Select Committee on Public Service Report



  103.    Until the 1990s, many of the changes made to the Civil Service seem to have been made piecemeal. Changes have arisen from such diverse causes as reports of significant committees and commissions, the creation of new management units, the ideological perspectives of the Government in office, the advances of modern technology, the personal impact of key individuals, membership of the European Union and changes in the wider environment within which the processes of Government proceed. Despite the piecemeal nature of the changes, some of them, especially those introduced in the past fifteen years or so, have been linked together in the literature and termed 'new public management' (NPM). The characteristics of NPM are not related only to developments in the United Kingdom, but are international trends in public administration.

  104.    The doctrines of NPM involve 'a focus on management, performance appraisal and efficiency; the use of agencies which deal with each other on a user-pay basis; the use of quasi-markets and contracting out to foster competition; cost-cutting; and a style of management which emphasises, among other things, output targets, limited term contracts, monetary incentives and freedom to manage'.


  105.    One of the most important change not already mentioned is the creation of a significant number of regulatory bodies-a process that, to some extent at least, reverses the much publicised reduction in the number of non-departmental public bodies at the time of the Pliatzky Report, and in the following few years. For example 1996 Civil Service Yearbook includes:

These Offices have all been created as a result of specific Acts of Parliament, implementing the policy of Ministers who judged it right that consumer prices should be determined not by the Government but by an independent adjudicator. Three examples, with statements from the Civil Service Yearbook, illustrate this.

  106.    OFFER is 'a non-Ministerial Government department established under the Electricity Act 1989. The office is headed by the Director of Electricity Supply who is responsible for monitoring the activities of all licensed generators, transmitters and suppliers of electricity. The Director General has to exercise his regulatory powers so as to promote competition in the generation and supply of electricity; ensure that all reasonable demands for electricity are satisfied, protect consumers' interests on prices, security of supply and quality of service; and promote the efficient use of electricity'.

  107.    OFLOT, 'set up under the National Lottery Act 1993, is responsible for the grant, variation and enforcement of licences to run the National Lottery. The Director General's duties include ensuring the propriety of the Lottery operation, including establishing that those involved in the running of the Lottery are fit and proper persons to do so; protection of the interests of participants; and, subject to those, to maximise revenues to the National Lottery Distribution Fund'.

  108.    OFWAT was created under the 1989 Water Act. It is a non-Ministerial department which exists to support the Director General of Water Services in regulating the privatised water industry in England and Wales. OFWAT's responsibilities include: 'regulating the charges that appointed companies make for their services while ensuring that these companies can finance their functions; protecting the interests of customers with regard to pricing and standards of service; encouraging economy and efficiency in the water industry; encouraging competition in the supply of water and sewerage services; and adjudicating certain disputes between appointed companies and their customers. To help with customer representation the Director has set up 10 Customer Service Committees (CSCs) to investigate complaints from customers, to approach the companies on matters of customer interest and to advise the Director on consumer matters generally. The 10 CSC Chairmen and the Director form a non-statutory National Customer Council which represents customers' views on a national basis'.

  109.    These new offices indicate the change in emphasis in Government in the past 30 years. The new offices do not have to be located in London, because so little of their work necessarily involves Ministers and Parliament; in fact, of the examples cited above, both OFFER and OFWAT are based in Birmingham. Their role is not to provide services to citizens or to departments, but to monitor or regulate the activities of parts of the private sector.

  110.    The variety of public bodies which exist today is wide. There are departments of Government; departments within departments (such as the Department of Transport-which has its own Cabinet Minister); non-Ministerial departments (such as the Charity Commission); agencies (such as the Benefits Agency); agencies within agencies (such as the Government Property Lawyers); non-departmental public bodies which call themselves "agencies" (such as the Environment Agency); non-departmental public bodies which don't call themselves "agencies" (such as the Countryside Commission); there are advisory bodies (such as the Inland Waterways Amenity Advisory Committee); and there are regulating bodies (such as OFTEL). By no means all of these structures are new, but the wide variety of structures which exist serves to illustrate the complexity and intricacy of the Civil Service as it is today.


  111.    It is interesting to compare the structure of the Ministry of Pensions and National Insurance as it was in 1967 with its successor department, the Department of Social Security in 1997. The comparison can not be direct, because functions and structures have changed so much; but the extent of the changes are, in themselves, of interest.

  112.    In 1967 the Ministry of Pensions and National Insurance (MPNI) was a well established Department resulting from the amalgamation in 1953 of the Ministry of National Insurance and the Ministry of Pensions. There had been no major structural changes since the merger[6].

      Pensions: After the First World War, pensions were introduced for disabled ex-service men and women, and for the widows and orphans of service men. The MPNI administered these. They were payable all over the world, wherever the recipients were living. The Ministry also had important responsibilities relating to the welfare services which were provided for pensioners and their families.

      National insurance: The MPNI was responsible for providing cash benefits payable under the National Insurance Acts 1946 to 1957 in relation to the main circumstances causing the interruption or cessation of earnings. In 1967 these benefits were: unemployment benefit; sickness benefit; maternity benefits (i.e. maternity grant, home confinement grant, and maternity allowance); guardian's allowance; death grant; widow's benefits (i.e. widow's allowance, widowed mother's allowance, widow's pension, and widow's basic pension); child's special allowance; retirement pension; and industrial injuries and industrial diseases benefits.

  113.    The MPNI was one of the largest departments of central Government. In addition to its headquarters, which was concerned mainly with parliamentary and policy work, it had 900 local offices, organised into 12 regional groups. The Ministry also had a medical department comprising 168 doctors, working in 120 medical boarding centres. The MPNI also had help from other sources. Unemployment benefit was administered on an agency basis through the Employment Exchange network of the Ministry of Labour. Most benefits were paid not at local MPNI offices but at one of the country's 25,000 Post Offices, which cashed the MPNI's postal drafts on an agency basis.

  114.    The Ministry's tasks were enormous. It prepared and issued about 9 million pension and family allowance books each year. It kept records on over 800,000 war pensioners. It maintained the records of 24 million insured contributors and of 3¼ million families drawing family allowances. Most of its war pensions work was done at Blackpool, but national insurance records were kept at Longbenton, near Newcastle upon Tyne, where, at its peak, nearly 9,000 Civil Servants (mainly young women) worked on a 64 acre site.

  115.    Eligibility for benefits in 1967 was, in general, determined by an individual's record of national insurance contributions. These were paid by stamps on cards and about 45 million cards were exchanged each year. The records office at Longbenton was contacted by local offices through the means of hand punched cards (known as 'shuttle cards') sent through the post. Shuttle cards giving details of the national insurance records of individuals arrived in Longbenton at a rate of about 15,000 a week in the summer, and up to 500,000 a week during a winter epidemic. Newcastle had been chosen as the site for the records office as part of the post-war policy to locate Government work away from London, and especially in areas that had been vulnerable to unemployment. In relation to sickness benefit alone, there were seldom fewer than 800,000 people receiving benefit at any one time, and the average number of new claims was 140,000 a week[7].

  116.    The Ministry's administrative structure was complemented by an enormous network of tribunals and committees.

      War pensions: In relation to war pensions, there were three pensions entitlement tribunals and two assessment tribunals in England and Wales (which, in the period 1952-6, received 55,000 appeals). There were also other tribunals in Northern Ireland and Scotland. In addition, there was a Central Advisory Committee, a Special Grants Committee, and 155 Local War Pensions Committees in Great Britain, plus a Committee in Northern Ireland.

      National insurance: For national insurance there was a National Insurance Advisory Committee and an Industrial Injuries Advisory Council, plus 230 local advisory committees for the purpose of advising on the administration of the National Insurance Act. There were also nearly 220 local tribunals, normally sitting at least once a week. In 1956, for example, these tribunals heard some 43,000 cases. From local tribunals it was possible to appeal to the National Insurance Commissioner.

      Medical tribunals: There were 14 medical tribunals to which appellants could be referred.

  117.    The Department of Social Security is today responsible for many of the same areas for which the MPNI was responsible in 1967. The department continues to administer the social security responsibilities laid down in the National Insurance and Industrial Injuries Acts, although many of the individual benefits have changed. The payment of death grants ceased some years ago; sickness benefit has been replaced by incapacity benefit; and unemployment benefit has been replaced by the job seekers' allowance. Many long term benefits are now paid direct to individual bank accounts instead of by means of postal drafts cashed at post offices.

  118.    Despite the obvious similarities which exist between the MPNI of 1967 and the DSS of 1997, there have, needless to say, been some far reaching changes. Today, almost all the department's staff work not in the core department, but in one of the department's agencies (the Benefits Agency, Child Support Agency, Contributions Agency, Information Technology Services Agency, or War Pensions Agency). The department is now assisted in its work by two advisory bodies: the National Disability Councils and the Social Security Advisory Council. The development of information technology has had an enormous impact on the department's work. 'Shuttle cards' have disappeared altogether, and computers are now central to the payment of benefits and the keeping of national insurance records.

6   (Paragraph 112) A description of the structure of the Department as it was in 1958 is given in the `New Whitehall Series' book on the MPNI by Sir Geoffrey King (published in 1958). Back

7   (Paragraph 115) See MPNI book by Sir Geoffrey King in the `New Whitehall Series' (1958). Back

previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 1998