Public Administration CommitteeWritten evidence submitted by Sir Bob Kerslake, Head of the Civil Service (CSR 34)

I am writing to you following my appearance in front of the Committee alongside Sir Jeremy Heywood, on 18 April, as part of your inquiry into the Future of the Civil Service. I promised to write to the Committee on a number of points raised during the session.

You raised the issue of lessons learnt from the organisation of Baroness Thatcher’s funeral (Q859). As I am sure you and the Committee will appreciate, the process to ensure we effectively capture the lessons learnt is currently taking place and is being led by the Minister for the Cabinet Office. We will certainly provide some further information on this work when it is completed.

You also expressed your admiration for the work done on the DfE zero-based review and asked if lessons were being shared from this process (Q898). As I said at the session, there has already been a lot of transferring of learning from the review. The Cabinet Office held a seminar in March with Departments for sharing good practice. Case studies were presented by DfE and HM Treasury on their zero-based approaches. A lessons learned pack was disseminated afterwards which included different approaches being applied in other Departments. I attach this at Annex A for your information. Please note this was designed for informal sharing of information between departments on the wider issue of matching resources to priorities and is not intended to be a formal publication.

I agreed to come back to you with information about other zero-based-style reviews going on across other Government Departments (Q901). As you know, many Departments used the Spending Review in 2010 as an opportunity to agree with Ministers how they would fundamentally realign their resources to meet policy priorities. There is an expectation that the Spending Round later this year will lead to a similar process across Government. In addition, a number of departments have indicated that they have specific plans to use a zero based approach, as follows:

HMT’s planning round in 2010 was zero based and this approach continues to underpin the allocation of administrative resources in the department;

DWP is applying a zero based review approach to its programmes; and

The Department of Health is planning to complete a zero based/efficiency review in 2013–14.

You asked about the average length of tenure for Permanent Secretaries (Q911). The average tenure for those who were in post at the election and have since left is 4.5 years. 31 Permanent Secretaries have moved since 2010. Four of these moves were internal movers to other Permanent Secretary roles.

I agreed to come back to you with figures for Senior Civil Service and Major Project SRO turnover (Q914). In 2011–12 turnover in the Senior Civil Service was 16.9% (those leaving the Civil Service). The Major Projects Authority is now tracking the level of turnover of senior responsible officers and, as I alluded to during the session, we are now starting to build up a clearer picture of the evidence in this area. Once we have a wider set of data, I will gladly share these findings with the Committee. I completely agree that we need to get better at keeping people in key roles, particularly where they are responsible for delivering major projects. We are putting this into action as part of the implementation of the Civil Service Reform Plan.

During the hearing you raised concerns around the Armstrong Memorandum and asked us to consider updating the Memo. We are currently reviewing the guidance for departments on providing evidence to Select Committees (“the Osmotherly Rules”). I can confirm that the Armstrong Memorandum is being considered as part of this review. The Government will liaise with interested parties within Parliament as part of the review, including PASC.

At the hearing you asked for a note about the process for the review of the split of roles between the Cabinet Secretary and the Head of the Civil Service, including a timetable (Q997). As I said then, we have not yet agreed a process for carrying out this review but I can reassure you that the work will happen within the timescales set out in the Government response to the Committee’s report “Leadership of change”. I will take on board the comments you and others made during the session on this issue.

Finally, I agreed to provide Alun Cairns with figures relating to interchange of Civil Servants between Whitehall and the Devolved Administrations (Q1021). Having looked at this issue, I have to tell the Committee that this data is not currently captured. There are a number of challenges to collecting this data—whilst the DAs record the number of people who come on direct transfer from another Government organisation, the data does not distinguish between those coming from a Whitehall Department, or from one of the devolved institutions or an arm’s length body. In addition, where a role is filled through an externally advertised vacancy, or where a member of staff has resigned to take up a post elsewhere, no record of the employee’s previous employer or their new employer is kept. However, I thought it might be useful to the Committee to see the figures for loans and secondments between Whitehall and the Devolved Administrations (these figures do not include interchange between ALBs or NDPBs). These are attached at Annex B. We are committed to increasing the interchange of both people and ideas between Whitehall and the Devolved Administrations.

May 2013

Scottish Government Staff on secondment/loan to Whitehall Departments

Whitehall Department Staff on secondment/loan to Scottish Government

2012/13

7

2012/13

7

2011/12

5

2011/12

5

2010/11

9

2010/11

4

2009/10

12

2009/10

7

2008/09

5

2008/09

0

Welsh Government Staff on secondment/loan to Whitehall Departments

Whitehall Department Staff on secondment/loan to Welsh Government

2012/13

14

2012/13

17

2011/12

16

2011/12

9

2010/11

12

2010/11

7

2009/10

10

2009/10

17

2008/09

65

2008/09

18

DEVOLVED ADMINISTRATIONS (WELSH AND SCOTTISH GOVERNMENTS COMBINED)

Devolved Administration Staff on secondment/loan to Whitehall Departments

Whitehall Department Staff on secondment/loan to Devolved Administrations

2012/13

21

2012/13

24

2011/12

21

2011/12

14

2010/11

21

2010/11

11

2009/10

22

2009/10

24

2008/09

70

2008/09

18

*Figures exclude interchange with agencies and other Devolved Administrations

Civil Service Reform Action 6:
Matching Resources to Priorities

Contents

1.Principles of an effective model.

2.Common issues.

3.Departmental approaches—Department for Education.

4.Departmental approaches—HMT Treasury.

Annex A: Summary of Departmental examples:

Cabinet Office.

DCMS.

FCO.

HMRC.

Principles of an Effective Model

Ministers and senior management should share results of prioritisation and establish early on the understanding and interest of Ministers in the overall department portfolio, or in specific directorates.

Inclusion of non-executive directors.

Relationship with existing ways of matching resources to Departments, eg business planning processes and flexible resourcing models.

2. Common issues

Senior management support is essential to implementation.

Cultural change is difficult to achieve, even with intensive communication with staff.

MI systems in place for monitoring and evaluation of costs and benefits, as well as for providing assurances to Ministers and Departmental Boards.

2. Common issues—Flexible Resourcing

Learning from flexible resourcing is also relevant:

Balance between individual wishes and business needs.

Performance management and diversity.

Projects v standing teams (flexible resourcing fits better with the former).

Generalist v specialist roles (will always take longer to find specialists and need to ensure that we don’t do long term recruitment for short term skills needs).

Departmental Approaches

Department for Education

Matching Resources to Priorities: the DfE

26 March 2013
Sharon McHale, Department for Education

Reforming the DfE

DfE Review undertaken published in November 2013.

The key findings were that the Department:

is bigger than it needs to be: high-quality but inefficient;

decision making is slow and involves too many people;

processes can be much leaner;

needs get better at prioritising work with Ministers regularly;

lacks flexibility in that it has trouble moving resource off low priority work and into new priorities;

There is too much resource continuing a job after the intended end period; and

Not enough staff can be moved to fill new priorities as they arise—currently ~5% of FTEs in policy groups are flexible.

How DfE is Responding 1

Our review considered from a zero base what work we have to do (because of legislation or other requirements we don’t control) and what work we have some form of choice over eg Ministerial requirements or how we have chosen to implement their decisions.

Scope to stop significant amounts of work where Ministers would prefer to see resource moved to higher priorities, or where we believe that the activities could be done more efficiently.

Trialled changes in this year’s business planning.

How DfE is Responding 2

Taking the Ministerial priorities as a starting point each Directorate/agency has assessed what resource it will need to deliver those priorities and also identified what can be stopped.

The “stop” exercise: officials proposed activities to stop according to the nature of the risk. The three categories used are: straightforward, hibernate, controversial. The proposals have been tested with Ministers and what/how work should stop has evolved accordingly.

Delivery plans and resourcing decisions have been informed by a series of scrutiny and challenge sessions, led by the Permanent Secretary, the non-executive Board Members, and the Directors of Finance and of Strategy and Performance.

Annual exercises aren’t enough. Ministers have committed to termly prioritisation and the subsequent re-allocation of resources. Resources will also be regularly reviewed by local and Directorate level SMTs.

Flexible Resourcing Across DfE

Informed by examination of other Government departments and public sector bodies, (MoJ, DCMS, HO, NHS), the private sector and DfE experience of operating flexible pools.

The review assumed an increase in flexible resourcing from 3% of staff to 30%.

Models being developed will meet and exceed this assumption.

No centrally mandated process—each Directorate free to develop a model that works for its business.

DfE-level thinking on cross departmental operating principles/issues ie HR/people policies, MI, Knowledge Management etc.

Developing Models

Two Directorates will be moving to new, more flexible structures with most staff being deployed flexibly within policy families.

Common features across both Directorates:

Minimal role types: generalist, analyst/economist, researcher and communications specialist.

Limited standing teams, most business delivered through clearly defined projects with end points.

Staff allocation managed locally. When projects close or are deprioritised resource moves to the next priority within the policy family.

Use of the new model will commence following a full selection exercise that completes in June 2013.

Across the two Directorates will be around 1000 staff that can be deployed flexibly.

Wider Models Across DfE

The third policy/delivery Directorate is taking a more incremental approach with flexibility being developed in different ways over time.

People and Change have already moved to project basis.

Other corporate areas considering their operating models within the context of reform and budget reduction.

Costs and Benefits

Emerging picture as models in various stages of development.

Soft benefits:

more efficient use of resource;

greater simplicity and as un-bureaucratic as possible;

more responsive, with more staff agile and adaptable;

working smarter: knowing the business end-to-end leads to improvements;

easier to draw in wider specialists (such as analysts) at the start of a project; and

supports motivation and variety for staff: shape careers, get interesting work, manage a fair workload.

Departmental Approaches—HM Treasury

HM Treasury: Context

Strategic Review 2010:

1/3 reduction in Department’s budget.

25% reduction in headcount by end of 2013–14.

Establishment of Director-led groups as main business unit.

Creation of “Strategy Planning and Budget Group”.

New Flexible Project Pool.

HM Treasury: Business Planning (i)

Annual, department-wide exercise:

Groups produce Strategic Resource Plans—resources & priorities.

DG-led Challenge Sessions.

SPB produce a coherent proposition for Board, with trade offs.

Executive Management Board—discussion & strategic choices.

Outputs:

Group Settlement Letters.

HM Treasury Work Programme.

Discussion with Ministers and Non-Executive Directors.

Crucially: SPB role facilitative, not directive

HM Treasury: Business Planning (ii)

In-Year management of risks & flexibility:

Risks Groups: Economic, Fiscal and Operational.

Quarterly Performance Report: EMB discussion & NEDs.

Ongoing discussions between DGs, Perm Sec and Ministers.

Formal mid-year review of business plans.

Specific tools:

Flexibility within groups.

Unallocated time-limited posts.

Strategic Project Resources.

Examples from 2012–13: Eurozone, Scotland, LIBOR,

HM Treasury: Flexible Project Resourcing

Project Pool of 20 FTE:

Policy professionals—mix of experienced HEOs and Grade 7.

Ongoing allocation, with “rounds” timed to business cycle.

Projects must be:

Time-bound and quite short: typically three–six months, sometimes more.

High priority—link to department’s strategic objectives and work programme, but also new pressures.

Light-touch and flexible model : central role for SPB/Deputy Director.

Ex-post transparency to department.

HM Treasury: Flexible Project Resourcing

 

Nov 2011—April 2012

(6 months)

 

April—Nov 2012

(6 months)

 

Jan -April 2013

(3 months)

Total (18 months)

Projects supported

8

 

33

 

8

49

Found resources elsewhere

10

 

19

 

8

37

Examples from 2012–13: RBS, Models Review, Europe, Roads, Heseltine Response

HM Treasury: Lessons

Successes

Top-down and bottom-up: strengthens buy-in and strategic choices

Professionalising department—culture change.

Matching resources to priorities—EMB & Ministerial feedback.

Staff development—recruitment and retention.

Relatively resource efficient.

Built trust—model can now be developed...

HM Treasury: Lessons

Challenges

Business planning—what are we stopping?

Project Initiation—especially scoping—and Exit.

Staff Management.

Balance between personal development and business need.

Embedding new approaches and tools fully across department.

Developing a robust performance management system & MI.

Annex A

SUMMARY OF DEPARTMENTAL EXAMPLES

CABINET OFFICE

Principles

As of January 2013–650 staff in FRD, 770 assignments—major recruitment gap.

Most assignment to roles done on a bilateral basis through advertised roles and personal contacts—some centralised deployment in the case of emergencies/new teams. 60% of pool permanent CO staff, others mix of secondments, loans, STFTAs etc.

All staff below SCS in five units (around 40% of CO).

Movement through pool on the basis of agreed end dates between resource and activity manager.

Ministers originally involved in Commissioning Board that agreed priorities and allocated resource (when FRD served one organisational unit). Now Ministerial involvement only when resourcing issues escalated.

Development hard wired into the model and major feature (Flexible Resourcing and Development).

Costs and Benefits

Team currently 1 x SCS1, 1 x Band A, 3 x B2, 1 x B1, 1 x C & temporary 1 x B1 for recruitment.

Implementation in core ERG done as part of overarching change programme with high level sponsorship.

Review currently underway.

Not designed to secure savings, but to drive organisational form; FRD played major role in controlling headcount in earlier phase, but controls now much looser across CO.

Staff based in open plan, hot desk environment with laptops; major resource required in FRD specific MI as CO HR systems are not fit for purpose.

Some time saved in resourcing priorities, but (a) overall resourcing shortfall (b) nature of priority posts which are often commercial or require other specific skills that need to be recruited elsewhere makes this difficult. However, can move staff quickly into assignments when they are available.

BIS

Experience to Date

Operated a project pool, but too resource intensive, became bureaucratic, usual suspects moved, but did not create a flexible culture.

Large fast stream complement relative to size provided flexible high skills resource pool.

Following 20% downsizing conducted a department moves round in summer 2011 consisting of two parts.

BIS Fair—where business areas showcased their responsibilities.

staff interested in a move expressed interest.

Created 25% churn and real energy—but long tail and exposed inconsistency in knowledge management, standards and evidence of poor performance management.

Consequently.

Implemented gateways for promotion.

Agreed to undertake regular open adverts for new priorities, limited moves rounds to keep up the energy of change without disruption to departmental business.

Decided on a flexible approach to resourcing, that would include managed moves, loans and secondments, but maintained open advertisement of vacancies to ensure opportunities available to all.

Going Forward

Important this is owned by staff and managers—not the HR capacity or available resource to have high overheads.

Ways of Working Programme established, engaging with staff and looking at more flexible use of space, IT and people (staff have worked in open plan/hot-desked for some time)

Assessment gateways to EO, HEO, g7 and SCS to embed common standards.

Business areas already empowered to move resource around/conduct local restructures to meet business priorities.

Opportunities Store being rolled out—advertises opportunities for job swaps, secondments, interchange, job shadowing, moves rounds, as well as the usual vacancies to open up unfamiliar areas of the business but encourage staff to own their careers.

All staff given opportunity to express interest in major new programmes eg “open house” sessions to raise interest in industrial strategy resulted in 40 loans at short notice to priority areas for six month stints, supported by reprioritisation in “loaning” business areas.

Push on performance management and career conversations as part of building Confident Managers so that there are more effective

DCMS

Principles

100% of core Department below SCS (approx 330 staff) now in flexible resourcing pool.

Resourcing cycle takes place six weekly and allocations are made on relative priority of role/task against structured criteria.

All non-specialist roles are flexibly resourced. All work in DCMS is now a project.

All staff (below SCS) have end dates to current roles. This causes the need for on-going work to be tested (against other priorities) on a regular basis and provides staff with development opportunities.

Ministers priorities are reflected in the weighting criteria for the bids—but the decision on resourcing is entirely for the executive.

Costs and Benefits

Small team currently headed by Band A, also responsible for managing project assurance.

A six week cycle means it’s a continuous activity. The process has been stripped back but inevitably has process overhead.

Staff have expressed concern they have limited control over roles they are posted to. Does not resolve capacity issues where significant vacancies are being carried.

Flexible Resourcing arrangements have been at the heart of our 50% admin reduction change programme. We would be unable to operate effectively without this flexibility.

A large proportion of SCS required to consider and agree the relative priorities on a six-weekly basis.

Significant benefits in being able to resource new priorities quickly. Very agile arrangements.

Department of Health

Principles

As of March 2013 55 in integrated structure Project Bank (excl SCS).

Generalist posts only—not included specialist roles.

All assigned to roles from April 2013 (with one exception).

Placements three—six months initially.

Requests for staff made on proforma and skills required then matched with availability. Postings made to new priority work and not into permanent posts. Assignment to roles done.

Movement between posts and assignments negotiated by PB coordinator and line manager.

Many assignments are to meet Ministerial priorities.

Encouraged to take L & D opportunities within teams.

Separate Pay Committee will be held for Project Bank staff.

Costs and Benefits

Team currently: 75% SEO, 10% SCS1plus HR support.

Establishment posts created for PB staff as part of overall workforce assurance process in 2011–12. But costs met locally.

To provide flexible resource into time-limited, project roles.

To explore new ways of working and resourcing.

Staff will be largely based within new teams, but location will depend on posting.

Some staff in transition posts have still not been available to move into enduring roles.

Demand has outstripped supply, particularly at G7 and SEO/HEO, where there has been some delay in staff taking up assignments.

FCO—Projects Task Force

Principles

30 Staff—Expanding to 60 by Autumn 2013.

Deployment agreed through bidding rounds on a quarterly basis.

Bids must be project based.

Changes to allocation managed through additional bids/liaising with management.

PUS championing & heavily involved in prioritisation. Foreign Secretary involved in identifying priorities.

Costs and Benefits

No specific running costs. Whole team, including management & administration, deployed to projects.

Projects range from one—eight months.

Regular feedback on individual’s performance after each project is completed.

Relatively small, one off costs in setting up mobile working infrastructure.

No savings identified. FCO flexible resourcing not a savings exercise.

HMRC

Principles

Number or % staff in flexible pool?

We do not manage staff in a flexible pool across the department however some of our individual business areas will move staff between processing and contact centre work.

Process for allocation (annual? quarterly?)

Through our business planning activity and the completion of our people and property outline plans we produce a workforce plan. We allocate resources on a yearly basis and manage this on a monthly basis across the department and make changes where required.

Criteria for activity being resourced flexibly?

We have in place a Resourcing Strategy with different criteria to allocate resources.

Managing changes to allocation?

We have a change control process and manage performance on a monthly basis

Involvement of Ministers/NEDs?

Our change control process allows us to make changes to our resourcing options when decisions are taken by Ministers on new priorities—such as Autumn Statement/Budget.

NEDs are on our People Board who have sight and assurance of our people strategy

Costs and Benefits

Cost of team that manages & regulates implementation.

The workforce management programme oversees all resourcing options and this function costs £3-£4 million per annum to manage 70k staff. There are also small teams in each line of business.

Time needed for successful implementation.

We have various processes for different resourcing options level moves of staff into roles can take between four weeks and three months depending on complexity. Large Promotion campaigns take about three months as does External Recruitment.

Feedback from staff? senior staff? Ministers? NEDs?

We have sponsorship from ExCom. Feedback from staff shows that we can improve our resourcing processes and our communication with them. We’ve had very positive feedback from senior stakeholders following early challenges in delivery of large scale recruitment and redeployment given the improvements we have made.

Savings achieved?

We have achieved savings in terms of reduction in estate and reduction in recruitment costs/exit costs by focusing on redeployment and minimising redundancy.

Infrastructure costs to support flexible working?

Not able to quantify.

Time saved in resourcing new priorities?

Not able to quantify.

Prepared 5th September 2013