarely one of their priorities. Indeed, they often had little or no knowledge of any reform programme in progress. They reported that these reform programmes failed to have an impact on how their department operated and found that the issues of most concern to them regarding performance in Whitehall were not addressed in their time in office.[38]

SPECIALISTS

23. In their evidence former ministers said they had wanted more subject matter experts on the policy areas for which they had had responsibility as ministers.[39] They complained, for example, that in the Department for Education's predecessors no one in charge of school policy had actually ever run a school, and that in the Department for Transport there were no officials who were sufficiently technically expert on developments in transport issues such as high speed trains. They also said they felt exposed when dealing with sectoral interests without countervailing advice from their officials, for example in regulating certain sectors of the economy or managing contractual relationships with commercial suppliers. In this more complex world they wanted more specialist support.[40] For example, extensive contracting out has led to a loss of expertise which is still required within departments to properly manage and negotiate contracts and procurement.[41]

24. In contrast, Ian Watmore, Chief Operating Officer of the Efficiency and Reform Group at the Cabinet Office, insists that the Civil Service now had many more skills to call upon and thought it was:

fantastic the way that we have brought some of the really best people from the private sector, the third sector and local government into the Civil Service and blended them with the traditional Civil Service skills.[42]

Sir Gus O'Donnell also claimed that today we have a more professionalised Civil Service with qualified finance directors and an increase in the professional groups such as statisticians and economists. He argued that "you do have a specialist that can get to the top. That is a very, very good message about the professionalisation of the Civil Service."[43]

25. We have previously also reported how the Civil Service is developing IT specialists through the Technology in Business Stream of the Civil Service Fast Stream Programme (established in 2007-08) and bringing in IT specialists from the SME sector.[44] We welcome the steps taken by the Civil Service to develop and bring in IT specialists, though such initiatives in themselves will not address the more specific concerns about performance in this field raised with us by former ministers. The Civil Service must also build up specialist expertise in outsourcing contract management and procurement.

GREATER RISK TAKING

26. A risk averse culture in Whitehall has been viewed as a block on wider public sector reform, epitomised, for example, by the well-known quote from the then Prime Minister, Tony Blair, of the "scars on his back" from battling the Civil Service on the issue of public sector reform after only two years in office.[45] The present Prime Minister, after a year in office, revealed some frustration with Whitehall in his speech to the Conservative Party Spring Conference, where he announced the Government's intention to take on "bureaucrats in government departments" who he described as "enemies of enterprise".[46] This statement apparently caused the Cabinet Secretary some concern, to the extent that he reportedly asked the Number 10 Permanent Secretary "to calm things down".[47]

27. A contrasting view of Civil Service capabilities came from Lord Wilson, who argued that the Civil Service had shown that it was able to manage large public sector change repeatedly. The privatisation programme in the 1980s, for example, had been "very successful and a pretty big change".[48] Our private discussion with former and current ministers revealed that while they believed it was the role of Ministers to offer the political lead to Whitehall, they noted the constitutional inability of the political head of the department to address poor performance and believed that selection, training and promotion arrangements could be enhanced to develop a more innovative and entrepreneurial culture in Whitehall.[49]

28. The Minister, Francis Maude, described the paradoxical situation where Government took huge risks at a macro level, but at a micro level tended to be very risk averse and hostile to innovation. He wanted a change from the current culture where:

we waste a huge amount of time and effort in stopping bad things happening and the result is we stop huge amounts of potentially good things happening as well.[50]

We note that he offered no specific solutions to this problem at the time that he said this. This suggests that Ministers do not yet know how to challenge the bureaucratic inertia in the system, which also explains why there is no clear plan for change.

A MORE CROSS-CUTTING APPROACH

29. Former ministers also said that attempts to improve the effectiveness of government have been hampered by the tendency of the Civil Service to continue to work in departmental silos, despite the benefits of joined-up working.[51] The previous administration's 2009 report 'Wiring it Up' set out the then Government's policy for dealing with these departmental silos and removing barriers to cross-departmental working, in particular by devising cross-cutting Public Sector Agreements (PSAs) extending across two or more departments.[52] Nonetheless the Institute for Government told us that:

mechanisms for co-ordinating policy and delivery between departments are still dominated by siloed thinking, making it difficult to manage cross-cutting policy issues.[53]

This silo effect has meant that the former ministers found it difficult to express a general view of the Civil Service, instead describing a variety of experiences across the Civil Service during their ministerial career. One former minister described the Civil Service as a "conglomerate" rather than a single organisation.[54]

30. Cross-departmental working remains a weakness for the Civil Service. We expect to consider the role of the Head of the Home Civil Service in this respect in the course of a future Inquiry.

LESS FREQUENT STAFF TURNOVER

31. Former Ministers also complained that a high turnover of senior civil servants led to a lack of continuity and the loss of 'corporate memory' from departments. This caused particular difficulties where officials for major projects had moved on during their lifespan, disrupting the accountability chain if and when such projects failed.[55] One former minister said that the term 'permanent Civil Service' was a misnomer. Another observed that just as the turnover of ministers made them more dependent on their officials, so the turnover of senior staff made them dependent on their longer-established, more junior officials. Such a trend shows no sign of abating: there has been a significant changeover of permanent secretaries in recent months, many of whom were drawn from other departments.[56] Jill Rutter from the Institute of Government has observed that

By the first anniversary of the government, of 16 departments, only six will not have had a change of permanent secretary - so ministers, all of whom have under a year's experience in all those departments, will all have someone with less experience at the top.[57]

32. We recommend that after any change of its Secretary of State, the Permanent Secretary of a Department should ideally remain in post for a minimum period of 12 months to maintain corporate memory and an in-depth knowledge of the workings of the Department. The Civil Service should also plan for much greater continuity among its senior contract and project managers.

33. The Civil Service inspires much admiration and loyalty from ministers, most of whom take full responsibility for the conduct of their departments rather than blaming officials for departmental failings. However, despite successive programmes of reform and some undoubted and successful change and modernisations of the Civil Service, Ministers remain dissatisfied with and disconnected from the outcomes. There is a wealth of evidence in Whitehall that, despite the attempts of Ministers and senior civil servants, departments lack expertise and specialist knowledge and the confidence to make decisions and implement them quickly. Departmental silos remain a constant concern, along with a risk-averse culture and bureaucratic inertia. The Civil Service 'establishment' remains complacent about this.

34. Ministers want, and the public interest demands, a more innovative and entrepreneurial Civil Service which fosters and retains expertise aligned to the policy or major project lifetime and can work across departmental boundaries to address cross-cutting issues. Numerous Civil Service reform initiatives have so far has failed to deliver these outcomes on a consistent basis. Our chief concern is that the latest efforts to reform Whitehall will fail unless these concerns are comprehensively addressed with a clear plan.

11 Constitutional Reform and Governance Act 2010, section 7 Back

12 Report of the Committee on the Civil Service, 1966-68, Cm 3638, June 1968, vol. 1, pp 9, 10 Back

13 Civil Service, Modernising government, Cm 4310, March 1999 Back

14 Public Administration Select Committee, Ninth Report of Session 2006-2007, Skills for Government, HC 93-I, para 39 Back

15 Q 2 [Professor Hood] Back

16 Ibid. Back

17 Q 36 Back

18 Q 2 [Professor Smith] Back

19 Q 2 [Dr Lodge] Back

20 Discussions with former ministers, April 2011 Back

21 Tony Blair, A Journey, (London, 2010), p. 206 Back

22 Q 142 [Lord Armstrong] Back