Civil Service Reform

Lord Beith Excerpts

Thursday 3rd April 2014 Commons Chamber

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

I congratulate the hon. Member for Harwich and North Essex (Mr Jenkin) on bringing this matter forward so determinedly. Indeed, I am glad that the debate will be responded to by a Minister who I know to be a reforming Minister, but we still feel he needs to raise his reforming game from the specific and valuable things that he has been doing to deal with a wider concept of the future of the civil service. We have a civil service with excellent qualities, and I will refer to some of them in a moment, but as the Government themselves have said, we want a

“world-class, 21st Century Civil Service capable of delivering”

future

“Government’s priorities and the best public services.”

When the Public Administration Committee produced its report, the Liaison Committee wanted to support its conclusions but also to bring together several Select Committees’ experience of failings in the system. That led us to question the Prime Minister last September, at one of our thrice-yearly sessions with him, about the civil service. He responded well on specific matters, but I am still not at all convinced that he grasped the fundamental problem that the civil service is now facing very different circumstances, and we need to assess how far it can change the way it does things without losing some of its essential features.

We published a short report that highlighted some of the problem areas, such as the electronic monitoring of offenders, the west coast main line franchise and universal credit, where there had been serious implementation problems. We also gave praise where it was due, for example for the success of the Olympic and Paralympic games organisation. We concluded that there was significant evidence that the civil service is not equipped to support consistent contract management and tends to be driven by short-term pressures rather than long-term value for money for the taxpayer. We were unconvinced that the Government’s civil service reform plan for Whitehall is based on a strategic consideration of the future of the civil service. We gave our support to the idea of a parliamentary commission, jointly involving both Houses.

The Government responded to our report earlier this week and published their response in time for this debate. They deal with all our specific points, but still do not, I think, grasp the overall point. They say

“the Government does not agree that these examples indicate a wider failure, nor suggest that there is any systemic problem of trust and honesty in the critical relationship between Ministers and officials.”

However, the Institute for Government recently published a report saying that there is a “lack of collective leadership” at the centre and that “short-termism” is weakening Whitehall’s ability to plan ahead, while there is

“no co-ordinating…narrative for the Civil Service to lock into”,

and although:

“Leaders of reform report strong Prime Ministerial support for civil service reform in private...this has little visibility within Whitehall.”

The argument that the Prime Minister used was that a parliamentary commission could displace current reform efforts, which are urgently needed. If that view ever had any significance, it does not in the last year of this Parliament, when so many of the Government’s reform initiatives have already been introduced. We ought now to be considering what we can bequeath to the next Parliament. We in the Select Committees inherited a significant bequest as a result of the Wright Committee’s work and, in many ways, we would like the next Parliament to inherit some worthwhile things, including a clear concept of how to develop the civil service to meet modern needs. A joint commission would make that possible.

The other place has a ready supply of former Cabinet Secretaries, people who have run large private and public sector organisations and people who have political experience, who can join with those who have recent and immediate experience in this House in analysing what is needed and making proposals.

[Mr Harper]

I have studied the motion on the Commons Order Paper and the proposed names of Members of this House. On the point about membership, I was a little worried, given the right hon. Gentleman’s enthusiasm for reform, that he seemed to suggest that the Members of the House of Lords who should serve on the commission would be former Cabinet Secretaries. Is that a way to get reform or to ensure that reform does not happen?

[Sir Alan Beith]

I understand the hon. Gentleman’s concern. My list was much longer than that. It included people with experience in the private sector and—as I was about to say but did not due to the shortage of time—in the armed forces.

[Mr Jenkin]

If the commission were chaired by a Cross Bencher in the other place, there would be no space on the committee for a former Cabinet Secretary.

[Sir Alan Beith]

I suppose I ought also to say that it would be an amendable motion in any event. Before I was elected to the House, I used to give university lectures about the civil service at the time of the Fulton report. My lecture notes would be of little use today as so much has changed. The Fulton report was itself trying to catch up with change, but so much has happened since then. The civil service is now far less an administrator of services and much more a buyer of services. Back-office outsourcing has been a major development. The Minister knows that I have some concerns that we will not have a footprint of the civil service in the smaller towns and communities around the country if we do not manage that carefully to take advantage of good people who are available, as in my own constituency.

The civil service can no longer be treated as a protected environment where private sector disciplines of personal responsibility, value for money and management of risk have no place. Much policy making is now international—in the European Union, the World Trade Organisation and the United Nations. We are a less centralised state, at least in Scotland, Wales and London, with some devolution to cities and combined local authorities. Departments cannot continue to operate as sole owners of policy, living in separate silos, when so many of the problems we have to address—crime prevention, public health and skills for employment, to name just three—can be solved only on a cross-departmental basis. This means that money needs to be spent in one Department when the consequent savings will be earned in another Department. Money spent dealing with alcohol problems will save money in prison places, for example. Our system is not designed to accommodate such decisions.

The Prime Minister’s office expects to be much more closely involved in many areas of policy, and questioning in the Liaison Committee has been developed to get at that and establish just what the Prime Minister’s office is doing when it has a guiding role—some would say an interfering role—in policy. Perhaps that is an unfortunately pejorative term. Many would say that it is right that the Prime Minister exercises a significant influence on policy development, but it has made a different character of work in at least some Departments.

The Treasury’s role is nowadays quite often one of encouraging specific expenditure as well as blocking other expenditure—a more active role than it sometimes played in the past. Select Committee scrutiny has pulled back the veil of ministerial responsibility and rightly opened up much more what actually happened when decisions were taken. Coalition Government has required new procedures to be developed, and Ministers are as impatient as ever to deliver policy change. The Government have sought to accommodate that through the idea of extended ministerial offices, but I am still unclear whether any Department has followed the Cabinet Office with an extended ministerial office. Perhaps the Minister can tell us.

Amidst all this there are key features of the British civil service that most of us are very anxious to keep, including political impartiality—a civil service that can serve any Government—high ethical standards and the ability to attract people of the highest ability. Resolving these things is not a simple matter. It needs some careful thought. We need to hand on to the next Parliament a well-thought-out understanding of the future of our civil service and how it can be achieved.

--- Later in debate ---

[Margaret Hodge]

I entirely agree, and that takes me very neatly to my next point. Promotion in the civil service is all too often about moving to a job in another area, rather than focusing on one job and seeing it through to the end. I think that the hon. Lady would agree that the worst example the Committee has seen was the attempt to implement the new FiReControl policy, for which we saw 10 senior responsible officers in a matter of five years. It is no wonder the project went horribly wrong.

I think that there is still a culture in the civil service of being hostile to outsiders, rather than embracing the talents that can be brought in from all sorts of backgrounds and experiences, which I think are often seen as a threat. When I was a Minister, I brought three incredibly talented women into the Department for Education to try to implement policies. None of them now works anywhere in Government, even though they could contribute to policy implementation.

I also think that too often the civil service and Government are—dare I say it?— exploited by consultants. My Committee will shortly be looking at the sale of Royal Mail, which might be just the last in a line of examples of that. I recognise that some steps are being taken, such as the development of the Major Projects Authority and the academy for training in project management. They are all steps in the right direction, but they are not enough and they are not happening fast enough.

Secondly, Government are just poorly organised for delivering what is wanted and needed. Government still work in silos, which always leads to unintended consequences. To take a current example, local authorities have had massive cuts, which inevitably has an impact on their social care expenditure. At the same time, we have a health policy that is trying to get people out of hospitals and into the community, but without any money to support it.

Working in silos leads to a failure to learn from mistakes, with one Department simply replicating the mistakes made by another. The Committee has seen that in the mistakes made during the early implementation of the private finance initiative, for example. If we look at how the contracts for energy have been implemented, we see that lots of those errors have been duplicated in the current contracts that have been signed by the Department of Energy and Climate Change.

There is a failure at the centre to recognise the importance of a strong centre. My Committee has just received a letter from Sir Bob Kerslake, Nicholas Macpherson and Richard Heaton. We had written to them about the importance of having a strong centre. I will quote a few lines from their letter:

“Your Committee urges the Cabinet Office and the Treasury to take a strong strategic lead, as the Government’s corporate centre, in civil service reform and associated issues… However, the… central direction and integration that you appear to recommend does not reflect the model that this government and previous governments have operated.”

I do not know whether that is true. I have asked the Minister whether he agrees.

The letter goes on to state that

“the Centre does not and cannot take decisions or set a strong direction on every item of the £720 billion of public expenditure… the government machine is not like a holding company dominating its subsidiaries from a corporate centre.”

Well, I do not know what business of that magnitude would not have a strong centre and would wash its hands of its responsibility for the performance of its constituent parts. Since when have we, as politicians, signed up to the mantra? It is almost like claiming that there is no such thing as Government; only Departments with their Secretaries of State. Reform, if it is to ensure that coherence, efficiency and effectiveness are delivered across Government, must mean that we have strong central direction and much better integration than we currently enjoy.

[Sir Alan Beith]

I agree with the point the right hon. Lady is making. It comes back to what I was saying about the role of the Prime Minister’s office, which often seems to get involved in specific policies because they are politically significant, rather than to exert the central management she describes.

[Margaret Hodge]

I entirely agree with that comment.

Finally, I want to talk about the conventions on responsibilities and accountabilities within the civil service and between civil servants and Ministers. The system is no longer working, and we need to rethink it. That is the extent of the complexity of the issues we are confronting. We need to deliver this in a sustainable way that will work across the political parties. The current position is frustrating for Ministers and for civil servants. We can look at the situation at the Ministry of Justice and at the Department for Work and Pensions, where I think there is a reluctance to speak truth to power, or at the Home Office, with the experience regarding the UK Borders Agency and the frustrations felt by Ministers.

As the hon. Member for Harwich and North Essex said, the doctrine of ministerial accountability is constructed on a basic lie. If Ministers are to be held accountable for the work of their civil servants, it is nonsensical that they can neither hire nor fire them. If we do not challenge that basic lie, we will never achieve the effective changes that we require.