Select Committee on Public Service Report

PART 3: CHANGES IN THE PUBLIC SERVICE SINCE 1967

THE FULTON COMMITTEE ON THE CIVIL SERVICE

  24.    In 1965 the Select Committee on Estimates had published a report on Recruitment to the Civil Service, in which a recommendation was made that 'A Committee...should be appointed to initiate research upon, to examine and to report upon the structure, recruitment and management of the Civil Service'. On 8th February 1966, the Prime Minister Harold Wilson announced in the House of Commons the appointment of a Committee on the Civil Service (which became known as the Fulton Committee) 'to examine the structure, recruitment and management, including training, of the Home Civil Service, and to make recommendations'. The Committee was urged to report urgently, but although it set itself the target of reporting in the Spring of 1967, it found that its task was so demanding that it was unable to report until 1968. The Committee was not entirely happy with its terms of reference, which excluded the machinery of Government. The Committee found that 'at many points of our enquiry ... this imposed limits on our work; questions about the number and size of departments, and their relationships with each other and the Cabinet Office, bear closely on the work and organisation of the Civil Service'.

  25.    Many of the changes which have occurred in the Civil Service since 1967 arose out of the Fulton recommendations. The findings of the Fulton Committee are described below.

THE FINDINGS OF THE FULTON COMMITTEE

  26.    In the first chapter of the its Report[4], the Fulton Committee stated that the Civil Service of the day was fundamentally the product of the nineteenth-century philosophy produced by the Northcote-Trevelyan Report; whereas the tasks the Civil Service faced were those of the twentieth century. The Civil Service was found to be inadequate to meet those tasks in six main respects.

  (a)  The Civil Service was essentially based on the cult of the amateur or generalist. This feature was most evident in the administrative class which dominated the service. Administrative class officials were regarded as amateur because they were moved too frequently from job to job and had no specific professional education or formal training for their work.

  (b)  The system of classes impeded the work of the Civil Service. The Fulton Committee was critical of the classification system, which it considered had caused the Civil Service to become rigid and had made it difficult for staff to move among the various classes. The Committee also took the view that the word 'class' in Britain had developed social connotations which could produce feelings of inferiority. As an alternative, the Committee proposed occupational 'groups' and 'categories', together with a simplified pay structure.

  (c)  Many scientists, engineers and other professional specialists were not given the responsibility or authority they deserved. The Committee therefore recommended that these specialists be given more policy-making and management opportunities, and training to equip them for their new work. The Committee recommended the creation of a new Civil Service College to provide this training and to meet the other training needs identified in the report.

  (d)  The Committee considered that the Civil Service lacked skilled managers. One reason for this was that most of the work of most Senior Civil Servants was not managerial, but rather related to matters such as the preparation of explanatory briefs and answers to parliamentary questions. To improve management skills, the Committee recommended that administrators should become more specialised, and more training in management should be given to scientists and specialists. The Committee also recommended that the principles of 'accountable management' be introduced. (According to those principles, the performance of individuals (or units) is measured as objectively as possible, and those individuals (or units) are then held responsible for tasks they have performed. Accountable management requires cost centres to be identified, and costs to be precisely allocated to the official in charge of each one.) To improve management even further, the Committee recommended several more innovations: the establishment of a new Civil Service Department; the creation of a management services unit in each department to promote new management techniques; a planning and research unit to undertake major long term planning; and the creation of departmental planning units to acquire facts and to consider and administer policy. The head of the planning unit would be the Senior Policy Adviser to the Minister.

  (e)  The Committee considered that there was not enough contact between the Civil Service and the rest of the community. This was partly because Civil Servants were expected to spend their entire working lives in the Service, and partly because the administrative process was surrounded by too much secrecy. The Committee therefore recommended greater openness in Government, less anonymity for officials, and greater mobility of staff into and out of the service. They recommended the use of short term appointments, temporary interchange with industry and commerce, and more flexible pension arrangements.

  (f)  The Committee also took the view that within the Civil Service there were major defects in personnel management. There was not enough career planning, and communication was bad between the Civil Service Commission, departmental establishment divisions and the Treasury. The Committee therefore recommended the creation of a new Civil Service Department, within which the Civil Service Commission would continue to operate, and the adoption of new recruitment procedures for administrators and high fliers.

  27.    The impact of the Fulton Report was very far-reaching, and many of the numerous changes which took place in the Civil Service over the next thirty years had their origins in Fulton's recommendations. It is possible to summarise only the main ones.

THE CIVIL SERVICE DEPARTMENT

  28.    One of the questions which the Fulton Committee addressed was whether the Treasury was the right Government department to exercise personnel responsibilities within the Civil Service. Should recruiting policy and management remain the concern of a department whose primary responsibility was for finance? The Fulton Committee took considerable evidence on this question, including an important memorandum prepared by Sir Lawrence Helsby, then Head of the Civil Service. The Committee concluded that the Treasury's management role had been 'patchy rather than systematic, with too few staff and too little expertise'. The Committee accordingly recommended that a new Government department should be established straight away, with responsibility specifically for the Civil Service.

  29.    The new Civil Service Department (CSD) was established on 1st November 1968. It took over the responsibilities of the Civil Service Commission, and the responsibilities of the pay and management divisions of the Treasury. 900 Civil Servants were transferred from the Treasury to the new Civil Service Department, and the Lord Privy Seal, Lord Shackleton, was appointed by the Prime Minister to oversee the Department's day to day operation. Sir William Armstrong, who was the Joint Permanent Secretary of the Treasury, left the Treasury and became the new Head of the Civil Service.

  30.    The Fulton Committee's idea was that the new CSD, once established, might be responsible for the implementation of the Committee's other recommendations. In its early years, the new CSD was a focus of intense activity as it fulfilled this role, implementing the Fulton reforms vigorously.

THE CIVIL SERVICE COLLEGE

  31.    When the Prime Minister, Harold Wilson, announced the creation of the new Civil Service Department in 1968, he also announced that a Civil Service College would be created under the new department's direction. It was expected that a great deal of college training would be needed, and there were therefore to be three training centres: two residential (one at Sunningdale and one in Edinburgh), and one non-residential (the Centre for Administrative Studies in London). The headquarters at Sunningdale was formally opened by Prime Minister Edward Heath on 26th June 1970, and the Edinburgh Centre was opened in November 1970.

  32.    Following the year 1968-69, the Civil Service Department announced that central management training in the Civil Service had been increased by nearly 80 per cent. This included twice as much training for all classes at Principal level. In total, about 8,000 Civil Servants attended courses at the College in that year. In addition, considerably more use was being made of external courses, held, for example, at universities and business schools. By 1969-70, well over 200,000 Civil Servants were receiving formal training in their departments and in the same year 25,000 Civil Servants attended external training courses ranging from first degree courses to short seminars of two or three days' duration.

THE REORGANISATION OF CENTRAL GOVERNMENT WHITE PAPER

  33.    The Fulton Committee's terms of reference had not included machinery of Government. In order to examine that subject, and as a complement to the Fulton Committee's work, the Government set up an official review; its report, published in 1970, took the form of the White Paper, The Reorganisation of Central Government.

  34.    The White Paper began with a striking first paragraph which said:

'This Administration has pledged itself to introduce a new style of Government. More is involved than bringing forward new policies and programmes: it means resolving the issue of the proper sphere of Government in a free society; and improving the efficiency of the machinery intended to achieve the aims it sets itself within that sphere.'

The White Paper looked at the theory behind the 'central mechanism by which public policy is made and carried out'. It recognised that the purpose of Government organisation was to serve policy, and recommended that responsibilities should be allocated to departments on the basis of function: Government departments should be organised by reference to the task to be done or the objectives to be attained.

  35.    The Reorganisation White Paper also made recommendations relating directly to the policy-making process: see paragraph 41 below.

THE CREATION OF THE 'GIANT' DEPARTMENTS

  36.    In the years before the publication of the Reorganisation White Paper a certain amount of structural change had already taken place in the machinery of Government: some examples are given in Appendix 4. The White Paper recommended the establishment of a new Department of Trade and Industry (DTI) and a new Department of the Environment (DOE). The DTI, created in 1970, was a giant department which absorbed the functions of the Ministry of Technology and the Board of Trade, and also took over responsibilities for monopolies, mergers and restrictive practices from the Department of Employment and Productivity. Having lost some of its functions, the Department of Employment and Productivity became the Department of Employment. The new Department of the Environment was created in the same year and was also very large. It took over the functions of the Ministry of Housing and Local Government, the Ministry of Transport and the Ministry of Public Building and Works.

CONTROL OF PUBLIC EXPENDITURE

  37.    In 1959, the Plowden Committee was set up to examine the control of public expenditure. The Committee's Report was published in 1961, and was critical of the prevalent piecemeal approach to the planning of public expenditure. It recommended that regular reviews of expenditure be introduced, that the Government accounting system be modernised and that more effective machinery be developed for taking collective decisions.

  38.    The Public Expenditure Survey Committee (PESC) was set up in 1961 as a direct result of the Plowden Committee's recommendations. It was technically a Treasury committee composed of the Principal Finance Officers of the major departments, whose task was to present reports to Ministers showing the financial implications of current policies. Programme Analysis and Review (PAR) was set up in 1970 as a direct result of the Fulton proposals. The purpose of the procedure was to ensure that departments presented clear statements of objectives and priorities before the process of allocating resources commenced. PAR was therefore a British adaptation of the programme budgeting approach that had been adopted by the United States Federal Government.

  39.    These processes were intended to assist the Treasury in advising Ministers on public expenditure and in drawing up the annual White Paper on Public Expenditure: indeed the Treasury was so deeply involved that it set up a special Committee to deal with PAR. The committee was called the Programme Analysis and Review Committee (or PARC). The chairman of PARC was also the chairman of PESC; the membership of the two committees was substantially overlapping.

  40.    Although the public expenditure survey process still exists, indeed it is the key element in planning and controlling public expenditure, PESC no longer meets: it is now no more than a circulation list for the distribution of certain papers from the Treasury. PAR made a significant impact at first, but gradually declined and was eventually wound up in 1979, to be replaced by scrutinies (see paragraph 63 below).

FORMULATION OF POLICY

  41.    Ministers have always sought advice when they required it, so the various arrangements introduced or made more formal in the 1970s were not entirely new. However, in the late 1960s and early 1970s there was a development of the role of the policy adviser, and of the role of policy advisory bodies. These developments were encouraged by the recommendations of the 1970 Reorganisation White Paper and of the Fulton Committee before it:

  (a)  The 1970 White Paper on The Reorganisation of Central Government had recommended that at a high level in the policy-making system, there should be 'a small multi-disciplinary central policy review staff in the Cabinet Office'.

  This recommendation was implemented in 1971. The Central Policy Review Staff (CPRS) was set up within in the Cabinet Office and was intended to define Government strategy and develop it to take account of changing circumstances. The CPRS was also intended to provide a framework within which the Government's policies as a whole might effectively be formulated. The first executive head of the CPRS was Lord Rothschild, who was appointed in 1971 by the Prime Minister, Edward Heath. Under Rothschild's leadership the CPRS studied fundamental aspects of Government policy, often crossing departmental boundaries, and drawing attention to the consequences of an action or inaction across the field of Government.

  (b)  The Fulton Committee had recommended that each department should have a small policy unit concerned with long-term policy planning, each headed by a Senior Policy Adviser. Another recommendation was the formal introduction of policy advisers for Ministers.

  42.    Throughout the post-war period there had been appointments to the Civil Service of specialist advisers on a temporary basis, but the introduction on a significant scale of policy advisers appointed to give political advice to Ministers dates from the early 1970s. Such advisers were salaried and worked alongside permanent Civil Servants but on the basis that their appointments would be terminated immediately on a change of Government. By 1974 most Ministers had at least one political adviser, the number of such appointees being controlled by the Prime Minister. At about the same time, policy planning units were introduced in individual departments (as recommended by the Fulton Committee). In most cases these worked in conjunction with the now formally appointed policy advisers.

  43.    In 1975 a policy unit was set up to work specifically for the Prime Minister. The first head of the policy unit was Dr Bernard Donoughue (now Lord Donoughue) appointed by Harold Wilson. Dr Donoughue was assisted by a small team of policy advisers and assistants, who became temporary Civil Servants within the Civil Service Department. The function of the unit when it was first set up was to 'assist the development of the whole range of policies contained in the Government's programme, especially those arising in the short and medium term'.

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4   (Paragraph 26) The Fulton Committee Report was published as a command paper, Cmnd. 3638 entitled The Report of the Committee on the Civil Service. Back