Race in the Workplace: The McGregor-Smith Review

Baroness Finn Excerpts

Monday 24th April 2017 Lords Chamber

[Baroness Finn (Con)]

My Lords, I apologise to the Chamber and to my noble friend Lady McGregor-Smith for entering the Chamber just after she had started speaking. I thank her for bringing this important debate here and congratulate her on her excellent and well-researched review. My noble friend has been a champion of diversity for many years and deserves admiration for her dedication to ensuring that talent should flourish by bringing down barriers, rather than by imposing arbitrary quotas. This review looks at the real issues and the recommendations are practical and designed to overcome them. It looks at, among other things, improving transparency and unconscious bias. It considers the leadership and the prevailing culture of organisations. Most important is the title, as my noble friend made clear: The Time for Talking is Over. Now is the Time to Act—no more reports.

Understanding why black and minority-ethnic staff are not meeting their full potential and not rising to the top tiers of management is not a new issue. Organisations often demonstrate a desire to confront the challenges that exist to harnessing the talents of BME staff. As the Government’s response makes clear, the opportunity to generate a further £24 billion for the economy is compelling enough. The moral case is unquestionable. My right honourable friend the Prime Minister showed the Government’s commitment to the issue by launching the race disparity audit last August. However, while policy intentions are often clear, their implementation is often inconsistent, unco-ordinated and lacking in real drive and commitment. Many BME staff do not feel that they are operating on a level playing field. That is why there is a critical need for action.

This debate asks Her Majesty’s Government for their actions in response to the recommendations made in the report. As the Government’s response made clear, while the majority of the recommendations are for businesses, the Civil Service should lead from the front in taking positive action to make the Civil Service and, where possible, the wider public sector more inclusive. There is, of course, a lot of overlap in the barriers to be overcome. Change takes time, but the previous narrow focus on targets and quotas has failed to change the culture and has sometimes harmed the cause.

I was very involved with the Civil Service’s diversity plan when it was launched in March 2015 as the Talent Action Plan. Everybody loved to talk about diversity, yet the first draft of the diversity report submitted to my noble friend Lord Maude, then Minister for the Cabinet Office, was full of a lot of bland platitudes and arbitrary targets. More worryingly, it suggested a discriminatory approach that potentially conflicted with the core principle of recruitment into the Civil Service—that it should be on merit.

Our successful experience of increasing the number of women appointed to public boards had demonstrated that such quotas in isolation had failed to work. They failed to address the key barriers and obstacles that women faced. A key point in this instance was the insistence on track record and proven experience, which meant that the same candidates were constantly recycled from one board to another and did not allow new participants to enter. By replacing such a requirement with an emphasis on ability, we managed to expand the field of female candidates. We made other changes, such as the requirement that job advertisements should be written in intelligible English and make clear what exactly is required. It is not rocket science, but it made an enormous difference. I noted with interest that my noble friend Lady McGregor-Smith made a similar recommendation in her report.

The results of our work on public appointments spoke for themselves. By 2016 the percentage of women being newly appointed to boards of public bodies rose from 34% in 2010 to more than 48%. Even the then Commissioner for Public Appointments Sir David Normington, who did not always rejoice in our reforms, paid tribute in his annual report. We therefore thought it would be sensible to apply a similar practical approach when tackling gender diversity in the Civil Service. In the interests of political impartiality, we commissioned the Hay Group to carry out a proper analysis of women in Whitehall. Its remit was to be brutally honest, to identify real problems and barriers, and to make practical recommendations. The final report was something of an eye-opener. It found that the policies were sound and progressive but that the culture and leadership climate prevented women progressing successfully into senior roles despite the fact that women entering the senior Civil Service possessed exactly the same required leadership qualities as men. Line-manager practice was variable, which meant that women’s experiences of leadership and talent were something of a lottery. Most critically, many women simply did not believe that the rhetoric on policy and promotions matched the reality on skills and behaviours.

I will not go into all the detailed findings but will highlight some of the more revealing. One woman described how she applied for a promotion but failed to get an interview. She was told that it was “because I would have performed better than the preferred candidate and it was his turn for promotion”. The leaders of the Civil Service were described as simply “not leading” and the culture was described as a “bear pit”. The Civil Service leadership was shocked and taken aback by the research, but it emboldened us to commission further work on LGBT, BME and those with disabilities. BME staff in particular, and in my opinion quite fairly, thought that the emphasis on diversity was always weighted very heavily towards gender.

Ethnic Dimension wrote the report on removing barriers to talented BAME staff progression in the Civil Service. The conclusions were strikingly similar to those of the Women in Whitehall report and again identified cultural and leadership climates as the main barriers to the progression of talented BAME staff within the Civil Service. Staff complained of a leadership that was not diverse, and of the persistence of unconscious bias and discrimination which blocked the progress of talented BAME staff and meant that there was not always equal access to promotions, projects, senior leaders and secondments. BAME staff were more likely to be marked down in performance appraisals, with little objective feedback as to why.

We published all the reports and used them to inform the senior Talent Action Plan, which was published in March 2015. The top senior leadership in the Civil Service worried that the reports were too critical, but the rank and file loved them. A number of staff felt that it was the first time that the conflict between rhetoric and reality had been properly addressed with practical actions and that they were being listened to. The Permanent Secretaries enthusiastically took ownership of the plan.

I return to my point on implementation. The Talent Action Plan was seen as a two- year plan. After year 1, in March 2016, the Cabinet Office published a progress report that set out which steps had been completed and which were still “in progress”. It was pleasing to note that the Civil Service had increased its unconscious bias training and appointed five Permanent Secretaries as diversity and inclusion champions. All Permanent Secretaries now have performance management objectives to improve diversity within their departments. However, the BAME report identified the crucial role of line managers in supporting and developing talented staff. It is always easy to write objectives but far harder to put them into practice. I await the two-year progress report on implementation of the Talent Action Plan, which I presume was due in March. I appreciate that it is a Cabinet Office-led exercise, but I wonder whether my noble friend can find out when we can expect to see it.

Ensuring the commitment to diversity and to BAME staff is hard work and we need to get it right. I commend my noble friend’s review and her recommendation of a one-year-on review so that the Government can assess the extent to which the recommendations have been implemented. I hope that both public and private sector can share their experiences to improve inclusivity in the workplace, so that the workforce will be able to deliver the incredible benefits to the UK economy.