Public Administration Select Committee - Minutes of EvidenceHC 74

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

PUBLIC ADMINISTRATION COMMITTEE

FUTURE OF THE CIVIL SERVICE

MONDAY 13 MAy 2013

Rt HON Francis MAUDE MP

Evidence heard in Public

Questions 1025 - 1110

USE OF THE TRANSCRIPT

1.

This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2.

Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is an approved formal record of these proceedings.

Oral Evidence

Taken before the Public Administration Committee

on Monday 13 May 2013

Members present:

Mr Bernard Jenkin (Chair)

Alun Cairns

Charlie Elphicke

Paul Flynn

Robert Halfon

Priti Patel

Mr Steve Reed

Examination of Witness

Witness: Rt Hon Francis Maude MP, Minister for the Cabinet Office and Paymaster General, gave evidence.

Q1025 Chair: We now move on to Civil Service reform and the future of the Civil Service. What do you think really is the root cause of you and your colleagues’ concern about the state of the Civil Service? I am not talking about the symptoms; what do you think the cause is?

Mr Maude: The first point to make is that this is not just a concern expressed by Ministers; the strongest demand for change in the Civil Service comes from civil servants themselves. I recently had a session with a programme called Base Camp, which is for people newly entered into the senior Civil Service at deputy director level. There must have been 80 or 90 of them there, and they were terrific-bright, energetic, ambitious and wanting to change the world. Great people; as good as I have ever known in the Civil Service. That was the good part of it; the bad part of it was that they were, to a man and woman, frustrated.

My conclusion is that the Civil Service today has managed to be less than the sum of its parts. There are lots of really good people who feel weighed down by a system which inhibits them from giving of their best. Clearly top among the things we need to do is for the system to change so that these great people can give of their best.

Q1026 Chair: We heard a lot in the previous session about what a dispersed system it is and, therefore, how difficult it is to lead and manage. You started to talk about where that leaves people’s sense of responsibility for outcomes. Can you say some more about that? That seems to be the challenge.

Mr Maude: Expand.

Q1027 Chair: Why do you feel that, in the end, these very talented and committed people either cannot take responsibility for producing effective outcomes, or do not feel that they are charged with that responsibility for creating effective outcomes? What has gone wrong with the system so that people’s sense of responsibility for what happens is somehow blunted or not there? You obviously feel that, don’t you?

Mr Maude: It is less what I feel than what lots of civil servants themselves feel; that is where the really compelling drive will come from. The country needs it to change, because we need to have a Civil Service that is playing at the top of its game, but civil servants themselves want it to change.

People who come in from outside will often point to several features. They will say that the Civil Service has been bad at giving individual civil servants and teams clearly defined responsibilities, a clearly defined space within which they have the authority to decide what to do and how to do it, because the outcomes and outputs that they are expected to deliver have been clearly defined and their freedom in the space beneath that is unencumbered. People who come in from local government tell me that the best in local government is better at doing that, and the best of the private sector is better at doing that. The failure to systematically give people the defined freedom, if you like, to get on and do their job, leads to the Civil Service behaving in a more hierarchical way than is desirable. Being a very hierarchical organisation is at least as much about culture and behaviour as it is about structure and organisation. That is one feature people will refer to.

The second is what I call the bias to inertia: people are not particularly encouraged to try new things. The Treasury, for example, will submit to rigorous interrogation and examination any proposal to change what is done, but there is an asymmetry, and it will not submit the status quo to the same kind of rigorous scrutiny. Those sorts of signals diffuse through the system, so people feel no one is going to criticise them for continuing to preside over something that, although it may not be going catastrophically wrong, is not very good. They feel, "If I try and change it, and it goes wrong, maybe I’ll be hung out to dry." That bias towards risk aversion and leaving the status quo as it is is quite frustrating for people. As I say, the great people I met were hungry to change things-hungry to change the world.

Q1028 Chair: But what you have described is very different in tone from what we have read about in the newspapers about Ministers being blocked and frustrated, although we will come to that. You have described an organisation where there is a lack of what the armed forces would call delegated mission command and where there is a culture that does not value-I use that word deliberately-challenge or embrace change. You say yourself that this is cultural, not structural. So much of what you have talked to us about in the past, and of what is in the Civil Service reform plan, seems to address process, structure, organisation and, yes, skills, but what are we going to do to deal with this cultural problem?

Mr Maude: My view, which I think would be supported by people who are much more expert than I, is that you do not change the culture by trying to change the culture. The culture flows from changes in behaviour, and a lot of that is about giving people permission to do things differently so that they feel they have permission to innovate and to challenge. But I absolutely freely acknowledge that a lot of what is in the Civil Service reform plan does look quite mundane and gritty, and is not very high-flown at all. I do not know that I have a single answer to how you change the culture; you do not change the culture of an age-old institution, which started, when we took over, with more than half a million people, in the space of a couple of years.

Q1029 Chair: But that process of giving permission is about the leadership, isn’t it? Who can give the permission except the leadership? Who can provide the inspiration except the leadership? Don’t you think something has gone wrong with the leadership if we find ourselves in this position? I am using the term "leadership" not just to finger senior civil servants; this is about the political supervision that we politicians, perhaps over a generation, have provided to the Civil Service and about the relationship that has developed, or not developed, between the political class and the administrative class. Don’t we think this has something to do with the failure of the leadership of our administrative system?

Mr Maude: We could spend a long time trying to analyse the origin of this deficiency.

Q1030 Chair: But unless we understand the origin of it, we’re not going to fix it, are we? It’s not going to fix itself.

Mr Maude: You will hear lots of reasons given for its being like it is. One of the things that will sometimes be said is, "Of course the Civil Service is risk averse, because Ministers are risk averse." I always find that a bit surprising, because Ministers belong to one of the most risky occupations there is. We have no tenure. We are exposed daily to public scrutiny of the most uninhibited kind. At the age of 38, I found myself, overnight, completely unemployed. Plenty of politicians have found themselves in that situation. This idea that we are a risk-averse breed is odd. What Ministers are is surprise averse. They are not averse to risk. A radical reforming Government, as I think this Government is, takes a lot of risks, but you want to have them as quantified risks. You want to understand the risks and you do not want to be taken by surprise.

Q1031 Chair: Is it more honest to say that politicians and Ministers operate in a very risky environment, which actually makes them risk averse? Psychologically, Ministers tend to be risk takers, but they live in such a risky environment that they are very risk averse.

Mr Maude: If that were the case, no Minister would ever do anything at all radical. It just doesn’t stack up. Why would we do the kind of things this Government are doing? Why would Chris Grayling be embarking on a very radical reform of the rehabilitation system? There are plenty of examples.

Q1032 Chair: But your centralising initiatives in procurement seem completely at odds with encouraging civil servants to use more of their own initiative, control more of their own resources and be more imaginative and innovative. How do you square that?

Mr Maude: We always said from the outset that there is a tight-loose balance. There are some things in any big, complex, dispersed organisation that you would expect to control pretty strictly from the centre.

Q1033 Chair: But tight-loose is a concept that is so conveniently obscure. Define it.

Mr Maude: I don’t think it is particularly obscure. Let me tell you what I mean by it. There are things that are common across Government that you would expect to be tightly controlled from the centre: the purchase of common goods and services; oversight of major projects that carry financial and operational risk; and property, where one part of the organisation embarking on changes in property impacts another part of it. You would expect HR standards across the organisation to be fairly tightly controlled. On IT infrastructure, you would expect to be quite militant about requiring open, common standards of interoperability. All of those things-

Q1034 Chair: Forgive me, Minister; I will let you put on record what you want to say about tight-loose, but may I ask you to put it in writing, because we are so short of time?

Mr Maude: Okay, but the loose part of it is exactly what I’m talking about. In delivering the operations, you would want people close to the front line to have as much freedom as possible to deliver the defined outputs that they have been asked to deliver. That is the loose part of it. Too much of it has been exactly the other way round. The things that should be tightly controlled haven’t been, and yet there has been a completely vain attempt to control front-line delivery from the centre, which you are never going to be able to do, nor should you even try.

Chair: I want to move on. If you could send us a page or so about tight-loose so that we understand what you are trying to explain to us, I would be grateful. This is probably not the easiest forum to explain it.

Q1035 Charlie Elphicke: Wouldn’t the risk-averse thing in this situation be to let the lazy corporatist consensus between Departments and big contractors just carry on, because you couldn’t really get into trouble through large businesses messing up as they have done for years and years? Is it possible that what you are doing in shaking up procurement is actually slightly more risky, because it could all go horribly wrong, in principle?

Mr Maude: Well, it’s not a story of unqualified success that we are seeking to change. We have a legacy of some abysmal failure and some hideous, locked-in cost to the taxpayer, which we are seeking to rectify. So, are we absolutely confident we can do this very much better? Yes, because we already are. We have already delivered £3.75 billion and £5.5 billion. We will soon disclose the efficiency saving number for the last financial year, which will be a significant enhancement of that. So yes, it can be done much better, and it already is being. The risk is actually not changing it.

Q1036 Chair: When you use those figures, Minister, that is not £5.5 billion in one year, is it? It’s-

Mr Maude: Yes.

Q1037 Chair: Well, if you could give us a table of annualised savings figures-for each year, what you think you have saved-that would be very helpful.

Mr Maude: Absolutely.

Q1038 Alun Cairns: Minister, in October last year, you talked about your concern about decisions being blocked. That was well reported, but you would not list the examples, although Sir Bob Kerslake, when he gave evidence to this Committee for this report, talked about there being only up to five examples. Before I try to pursue that a bit further, can you tell me exactly what you mean by decisions being blocked?

Mr Maude: Being not implemented. One example was the one I gave earlier today, of a decision made by a Cabinet Committee that all common goods and services should be bought in aggregate. Some parts of Government had simply decided to ignore that.

Q1039 Alun Cairns: Since October last year, do you think the situation has improved? Do you think your comments antagonised the position? Do you think the number that Sir Bob Kerslake has spoken about, of up to five, is realistic and are you-well, I will hold on there for the moment, and then we’ll take it a bit further.

Mr Maude: The handful of cases that I think he was referring to are probably ones that I myself have raised and which Sir Bob and Sir Jeremy very robustly took up and dealt with, because obviously it falls to them. Their support, when these cases have been brought to their attention, has been exemplary.

Q1040 Alun Cairns: But since October, has there been a change, then? You said those were the specific cases that you raised with Sir Bob Kerslake, but has there been a broad improvement? The comment you have just made would suggest it is much more widespread than maybe the five that Sir Bob Kerslake listed or identified.

Mr Maude: Is it happening every day? Not as far as I am aware. But have there been more recent examples? Yes. I’m not saying this is an everyday occurrence, but it happens enough in cases that you find out about for you to be a little concerned about cases where you don’t find out about it.

Q1041 Alun Cairns: What I am trying to get to is this. If Sir Bob Kerslake was happy to list-well, happy to identify-five examples, and you have just told me that those are the ones that you have brought to his attention-

Mr Maude: There may be others; I don’t-

Q1042 Alun Cairns: Yes, exactly, but what I am trying to work out is this. Is that within your Department or across Government? How widespread is the blocking? Is it a cultural issue? Have we made any progress? What action needs to be taken to try to resolve it? That’s how I am trying to go. Do you want to humour me a little bit more?

Mr Maude: Has it got better? I think it probably has, and I think it was healthy to ventilate the issue, because it enabled Sir Bob and Sir Jeremy to make it absolutely clear, publicly and within the Civil Service, that it won’t be tolerated. A lot of what I said has been misinterpreted-people saying, "Well, Francis doesn’t want people to challenge him." What you want as a Minister is very robust, candid advice. You do not want civil servants to hold back. My complaint has not been remotely about having very candid, frank advice. My complaint has been, on some of these occasions you do not get the push-back at the time when the decision is being made; but it then doesn’t get implemented. I think Jeremy Heywood described it very well. I saw a bit of transcript from when he gave evidence here, when he said that what you want is very robust advice and a willingness of civil servants to challenge at that stage; but when the decision has been made, and the Minister has undertaken his proper obligation to seek advice and listen to it, then the Minister should expect it to be carried out, and not just to be quietly forgotten about.

Q1043 Alun Cairns: Is it still work in progress, or do you believe it has generally been fixed?

Mr Maude: Am I confident that for as long as I remain a Minister there will never be something that comes up where I find that something I thought had been decided and assumed was being implemented was not being implemented? I am absolutely certain it will recur; but is it something that keeps me awake at night? No, because actually most of what we decide does get done.

Q1044 Mr Reed: I didn’t get a sense from your responses of why you thought civil servants would block what Ministers were doing. Are they in these instances sitting with Ministers, nodding away and then going outside the room and saying, "Oh, well, let’s just forget what they said and we will go and do the opposite and see if they notice"? Is it that blatant?

Mr Maude: Well, I have come across one example of pretty much exactly that.

Q1045 Chair: That is a symptom of a failing organisation. Why doesn’t he feel-that civil servant-able to speak in your meeting? What has gone wrong with the confidence he has got in the system that his voice will be heard?

Mr Maude: I don’t know. The obligation-we often hear the phrase "speak truth unto power", and it is absolutely what you want-is that people should feel confident enough. This was a senior person-a very senior figure who then countermanded what I had decided. I only discovered that later.

Q1046 Paul Flynn: What was the issue involved?

Mr Maude: The issue was in the field of efficiency and reform.

Q1047 Chair: Professor Andrew Kakabadse has given us evidence where he has made it clear that in a failing organisation most people know that the organisation is failing, but they don’t know how to talk about it up the command chain, because the command chain doesn’t want to know.

Paul Flynn: You are in danger of undermining our faith in this Government.

Mr Maude: That would be shocking. I know you have a very high level of confidence in it already.

Q1048 Chair: If I may finish, a feature of this behaviour is that people go to meetings and they appear to consent to decisions and then leave the meeting and say something else. That seems to be a very familiar thing in Whitehall.

Mr Maude: I don’t know how familiar it is. I think most of the time it does not happen like that. Most of the time I would not have that complaint. You ask why someone would do that. Some of it is the old thing of "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."

Q1049 Chair: So it is just belligerence.

Mr Maude: It is part of the bias to inertia that I was talking about.

Q1050 Mr Reed: I wonder whether Ministers should accept some responsibility as well, rather than just seek to blame the organisation. That seems to me one of the behaviours that creates risk aversion, because there is not clear communication.

Mr Maude: But you are assuming that there was not clear communication.

Mr Reed: I am assuming that there was not clear communication; you are right.

Mr Maude: Why do you make that assumption?

Q1051 Mr Reed: To refer back to my experience of leading what used to be a dysfunctional public service organisation-a local authority-when things did not happen that I was asking for, it could have been because we had not explained clearly enough what was expected, or we were putting too many burdens on the organisation and failed to prioritise which had to happen and which did not, or we had failed to buy in a particular team, or even the whole organisation, so that they understood and therefore felt that they wanted to help make the change happen. In those cases, in order to learn, we had to accept failure on our part as politicians, but I do not hear any acceptance of responsibility on your part, only blame of the organisation.

Mr Maude: If we are overloading the organisation, the leaders of the organisation can say, "You’re overloading us. We can’t do all of this."

Q1052 Mr Reed: Have you asked them that question?

Mr Maude: It gets said plenty of times, I can tell you. I have not noticed any inhibition when people want to make the case that "You can’t ask us to do this, because we’re already doing that, that and that." Again, if communication is unclear-in one of the cases that I referred to, it was a decision by a Cabinet Committee, which gets put into a Cabinet Committee minute and circulated, but if people were not certain quite what Francis, the Cabinet Committee or whoever meant, surely they would come back and say, "Can you clarify exactly what you meant by that?" It does not seem to me an excuse for not doing anything.

Q1053 Mr Reed: If I were in your position, I would want to know why that decision had not happened, and I would then see what I could do as the Minister to address the problem, but you just seem to be blaming them.

Mr Maude: Well, if someone ignores a perfectly plain instruction, I do feel entitled to blame.

Q1054 Mr Reed: If someone is being obstructive, you should remove them.

Mr Maude: I don’t have the power to remove anybody.

Q1055Chair: May I look at two organisations which could be said to be obstructing Government policy, but which we know are in fact just overwhelmed? HMRC is having trouble answering the telephones and cannot process all the tax calculations because the tax code has become so complicated and we insist on giving them fewer people to process tax returns. Similarly, the Border Agency has been downsized, yet we set them an unachievable target for processing the backlog of visa and asylum claims. Is not part of the problem that we may be expecting too much, not understanding enough or not being receptive to input from the people who are required to implement what we are asking them to implement? There is something really dysfunctional in those two very large examples. I submit that it is a leadership problem.

Mr Maude: I am not close enough to the detailed working of either of those two organisations to be able to comment on the specifics. The Border Agency case has been-

Q1056Chair: The reflex of Whitehall, as usual, is to restructure rather than to look at the leadership.

Mr Maude: My recollection is that there is new leadership in the Border Agency.

Q1057Chair: It is being brought back into the Home Office.

Mr Maude: Yes, but there is new leadership there.

Q1058Chair: Yes. I hope that will address it and that the mistakes made in the first two and a half years of this Government will not be repeated. Obviously, however innocently those mistakes were made, the expectation was clearly way beyond what the organisation could deliver. That is bad decision making or bad information. It is something gone wrong with the system.

Mr Maude: Well, I don’t think anyone claims that this is a perfectly functioning system.

Q1059Chair: No, I don’t think anyone is. Can we move on and look at skills? We are grateful for your paper on this.

Mr Maude: Which paper?

Q1060Chair: You have been looking at skills in the Civil Service, or am I jumping ahead?

Mr Maude: The head of the Civil Service recently published the capabilities plan that he had promised in the-

Q1061 Chair: I wanted to address that, because in it, there is a great deal of discussion about ensuring that we have commercial skills and behaviours for delivering successful programmes. What we have just been talking about regarding the top of the Civil Service seems to reflect that too many permanent secretaries and senior civil servants-I am not going to infringe on the next question, about how they are appointed-seem to spend too short a time in their senior roles before they are moved on to something else. Often, they finish up running a Department in which they have relatively few skills and little experience.

My favourite example is the Ministry of Defence, where we no longer have permanent secretaries who have been brought up in Defence. They are brought in from outside and know little about defence. In Transport, we are on to our third permanent secretary since the election; in Defence, we are on to our third permanent secretary. This is not a good way to run what used to be called the permanent Civil Service. Everybody now seems to accept that such a fast churn among senior appointments in the Civil Service is not good for the public administration service. What is your comment on that?

Mr Maude: I agree.

Q1062 Chair: How did the system do that?

Mr Maude: I do not think succession planning has been as robust as it might have been.

Q1063 Chair: What are the pressures that have driven a corruption of the succession planning that used to work quite well?

Mr Maude: It wasn’t infallible-

Chair: I don’t want to talk about appointments; we are going to talk about the system of appointments in a minute. I want to talk about the leadership. How has the leadership allowed a system to develop so that so few permanent secretaries have as much experience in their Departments as the Ministers they serve?

Mr Maude: One of the things we highlight in the reform plan is that talent management has not been anywhere near as good as it needs to be. Theoretically, the Senior Civil Service is managed as a corporate resource, but in reality, it has not been. We have moved to a world where it is a kind of free market in jobs in the Civil Service, where if civil servants saw an interesting job opportunity elsewhere in the service, they would be completely free to apply for it, whereas in most organisations, careers would be much more actively managed.

Q1064 Chair: There is another big difference from what used to prevail. Civil servants used to be groomed for taking on the senior roles in a particular Department. They would spend most of their career in one Department to become an expert in that Department.

Mr Maude: Up to a point. It was much more mixed than that. I am familiar with the phenomenon you are talking about. It is exactly the point I am making: there used to be much more proactive management of people’s careers, with a view to having the right people in the right places to pick up the difficult and demanding jobs.

Q1065 Chair: But the system of revolving people around the top of the Civil Service, giving them opportunities, promoting equality and making sure that the top of the Civil Service is more representative, are all new pressures on the system that 20 or 30 years ago we did not regard as important pressures to respond to. Would you agree with that?

Mr Maude: Yes, I would. Over a period the eye has been taken off the ball of ensuring that you had the very best prepared people poised to take over the most demanding jobs.

Q1066 Chair: So you finish up with the east coast main line franchising fiasco, partly because we were churning around with the top civil servants. Too much was delegated to an inexperienced team, who were left with too much responsibility, and mistakes were made that even the Cabinet Secretary, in his very pressured job, failed to spot. That is not a good advertisement for the Civil Service, is it?

Mr Maude: Well, as I said before, no one claims that this is a perfectly functioning system.

Q1067 Chair: Understatement of the day. Given that this reflects a whole lot of new external pressures, where is the Government document that says this is the new context in which we are having to run a very complex Civil Service and a very complex system of Government and whole public administration system? It is not just the pressures that I have already mentioned. In your Civil Service capabilities plan, you do not address this at all.

Mr Maude: That plan was very much drawn up around four specific, immediate, staring us in the face needs. Building up a deep talent pool of people being prepared for the most demanding jobs will take longer. It is not in that plan. I do not have the final-

Q1068 Chair: But you will appreciate that what I am building to is that the system will not fix itself. In the normal course of a Government being run by Ministers and senior civil servants, there is more and more happening that is not right, and this needs an external look for the first time since the Fulton Committee in 1967.

Mr Maude: I am not averse to there being an external look at it for the future. What we cannot do is put everything on hold while that happens, because there are immediate needs; the country needs the Civil Service to function better, so we have to get on with that.

Chair: I appreciate that.

Mr Maude: I think Jeremy Heywood put it well when he gave evidence here. He said that we know a lot of the things that need to be done, and we need to be better at getting on and doing it, because too little of what we set out 11 months ago has actually been executed.

Q1069 Chair: Sir Jeremy Heywood told us that it would take five or 10 years to see the full effect of many parts of the Civil Service reform plan. Do you think that is fast enough?

Mr Maude: Some of the effects we will see delivered-

Q1070 Chair: But you are frustrated by the pace of change?

Mr Maude: Oh, yes, absolutely-as I think he is as well.

Q1071 Chair: What have been the main obstacles to a much faster pace of change?

Mr Maude: I think some of it is that exactly the things that need reform make it difficult to reform. There is a culture that has a bias to inertia and is resistant to change. There are capability deficiencies. It is not as skilled at developing and executing implementation plans. Policy development is much better than execution. This is all about execution-all about doing it. For some of it, there is departmental resistance-shared services, for example, where there is a real cost gain and quality improvement to be had. Peter Gershon first recommended that in 2004. It took until 2012 to have a breakthrough.

Q1072 Chair: This is absolutely no criticism of you personally, but it is an awful lot to ask a Minister of State to drive the reform of such an enormous and complex machine as our system of public administration across Whitehall and all its Departments and agencies.

Mr Maude: I do not feel particularly inhibited in seeking to do that.

Chair: I have never thought you were inhibited.

Mr Maude: I carry these responsibilities for the Prime Minister.

Q1073 Chair: Do you think the system can fix itself? In the normal course of running the country, do you think Ministers and civil servants can fix all these problems?

Mr Maude: Well, it does not happen spontaneously.

Q1074 Chair: But five or 10 years seems to be too long to me.

Mr Maude: Yes, but Jeremy was not saying that you will not see any change for five or 10 years. That is absolutely not what he was saying.

Q1075 Chair: Each challenge that I mentioned to him, he just said, "We deal with these things as they come up." But more and more things are coming up.

Mr Maude: True. Tell me about it.

Q1076 Chair: And there seems to be a systemic problem that more problems are arising and the problems are arising faster than they are being resolved.

Mr Maude: We are driving change as best we can. Bob Kerslake, as head of the Civil Service, obviously undertook responsibility for implementation of the plan. There has been some progress, but not nearly enough, as he would be the first to accept. We don’t have to wait five or 10 years to see some results from this. The results of much more active talent management across the piece will take time to come through.

Q1077 Mr Reed: My other concern around that is something that was said to us by Katherine Kerswell, who agreed that the Civil Service reform plan was more of an efficiency programme than a transformational agenda, but I know from hearing you in other forums talking about mutuals, social value and the rest of it that you understand the need for transformation across Government to meet changing citizen demand to harness advances in new technology to focus on outcomes instead of always being stuck in silos and processes. All that is understood, but it does not feature in the Civil Service reform plan, which just talks about efficiency in a relatively pedestrian way, if I might say so, and over a time scale that is totally inadequate to the challenge that faces us as a country. So why are we not trying to be more ambitious, given that you understand what the challenges are?

Mr Maude: I am always willing to be encouraged to go further and faster. It is not all about efficiency. Some of it is-I make absolutely no apology for that-or a lot of it is, but some of it that may look as if it is just about efficiency is about much more than that. Take the digital piece, for example. If we are successful-I am hopeful that we will be-in driving a big channel shift from post, face-to-face and phone transaction to online transaction, there will be a big efficiency gain, but it also forces a cultural change within the organisation because we have typically delivered public services in a way in which the citizen has to adapt to the needs of the public sector organisation, rather than the public sector organisation configuring its service around the needs of the citizen. The whole point about digital is that it is absolutely crucial that we do not just automate the existing processes, and that we design the digital offering around what the citizen wants so as to make it compelling. It is a common feature in the commercial world that, if you can get 20% of users using the online offering, you can get to 80%. For Government services, it is very rare for them to get above 40% or 50%.

Q1078 Chair: I am terribly sorry. This is all fascinating, but we will do digital government another day because it is very important, but we need to move on.

Mr Maude: I was only seeking to answer the question.

Chair: Quite right.

Mr Reed: It was just getting exciting.

Q1079 Paul Flynn: The behavioural insight team, known as the nudge unit, was lavishly praised on 1 May in an announcement saying that the first step has been taken to find a partner, presumably with a view to its becoming a privatised unit on its own. Isn’t there a danger that that could repeat the errors of QinetiQ, when a vast amount of valuable intellectual property was sold by the Government for a song, and later the taxpayer had to buy back that expertise through the private company? Isn’t there a danger that if what seems to be a good idea, because all the reports on the nudge unit are good and it seems to have huge potential, is moved out of the public sector, perhaps for doctrinaire reasons-the Government believe that everything private is good and everything public is bad-and it becomes successful, it might then decide to sell its advice abroad or back to the country at a huge profit? Wouldn’t it be better, if it is so successful and has such promise, to keep it in the public sector so that taxpayers can benefit from their investment?

Mr Maude: It is absolutely our intention that, first, they will sell their services abroad-they are already being sought after because they do have something rather special, and we want them to be free to do that and to build a successful operation free from the constraints that come with operating within the Civil Service-and secondly, if they are very successful, which we obviously hope that they will be, we absolutely want the taxpayer to benefit from that. That is why the absolute intention is that this should be a joint venture, where there would be a partner from outside Government, which might be a social enterprise or a private sector company, but where the Government would retain a very significant stake in the operation so that if it does turn into an amazing success, the taxpayer is along for the ride.

Q1080 Paul Flynn: What sort of stake would you guarantee would be retained by the public interest in it?

Mr Maude: A significant stake. Not a few percentage points-a significant, chunky stake.

Chair: Mr Reed: relationship with the Cabinet Office.

Q1081 Mr Reed: This is something Sir Jeremy told us when he appeared before the Committee. There is a SWAT team-it is called the Cabinet Office implementation unit-which goes out to Departments to try to understand what the blockages are in delivering policy implementation. What has the reaction of Departments been to this team?

Mr Maude: I do not have all that much to do with, to be honest. It is based in the Cabinet Office, and it works very much more to Oliver Letwin and to the chief secretary. I think they kind of sit over it. They are from head office; they are there to help.

Q1082 Mr Reed: What does the fact that they see it being required tell us about the relationship between the centre and the Departments, and any power relationship between the two?

Mr Maude: Nothing very novel, really. Tony Blair had his Delivery Unit, which was a slightly different name but a comparable type of operation.

Q1083 Mr Reed: He did, and actually we had Jonathan Powell here talking about that. He described the need for it as being based on the fact that "There is a problem: we still have a feudal system in our Government structure…No. 10 does not have civil servants and does not have budgets. The only way it can get a Secretary of State to do something is by a threat to his future in the job." Is there too little power in the centre?

Mr Maude: I think it is possible to confuse size with strength. We should have a strong centre, but it does not need to be a big centre. The main problem the centre has is visibility, of seeing what is happening and knowing what is happening. Data in Government are still very poor. Management information is still very poor. It is one of the key building blocks in the platform on which everything needs to be built. Our management information is better than it was, but it is still very poor indeed. Part of the problem for the centre is knowing whether things are getting implemented. That is what Tony Blair’s Delivery Unit was all about: ensuring that decisions that had been made by Ministers were actually being implemented on the ground, and helping to drive that.

Q1084 Mr Reed: Could you expand scrutiny on that performance by making more data publicly available? Inadequate though they may be, at least if they were out there and more accessible, you would have loads of other people who are interested in how services are performing helping you to put pressure on those areas to improve.

Mr Maude: Yes, yes and yes, completely, and we do already. We put out much more data than have ever been put out before. That is not always welcome, because with transparency comes accountability. I sometimes say that all Oppositions favour transparency and Governments do for their first 12 months, when all they are exposing is what their predecessors have done, but then it gets less comfortable. We have stuck with it. We are the world leader in open data. No Government have done more to promote open data than this one.

Q1085 Chair: Shall we press on? We have very few minutes left. We know that much more policy is done in No. 10. On the effect of putting an implementation unit in No. 10, what does that feel like in a Government Department, if the Department is no longer responsible for measuring the effectiveness of implementation? If it were going really badly, the Cabinet Office would intervene. You have a conundrum here, haven’t you? It makes civil servants in Departments feel undervalued. They no longer do their policy. They no longer oversee their own implementation.

Mr Maude: Who says they do not do their policy?

Q1086 Chair: There are innumerable policy people in No. 10 now.

Mr Maude: There are significantly more than there have ever been.

Q1087 Chair: We have one senior academic quoting a senior civil servant as saying, "Departments are emasculated. Policy is driven from the centre."

Mr Maude: I think that that is just one of those things that people say periodically. I do not think that there is any evidence for that. I see very vigorous policy Departments. Is there interaction with the centre? Yes, of course there is. There always has been. Is policy driven from the centre? No, there is what is called "a discussion".

Q1088 Chair: But isn’t "It’s No. 10 on the phone; they want to help." the most dreaded phone call in a Whitehall Department?

Mr Maude: It is one of the old jokes-"I’m from head office and I’m here to help." I do not think that this is any different from how it has always been, which is that the centre and No. 10 obviously have a keen interest in policy development and they expect there to be a discussion on central and strategic things.

Q1089 Chair: Can we skip over the appointment of permanent secretaries? That matter has been resolved, hasn’t it?

Mr Maude: There has been some movement, but, no, I would not say that it was resolved for all time.

Q1090 Chair: Could you describe to us what is unresolved?

Mr Maude: We said in the Civil Service reform plan that we wanted to strengthen the role of Ministers in the appointment of permanent secretaries. There have been modest changes in that direction made by the Civil Service Commission. It does not go as far as Ministers have sought-not only current Ministers, but Ministers in the previous Government-and that is that the selection panel, which will obviously include the First Civil Service Commissioner, should be able to submit to the Secretary of State a choice of candidates and leave the final choice to the Secretary of State. You will have heard Jack Straw talk about how when he was a Cabinet Minister he personally appointed three permanent secretaries. In one case, he chaired the selection panel himself, which is not at all how the current Civil Service Commission does things.

We think that it is a very important relationship. When the panel has done its proper job of ensuring that the candidates from whom the Secretary of State can make his or her choice are all politically neutral, capable of doing the job, will fit and can do what is needed, there does not seem to me, or any of us, to be any problem in letting the final choice be the Secretary of State’s.

Q1091 Chair: But in the end, the Prime Minister can veto an appointment.

Mr Maude: He can, and if he does that, it goes back and the whole process starts again.

Q1092 Chair: Yes, but nobody wants that to happen. When it happens, there has clearly been a failure in the system.

Mr Maude: Yes.

Q1093 Chair: Surely we need some classic, British fudge, because we do not want to go back to what Lord Wilson of Dinton described as "patronage".

Mr Maude: It is certainly not about patronage; it is about having much more honesty in the system. I think what David Normington has done has introduced more honesty, because we have got rid of this ridiculous fiction that Ministers were not allowed to interview the candidates.

Q1094 Chair: That did sound ridiculous to me.

Mr Maude: It was nonsense. It was a complete fiction and it led to-

Q1095 Chair: It was a fiction believed by Secretaries of State.

Mr Maude: Yes. Poor Caroline Spelman was told by Gus O’Donnell that when she met the candidates, she was not allowed to ask them any questions. She was there only to answer their questions, which is bizarre and was not true. When Caroline said that in public, a former Cabinet Secretary said that it simply was not true. But the reality was that it was intended to be a proper interview-the ability for the Secretary of State to interview the candidates. What David Normington and the Civil Service Commission have now done is make that honest. They have not changed it, but they have made it, at least, open and honest.

Chair: Moving briefly to accountability-Mr Cairns.

Q1096 Alun Cairns: The IPPR report into different accountability systems was due to be received in the autumn last year, but Sir Bob Kerslake said to the Committee that he had not received it. Has it been received yet? Why was it late? And how much did it cost?

Mr Maude: It cost very little. It’s a public figure-I think it is £50,000. We have not received it yet; we are expecting it very shortly.

Q1097 Alun Cairns: It still has not been received.

Mr Maude: No. What they thought it useful to do, with our encouragement, is to look rather more widely than we envisaged at different systems in different places, really to see what the experience is. I think they have visited several of them, because what happens in reality is often a bit different from the description in the textbook.

Q1098 Chair: I had an exchange with the Prime Minister in the Liaison Committee about the Osmotherly rules and the Armstrong memorandum, and you very helpfully provided a written answer, which suggested a mindedness to revise the Armstrong memorandum, because the language is so outdated in this era of transparency. But you do not have any problem with the basic view that Select Committees can invite who they like to give evidence, and there is an obligation on the Government to provide the witnesses that Select Committees ask for.

Mr Maude: Yes, I guess that’s right.

Q1099 Chair: And that it should be perfectly acceptable for a civil servant to say, "I’m sorry. I have been asked by my Minister not to answer that question," because that is the reality, isn’t it? Civil servants are trained with the line to take, aren’t they?

Mr Maude: I thought they were trained to provide the line to take.

Q1100 Chair: They are actually trained to give the line to take, aren’t they? That is what the Armstrong memorandum says they must do: they are the alter ego of their Minister. It is completely out of date, isn’t it?

Mr Maude: There is something valuable there, which is that they are not independent public figures.

Q1101 Chair: No, but if they are asked about matters of fact, or matters of administration-this is slightly "Yes Minister"-ish of course-

Mr Maude: Matters of administration can easily merge into matters of policy.

Q1102 Chair: It is the confusion between the policy of administration and the administration of policy, if I remember correctly from "Yes Minister", but the point is where they are being asked about matters of fact and plain matters of administration, they are under an obligation to give information to Select Committees.

Mr Maude: Yes, I guess so.

Q1103 Chair: And if they feel constrained from answering, it would be much better if they just said, "That is a matter you must put to the Minister."

Mr Maude: I don’t think it is all that hard, actually.

Q1104 Chair: I don’t think it is rocket science at all, but it would be helpful if the guidance to civil servants said, "If you feel uncomfortable answering a question, just say that you must refer the matter to the Minister." Suggesting that there are not answers, or that obscure answers must be given in order to divert the Committee from the truth, would seem to be the wrong thing for a civil servant to do, but it seems sometimes that they find it convenient to do so-shall I put it that way?

Mr Maude: You might say that; I could not possibly comment.

Q1105 Chair: Are there any problems with the system of ministerial accountability that in your view need to be addressed?

Mr Maude: Not that I am aware of. I feel extremely accountable. I think I have been pretty accountable for the last two hours.

Q1106 Chair: I am very grateful to you. You have actually given us some really interesting background and evidence for our inquiry.

Mr Maude: That is the most alarming thing you have said all afternoon.

Q1107 Chair: You will look very closely at the transcript to remind yourself what on earth you said.

You are aware that we have discussed the possibility of concluding that we need something like the Tyrie review of banking to give the same kind of dispassionate, detached and accountable overview of the future of the Civil Service. Given that so much has happened to the Civil Service over the last 55 years, since the Fulton Committee; given that there used to be a Royal Commission on the Civil Service about every 15 years, but that we have had nothing since 1967; and given that we now have 24/7 media, freedom of information, globalisation of problems, globalisation of decision making, devolution and decentralisation, is it not time that we gave the whole context of the future of the Civil Service that comprehensive look? I think you have agreed that your Civil Service Reform Plan has not done that, and that your skills and capability review has been unable to do it, and you have more or less agreed that problems seem to be accumulating faster than they can be resolved.

Mr Maude: If it is the case that there is a regular pattern of one every 15 years, we are probably due four now-there is nearly a 60-year gap. The dangers, of course, are that Royal Commissions take minutes and last years, and that they act as a pretext for not doing stuff that needs to be addressed urgently. That we cannot allow: the demands of the situation today mean that we need urgent change, invested with energy and purpose. We are not seeing that quickly enough. The last thing that I would want to see is all of the urgent things that we have identified, but not sufficiently executed, being put on hold or on the back burner while a sage and wise Royal Commission scratches its head about this for the next two years.

Q1108 Chair: We hear what you say about Royal Commissions. Would you accept that a parliamentary commission would be lighter and more nimble?

Mr Maude: I think it could have many attractive features.

Q1109 Chair: If it were clear that this parliamentary commission should not interfere with the programme of reform that is already under way, that would seem to resolve your concern on that score.

Mr Maude: The danger is that, with the best will in the world, it does, because you then have a whole lot of possibilities being raised by the commission for direction in the future, and so nothing happens in the mean time. It is difficult enough to get anything to happen at all.

Q1110 Chair: If the situation had been getting better over the past 10 or 15 years, you would be in a stronger position. The consensus on the relationship between Ministers, the degree of trust and the organisation’s morale is that, as you yourself have said, there are confused ideas about where responsibility lies-the Civil Service is full of able and talented people who feel incapable or unwilling to deliver what Ministers want. Isn’t that a strong enough case for a different way of looking at the future of the Civil Service, rather than the way we have looked at it for the past 50 years?

Mr Maude: I don’t think it is getting worse. In plenty of ways, it is getting better. I wouldn’t be quite as pessimistic as you are, although pessimism is my default setting. I think we are making progress. It is painful, and it is grinding, hard work, but we are making progress. What I wouldn’t want is a sense that, somehow, all of this is in vain and we should put it all on one side while we examine our navel for a period.

Chair: Thank you very much, Minister. You have been extremely helpful this afternoon. You have stayed an extra 10 minutes, for which I am very grateful.

Prepared 5th July 2013