Civil Service Reform

Margaret Hodge Excerpts

Thursday 3rd April 2014 Commons Chamber

[Margaret Hodge (Barking) (Lab)]

I congratulate the hon. Member for Harwich and North Essex (Mr Jenkin) on securing this hugely important debate, even if it is taking place in the twilight hour of a Thursday afternoon. I also congratulate the Minister for the Cabinet Office on undertaking important reforms, and we should wish him well across the House. I welcome the work that has been done by bodies such as the Institute for Public Policy Research and the Institute for Government to try to tackle some of the complex issues that we face. I am delighted by today’s launch of GovernUp, so I congratulate my right hon. Friend the Member for Wentworth and Dearne (John Healey) and the right hon. Member for Arundel and South Downs (Nick Herbert) on their hard work. I also congratulate the hon. Member for Harwich and North Essex on his Committee’s important cross-party work, as well as on the proposition that we should have a commission. My view on such things is that we should let a thousand flowers bloom given that, as there are so many complex issues, every new idea will add value.

To get to the meat of the debate, wherever we sit in the House the challenge that faces us all in an age of austerity is how we maximise the value of constrained expenditure to meet the pressing and ever-growing needs of our constituents. That interest in best value crosses political divides and, I hope, unites Members on both sides of the House. If we are to achieve that, however, radical transformation is essential, and that, too, should be a shared objective. Bringing about such transformation is a huge challenge that requires absolute commitment and will take a long time, so we need to work together across the House so that the vital reforms that are needed to deliver more effective and efficient government are taken out of crude party politics, which is why the work that is being done by the Public Administration Committee and in other forums is important. We need to build a cross-party consensus on reform that can be delivered across electoral cycles.

I want to talk about three issues, although I could talk about more: the capability of the civil service; the organisation of Government in managing and delivering projects and programmes; and responsibility and accountability to Parliament and the taxpayer for services and projects delivered. First, on capability, I think that we all agree that the civil service recruits the brightest and the best, and people who are committed to public service, yet all too often the Public Accounts Committee finds that they fail to deliver major projects and vital services efficiently. We find that they too often cannot manage major business transformation, such as universal credit, and that they waste money on big projects. For example, with the aircraft carrier project, which has spanned Governments of both parties, the original proposal was for two aircraft and delivery in 2016 at a cost of £3.65 billion, but now, if we are lucky, it will involve one aircraft by 2020 at a cost of £6 billion. All too often, people working for the Government liberally use other people’s money—taxpayers’ money—in a way that they would never use their own, and our Committee has seen the NHS and BBC pay-offs as cases in point.

Although people come into government with the best of motives and abilities, they are not trained in the skills that they need to carry out the job that is required of them today, so they do not have commercial, project management, financial and IT skills that we need in a modern civil service. My Committee has seen many examples of things going wrong, most recently with the letting of the interpreter contract by the Ministry of Justice and the contract for offshore power transmission to the grid.

[Kelvin Hopkins]

Managing contracts is the issue, because if less was contracted out and more was done in house, some of those problems might be overcome.

--- Later in debate ---

[Margaret Hodge]

I know where my hon. Friend is coming from, but we need the capability in government effectively to manage contracts whenever and by whomever they are delivered. There is a legacy in the civil service of focusing on policy, which is valued, but not implementation, which is vital, so we must challenge that culture.

[Jackie Doyle-Price (Thurrock) (Con)]

Was the right hon. Lady as impressed as I was by Michael Spurr, the new head of the National Offender Management Service, who started his career as a prison officer, has front-line experience and is now chief executive? He was a breath of fresh air when he appeared before our Committee, because he really focused on what we have to do to deliver good public services.

[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.

[Mr Jenkin]

The right hon. Lady might be surprised to know that when I addressed 200 civil servants at lunchtime today and asked how many had read the Haldane memorandum, which remains the absolute basis of the doctrine of ministerial accountability and should affect every one of their working lives, no one put their hand up. Does that not suggest that we need to rework the whole concept of accountability into the education of civil servants so that they understand why they are accountable?

[Margaret Hodge]

The hon. Gentleman has had a very telling experience, and I agree with him.

Right across today’s world, not just in Government but in every sphere of life, better accountability and more transparency should be the order of the day, and that must feed into the way that we govern ourselves and are governed. Analysing the fact that we have a problem is much easier then finding a sustainable solution over time.

In this short contribution, I have been able only to skim the surface of some very tough issues. We need a radical overhaul of how we do Government. We need cross-party co-operation if we are to make progress. We know that we have the brightest and the best working for us in Government and the civil service, and we need to work with them to ensure that between us we properly serve the people in whose name we are privileged to govern.

[Several hon. Members]

rose—