Truth to power: how Civil Service reform can succeed - Public Administration Committee Contents

2  Civil Service reform: history and background

Northcote-Trevelyan and political impartiality

7. On 12 April 1853 William Gladstone, as Chancellor of the Exchequer, commissioned a review of the Civil Service to be carried out by the Permanent Secretary at the Treasury, Charles Trevelyan, assisted by Sir Stafford Northcote, a former civil servant at the Board of Trade (who later was to serve as Chancellor of the Exchequer). Northcote and Trevelyan's report was published in February 1854 and recommended a system of examination ahead of entry and promotion on merit through open competition. It was, as historian Lord Hennessy has stated, "the greatest single governing gift of the nineteenth to the twentieth century: a politically disinterested and permanent Civil Service with core values of integrity, propriety, objectivity and appointment on merit, able to transfer its loyalty and expertise from one elected government to the next".[5]

8. It is the impartiality aspect of the Northcote-Trevelyan settlement that has prompted comment in the current debate about the Government's reform plans. Lord Hennessy argued that "the danger of seeping politicisation [in the Government's 2012 Civil Service Reform Plan] is very real".[6] He cautioned that "it would be a huge own goal, a national own goal of serious proportions, if we got rid of the Northcote-Trevelyan principles".[7] Andrew Haldenby, the Director of think tank Reform, argued, however, that "Northcote-Trevelyan is consistent with the idea that there are some political appointments on merit", and quoted the report's statement that:

    it is of course essential to the public service that men of the highest abilities should be selected for the highest posts; and it cannot be denied there are a few situations in which such varied talent and such an amount of experience are required, that it is probable that under any circumstances it will occasionally be found necessary to fill them with persons who have distinguished themselves elsewhere than in the Civil Service.[8]

9. Ministers have expressed their intention to maintain the politically impartial Civil Service proposed by Northcote and Trevelyan in 1854. We welcome this, as it remains the most effective way of supporting the democratically elected Government and future administrations in the UK, and of maintaining the stability of the UK's largely uncodified constitution. For more than 150 years, this settlement has seen the nation through depression, the general strike, two world wars, the cold war and into the age of globalisation and high technology. Nobody, however, argues that the Civil Service should be immune from change. This Report considers whether the Government's proposed reforms will remain consistent with the Northcote-Trevelyan settlement.

The Haldane report—impact on accountability

10. In 1918 a Machinery of Government sub-committee of the Committee on Reconstruction was established by Lloyd George's Coalition Government "to enquire into the responsibilities of the various departments of the central executive Government and to advise in what manner the exercise and distribution by the Government of its functions should be improved".[9] The Committee was chaired by Viscount Haldane of Cloan, a former Liberal Lord Chancellor, and in its final report recommended the principle of departmental structures for which ministers would be individually responsible and which endures to this day: that the "field of activity in the case of each department" should be "the particular service which it renders to the community as a whole".[10]

11. Haldane further recommended that civil servants, as advisers to ministers, were to have an indivisible relationship with them. This remains reflected in the Cabinet Manual, that "civil servants are accountable to ministers, who in turn are accountable to Parliament".[11] The exception to this is the accounting officer role—civil servants whom Parliament holds directly to account for the stewardship of resources within their department's control.

12. In our September 2011 Change in Government Report we recommended that "it is timely to consider the development of a new Haldane model to codify the changing accountabilities and organisation of Government".[12] Andrew Haldenby told us that "the doctrine of ministerial accountability cannot apply now" due to the massive increase in departmental staff numbers since the Haldane Report.[13] Former cabinet minister the Rt Hon Jack Straw MP recommended that a similar mechanism to the accounting officer principle be found for holding the Civil Service to account for major projects, noting that he felt "uncomfortable" being held to account by Parliament regarding large-scale IT projects, which he felt were out of his control.[14] We consider the Government's proposals for strengthening accountability of major projects in chapter three of this Report.

13. The Osmotherly Rules—the detailed guidance provided for civil servants giving evidence to Select Committees—are based on the Haldane doctrine. The Rules were first published in 1980 and last updated in 2005; they state that civil servants may describe and explain the reasons behind the adoption by ministers of existing policies, but that they should not give information which undermines collective responsibility nor get into a discussion about alternative policies. In November 2012 the House of Commons Liaison Committee reaffirmed that the Osmotherly Rules were "merely internal to Government [and] have never been accepted by Parliament".[15]

14. The Government has announced that it is reviewing the Osmotherly Rules—but that it is considering "improvements rather than a fundamental change" to the rules.[16] The Government is also conducting a similar revision of the Armstrong Memorandum, first issued in 1985 and updated in 1987 and 1996, which states that if a civil servant considers he or she is being asked to do something which he or she believes to be unlawful, unethical or against his or her conscience, the civil servant should report it to a senior official or the permanent head of the department. If the matter could not be resolved, the civil servant would be required to either carry out the instructions or resign from public service. Much of the content of the memorandum has been incorporated into the Civil Service Code, which was first published in 1996. Sir Jeremy Heywood stated that, although he could "certainly update the language [of the Armstrong Memorandum] and polish it up a little [...] eventually there will come a hard point, which is that if a Minister has decided that a piece of information should not be made public at a particular point, it is very difficult for the civil servant to countermand that".[17] The Prime Minister told the Liaison Committee that he would like to see improvements to the Armstrong Memorandum and "a greater level of accountability for civil servants".[18]

15. The Haldane doctrine of ministerial accountability is not only crucial to Parliament's ability to hold the executive to account, it is at the core of the relationship between ministers and officials. It is this relationship which has become subject to intense scrutiny and is now being questioned. The tension between ministers and officials reflects that Whitehall is struggling to adapt to the demands of modern politics. Ministers are accountable for all that occurs within their department, but we were told that, for example, they are without the power and the authority to select their own key officials. Ministers are also unable to remove civil servants whom they regard as under-performing or obstructive, despite being held accountable for the performance of their department. The ministers we heard from told us that this is necessary in order to be able to implement their policy programme and to drive change within their departments. In the private sector, executives are given the authority to choose their teams and this is at the core of their accountability to their board and shareholders. It is understandable that ministers wish to be able to choose the officials upon whom they should be able to rely. The doctrine of ministerial accountability is therefore increasingly subject to question and this leads to failure of the doctrine itself.

16. The failure to be clear about the authority and responsibilities of officials means that officials themselves do not feel accountable or empowered to take full responsibility for their part in delivering ministerial priorities. This underlines the recommendation from our previous Report, Change in Government: The Agenda for Leadership, that a review of the Haldane doctrine would be timely.

17. Much has changed since the Haldane model of ministerial accountability became established nearly a century ago, not least the size, role and complexity of departments for which ministers are accountable. In recent decades, citizens as consumers have hugely increased their demands and expectations of what Government should be able to deliver. Technology has transformed the way business operates, which has adopted new structures and management practices which would seem unrecognisable to previous generations. Modern business structures have far fewer tiers of management, and delegate far more to empowered, autonomous managers who are accountable for standards and performance, but this has hardly happened at all in the Civil Service, despite the fact that many believe in these principles. At the same time, the demands of 24-7 media, Parliamentary select committees, the Freedom of Information Act, and the demand for open data, openness and transparency now subject the system and the people and their relationships within it to unparalleled scrutiny and exposure. Furthermore, society has changed; we no longer live in an age of deference which tended to respect established institutions and cultures, but in a new 'age of reference', in which anyone can obtain almost unlimited information about almost everything, empowering individuals to challenge people with power and their motives.

18. Ministers say they want to strengthen ministerial accountability, but a comprehensive reassessment of how the Haldane doctrine can operate in today's world is long overdue. Much of the rhetoric of the present administration was about embracing change of this nature—the word "change" was the watchword of the Prime Minister's approach to his new Government—but this has exposed an increasing dysfunctionality in aspects of the Civil Service key skills: procurement, IT, strategic thinking, and implementation. Ministers tend to blame failures in defence procurement or the Borders Agency on civil servants or previous governments and we believe that Civil Servants may attribute such failures to inexperienced ministers with party political agendas. Either way, few ministers or officials seem to be held accountable when things go wrong. More importantly, there is a risk that an atmosphere of blame overshadows acknowledgement of excellent work. The need to address this may not invalidate the traditional doctrine of ministerial responsibility, but it needs to be redefined and adapted in order to serve good process and effective government in the modern context.

Fulton—and the difficulty of implementation

19. In 1965 the Fulton Committee was established, on the recommendation of the House of Commons Select Committee on Estimates, "to initiate research upon, to examine and to report upon the structure, recruitment and management of the Civil Service".[19] In their history of the Fulton Report, Peter Kellner and Lord Crowther-Hunt stated that the then Prime Minister, Harold Wilson, was "happy to oblige" the Estimates Committee's recommendation as it was an "opportunity [...] to characterise his government as one of radical reform".[20] Foreshadowing today's debate about the Civil Service, Mr Wilson stated that:

    There have been so many changes both in the demands placed on the Civil Service and in the educational organisation of the country that the Government believe that the time has come to ensure that the Service is properly equipped for its role in the modern State.

He went on to reassure the Civil Service that:

    the decision to set up this committee does not mean that the Civil Service has been found lacking in any way by the Government in its current operations. On the contrary, it is the experience of Ministers—and I think that right hon. Members opposite would wish to join me in this—that the Service meets the demands put on it with flexibility and enterprise. [21]

This is in sharp contrast to ministers' public criticism of the Civil Service that has characterised today's debate.

20. The Fulton Committee was not, however, asked to consider "machinery of government questions" nor the relationship between ministers and civil servants. Kellner and Crowther-Hunt describe these exclusions as victories for the mandarins: Sir William Armstrong both pressed for these exclusions as Permanent Secretary to the Treasury and then, as Head of the Civil Service, argued that there was considerable doubt about Fulton's recommendations, as the committee had been so circumscribed. Kellner and Crowther-Hunt stated that this was:

    the way that the Civil Service helped to narrow the committee's terms of reference—and later was able to argue that this restriction invalidated much of what the Committee said.[22]

21. Lord Hennessy suggested that the imposition of these restrictions on the remit of the Committee was intended to ensure that it could "not be a new Haldane, posing and answering fundamental questions about the adequacy of the Whitehall machine to cope with the increasing workload which it was required to bear".[23]

22. The Committee, chaired by Lord Fulton, the Vice-Chancellor of Sussex University, and made up of MPs, alongside civil servants, representatives of industry, and academics, started work in 1966.[24] In its 1968 final report the Committee concluded that the Civil Service was essentially based on the cult of the amateur or generalist; that there was a lack of skilled management; and that not enough responsibility was given to specialists, such as scientists and engineers.[25] The report made 22 recommendations, including:

a)  The abolition of the [1,400] Civil Service classes, used to divide jobs and pay, and the introduction of a unified grading structure;

b)  the establishment of a separate Civil Service Department, led by the Prime Minister, to take over running of the Civil Service from the Treasury. It also recommended that the permanent secretary of this department should also be the Head of the Civil Service;

c)  increased mobility between the Civil Service and other sectors;

d)  secretaries of state being able to employ, on a temporary basis, a small number of expert staff;

e)  greater professionalism among specialists and generalists; and

f)  the establishment of a Civil Service college.[26]

23. The implementation of the Committee's recommendations, which was left to the Civil Service, was mixed. Lord Hennessy argued that, by restricting Fulton to only "second-order questions" relating to recruitment, management and training, instead of the fundamental questions facing the Civil Service, Fulton "never had a chance of joining Northcote, Trevelyan and Haldane in the select club of ground-breaking inquirers".[27] By 1978, the Government declared that the acceptance of the Fulton Report "had resulted in a number of radical changes in the organisation and management of the Civil Service".[28] Kellner and Crowther-Hunt argued that this was, in fact, "a reversal of the truth; by then the main Fulton recommendations had been defeated" by the Civil Service.[29] One such example of civil service resistance to reform, identified by Kellner and Crowther-Hunt, was the statement in 1969 from the committee of civil servants tasked with implementing the Fulton recommendations that the substantive reforms to the grading structure could not be introduced as there were "pressing problems to be dealt with".[30]

24. The lesson of the Fulton Committee is not that a formal inquiry into the future of the Civil Service should never be considered, but that the Civil Service's own natural internal resistance to change (common to all large organisations) should not be allowed to limit the remit of such an inquiry in order to allay Civil Service fear of change. Moreover, any proposals for change must include a plan and timetable for implementation, against which Parliament, and others outside the Government, can measure progress. We also observe how often resistance to change need not reflect bad motives amongst civil servants. Confused messages from divided and ineffective leadership will make this resistance difficult to overcome. Civil Servants face disparate messages about their role: ministers outwardly stress the need for officials to be business-like and outward facing, but signal to them to work closely and face upwards not outwards. They face similar contrasting messages from their permanent secretaries, who emphasise the need to focus on delivery and meet targets, but still indicate that policy roles are the most prized. It is little wonder that the system is frequently characterised as defensive, risk-averse and slow. The lines of communication and responsibility between ministers and officials must be clearer, so that officials feel accountable for delivering ministerial priorities.

25. Effective resistance to change is a mark of the resilience of the Civil Service. This energy needs to be harnessed as a force for change. In fact, we note that far more change has taken place in the Civil Service than is ever acknowledged, though change without a clear analysis, declaration of intent and plan for implementation tends to be disjointed, harder to sustain and altogether less effective.

26. The Fulton Committee was prevented from considering the relationship between ministers and officials, and was therefore unable to tackle the issue of accountability. The increase in government activity and the increasingly complex challenges facing the Civil Service in the 45 years since Fulton reported mean that a review of the role of the Civil Service, which includes the relationship between ministers and officials, is now long overdue.

Reforms since Fulton

27. Since Fulton civil service reform during the 1980s, 1990s and 2000s was often dominated by managerialism, rather than a strategic evidence-based look at what the Civil Service should do, or thorough consideration of the consequences of reform.[31] By becoming more preoccupied by process and technique, it has been argued that the Government has lost sight of the true and distinctive purposes of the Civil Service. Professor Elcock remarked that there has been a "ruthless drive towards business values encapsulated in the 'New Public Management' [which] has resulted in more fundamental distortions of the true role of government".[32] Lord Hennessy described the attempts at reforming the Civil Service over the last thirty years as having been "distracted to some degree by the curse of management babble".[33] Patrick Diamond, who served as a special adviser in the Blair Government, suggested that, apart from a wish for better project management and implementation skills, the previous Government did not have "a very coherent and clear view about what it saw the Civil Service as being for".[34] Where reforms were successfully introduced and established, the Civil Service often reverted to type, and inefficient ways of working: in evidence to our inquiry into Government procurement, former Chief of Defence Procurement, Lord Levene, told us that, despite the reforms he introduced, the Ministry of Defence has in recent times reverted to the situation he had found when he started in post in 1985.[35] As we will see later in this report, these failings are reflected in the current Civil Service Reform Plan.

28. We concluded in two Reports this Parliament (Strategic thinking in Government: without National Strategy, can viable Government strategy emerge? and Who does UK National Strategy?) that Government appears to have lost the art of strategic thinking. We also concluded in our 2011 Report, Change in Government: The Agenda for Leadership, that successive governments had failed to reform the Civil Service, because they had failed to consider what the Civil Service is for and what it should do. We stand by our conclusion. There may be superficial changes, but the core of the system will continue to revert to type, rather than to change permanently. There is little to suggest that the latest attempt at Civil Service reform will be any different.

5   Professor Peter Hennessy, Founder's Day address, Hawarden Castle 8 July 1999, cited in Whither the Civil Service, Research Paper 03/49, House of Commons Library, May 2003 Back

6   Q 9 Back

7   Q 9 Back

8   Q 59, Report on the Organisation of the Permanent Civil Service, 1854, q/JN 426 NOR Back

9   Ministry of Reconstruction, Report of the Machinery of Government Committee, Cm 9230, 1918 p. 4 Back

10   Ministry of Reconstruction, Report of the Machinery of Government Committee, Cm 9230, 1918 p. 8 Back

11   Cabinet Office, The Cabinet Manual, October 2011, p 57 Back

12   Public Administration Select Committee, Thirteenth Report of Session 2010-12, Change in Government: The agenda for leadership, HC 714, para 93 Back

13   Q 75 Back

14   Q 717 Back

15   Liaison Committee, Second Report of Session 2012-13, Select committee effectiveness, resources and powers, HC 697, para 113 Back

16   Q 967 Back

17   Q 975 Back

18   Oral evidence taken before the Liaison Committee on 12 March 2013, HC (2012-13) 484-iv, Q40 Back

19   The Civil Service, Vol 1 Report of the Committee 1966-68, Cmnd 3638, June 1968 Back

20   The Civil Servants: An inquiry into Britain's ruling class, Kellner and Hunt, (London: 1980), p 25 Back

21   HC Deb 08 February 1966 vol 724 cc 209-201 Back

22   Kellner and Hunt, The Civil Servants: An inquiry into Britain's ruling class, (London: 1980), p 28 Back

23   Peter Hennessy, Whitehall, (London: 2001), p 190 Back

24   Kellner and Hunt, The Civil Servants: An inquiry into Britain's ruling class, (London: 1980), p 26 Back

25   The Civil Service, Vol 1 Report of the Committee 1966-68, Cmnd 3638, June 1968 Back

26   The Civil Service, Vol 1 Report of the Committee 1966-68, Cmnd 3638, June 1968 Back

27   Peter Hennessy, Whitehall, (London: 2001), p 190 Back

28   Kellner and Hunt, The Civil Servants: An inquiry into Britain's ruling class (London: 1980), p 24 Back

29   Kellner and Hunt, The Civil Servants: An inquiry into Britain's ruling class (London: 1980), p 24 Back

30   Kellner and Hunt, The Civil Servants: An inquiry into Britain's ruling class (London: 1980), p 2, p 66 Back

31   CSR 3 Back

32   CSR 15 Back

33   Q 8 Back

34   Q 15 Back

35   Public Administration Select Committee, Sixth Report of Session 2013-14, Government Procurement, HC 123, Ev w121 Back

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© Parliamentary copyright 2013
Prepared 6 September 2013