Cabinet Office: Constitution Committee Report

Lord Bichard Excerpts

Tuesday 6th July 2010 Lords Chamber

[Lord Bichard]

My Lords, I, too, very much welcome the report of the Constitution Committee. It makes a number of important points about the structure and accountability systems at the centre of government, which I very much hope the new Government will take note of. As the noble Lord, Lord Goodlad, said in opening the debate this evening, the way in which the Cabinet Office and the centre works is vital to the effectiveness of the whole of government. It is, as the noble Lord also said, anything but arcane. It should not be something which interests only insiders, and certainly not something about which any of us can be complacent. All of which are reasons why the Institute for Government, of which I have to declare an interest as the current director, this year looked at the issues surrounding the Cabinet Office and the centre of government in a report entitled Shaping Up. We, too, concluded that there remained considerable scope for making the centre more effective. The findings of the institute report sit very happily alongside the Constitution Committee’s report, and perhaps could provide some pointers for the Government on a way forward.

In that report, our first recommendation was that the centre and the Cabinet Office should be very much smaller, but more strategic, with fewer of the ad hoc functions that we have already touched upon this evening and a much greater sense of purpose and direction. It is rather surprising that at the time of the election, there were no fewer than 1,500 civil servants working in the Cabinet Office. We can argue about whether there were six or seven Permanent Secretaries, but it was a fair clutch. Whatever the structure, the centre had become overextended and, as the noble Lord, Lord Butler, said, it had become something of a mess. It needs to be smaller and more strategic.

Our second recommendation was that the powers of the centre should be clearer, especially where Whitehall departments are concerned, so that it is more apparent where the responsibility for final decisions rests. We do not need a larger centre—on the contrary—but people need to know when the centre has the final say. As a former Permanent Secretary, I have to say that on many occasions, that was not clear to me and it is one of the reasons why some rather strange things have happened across government.

Our third recommendation was that the Cabinet Office should support the Cabinet more vigorously in developing a strategy for the whole of government. Perhaps we should try to encapsulate that in 20 key outcomes which should then be reflected in the business plans of departments. That is even more important in the current fiscal crisis. It is really important at a time when there is very little money that government is absolutely clear about its priorities and the issues on which individual departments should be focusing. The Cabinet Office—the centre—has a really important part to play in ensuring that there is that clarity.

The fourth issue that we commented on was the need for the centre to play a greater part in ensuring that departments collaborate where necessary, not just in the development of policy that crosses bureaucratic boundaries, but also in some more prosaic areas, such as the purchase, management and use of materials, goods and services. I have said before in this House that the public sector procurement budget amounts to £220 billion a year, and more than £100 billion of that is spent on common goods—goods that are purchased by different departments and public agencies—yet no convincing purchasing strategy is in place, and a vast amount of public money is consequently being wasted. Those of us who have worked in any bureaucracy know that too often there is a tendency to defend territories and resist justified attempts for greater co-operation, not least where procurement is concerned. Such behaviour is simply unaffordable in times like these, and the centre—the Cabinet Office—needs to have the power to exert its authority. It may be that the recent appointment of a chief operating officer or the establishment of an office of efficiency and reform will improve that situation.

Finally, we concluded that, contrary to popular belief, we have in this country one of the most devolved systems of central government in the developed world, by which I mean that departments retain a huge amount of power. Eighty-five per cent of the budgets allocated to departments remain within their control. This contrasts rather sharply and strangely with the wider governance system in this country in which power is heavily centralised in Whitehall and Westminster.

I think that most of us are now agreed that we need to devolve the power of government closer to communities and neighbourhoods. However, paradoxically, it may just be the time to think about rebalancing the power within government between the Cabinet Office and individual departments with a smaller, stronger, more strategic centre playing its part in ensuring that government really does work, when necessary, collectively.