Permanent Secretaries: Appointment and Removal (Constitution Committee Report)

Baroness Neville-Rolfe Excerpts

Thursday 9th May 2024 Grand Committee

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, this is essentially a debate about Permanent Secretaries, and especially their appointments and what happens when they leave office. I am well acquainted with the species, having been married to a former Permanent Secretary for over 40 years. Noble Lords might agree that our four sons are evidence of a close and indeed intimate knowledge of the subject.

The Government are grateful to the Constitution Committee for its report. I thank the noble Baroness, Lady Drake, for her clear summary and her questions, which I will try to answer in context. I thank the noble Baroness, Lady Stuart of Edgbaston, for her tireless work on the commission, relating to some of the most important roles in the country, as she said.

We are dealing today with one of the most delicate parts of the UK constitution. In this country, we have a system, supported by the report, that the Civil Service should be impartial and able to serve any Administration. They do it differently in the US and in France, for example, but our system has been successful, by and large, for 150 years. Impartiality is one important factor. Another is that the relationship between Ministers and civil servants, especially very senior ones, is crucial to government performance, and there is always a personal element too. Good relations are very important, as the noble Baroness, Lady Chapman, said, as is the ability of civil servants to speak truth to power.

The conventions have to be able to function satisfactorily, not just day to day but when there is a major challenge such as Covid-19. They also have to be able to operate well in the presence of powerful and unusual personalities. I have witnessed this in several departments, as a member of the SCS, as a Minister and from the perspective of private industry.

By and large, I agree with the committee and the noble Baroness, Lady Drake, that the system is worth preserving. In particular, I agree that the impartiality and perceived impartiality of the Civil Service is a central tenet of our constitution, which, as the noble Lord, Lord Butler, observed, is an important principle in the appointment of civil servants. As he said, from a constitutional perspective, the arrangements provide a good balance.

Ministerial involvement in the appointment process for Permanent Secretaries has to strike a balance. It allows input into the job description, the person specification and the composition of the panel, while preserving the important principle of appointment on merit. The report said that some Ministers were not aware of this. The Deputy Prime Minister and the First Civil Service Commissioner, as we have heard from her, wrote to government Ministers on 8 April to set this out and encourage them to take up opportunities to engage in the process.

The noble Baroness, Lady Chapman, asked about special advisers. They have no role in the appointment of civil servants. The Constitutional Reform and Governance Act 2010 states clearly that special advisers

“may not … exercise any power in relation to the management of any part of the civil service”.

It refers to the Code of Conduct for Special Advisers. It in turn specifically states that this includes the recruitment of civil servants, and this is reiterated in the Recruitment Principles.

The close working relationship between the Cabinet Secretary and the Prime Minister necessitates the Prime Minister’s close involvement with the appointment of a new Cabinet Secretary. The Civil Service Commission’s recruitment principles do not need to include specific provisions for this appointment. Any process should remain sufficiently flexible to enable the Prime Minister of the day to refine the selection approach as they wish, with the benefit of Civil Service advice. In practice, as has happened in most cases, candidates have submitted an application and have been interviewed for the role.

I also agree with the committee that external appointments to the Civil Service can fill skills gaps and refresh organisational culture. Moves in and out of the Civil Service may benefit the career development of individuals and bring new insights and recipes for success into government. I very much welcome my noble friend Lord Maude’s work to bring much-needed professional skills, such as commercial, digital and programme management, into the Civil Service, which I found on my return to office, while of course understanding his frustrations at that time.

My noble friend may be interested to look at the Minister for the Cabinet Office’s speech to Reform today. In it, the Minister described how we can improve the Civil Service by encouraging “excellent performance”, by improving its attractiveness to outsiders and “specialist talent”, and by improving skills and management training —one of my noble friend’s own preoccupations. I am confident that these changes will help provide the focus on management and leadership training that the noble Lord, Lord Norton, and I agreed on. I also agree that expressing appreciation for talent and performance can be a powerful and positive driver as part of performance management. I am sure that we will discuss Mr Glen’s proposals further.

I will not comment on pay today, although I think it is a pity that some of the Ministers in this House are unpaid. This discourages some from joining the Front Bench.

The external by default approach to senior appointments is an important step. Data is collected regularly and guidance in the revised Civil Service recruitment framework reinforces this commitment; this includes recording how many permanent recruitment campaigns are advertised externally and where there is a need for a senior Civil Service role on a short-term, temporary basis. As the noble Baroness, Lady Stuart, mentioned, the Minister for the Cabinet Office said today that the Civil Service Commission will review the rigour with which the external by default policy is applied. The noble Baroness also said, I think, that the commission will commence a root-and-branch review of the policy, working closely with the Government. More movement in and out of the Civil Service could be valuable, as the noble Lord, Lord Wallace of Saltaire, said.

During the evidence-gathering stage of the inquiry, there was a lot of focus on the role of the Senior Leadership Committee. The Cabinet Secretary provided the committee with details of the SLC’s membership and its terms of reference; indeed, his letter of 30 August was published on the committee’s inquiry page. However, given the interest and the committee’s request today, I can assure the Committee that the SLC’s details will also be added to GOV.UK; I undertake to do that by next week.

The Cabinet Secretary and the First Civil Service Commissioner agree that the senior appointments protocol needs to be updated to reflect current practice; that work is due to be completed shortly. The Civil Service Commission will consider reviewing the Recruitment Principles, particularly in the light of any implications that the updated senior appointments protocol may have for them.

The Cabinet Office, as the sponsor of the Civil Service Commission, is working closely with the commission and the First Civil Service Commissioner to update its existing MoU. I must tell the noble Baroness, Lady Drake, that that dates back to 2010, I am afraid, not 2020. However, work on a new framework document is well advanced to replace the MoU, in line with the Treasury’s practice for arm’s-length bodies. The Civil Service Commission is of course an independent statutory body. It performs important regulatory functions under the CRaG Act, within an accountability framework to Ministers and to Parliament. The upcoming framework document/agreement will set out the commission’s operational independence and codify and clarify its relationship with the Cabinet Office as its sponsor safeguarding its operational independence. I am well aware of the need to resource this area appropriately.

My noble friend Lady Finn commented on this. I can assure her that the CEO of the commission is line-managed by the commission’s senior sponsor in the Cabinet Office. However, the work of the commission’s CEO and staff is directed by the First Civil Service Commissioner.

On business appointment rules, in a statement in July 2023, the Government announced their response to the report from the Committee on Standards in Public Life, the Nigel Boardman review and PACAC’s work. A number of those reforms, including reforms to the Governance Code on Public Appointments and transparency declarations, have already been implemented. The response outlined plans to reform the business appointment rules, including changes to Civil Service contracts, and, as has been said, the development of a ministerial deed. The Government recognise that any such changes should not deter people from entering public service—we do not want to have a chilling effect. Similarly, it is in the public interest that people with experience of public administration move into other sectors. We intend to keep this proportionate approach, but, to answer the noble Baroness, Lady Drake, this far from simple work is progressing at pace and an announcement will be made in due course.

The Government agree with the committee that HR processes for the performance and misconduct management of Permanent Secretaries are fit for purpose. However, we do not agree with its view that there is scope for the Civil Service Commission to play a role in the dismissal of senior civil servants—we made that clear in our response. Formal HR processes, which sit alongside an individual’s core employment rights, are a matter for the employer. However, Permanent Secretaries should not be removed from their posts without due process, as the Government made clear in our response.

I shall not comment on recent individual exits, as we do not routinely comment on individual HR matters, but these are not decisions which are taken lightly. If the relationship between Ministers and their officials breaks down, swift action must be taken to resolve the situation, stabilise the leadership of the organisation and maintain focus on delivery. Such exits happen from time to time, as we have heard, but they are rare and should be an action of last resort. Since the high-profile exits of 2022, we have in James Bowler a new and experienced Permanent Secretary leading the Treasury and, as was announced recently, General Gwyn Jenkins will become the new National Security Adviser in the summer—we very much look forward to working with them.

A strong relationship between Ministers and civil servants is crucial to ensuring that government functions and delivers effectively. To competently advise the Government of the day and maintain impartiality, civil servants must provide objective, evidence-based advice and take decisions on their merits. We have appointed 11 Permanent Secretaries since the beginning of 2023—that includes specialist Permanent Secretaries—and there has been no difficulty in attracting candidates and no shortage of applicants.

I was pleased to see the report’s conclusion, therefore, that there is no evidence of a trend for the removal of civil servants on political or ideological grounds. However, introducing a criterion of broad political alignment between the Secretary of State and Permanent Secretary, as some have suggested, would complicate the existing duty to serve the Government of the day to the best of their ability regardless of their own political beliefs and would risk undermining their ability to establish the confidence of future Secretaries of State and Governments of different dispositions—I think that there is a lot of support for that view today.

On accounting officers, it is long-standing constitutional practice that each accounting officer is personally and directly responsible to Parliament for the stewardship of resources, against the criteria of regularity, propriety, value for money and feasibility, as the report notes. Their ability to carry out these essential responsibilities effectively must be maintained, and relies both on the impartiality of Permanent Secretaries and on their ability to speak truth to power. A shift towards greater ministerial influence would risk undermining this, but a ministerial direction can be requested on the rare occasions it is required.

The principle of a single Civil Service across England, Wales and Scotland is important, and we have discussed it at a number of Question Times. We acknowledge the arrangement whereby senior civil servants in Scotland and Wales are accountable to the Scottish or Welsh Government but are managed by their Permanent Secretary, who reports to the Head of the Civil Service. It can be tricky to navigate. However, Permanent Secretaries who are accounting officers are subject to HM Treasury rules set out in Managing Public Money, which can include asking for a ministerial direction on the rare occasion one is needed. In addition, the Civil Service Code, which is adopted and adapted in devolved Governments, sets out clearly the expectations for civil servants. Where Permanent Secretaries are asked to work on and spend public funds on matters outwith devolved competence, the Permanent Secretary should raise this with the Cabinet Secretary.

The Government agree with the committee that the principle of a single Civil Service must be maintained. Both sides benefit from interchange. We recognise the strength of the argument that further guidance to tighten up best practice may be due, and it is in the process of being considered. How all our current guidance supports civil servants working in the devolved Administrations on areas that may relate to reserved matters is a key priority, not least to help ensure that the Civil Service Code is maintained.

This has been an interesting debate. We are honoured to have so many experts on this area gathered together in this beautiful Room. I conclude by thanking the noble Baroness, Lady Drake, the members of her committee, the clerk—who is always so important—and all who have spoken in today’s interesting debate. The report was timely, quick, thoughtful and crisp, and we agree with the majority of its findings. The Government agree with the committee that we should not expand the role that Ministers already play in the appointment of senior civil servants, and we welcome its acknowledgement that existing policies for managing the performance and conduct of Permanent Secretaries are generally fit for purpose.