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

4  The state of the Civil Service

53. Some witnesses argued that the conflict between ministers and officials was overstated. Lord Hennessy suggested that, while the "governing marriage" between ministers and civil servants was "in trouble", it was typical for ministers, halfway through a Parliament, to blame the Civil Service.[75] Former Cabinet Secretary and Head of the Civil Service, Lord O'Donnell, told us that, based on his conversation with "a number of ministers [...] there are a lot of ministers who are happy" with their officials, and that the frustrations of some other ministers are not entirely attributable to the Civil Service.[76] Others argued that major failures in the Civil Service had not increased in frequency, but were more prominent due to greater transparency. Professor Hood argued that the frequency of "major errors" in Whitehall had not, in his view, increased.[77] Jonathan Powell, former civil servant and chief of staff to Tony Blair as Prime Minister, concurred, suggesting that "there is more transparency about the failures that happen, rather than their being covered up".[78]

54. Lord O'Donnell also cited the employee engagement index in the Civil Service People Survey, which showed a slight increase in 2012, compared to 2011 and 2010.[79] The Civil Service average engagement score in 2012 was 58%, with wide variation across departments and agencies. In the now-defunct UK Border Agency engagement was only 36%, compared to 81% in the Attorney General's office. In the main departments, engagement was as low as 43% in the Department for Communities and Local Government and 45% in the Department for Culture, Media and Sport, and reached 71% in the Department for International Development.[80] The polling company Gallup have described "world class" levels of employee engagement as 67%.[81]

55. Professor Andrew Kakabadse cited evidence from his global study of why it is so challenging for the leadership of the organisation to win engagement with staff, management and other critical stakeholders. In his written evidence, he stated:

    Engagement or the lack of it is emerging as a deep concern for private and public sector organisations alike [...] Research highlights that over 66% of the world's private and public sector organisations have a leadership where infighting, lack of shared vision/mission and fear to speak and raise known concerns are the norm. The Civil Service in the UK is no exception [...] the signs of disengagement are evident in the Civil Service: a transactional mindset as opposed to focusing on delivering value, low trust in the leadership to find sustainable ways forward, silo mentality, a lack of innovation and an eroding culture of service delivery. To combat such a deep seated malaise research does offer particular steps to take so as to break with the past and nurture a performance oriented culture and a mindset of diversity of thinking.[82]

56. We very much welcome the fact that the Civil Service conducts an annual engagement survey, and that, at 58% in 2012, the average engagement score across departments was encouraging, given the world-class level of 67%. We are most disappointed, however, that this data does not provoke more concern and debate about how to share best practice with the parts of the Civil Service where engagement is so much lower. This demonstrates the need for more independent assessment of this data, and of what actions are required to address it, than the internal Civil Service leadership can provide.

Trust between ministers and officials

57. Media reports at the start of 2013 depicted a "Whitehall at War", stressing tensions between ministers and officials.[83] Media reports focused in part on the statement by the Minister for the Cabinet Office in October 2012 that civil servants had blocked decisions made by ministers, both in the current and previous Governments. The Minister repeated these allegations in evidence to us, stating:

    it has not been contested that that has happened—deliberate obstruction. I am not saying it is a routine daily event, but the discovery that on particular occasions officials had blocked clear ministerial decisions, failed to implement them or instructed that, in some cases, what Ministers had decided should not be implemented, has not been subject to any contest.[84

58. The Minister highlighted an example of a decision of his being "countermanded" by "a very senior figure", who had failed to speak up to express any concerns or objections to the decision when they met, but later reneged on the commitment to implement the decision.[85] There was, Mr Maude suggested, an attitude among civil servants that "ministers come and ministers go. We are the permanent Civil Service. We have been here, and our forebears have been here, for 150 years, and the system will exist after ministers go".[86]

59. Sean Worth, a former special adviser in the Coalition Government, reported that, while he had not personally experienced civil servants blocking requests, he had faced civil servants employing delaying tactics. He told us:

    You ask for something to happen and it sort of disappears into a blancmange, and then a paper comes back that is slightly different from what you asked for, because it is very clear that they do not want to actually address the question.[87]

60. The Head of the Civil Service, Sir Bob Kerslake, said that there had been only "up to five" examples of decisions blocked in the 16 months he had been in post and where it had happened he had "sought to tackle them in a very robust way".[88] Sir Bob added that, while ministers felt their decisions were being blocked, the situations were a mixture of misunderstandings and insufficient enthusiasm from officials.[89] Sir Bob's predecessor, Lord O'Donnell, suggested that some instances of civil servants allegedly blocking ministerial decisions were in fact instances of ministers disagreeing with each other, but choosing not to say it to each other directly.[90]

61. The level of trust between ministers and officials had also been affected, we heard, by public criticism of the Civil Service. Former Cabinet Secretary, Lord Wilson of Dinton, suggested that ministers had "undermine[d] trust" by publicly blaming officials for government failures, which he viewed as "unnecessary" and "very demoralising to the Civil Service".[91] This view was shared by former Cabinet Minister the Rt Hon Jack Straw MP, who told us that "it is weak ministers who blame officials".[92] Former Permanent Secretary Sir John Elvidge warned that it was "unrealistic to expect citizens to sustain their respect and trust in government if it is evident that respect and trust are lacking within government, between ministers and civil servants".[93] Historian Lord Hennessy argued that, while ministers might have found criticising the Civil Service to be cathartic, to do so "snaps the bonds of loyalty" between officials and ministers, and broke one of the "essential deals" of the Northcote-Trevelyan arrangement "that you carry the can in public for your Department if you are a Secretary of State, even if things have gone wrong that you did not have much control over in the first place".[94]

62. In response, the Minister stated:

    To try to pretend that everything is fine when it is not is as demoralising to civil servants, who can see that things are not right, as to hear the criticisms. What they do not want to hear is criticism for the sake of criticism: criticism without solutions.[95]

63. The Head of the Civil Service, Sir Bob Kerslake, argued that "much" of the media coverage of problems between ministers and officials was "overstated. Taken as a whole, there is a high level of trust between ministers and their civil servants".[96]

64. Professor Kakabadse's written evidence cited his research that demonstrated that:

    Most people in a failing organisation know it is failing, but they do not know how to talk about it with their work colleagues in order to address it. In failing organisations, many people attend meetings and agree to things in that meeting, but then leave the meeting and express something different. It tends to be good people who leave a failing organisation, and the less good who remain and stay quiet. In failing organisations, the leadership are the last to admit the seriousness of the challenges they face. [97]

65. There is no question that any blocking of ministerial decisions by civil servants would be unacceptable. The perception that ministerial decisions are being deliberately blocked or frustrated points to deeper failures in our system of government. Professor Kakabadse's research has highlighted how failing organisations demonstrate common characteristics, and while these may not be evident in all parts of Whitehall, they are certainly evident in some departments and agencies. In our deliberations with ministers and civil servants, most recognise a prevalence of these behaviours. We remain unconvinced that the Government has developed the policies and leadership to address these problems. We have found that both ministers and senior civil servants are still somewhat in denial about their respective accountabilities in respect of the problems of the Civil Service.


66. In his Policy Exchange speech, the Minister for the Cabinet Office said:

    Most of all civil servants themselves are impatient for change. I recently spoke at a gathering of newly-entered members of the Senior Civil Service. They were fabulous. Able, bright, energetic, ambitious to change the world. But to a man and woman - frustrated. Frustrated by a culture that weighs them down. A culture that is overly bureaucratic, risk averse, hierarchical and focused on process rather than outcomes. That makes the whole somehow less than the sum of the parts.[98]

He added that "hierarchy is not just about structure and organisation; it is about behaviour."[99] We return to the wider consequence of this in the next section.

67. The allegations of "blocked" ministerial decisions are linked to wider questions about culture in the Civil Service. Francis Maude depicted the Civil Service as having "a bias towards inertia".[100] Former Cabinet Minister Lord Adonis, while not experiencing "ideological objections", found that within the Civil Service there were "plenty of brakes [on ministerial requests] in the sense of just inadequate energy and drive".[101] He added:

    Whitehall is often at its best in a crisis, because then things have to be done, and they have to be done that day. Where you are not dealing with a crisis, it can always wait until tomorrow, and often not just tomorrow but next week or next month.[102]

68. Jonathan Powell described the Civil Service as "a bit like a monastic order. People still join at 21 and leave when they retire at 60 [...] they all think the same way".[103] Former civil servant and special adviser Damian McBride suggested that some civil servants would prevent ministers from considering some policy options because of an "attitude that there are some technical and administrative things that are nothing to do with Ministers".[104] Mr McBride also commented that civil servants sometimes needed to be made aware that they were, inadvertently, regulating in a way that could block enterprise.[105] Lord Browne has argued that "the biggest single obstacle to progress in government" could be a cultural issue: a failure to learn from failure and a tendency to turn "everything into some sort of achievement [...] people say not that something went badly, but that it went 'less well' than they had hoped".[106] Lord Browne added:

    An obsession with successes is not the fault of individuals; it is the result of an organisation's induced behaviour. To tell stories of failure, you need to record them. But why would a civil servant want to do that? The only consequence would be discovery through a Freedom of Information request, followed by a hue and cry to search for those to blame.[107]

69. We agree with Lord Browne's analysis that the failure to learn from failure is a major obstacle to more effective government, arising from leadership that does not affirm the value of learning. This is something which the Civil Service has yet to learn from successful organisations. The present culture promotes the filtering of honest and complete assessments to ministers and is the antithesis of 'truth to power'. It is a denial of responsibility and accountability.

Lack of support for ministers

70. Nick Herbert MP told us that ministers' private offices were not "sufficiently strong" for ministers to achieve their policy programmes. Mr Herbert added that he felt as if he had less support as a minister than he had had in opposition.[108] We have found this to be a typical view amongst current and former ministers. He felt that this lack of support is at odds with the requirement for a minister to be held accountable to Parliament for the performance of his brief. He said the system is "no longer fit for purpose".[109] Mr Herbert told us that he would have benefited from having policy advisers working directly for him to help him "interrogate the system" more effectively.[110] Former Cabinet Minister Rt Hon Jack Straw MP recommended the introduction of "central policy units in Departments made up of career officials, some people brought in on contracts, and political appointments" to improve "the interface between the political leadership and the Civil Service".[111]

71. Francis Maude spoke of ministers experiencing "a lack of firepower to get things done: people to do progress chasing, people whose overwhelming loyalty is to the Minister".[112] He made a related point following his Policy Exchange speech, entitled "Ministers and Mandarins: speaking truth to power", when he commented:

    [Do] the people you appoint only tell you what you want to hear?... Ask any minister! You are much more likely to get that candid and often brutal advice from your special advisers who have no tenure at all except at your will - they want the minister to succeed.[113]

72. The IPPR concluded in favour of a Cabinet in all but name:

    There is a compelling case for strengthening the level of support given to Secretaries of State (and other Ministers who run departments). This, we argue, should form part of a wider reform of the key functions in Government that need to be performed 'close' to Ministers. The objective should be to ensure that Secretaries of State have an extended office of people who work directly on their behalf in the department, in whom they have complete trust.[114]

73. Academic Patrick Diamond warned, however, that for thirty to forty years ministers had tried to bring in new officials, in the form of consultants, academics and special advisers, but that experience had shown it to be "often a very unsatisfactory solution, because what you are doing is creating pockets around a Minister that are not properly linked into the rest of the Civil Service and not properly worked into the rest of the system of public administration".[115] Professor Kakabadse also warns about the effects of "the separation of policy input from implementation at the departmental level."[116] Sir John Elvidge commented that strategy units, delivery units, and the introduction of non-executive directors were "all attempts to make organisational solutions to something that is not fundamentally an organisational problem [...] it is a problem about trust, respect and the quality of relationships, not about the mechanisms that you use to put particular people in particular places".[117]

74. The Civil Service Reform Plan does not address the fact that effective organisations depend on the relationships between ministers and officials, which in turn depend on the "subtle understandings" between individuals. Instead the Reform Plan is based too much on the notion that it is possible to solve confusions in working relationships simply through structures and ministerial direction. We are therefore concerned that the proposal for increasing the staffing of lead ministers, in the One Year On document, is not made on the basis of any evidence except that ministers, like Nick Herbert, feel accountable but feel unable to rely on their officials to achieve their objectives. The fundamental issue is why some civil servants feel resistant to what ministers want, and this question has not been considered in any systematic way. If lead departmental ministers require additional support, what about the challenges faced by junior ministers, for it is they who express this lack of support more vehemently than secretaries of state? Such an increase in ministerial support should, however, obviate the need for so many junior ministers, in accordance with the recommendations made in our 2011 Report, Smaller Government: What do ministers do?, in which we pointed out that, at that time, the UK Government contained many more ministers (95) than in France (31) or Germany (46). The same question could apply to the number of departments.

75. Concerns about the support offered to ministers poses fundamental questions about the nature of leadership and management in Whitehall and about what it means for individuals, institutions and societies when people are expected and permitted to use discretion. This in turn rests on the embedded culture of Whitehall and the Civil Service. In answer to questions following his Policy Exchange speech, the Minister referred to the way in which some Armed Forces operate— "the culture there" —and said:

    It is about huge empowerment of often very young soldiers who don't have the massive kind of hierarchical structure above them. They have two things. They are entrusted with quite a lot of decision taking and required to exercise it. That's the kind of freedom and empowerment part. Second is an acute sense of responsibility —that they can't pass that on to anybody else. And the danger with an organisation that behaves in a hierarchical way is that people don't take responsibility for what they do [...] The Civil Service is much less good at defining the space that an individual civil servant has to take decisions, and the good organisations mark out your ground—this is what you are expected to deliver; these are the outcomes or outputs that we are expecting from you. And actually that's the space within which you can operate. That's a very liberating and empowering thing [...] Setting out the space within which people have the scope to make decisions and then are expected to take responsibility for it: that's a strong organisation. But we are not good at that in the Civil Service.[118]

76. We fully concur with the Minister about the need to empower civil servants to take decisions and take responsibility for those decisions. The fact that he cites the Armed Forces which have to operate in a very agile manner demonstrates a key point: that the more uncertain and volatile the environment of politics and government becomes, the greater the need for the exercise of discretion and judgment at all levels, not just at the top. This is well understood by our own Armed Forces by the concept of "delegated mission command". This latter concept does, however, depend on a coherent intent—shared understanding of purpose. Good leadership provides a framework within which people feel they are trusted to use their judgment. The Minister's need for "progress chasing" and "loyalty" suggests that the more uncertain and volatile the environment becomes, the more anxious that ministers and senior officials are to maintain a culture of control.

77. This in turn begs the question: to whom should officials be expected to owe their loyalty? Haldane established that ministers and officials should be "indivisible", but the reality is that this has more and more created an implicit but artificial division between "policy" and "implementation", when in reality policy conceived without equal attention given to implementation is bound to fail. This separation increases as Parliament gives greater attention to the direct accountability of permanent secretaries to Parliament in their role as accounting officers. There is a growing expectation that other officials will give evidence to select committees about matters other than policy or advice to ministers. Now, Senior Responsible Officers for major projects are also to be made directly accountable. The direct accountability of civil servants to Parliament is not a novel doctrine and was anticipated in the Haldane Report, when it foreshadowed the formation of "departmental" (i.e. select) committees and said:

    Any such Committees would require to be furnished with full information as to the course of administration pursued by the Departments with which they were concerned; and for this purpose it would be requisite that ministers, as well as the officers of Departments, should appear before them to explain and defend the acts for which they were responsible.[119]

78. This implied that the innovation envisaged would be that ministers rather than only officials would appear to give evidence before them. Today, this somewhat artificial division of roles has been further amplified by an increasing tendency for policy to be driven from No 10 and the Treasury, while implementation is left to departments or even more remote agencies and private contractors. This undermines the Minister's view that civil servant actions should be accountable to their ministers and through their ministers to Parliament.[120]

79. Departmental civil servants are in an invidious position with conflicting loyalties. The already delicate leadership role of the combination of the secretary of state and his or her permanent secretary makes it extremely difficult for subordinate officials to understand what may be the "shared vision" for the department. The well-documented tensions in that relationship also reflect confusion of messages from the top that may be perceived as contradictory, which leaves the official wondering, "Which should I please: the minister or the permanent secretary? Whose vision do I follow?" This conflict is further compounded by the complexity of relationships between departments, No 10 (the Cabinet Secretary) and the Cabinet Office (the Head of the Civil Service). Ministers have for some years been relying on Special Advisers, specialist temporary civil servants or outside consultants. Even policy-making is now being "outsourced" to think tanks. We find it unsurprising that many officials find resistance is perhaps the only rational response. Adding more "personalised" ministerial appointments to this confusion will not address the fundamental problem, and could add to the chaos.

80. We are far from persuaded that the creation of separate enclaves of ministerial appointees, who would owe their first loyalty to minsters, will address the concerns for "increased accountability" expressed by the Minister for the Cabinet Office. This is likely to increase the dissonance between ministers and officials in what should be mutually dependent relationships. We sense many ministers aspire to this mutual dependence (Haldane's indivisibility) and are all too aware of what has been lost but do not know how to restore it. As they stand, these proposals are at odds with the aspiration to trust, to empower and to delegate to lower tiers of departments where officials have the discretion to exercise their judgment and will be supported by those above when they do so.

81. We recognise that progress-chasing is a necessity in any system, but it is a counsel of despair to justify increased ministerial appointees on this basis. It is treating symptoms rather than causes. We find it hard to imagine an effective system of government in which ministers could or should be micro-managing their departments as many feel they must.


82. As we have highlighted in our Reports Government and IT - "a recipe for rip-offs": time for a new approach (July 2011) and Government Procurement (July 2013), there are critical skills gaps within the Civil Service.[121] Witnesses in this inquiry were united in arguing that Whitehall did not have the commercial and procurement skills it required. Lord Adonis commented that, while civil servants were able, "they [were] very poorly trained and their experience of the sectors in which they work [was] very poor".[122] Damian McBride spoke of "a tendency to throw people in at the deep end and expect them to swim straight away".[123] Former Cabinet Secretary Lord Wilson suggested that "incompetence" rather than "malice" was usually the cause of failings in the Civil Service.[124] Andrew Haldenby, Director of the think tank Reform, reported that "the issue of competence does go quite deeply".[125]

83. One example of the skills gap was revealed in the collapse of the tendering process for the West Coast Main Line in October 2012. This followed a review of the franchise decision conducted by the Cabinet Secretary Sir Jeremy Heywood, at the request of the Prime Minister, which failed to identify fundamental flaws in the assessment of the franchise bid. The collapse of this decision provoked an outbreak of blame and recrimination, and the failure was publicly blamed on the key civil servants conducting the process. The subsequent review of the collapse, conducted by Sam Laidlaw, the lead non-executive director at the Department for Transport, and the Secretary of State for Transport, attributed it to "completely unacceptable mistakes" by Department for Transport officials working on the franchise process.[126] In this specific example, former Transport Minister, Lord Adonis, referred to the retirement, after the 2010 general election, of a key senior civil servant with experience running a train company, which he said left the Department for Transport "essentially flying blind in dealing with the West Coast Mainline".[127] Many took this episode to be symptomatic of a wider malaise in the Civil Service.

84. Witnesses doubted whether the Government's reform plans would be sufficient to address the skills deficit. Lord Norton of Louth argued that the Civil Service Reform Plan paid insufficient focus to "subject-specific knowledge", with an alternative objective of "a Civil Service that is more fit for purpose from a managerial point of view, so they can do the job, but not necessarily know that much about the substance of the sector they are working in".[128] The National Audit Office recommended that the Head of the Civil Service and permanent secretaries should "encourage senior civil servants to be active members of a specialist profession and to keep their profession-specific skills and networks up to date".[129] This supports the recommendation in our previous Report on Government Procurement, that "consideration be given to regenerating the professional civil service".[130]

85. We regard the collapse of the West Coast Main Line franchise as symptomatic of many wider questions concerning governance and leadership within the Civil Service, which have not been addressed in the rush to scapegoat a few officials. Why was the blanket ban on outside financial consultants made to apply in this case, when previously the process had always depended upon it? Why was the process of departmental downsizing not conducted in a more selective manner to avoid the departure of key skills? Why was the consequence of this departure not recognised by line management? What support did line management give to this relatively inexperienced team of officials, which in turn was led by a new official recruited from outside the Civil Service? Why was line management not held as responsible for the outcome as the officials themselves? What effect did the frequent change of ministers and of personnel have on all these questions? We are concerned that this episode demonstrates the tendency of Whitehall to locate blame for failure on a few individuals, rather than to use the lessons of failure, as Lord Browne recommended, to address wider shortcomings in systems and culture.

86. As we have made clear in our Government IT and Government Procurement Reports, the inability of the Civil Service to develop, recruit, and retain key skills is a fundamental failure of today's Civil Service, which successive Governments and the leadership of the Civil Service have failed to address. The fact that so many with key skills just leave the service also underlines how counterproductive it is to maintain the existing restrictions on salaries and conditions for leading professionals in a modern Civil Service. No other Civil Service in a comparable country operates on the basis that the Prime Minister's salary should be a maximum. Such a myopic policy makes the UK Civil Service internationally uncompetitive.


87. Only one of the sixteen Whitehall departments (HM Treasury) has not experienced a change of lead permanent secretary since the 2010 general election. This rapid rate of turnover at permanent secretary level extends throughout departments and their agencies at senior level. On average, the secretary of state has more experience in post than the permanent secretary: the Department for Transport, Home Office, Ministry of Defence and Cabinet Office have each had three different permanent secretaries in the last three years. Dr Chris Gibson-Smith, then Chairman of the London Stock Exchange, told us that this level of turnover was "completely incompatible with the objectives of good government".[131]

88. Professors Flinders and Skelcher, and Doctors Tonkiss and Dommett, commented that "intra-civil service churn and turnover" was an even more fundamental issue than the turnover of permanent secretaries, as it undermined "any notion of institutional memory".[132] The Association for Project Management cited 2009 research by the Office of Government Commerce which revealed the "average duration for Senior Responsible Owners (SROs) on major government projects was only 18 months, while the projects themselves lasted between three and ten years".[133] TheNAO's June 2013 report on the Senior Civil Service stated that accountability had been "weakened by turnover in key posts".[134]

89. Lord Adonis told us that there had been eight directors of the academy programme in ten years, with the best directors leaving the post before they had even served a year, in order to be promoted. The appointment of civil servants, in his experience, was related to the promotion prospects and management of careers by the civil servants, rather than by the needs of the Civil Service. Lord Adonis reported his efforts with the Cabinet Secretary, Sir Gus [now Lord]O'Donnell, to keep a talented official in post:

    I was fighting to keep the civil servant who was being promoted into another Department in order to become a Director General, and was told by him that there was nothing he could do. As he put it to me, "My dear Andrew, I am only Head of the Civil Service; I do not manage it."[135]

90. He added "it is quite a misnomer to describe what we have as a permanent Civil Service".[136] Jack Straw shared a similar experience:

    If you are a Minister, you can develop a really good relationship with an official or set of officials, and suddenly, without being told, there is a meeting the following week. You look round the room, and the senior official you have been dealing with—or it might have been a middle-ranking one who was really good—has gone. You say, "Where's so and so?" "They've been promoted," or "They've moved on. It's all career development, Secretary of State." "Thank you very much." [137]

91. Professor King argued that, while the Civil Service Reform Plan acknowledged the need for key officials to stay in post for longer, it also emphasised "the desirability of moving people around so that they acquire a wide variety of different skills", which would maintain high levels of churn.[138]

92. The rapid turnover of senior civil servants and in particular, of lead departmental permanent secretaries, at a faster rate than Secretaries of State, begs the question: why do we still use the term, "Permanent Civil Service"? Weak departmental leadership contributes to the risk of poor decisions, as demonstrated by the West Coast Main Line franchising debacle, where the department was on its third permanent secretary since the election. We find that this can only reflect a failure of the senior leadership of the Civil Service over a number of years, and a lack of concern about this failure from senior ministers, including recent prime ministers.

The Whitehall structure

93. As the Minister for the Cabinet Office emphasised, the Civil Service "is not a single entity":

    There are 17 principal Government Departments, which are separate entities, headed by Secretaries of State, who collectively form the Cabinet [...]. They run their own Departments, so of course there is going to be inconsistency across the piece.[139]

94. The trade union Prospect commented that no Civil Service reform programme "has successfully joined up the rigid departmental silos, [which are] often jealously guarded by senior civil servants".[140] Jonathan Powell argued that permanent secretaries "regard themselves as feudal barons, dependent on their secretaries of state and their budgets, and not answerable to the Cabinet Secretary or anyone else".[141] It was, he said, "the guilty secret of our system" that "No. 10 Downing Street and the Prime Minister are remarkably unpowerful in our system [...]It is very hard for the Prime Minister to get Departments to do things".[142]

95. Nick Herbert, who served as a joint minister in the Home Office and Ministry of Justice, reported that the whole federal department structure was "set up for conflict", ensuring a "dislocation [that was] one of the big obstacles to getting things done".[143] He added that when his agenda required both departments to work together, "there was a competition and a lack of desire to work together that made it very difficult to get the process moving at all".[144] Mr Herbert said that this "inbuilt" resistance was only broken down following the 2011 riots, as a result of the impetus brought by the Prime Minister's interest in the area.[145] Sir Jeremy Heywood, the Cabinet Secretary, told us that the Cabinet Office had set up its "own SWAT team"—the 30 person Implementation Unit— that went into departments "to understand what the delivery blockages are getting in the way".[146]

96. On the retirement of Sir Gus O'Donnell (now Lord O'Donnell) at the end of 2011, his role was split into three separate posts: Cabinet Secretary; Head of the Civil Service; and Permanent Secretary, Cabinet Office. In our January 2012 Report Leadership of change: new arrangements for the roles of the Head of the Civil Service and the Cabinet Secretary, we warned that splitting of the role, and in particular the decision to combine the role of Head of the Civil Service with that of permanent secretary at another department, would weaken the leadership of the Civil Service and undermine the independence of the Cabinet Secretary.[147] We asked Lord O'Donnell if the new arrangement was working better than previously. He answered that it was "impossible to say".[148]

97. Former Cabinet Secretary, Lord Wilson, suggested that it was more difficult for the Cabinet Secretary to address ministerial concerns about the Civil Service when the roles of Cabinet Secretary and Head of the Civil Service were held by separate people.[149] Sir David Normington told us he believed that it was "always better to have a single line of authority from the Prime Minister through the Head of the Civil Service and the Cabinet Secretary".[150] The June 2012 IPPR report called for the Head of the Civil Service to be "a full-time post, taking on all responsibilities for managing permanent secretaries". This would, the report argued, strengthen the role of the Head of the Civil Service "in respect of holding permanent secretaries accountable", and be a similar role to that performed by the New Zealand State Service Commissioner.[151] We know of no former Cabinet Secretary who supports the present split arrangement.

98. The Minister responded that, while the system was "very siloed" and "overly hierarchical", the problems in the Civil Service were not simply a result of the structure.[152] He argued that the centre of Government needed to be strong, rather than large, and able to assess the progress of policy implementation across departments.[153] The Minister added that there was no evidence for the suggestion that departments had been emasculated and that policy was being driven by the centre, a suggestion which he said recurred periodically.[154]

99. The split of the Head of the Civil Service and Cabinet Secretary roles have contributed to weak leadership and confusion over the division of roles, responsibilities and tasks between the centre and the departments. The two roles purport to be equal in status, but the division between "policy" departments responsible to the Cabinet Secretary, and "implementation" departments responsible to the Head of the Civil Service, not only reinforces an artificial separation of policy from implementation but the disparity in status between the roles.

100. The complexity of government structures contributes to the confusion between the centre and departments. Yet there has been no serious consideration of what the relationship between the centre and the departments of state should be, beyond the Minister for the Cabinet Office's suggestion that a single operating system for Whitehall should be considered. This is again a crucial aspect of government that lacks strategic coherence and clear lines of accountability so that people in the organisation know where they stand, and again underlines the lack of clear analysis and clear strategy in the Government's approach to civil service reform.

Role of non-executive directors (NEDs)

101. The Coalition Government reformed the Civil Service departmental boards in June 2010, with the aim of making departments more effective and business-like. These reforms included: making secretaries of state chairs of their departmental boards; altering the composition of boards to enable junior ministers to sit on them; reducing the number of officials on boards; and creating the position of Lead Non-Executive Director on each board.[155]

102. Lord Browne, the Government's Lead Non-Executive Director, has reported limited progress in the use of non-executive directors (NEDs) by departments. In evidence in July 2012, Lord Browne said that on a scale of one to ten, he would put his satisfaction with the contribution made so far by non-executive directors to departmental boards at "about two".[156] He elevated this score to "four to five" in his evidence in February 2013, and added that NEDs "cannot be the magic bullet that makes everything perfect" but could help improve relationships between ministers and officials.[157].

103. Lord Heseltine, in evidence in December 2012, argued that the new NEDs were not being given sufficient support to carry out their role.[158] Professor Andrew Kakabadse, our former specialist adviser, expressed "deep scepticism" about the reformed Whitehall boards and lead NEDs, which he viewed as "people's mates being appointed" in these roles.[159] He added:

    There should be an independent investigation conducted about how these people were appointed, why they were appointed, for what roles they were appointed, what the reality of the chairmanship skills that apply are and how those boards work. Do many of those non-executives even understand what is happening in some of those Departments, except for those who have been civil servants beforehand? Of the ones I have spoken to, their greatest concern when they talk to me is, "I don't know what my role is, I don't know what I'm doing here and I don't know if I'm providing any value".[160]

104. Non-Executive Directors (NEDs) within Whitehall departments have no defined role, no fiduciary duties, and it is not clear who can hold them to account. They are more like advisers or mentors than company directors. Their value depends entirely upon how ministers and senior officials seek to use them. Their experience has been mixed, with many departments failing to use the expertise of their NEDS, and a lack of clarity over their roles and responsibilities. NEDs play a key role in some departments in supporting both ministers and officials to work more effectively and efficiently, but this is a very different role from the role of an NED in the private sector. A review of their value and effectiveness should be part of any comprehensive review of the civil service.

Permanent secretary appointments

105. The Civil Service Reform Plan proposed that "to reflect Ministers' accountability to Parliament for the performance of their departments" there would be a strengthening of the role of Ministers in departmental and Permanent Secretary appointments". At present, the Prime Minister may veto the choice of the independent selection panel, but not select an alternative candidate. Providing ministers with the final say over the appointment process, would, the Plan stated, increase the chance of a successful relationship between a Secretary of State and his or her permanent secretary and as a result, increase the likelihood of the department operating effectively.[161] The Plan committed the Government to consulting with the Civil Service Commission on its proposals.[162]

106. The First Civil Service Commissioner, Sir David Normington, argued that giving ministers the final say in permanent secretary appointments would "not change the whole system overnight, but it [was] a step in the wrong direction" and "could lead to more personal favouritism and patronage".[163] Sir David set out the difference between the Prime Minister's veto, as in the law at present, and ministerial choice which he argued "risk[ed] a political choice being made".[164] Sir David added that the judgment of the Civil Service Commission was that it "should not concede this point because it is fundamental to the way in which the Commission was set up and to the way the Civil Service was developed".[165]

107. The Civil Service Commission instead set out revised guidance for permanent secretary appointments which set out a limited increase in the Secretary of State's role in the appointment process. The Secretary of State would be consulted at the outset on the nature of the job, the skills required, and the best way of attracting a strong field; would agree the final job description and person specification, and the terms of the advertisement; would agree the composition of the selection panel, in particular to ensure that there was sufficient external challenge; would meet each of the shortlisted candidates to discuss his or her priorities and feed back to the panel on any strengths and weaknesses to probe at final interview; and would have the option of further consultation before the panel made its recommendation.[166]

108. Under sections 10 and 11 of the Constitutional Reform and Governance Act 2010, appointments to the Civil Service are required to be carried out in line with the recruitment principles established (under the same statute) by the Civil Service Commission. If the Civil Service Commission did not change its position on this issue, the Minister would therefore require primary legislation to give the Secretary of State the final choice in the appointment of permanent secretaries.[167]

109. Sir David Normington stated that the Government was "disappointed" with the Commission's proposals, but ministers had agreed to trial the Civil Service Commission's revised appointment principles over the course of a year. [168] Francis Maude stated that the Civil Service Commission's objections were "mistaken", but confirmed that the Government would allow time to test out the new appointment system, before proposing further involvement for ministers.[169] The Minister stated that he was not being kept "awake at night" by the prospect of the Civil Service Commission "absolutely [holding] fast to its current position", requiring the Government to introduce primary legislation to give ministers the final say over permanent secretary appointments.[170]

110. There was support for the Government's proposals from some academics. Professor Flinders and the "Shrinking the state project" academics argued that giving ministers a choice from a shortlist of candidates "would not amount to the politicisation of the Civil Service as candidates would have been selected through an independent and merit-based appointments procedure".[171]

111. Former ministers also supported the Minister's proposal. Former Labour Cabinet Minister Jack Straw argued that the Civil Service Commission's objections to the Government's proposals were "narrow, self-defeating, and will not work", adding that senior civil servants would not accept their own powers of appointment to be limited in the same way as ministers.[172] Nick Herbert argued that "if accountability is to rest with the politicians, the politicians are entitled to a greater degree of control about who works for them".[173] Caroline Spelman reported that when her departmental permanent secretary left, just a few months after she was appointed as Secretary of State, she was told that she was not allowed to interview the shortlisted candidates, although they could ask questions of her. (Her understanding has subsequently been contested.) She told us that as she was accountable for the department it felt "very strange" that she did not have more say in the appointment of her permanent secretary, on whom, she viewed, her "political life depend[ed]".[174] Mrs Spelman added:

    It is actually a very tough experience to face the bullets flying at you [at a select committee hearing], especially over a difficult decision or something that has not gone well. That is why it is so important the Secretary of State has a say in who the permanent secretary will be, because when you go into bat together, you have got to be able to rely on each other in that situation.[175]

This underlines the pressure on ministers who are answerable to Parliament for the performance of their departments which they do not feel they adequately control.

112. Former civil servants expressed serious concerns over the Government's proposal, however, with former Cabinet Secretary, Lord Wilson of Dinton, describing it as the "slippery slope" to "reintroducing patronage".[176] Lord Wilson added that he was "absolutely convinced" that ministers' frustrations with the Civil Service could be addressed without "going across the red lines" and giving ministers the final say in the appointment of their permanent secretary.[177]

113. Former First Civil Service Commissioner, Dame Janet Paraskeva, expressed a concern that giving ministers the final say in the appointment of their permanent secretary would mean a higher turnover among permanent secretaries, as the appointed candidate would be seen as closely aligned with their minister, and thus potentially unable to serve a new minister in the post, particularly after a change of government.[178] Lord Wilson agreed that such a proposal would increase churn among permanent secretaries, rather than reduce it.[179]

114. Sir John Elvidge, former permanent secretary at the Scottish Government, suggested that while ministers should have a veto on appointments, if they were able to pick the individual for a particular role, it could "narrow the base on which public confidence in Government rests".[180] Sir John added that introducing the Minister's proposal would be incompatible with the accountability to Parliament by the permanent secretary as the department's accounting officer:

    you cannot really maintain our accounting officer concept if you move to this system, because if your Permanent Secretary is directly appointed by your Minister, the perceived credibility of that role as an independent servant of Parliament as well as of the Minister is very difficult to sustain. So you have to find a different mechanism for providing that kind of before-the-event check on the propriety of the use of public funds.[181]

115. The Civil Service trade unions also expressed caution about giving ministers the final say over the appointment of their permanent secretary. Hugh Lanning of PCS suggested that giving ministers the final say over permanent secretary appointments would "increase compartmentalism" in Whitehall, as ministerial-chosen permanent secretaries would not, he argued, "take the wider view of the Civil Service or the country as a whole".[182] Dave Penman of the FDA suggested that permanent secretaries chosen by ministers would be political appointments "either in reality or perception". He added, "many ministers come with absolutely no management experience" to aid them in choosing the right permanent secretary to manage a large Civil Service department.[183]

116. Lord Norton of Louth shared similar concerns about ministerial abilities to choose their permanent secretaries, suggesting that fears of politicisation "rather miss[ed] the wider point, namely that ministers usually have no training or qualifications in making managerial appointments".[184] Historian Lord Hennessy argued that giving ministers greater involvement in the appointment of their permanent secretaries would entail a risk that "ministers will go for people who, by and large, share their ideological charge. You will have people there because they believe things, not because they know things".[185]

117. In local government, chief executives are appointed by a panel of councillors. This system created, in the view of Carolyn Downs of the Local Government Association, "a very strong ownership on both sides of the relationship between politicians and officials".[186] Ms Downs added, however, that the cross-party nature of the appointment panel was "fundamentally important".[187] The current First Civil Service Commissioner, Sir David Normington, told us that this is "a safeguard" in local authority appointments.[188] Sir David added that some local government chief executives are "identified very closely with the party in power", requiring a change of chief executive when a different party takes control of the authority.[189]

118. Some witnesses argued that the Government's proposals denoted "constitutional change".[190] Dame Janet Paraskeva, who was First Civil Service Commissioner when the Constitutional Reform and Governance Act was passed in 2010, told us that there was all-party support" for the principle that "the final decision should be not of the Minister but of the appointments panel [and] the appointment should be made on merit, after fair and open competition".[191] Dame Janet's successor, Sir David Normington, told us he was "very surprised and extremely disappointed" that ministers were seeking to change the settlement agreed in 2010.[192] The Minister, however, suggested that, at the time the Act was passed, both he, and the Minister responsible for the Act, the Rt Hon Jack Straw MP, "believed there was nothing in that Act that prevented Ministers from having a choice of candidates for Permanent Secretary".[193]

119. The IPPR's report on accountability recommended that the Prime Minister, rather than the Secretary of State, should choose permanent secretaries from a shortlist (as in Canada and Australia) chosen on merit, from a recruitment process overseen by the Civil Service Commission. The IPPR argued that, as head of government and Minister for the Civil Service, the Prime Minister would be better placed than the Secretary of State to make the final decision; would be better-placed to choose a permanent secretary who complemented the Minister's skills and personality; and would be a further "bulwark against potential politicisation", as the Prime Minister would want to select the most able and competent candidate.[194]

120. The Prime Minister exercised his existing right to veto permanent secretary appointments in December 2012, during the recruitment process for a new Permanent Secretary at the Department of Energy and Climate Change.[195] The rejected candidate, David Kennedy, currently Chief Executive of the Committee on Climate Change, was recommended by a panel which was chaired by Sir David Normington, and also included Sir Bob Kerslake, Paul Walsh, Lead Non-Executive Director for DECC and CEO of Diageo Plc; Professor Nicholas Stern, Director, LSE; and Bronwyn Hill, Permanent Secretary at DEFRA.[196] It was reported by The Financial Times that the appointment was supported by Ed Davey, the Liberal Democrat Secretary of State at DECC.[197] The Prime Minister's intervention was confirmed by his spokesman who said: "as Minister for the Civil Service, the Prime Minister oversees Senior Civil Service appointments".[198] When questioned on this issue by the House of Commons Liaison Committee, the Prime Minister said that while "it would be wrong to talk about specific individuals and specific cases [...] the most important thing we need now at the Department of Energy and Climate Change is commercial experience and the ability to do deals".[199] A second candidate, Stephen Lovegrove, was appointed in January 2013.

121. We welcome the compromise between the Government and the Civil Service Commission on the appointment of departmental permanent secretaries, which allows for increased involvement for departmental ministers but leaves the recommendation with the Commission's interview panel and the final decision with the Prime Minister. This should avoid any misunderstanding that the decision should bypass a Secretary of State altogether. We recognise the unique demands placed on ministers who do not control the appointment of their most senior official in their department, particularly as this previously almost secret relationship is today more than ever exposed to public scrutiny and to the glare of publicity. Tensions are bound to arise between politicians and their officials who seek to remain impartial, but we are sceptical about whether increased political influence over their appointment would resolve these tensions. Effective working relationships at the top of Whitehall departments depend on openness and trust, and it is far from clear how the Government's original proposal would promote this. We remain concerned that the Government's original proposal is only "on hold" and that the Minister still seems intent on pursuing it without the wider and deeper consideration of the future of the Civil Service which would be needed before taking more radical steps. We wish to make it clear that the Civil Service Commission has our fullest support.

Permanent secretary contracts

122. The IPPR report, published by the Cabinet Office in June 2013, recommended the introduction of four-year, renewable fixed-term contracts for new permanent secretaries, with the Prime Minister responsible for the renewal of contracts. The IPPR cited the experience of New Zealand where, the report stated, the introduction of such contracts was "widely considered to have sharpened the accountability of Chief Executives".[200]

123. Patrick Diamond suggested that there would be a risk if the New Zealand model, which had been "created for a particular system in a particularly small country, with a set of particular parliamentary arrangements" was imposed onto the UK Civil Service, in which "our parliamentary arrangements are quite different".[201] His written evidence expanded on this point, noting that the New Zealand model had the potential to "entrench the artificial distinction between 'policy-making' and 'implementation'".[202]

124. The Minister stated that he was unsure whether employment law permitted the Government to introduce fixed-term contracts for permanent secretaries.[203] He also noted the potential cost of terminating a fixed-term contract as a possible reason not to move to such a system.[204] He added, however, that fixed-tenure contracts could be introduced, and that they might have the effect of lengthening the average time spent in post by a permanent secretary.[205]

125. The current levels of turnover of lead permanent secretaries is incompatible with good government. We are sceptical of the Minister's suggestion that fixed-tenure for permanent secretaries will increase the average time spent in post. On the contrary, fixed-term contracts are a means of removing an incumbent, unless safeguards are included, similar to those in New Zealand, where the State Services Commissioner appoints and employs "Chief Executives" and it is he or she who recommends whether the permanent secretary should be reappointed. As the IPPR report points out, the New Zealand system is viewed as the least politicised of the Westminster systems. The Government has cherry-picked the fixed-tenure contracts while looking to enhance the ministerial role in appointments. The danger is that the personalisation of the appointments of permanent secretaries is that they will leave as the renewal point approaches, particularly if the minister who appointed them is no longer around. Our evidence does not suggest that fixed-tenure contracts will address the serious structural and cultural problems in the Civil Service.

75   Q 3 Back

76   Q 329 Back

77   Q 19 Back

78   Q 19 Back

79   Q 323, Civil Service, Civil Service People Survey 2012 Benchmark Results, Back

80   Civil Service, Civil Service People Survey 2012 Benchmark Results, Back

81   Gallup, Employee engagement overview brochure,  Back

82   CSR 36 Back

83   "No, Minister: Whitehall in 'worst' crisis", The Times, 14 January 2013, p 1 Back

84   Oral evidence taken before the Public Administration Select Committee, 28 November 2012, HC (2012-13) 663-iii, q 171 Back

85   Qq 1044, 1045 Back

86   Q 1048 Back

87   Q 66 Back

88   Qq 829, 833 Back

89   Q 835 Back

90   Q 343 Back

91   Q 164 Back

92   Q 679 Back

93   CSR 13 Back

94   Q 34 Back

95   Q 1176 Back

96   Q 837 Back

97   CSR 36 Back

98   "Ministers and Mandarins: speaking truth unto power", Cabinet Office, 4 June 2013, Back

99   "Video of Q&A following Ministers and Mandarins: speaking truth unto power", Policy Exchange, 4 June 2013 Back

100   Q 1027 Back

101   Q 205 Back

102   Q 220 Back

103   Q 720 Back

104   Q 548 Back

105   Q 562 Back

106   "Business and Government: Lessons Learned - in conversation with Lord Browne", Institute for Government, 6 June 2013, Back

107   "Business and Government: Lessons Learned - in conversation with Lord Browne", Institute for Government, 6 June 2013, Back

108   Q 202 Back

109   Q 221 Back

110   Q 222 Back

111   Q 702 Back

112   Q 1171 Back

113   "Ministers and Mandarins: speaking truth unto power", Cabinet Office, 4 June 2013, Back

114   Cabinet Office, Accountability and responsiveness in the senior Civil Service: Lessons from Overseas: A Report by the IPPR, June 2013, p 112 Back

115   Q 37 Back

116   CSR 36 Back

117   Q 125 Back

118   "Video of Q&A following Ministers and Mandarins: speaking truth unto power", Policy Exchange, 4 June 2013 Back

119   Ministry of Reconstruction, Report of the Machinery of Government Committee, Cm 9230, 1918 Back

120   Public Administration Select Committee, Fifth Report of Session 2010-12, Smaller Government: Shrinking the quango state, HC 6537, Q 50  Back

121   Public Administration Select Committee, Twelfth Report of Session 2010-12. Government and IT - "a recipe for rip-offs": time for a new approach, HC 715-I, Public Administration Select Committee, Sixth Report of Session 2013-14, Government Procurement, HC 123 Back

122   Q 204 Back

123   Q 565 Back

124   Q 180 Back

125   Q 61 Back

126   HC Deb, 15 October 2012, c46 Back

127   Q 224 Back

128   Q 624 Back

129   NAO, Building capability in the Senior Civil Service to meet today's challenges, HC 129,19 June 2013 Back

130   Public Administration Select Committee, Sixth Report of Session 2013-14, Government Procurement, HC 123, para 71 Back

131   Q 120 Back

132   CSR 25, Q 62 Back

133   CSR 21, NAO, Identifying and Meeting Central Government's Skills Requirements, July 2011, p31 Back

134   NAO, Building capability in the Senior Civil Service to meet today's challenges, HC 129,19 June 2013 Back

135   Q 204 Back

136   Q 199 Back

137   Q 690 Back

138   Q 666 Back

139   Oral evidence taken before the Public Administration Select Committee, 12 October 2011 HC 902-vi, Q 530 Back

140   CSR 3 Back

141   Q 797 Back

142   Q 741, 742 Back

143   Q 205 Back

144   Q 218  Back

145   Q 218 Back

146   Q 849 Back

147   Public Administration Select Committee, Nineteenth Report of Session 2010-12, Leadership of Change: new arrangements for the roles of Head of the Civil Service and the Cabinet Secretary, HC 1582, para 91 Back

148   Q 414 Back

149   Q 169 Back

150   Q 463 Back

151   Cabinet Office, Accountability and responsiveness in the senior Civil Service: Lessons from Overseas: A Report by the IPPR, June 2013, p 112, Q 110 Back

152   Q 1027, Oral evidence taken before the Public Administration Select Committee, 13 May 2013, HC 123-I, q 549 Back

153   Q 1083 Back

154   Q 1087 Back

155   Cabinet Office, Enhanced departmental boards protocol, December 2010,  Back

156   Oral evidence taken by the Public Administration Select Committee on 10 July 2012, HC 405-I, q 2 Back

157   Qq 260, 289 Back

158   Oral evidence taken by the Public Administration Select Committee on 2 December 2012, HC 756-I, q 48 Back

159   Q 114 Back

160   Q 114 Back

161   HM Government, Civil Service Reform Plan, June 2012, p21 Back

162   HM Government, Civil Service Reform Plan, June 2012, p21 Back

163   Q 431 Back

164   Q 443 Back

165   Q 439 Back

166   CSR 24 Back

167   Constitutional Reform and Governance Act 2010, sections 10, 11 Back

168   Q 428 Back

169   Q 1162 Back

170   Q 1215 Back

171   CSR 25 Back

172   Q 686 Back

173   Q 193 Back

174   Q 192 Back

175   Q 254 Back

176   Q 136 Back

177   Q 159 Back

178   Q 138 Back

179   Q 141 Back

180   Q 111 Back

181   Q 124 Back

182   Q 512 Back

183   Q 511 Back

184   CSR 26 Back

185   Q 39 Back

186   Q 617 Back

187   Q 617 Back

188   Q 436 Back

189   Q 436 Back

190   Q 136 [Lord Wilson] Back

191   Q 134 Back

192   Q 451 Back

193   Q 1216 Back

194   Cabinet Office, Accountability and responsiveness in the senior Civil Service: Lessons from Overseas: A Report by the IPPR, June 2013, p 112, Q 110 Back

195   Oral evidence taken before the Liaison Committee on 11 December 2012, HC (2012-13), 484-ii, Q 34 Back

196   HC Deb, 9 January 2013, c373W Back

197   "PM rejects climate expert for top job", Financial Times, 29 November 2012 Back

198   Ibid.  Back

199   Oral evidence taken before the Liaison Committee on 11 December 2012, HC (2012-13), 484-ii, Q 34 Back

200   Cabinet Office, Accountability and responsiveness in the senior Civil Service: Lessons from Overseas: A Report by the IPPR, June 2013, p 112 Back

201   Q 24 Back

202   CSR 11 Back

203   Q 1156 Back

204   Q 1167 Back

205   Q 1166 Back

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© Parliamentary copyright 2013
Prepared 6 September 2013