Public Administration CommitteeWritten evidence submitted by the Universities of Exeter, Cardiff and Kentucky from the “Chief Executive Succession and the Performance of Central Government Agencies” ESRC Funded Research project Principal Investigator Professor Oliver James, University of Exeter ; Co-Investigators Professor George Boyne, Cardiff University and Dr Nicolai Petrovsky, University of Kentucky ; Research Fellow Dr Alice Moseley, University of Exeter ; Economic and Social Research Council grant reference RES-062-23-2471. (CSR 33)

Summary Statement

The Civil Service reform plan indicates a desire for more interchange between the civil service and the private sector; our research indicates that private sector outsiders have played an increasing role in Executive Agencies throughout the 2000s but that this has declined in the last two years.

While private sector experience is a valuable asset to the civil service, a broad base of experience in the public and private sectors is required to provide the expertise needed in the civil service because current systems of public service provision involve networks of service providers from different sectors.

The civil service reform plan calls for more attention to delivering outcomes and results and less time spent on process and bureaucracy. However our evidence suggests that in Executive Agencies in terms of performance management, much attention is already focused on outputs and outcomes relative to process, as reflected in performance targets for these bodies that are set by ministers.

While a focus on outcomes is helpful for ensuring that overall policy objectives are met, appropriate processes remain important and should not be neglected, especially where outcomes are difficult to measure. Processes can help ensure proper action oriented towards achieving goals and have an enduring importance in the eyes of citizens, helping build a perception of legitimacy and trust in government.

Does the civil service reform plan reflect the right approach to the Civil Service?

1. As noted in the Civil Service Reform Plan (HM Government 2012, page 13), Executive Agencies are a key part of the Civil Service and so are included in the proposed civil service reforms. According to official data Executive Agencies in 2012 accounted for 30% of all UK civil service employment2 and so form an important part of the Future of the Civil Service Inquiry. Our submission focuses on evidence about Executive Agencies in the UK because our research project relates to this important type of organisation.

2. As stated in the PASC’s Issues and Questions paper for the Inquiry, a key part of the Government’s Civil Service Reform Plan proposes a greater interchange of staff between the public and private sector. This idea is not new and there have been similar calls for more recruitment of civil servants with private sector experience in the past and for a greater flow of staff in and out of the civil service, most notably in the case of the Next Steps Agencies from Sir Peter Kemp, former Head of the Next Steps Unit (See Greer 1994). To date there is little published up-to-date information on the career backgrounds of civil servants and so it is unclear the extent to which this movement really occurs, which motivated our current research.

3. The data from our ESRC project covers the period 1989–2012, and includes 628 chief executives from UK Executive Agencies including England, Wales, Scotland and Northern Ireland. During this period on average 11% of serving chief executives each year were from a private sector background3. In the first two years of the Next Steps Initiative when Executives Agencies were launched (1989–1991) none of the Chief Executives heading these bodies were from the private sector, reflecting the early stage of the reform which focused on setting up this new type of body. The proportion of CEOs from the private sector grew sharply to 12% by 1992, but this was followed by a gradual reduction to just 5% in 2000. The rate increased again throughout the 2000s from 5% to a peak of 21% in 2010, but has declined in the past few years to 13% in 2012. In terms of new chief executive appointments to Executive Agencies, no such appointments have been made from the private sector in either 2011 or 2012, with 100% of the 16 appointments made in each of these years coming from within the public sector.

4. We agree that increasing the stock of civil servants with private sector experience will bring valuable skills into the civil service. Since government policy is currently focused on greater use of the private sector in delivering public services, it is important that civil servants have the skills to effectively tender and manage contracts with this sector.

5. However, recruiting civil servants with experience in other parts of government, the public sector or the third sector will also strengthen the civil service. The civil service now operates in increasingly complex policy networks and public services are delivered by multiple service providers including by those in the “third”, or voluntary sector. The third sector has distinctive values and working styles that make it difficult for the sector straightforwardly to assume the role of public service provider. People with experience in this sector would strengthen the civil service, yet our data suggest that on average only 1% of Chief Executives of Executive Agencies have come from this background.

6. Recruiting managers to the civil service with experience in local government or other frontline public services is likely to improve policy implementation, a priority area of the Reform Plan. Our data indicate that only 4% of UK executive agency chief executives over the Next Steps period have come from local public services including local government, with the vast majority (71%) coming from within the civil service. The new Implementation Unit established by the present government has been created to strengthen implementation of policies determined by the Prime Minister and Deputy Prime Minister to have the greatest strategic importance. However having a broader base of civil servants in Whitehall with experience of frontline public services or local government is likely to create a more profound and sustained culture change to help ensure that policies are designed with implementation in mind.

7. The reform plan states that civil service culture can often be seen as cautious and slow moving, focused on process not outcomes, bureaucratic and hierarchical. The plan calls for more focus on results and outcomes rather than process. More focus on outcomes can help to ensure that overarching policy objectives are met and help maintain the focus of staff on the end result. However, process remains a critically important part of public administration. This is especially the case where outcomes are difficult to measure and where crude incentives for hitting outcome targets risk distorting and gaming behaviour. In addition, research suggests that citizens’ trust in government and in civil servants is determined as much by process as by outcomes, with people valuing honesty, respect, fairness and equity (see Van Ryzin 2011 for a discussion). In view of the decline of trust in government that has been evident over the past two decades in the UK as well as lack of trust in information provided by public bodies (Stoker, 2006), it is important that attention to due process is not lost.

8. Executive agencies are set targets each year by the responsible minister in each agency’s parent department, with chief executives personally accountable to ministers for performance (James et al. 2012). Agencies’ performance against targets is reported each year in their annual reports which are published as House of Commons Papers. Identifying the types of targets set is one way of determining the amount of time and effort spent by civil service agencies on outcomes, processes and other types of activity. Despite criticisms of the civil service being process driven, we find that the majority of agencies’ targets are related to outputs and outcomes, with outputs and outcomes forming the largest category of targets for agencies over time. In 2011, there were an average of nine output or outcome targets per agency as compared to just two process targets, one input target and one efficiency target. Overall, more of the formal activity of executive agencies as expressed through performance targets is spent on outputs and outcomes than on process. Our data indicate that the average number of key ministerial performance targets overall rose from an average of nine across executive agencies in 1993 to 13 per year in 2011, with most of this increase accounted for by an increase in output and outcome targets. The growth in the overall volume of targets is potentially a cause for concern because it may lead to a lack of focus for agencies, with these bodies being expected to hit a diverse and potentially conflicting set of targets.

9. The Shared Service Agenda is a strong theme of the Reform Plan. There is potential for shared services across Executive Agencies, especially those within departments that already share a common culture, systems and processes as well as shared political leadership under one minister. Opportunities for shared services in Executive Agencies such as IT infrastructure have been missed in the past, for instance in the social security system (James 2003).

10. There is also potential for using more strategic cross boundary working. For instance, there is to date relatively little use of shared performance targets across Executive Agencies. Many agencies’ targets already directly contribute to Departmental Public Service Agreements, but there is more potential for sharing targets between agencies with similar objectives, such as the family of executive agencies dealing with transport and vehicles in the Department for Transport or the group of agencies under the Department for Work and Pensions that deal with pensions and benefits.

References

Greer, P 1994. Transforming Central Government: The Next Steps Initiative. Buckingham and Bristol: Open University Press.

James, Oliver. 2003. The Executive Agency Revolution In Whitehall. Public Interest versus Bureau Shaping Perspectives. Basingstoke: Palgrave Macmillan.

James, Oliver, Moseley, Alice, Petrovsky, Nicolai and Boyne, George. 2012. “United Kingdom”, in Government Agencies: Practices and Lessons from 30 Countries. Basingstoke: Palgrave Macmillan.

Stoker, Gerry. 2006. Why Politics Matters. Basingstoke: Palgrave Macmillan.

Van Ryzin, Gregg G. 2011. “Outcomes, Process and Trust of Civil Servants”, Journal of Public Administration Research and Theory, 21(4): 745–760.

May 2013

1 Principal Investigator Professor Oliver James, University of Exeter; Co-Investigators Professor George Boyne, Cardiff University and Dr Nicolai Petrovsky, University of Kentucky; Research Fellow Dr Alice Moseley, University of Exeter; Economic and Social Research Council grant reference RES-062-23-2471.

2 Full time equivalent staff in Executive Agencies & the UK Civil Service (not including Northern Ireland Civil Service). Source of data: Civil Service Statistics 2012.

3 Defined as having their previous job in the private (for profit) sector.

Prepared 5th September 2013