The Cabinet Office and the Centre of Government - Constitution Committee Contents


The Development of Central Government

Prior to the mid-nineteenth century, there was no clear or consistent structure to central government in Britain. The 1854 Northcote-Trevelyan Report laid the foundations for the creation of a professional Civil Service. It also enshrined the architectural arrangements of Whitehall based on a model of functionally distinct departments, the principle of which still remains intact. The cornerstone of the Report was that the Civil Service should be unified. This raised the issue of how best to co-ordinate the activities of each department across Whitehall—a theme that has transcended the subsequent 165-year history of central government relations.

Northcote-Trevelyan's advocacy of functionally separate yet unified departments gave rise to a particular set of institutional arrangements. Over time, it was departments and not the central units of British government that became increasingly resource-rich and powerful. Throughout the twentieth century, departments developed the necessary expertise and organisational capability to command control of policy within their functional sphere. A consequence of this was an emergent need for the strengthening of the co-ordinating mechanisms at the centre of Whitehall.

The various co-ordinating mechanisms that have evolved are based on the principle of Cabinet government. Constitutionally, the Cabinet is regarded as the formal location of power in the British political system. In practice, the Cabinet and the Cabinet committee system operate as a means both to enforce the principle of collective Cabinet government on ministers and their respective departments and as a mechanism to resolve interdepartmental conflicts. The formalisation of this system mainly took place in the early twentieth century, first with the formal creation of the Cabinet Office in 1916 and subsequently in the reforms stemming from the 1918 Report of the Machinery of Government: Ministry of Reconstruction by Lord Haldane.[22]

The First World War was the catalyst for change, creating a pressure for modernisation. As the former Cabinet Secretary, Lord Hunt of Tamworth observed, prior to 1914 "Cabinet was a fairly leisurely process. The number of things government was involved in was fairly limited … Cabinets met infrequently … without a secretariat."[23] The December 1916 Cabinet crisis and with it the replacement of Asquith with Lloyd George as Prime Minister led to the creation of a War Cabinet. It was the precursor to what was subsequently to become the Cabinet Office and its role was to provide overall direction to the war effort.

Under Lloyd George's new model of government, the businesslike procedure of the War Committee was applied to the War Cabinet, and in due course the Cabinet Secretariat became, in peacetime, a permanent institution.

The Lloyd George reforms led to the Cabinet Office being formally conferred with responsibility to co-ordinate policy and offer strategic direction to government. But its subsequent history throughout the twentieth century has been shaped by, at times, an uneasy relationship with the other main co-ordinating units in central government. Key amongst these bodies is the Treasury. Our perception of the Treasury's role, the concept of Treasury "control" and the omnipotence of the "Treasury view" all derive from post-First World War reform and reorganisation. New wartime ministries had been created by Acts of Parliament that vested control over spending and staffing with the individual ministers rather than with the Chancellor of the Exchequer. To restore control, a Treasury minute empowered its own Permanent Secretary, as Head of the Civil Service and adviser to the Prime Minister, to recommend all senior Civil Service appointments. An Order in Council also gave the Treasury power to regulate the whole establishment, classification, remuneration and conditions of service, so paving the way for a uniformly trained and staffed British Civil Service. Ultimately, Treasury control was reinforced by a minute requiring all departmental spending submissions to be put to the Treasury before going to the Cabinet. Internal reorganisation established three branches: home, supply (public expenditure) and establishment (organisation, manpower and pay of the entire Civil Service).

i) Improving the co-ordination of departmental activity

There have been numerous attempts throughout the last fifty years to bolster the centre of government and to improve the co-ordination of departmental activity.

Between 1951 and 1953, the Churchill Government experimented with a system of "overlords", drawn from the House of Lords to oversee and co-ordinate the activities of different departments and spheres of interest.

During the 1960s and 1970s, "super-ministries" and new central co-ordinating units became fashionable, in an attempt to effect a more joined-up approach to policy-making. It was hoped that this would help the Cabinet to develop a broader strategic overview of the Government's programme and militate against the outbreak of "departmentalism". The Heath Government also established the Central Policy Review Staff (CPRS) within the Cabinet Office, effectively modelled on US-style "think-tanks": to provide a broad overview of the direction of general government policy; where necessary, to challenge the traditional views of Whitehall departments; and to undertake in-depth studies crossing departmental boundaries, for example in energy conservation, the British motor industry and race relations.

After 1979, the overarching theme of the Conservative administration's programme of government reform was a perceived need to impose ministerial control over the policy-making process in Whitehall and to bring what it regarded as the discipline of the market to the public sector. The reforms, though rather incremental in nature, were intended to enhance the co-ordinating capability of the centre. However, some critics argued that they contributed to the increasing fragmentation and complexity of Whitehall.

In the first phase, a variety of managerialist reforms were introduced—Rayner scrutinies (1979-1982) (a series of scrutiny exercises conducted across Whitehall by an Efficiency Unit team located in the Cabinet Office but reporting directly to the Prime Minister), the Financial Management Initiative (1982-84) and Next Steps Agencies (after 1988)—in an attempt to impose greater financial and political disciplines on departmental activity. Collectively, they transformed the way Whitehall operated. In particular, agencification (the creation of semi-autonomous satellite agencies, detached from departments but with responsibility to deliver public services), based on a principal-agent model, was an attempt to enhance the effectiveness of policy-making. It left a smaller core of officials in Whitehall departments to concentrate on policy-making, while semi-detached agencies in the field took responsibility for delivery. Yet these reforms did not abandon the Northcote-Trevelyan principle of "functional departments" and the tendency for each to operate in a hierarchical, sometimes inflexible manner.

The second phase of reforms, after 1990, saw various attempts to address the two-fold issue of departmentalism (departments defending their own turf) and policy-making being conducted in silos (i.e. only in a vertical not horizontal manner). Various initiatives, including two Continuity and Change White Papers (1994, 1995) and the Senior Management Review (1995), were aimed at strengthening the horizontal and strategic links both across Whitehall and beyond to include service deliverers in the field, and more specifically to counter the hierarchical culture in Whitehall.

All the various reform initiatives in Whitehall from 1945-97 were conditioned by the enduring principle established by Northcote-Trevelyan of strong, functionally distinct, yet unified departments. The reforms pursued during this period reflect the challenge confronting the various units at the centre of government charged with responsibility to ensure effective co-ordination across government.

ii)Relations at the centre

Relations between the three units making up the centre of Government (the Cabinet Office, the Prime Minister's Office and the Treasury) have varied over time. The nature of the relationship between the Cabinet Office and the Prime Minister's Office has really only come under scrutiny in recent times, prompted by the rise of a debate over "presidentialism" and the greater resources now found at Number 10 compared to a decade ago.

Reform of central government since 1997

The forces shaping contemporary government are different from thirty years ago. Numerous factors have changed the modern face of politics: globalisation; post-9/11 security; a 24/7 media news cycle; the increasing network of relations between the UK Government and supra-national organisations such as the G8, the G20 and the European Union; and greater complexity in governing through processes such as devolution and agencification.

The Labour Government came to office with a perception that the challenge of effective, co-ordinated policy-making had become an increasingly difficult task. This issue was compounded by the view that departments had responded by becoming more insular, hierarchical and inward-looking in their approach to policy-making in order to try to secure their own interests. As Tony Blair observed a year after coming to office:

"Many parts of the civil service culture are still too hierarchical and inward looking ... We need to think also about the structures in which we make people work. Often they frustrate more than they enable ... Joined-up government ... I believe this is one of the greatest challenges. We owe it to citizens to focus on what needs to be done, not on protecting our turf. More and more that will require working across boundaries ... It [Whitehall] needs to become more open, and responsibility needs to be devolved. Reinventing government to remedy these failures is a key part of our constitutional reform agenda."[24]

The Labour administration argued that the growth of departmentalism in Whitehall had eroded the ability of the executive to operate in a single, unified, co-ordinated manner across the policy spectrum: "Too often, the work of Departments, their agencies and other bodies has been fragmented and the focus of scrutiny has been on their individual achievements rather than on their contribution to the Government's overall strategic purpose".[25] Prior to entering office, Tony Blair outlined Labour's chosen strategy: "People have to know that we will run from the centre and govern from the centre".[26] The Labour Government's solution to the problem of fragmentation was to pursue reforms focused on restructuring the co-ordinating units at the centre and fortifying their resources.

The Labour administration's reform strategy since 1997 is epitomised by two key publications: first, Modernising Government (1999), which established what was to become a familiar theme of Labour's approach to reform—an emphasis on "joined-up government"; second, a strategy document by the Performance and Innovation Unit, Wiring It Up: Whitehall's Management of Cross-Cutting Policies and Services (2000). This outlined the Labour administration's approach to joined-up government, arguing for the need to reconnect the various elements of the machinery of government. This was to be achieved by "using the centre … to lead the drive to more effective cross-cutting approaches wherever they are needed. The centre has a critical role to play in creating a strategic framework in which cross-cutting working can thrive, supporting departments and promoting cross-cutting action."[27] The Government's subsequent agenda, outlined in a number of key official publications,[28] was a model of strong central control based on reforming Number 10, the Cabinet Office and the Treasury. This table highlights some of the key changes that have taken place:
Key Structural Reforms Post-1997
1997-01Office of Public Service merged into the Cabinet Office;

Unit-building—establishment of the Centre for Management and Policy Studies, Performance and Innovation Unit (later the Strategy Unit), Social Exclusion Unit, Women's Unit, Regulatory Impact Unit, and Anti-Drugs Coordination Unit.

2001-2Establishment of the Office of the Deputy Prime Minister within the Cabinet Office;

Various changes following the events of September 11 2001, including the creation of the post of Security and Intelligence Co-ordinator.

2002-7Establishment of the Office of the Deputy Prime Minister as an independent department (this Office has since been abolished);

Creation of the Delivery and Reform Group to strengthen the capacity of the Cabinet Office and to provide a strategic lead at the centre of Government;

A new Civil Service Strategy Board replacing the Cabinet Office Management Board.

Post-2007Emphasis on structural changes to improve policy and security /intelligence functions and to assist the Cabinet Office, Number 10 and the Treasury to work closer together e.g. advisers to the PM on European and Global Issues, Foreign and Defence Policy, and Domestic Policy moved from Number 10 to the Cabinet Office.

Newly-created post of Permanent Secretary for Number 10 to provide greater cohesion between the Cabinet Office and Number 10.

Beyond reforming the institutional arrangements at the centre, the Labour Government also introduced a number of mechanisms and tools of government aimed at bolstering the ability of the centre to co-ordinate and control the activities of departments and the various service delivery agencies. Since 1997, there has been a growth in targets and audit mechanisms—initiatives which are sometimes used to help the centre maintain control over both departments and the growing number of delivery agencies—for example the establishment of Public Service Agreements (30 signed in 2007), and the introduction of the Comprehensive Spending Review, in which the Treasury in conjunction with the Prime Minister's Delivery Unit set 3-year departmental expenditure limits through Public Service Agreements.

22   For example, the pre-war system of Cabinet operated with no agenda, minutes or a secretary.  Back

23   Cf. P.Hennessy (1989) Whitehall London: Fontana, p 63. Back

24   T.Blair, (1998) Modernising Central Government Speech to the Senior Civil Service Conference London, 13 October 1998. Back

25   Cm 4310 (1999) Modernising Government London: The Stationery Office, p 12. Back

26   Quoted from D. Richards (2008) New Labour and the Civil Service: Reconstituting the Westminster Model Basingstoke: Palgrave Macmillan. Back

27   Cabinet Office (2000) Wiring It Up-Whitehall's Management of Cross-Cutting Policies and Services London: Stationery Office, p 5. Back

28   See for example: Cm 4310 (1999) Modernising Government London: Stationary Office, Cabinet Office (2000) Wiring It Up-Whitehall's Management of Cross-Cutting Policies and Services London: Stationery Office. Cabinet Office (2002) Organising to Deliver, Cabinet Office (2004) Civil Service Reform, Delivery and Value: Transforming Public Service-A Civil Service that Delivers London: Cabinet Office, HM Treasury (2006) Service Transformation: A Better Service for Citizens and Businesses, a Better Deal for the Taxpayer London: Stationery Office. Back

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