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The evolution of the United Kingdom Civil Service 1848-1997
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5. The first steps
The 18 years since 1979 have seen a whirlwind of change in the British Civil Service. In many ways they have been a continuation of the reform agendas that were introduced by Northcote-Trevelyan and Fulton; as well as of the continuity processes that Bridges described as inherent in the situation of the British Civil Service. Margaret Thatcher, who became (Conservative) Prime Minister on 4 May 1979 placed her stamp upon the Civil Service. She did so in a way that no other Prime Minister so far, even possibly including Gladstone, has done. As he had many years, not only as Prime Minister but as Chancellor of the Exchequer - with its real power over the personnel and budgets of government - so she had 11 years in 10 Downing Street, winning the election of 1979 and then those of June 1983 and June 1987 before her resignation in November 1990, all the time as Minister for the Civil Service. Thus sheer longevity is an important explanation for the impact her government made. Another must be the strength of the doctrine and its resonance for the conduct of public affairs; the doctrine that bears her name and that has as its main elements the following:
- rolling back the state
- providing value-for-money for taxpayers
- getting a grip on public spending
- privatisation
- learning from best private-sector experience
- introducing management and efficiency into government.
It is also not banal to point out that she was a woman from a relatively humble background. She was armed by a science degree from Oxford and not lacking in self-belief after her defeat of Mr Heath for the leadership of her party and then of Mr Callaghan for the leadership of her country. Intellectual self-confidence was underpinned by the group of advisers that worked with her before the party came into office, including the then Sir Keith Joseph, Ralph Harris and Arthur Seldon at the Centre for Policy Studies and the Institute for Economic Affairs. Margaret Thatcher did not buy into any of the club-like assumptions about Whitehall and its government. This was why, as Hugh Stephenson put it30
The arrival of Margaret Thatcher’s government in the corridors of Whitehall
in May 1979 was the biggest jolt that the Civil Service had experienced in
living memory. For a while the whole Whitehall system almost visibly
juddered...It was a culture shock. The elite administrative grade of the
Civil Service in Whitehall has come to think of itself as the guardian
and trustee of national continuity...The Prime Minister and a small group
of sympathetic ministers...were arguing that its ideas and advice had proved
bankrupt, that now was the time for an entirely new approach...
However, the Whitehall system was able to absorb the changes at the very top, with the staff of the Prime Minister in Number 10 continuing to serve her as they had served her predecessor. Sir Kenneth Stowe as her Principal Private Secretary managed a smooth take-over and Sir Clive Whitmore similarly, while Sir Robert Armstrong, the new Secretary to the Cabinet, effortlessly took on the role as her most senior closest official adviser. The role of Head of the Civil Service, which had been designed by Fulton to be held by the head of the CSD was held by Sir Ian Bancroft. It was to him that the task of "de-privileging" the Civil Service was given, together with that of controlling Civil Service pay and pensions. But in doing this task the Prime Minister’s Policy Unit, an organisation established by Harold Wilson, but now headed by Sir John Hoskyns and close to Margaret Thatcher was looking closely over his shoulder.
One of the ways that the government of Margaret Thatcher impacted upon the system was by the creation of small dynamic teams, "hit-squads", tasked with particular areas of competence and reporting directly to the Prime Minister. Hoskyns and Norman Strauss were one of these in the Policy Unit. Another was set up under Derek Rayner, of Marks and Spencer, ("a firm she admires and uses" as it was said31) who was given an office in 70 Whitehall, the Cabinet Office, a small staff, run by Clive Priestley, and the title of the Prime Minister’s Adviser on Efficiency. They instituted a system of "Efficiency Scrutiny" of major departments and programmes, run by small teams known as "Rayner’s raiders". The purpose of the Scrutinies, as he put it was32
action, not study. It is therefore (a) to examine a specific policy, activity or function
with a view to savings or increased effectiveness and to questioning all aspects of the
work normally taken for granted; (b) to propose solutions to any problems identified;
and (c) to implement agreed solutions, or begin their implementation, within 12 months
of the start of the scrutiny...
It was the radical asking of questions that was of most significance. Does this activity need to be done at all? Being one of the hardest questions to answer, the question "why?" caused Whitehall officialdom immense difficulties, as it was intended to. The enthusiastic, young, high-flying officials put in charge of the scrutinies were protected by Rayner and he by the Prime Minister from any damage to their career prospects. Hennessy quotes one youngish Civil Servant33
It was exhilarating...you knew you had an opportunity to show that the Civil Service
could improve itself...you were asked to apply your own judgement to a situation.
You were asked to look at a topic. You were asked to write a report. It would have
your name on it. It would go in front of the Minister with your name on it...
By the time he left the Efficiency Unit in late 1982 130 scrutinies had produced savings of £170 million and of 16,000 posts per annum, and the Head of the Civil Service Sir Robert Armstrong affirmed that the main message taught to the service by Lord Rayner was that "they must never become complacent about the functions within their control".34
The Efficiency Unit passed into the hands of Sir Robin Ibbs of ICI in 1983, and it was given a new task. It had become part of the structure of Whitehall itself. But before we look at that new task it is necessary to deal with another element of the anti-complacency drive of the early years of Margaret Thatcher ’s government, namely the "FMI" (Financial Management Initiative). First introduced into the consciousness of the Civil Service by a video, which was in itself deliberately revolutionary, the FMI, as was explained by Richard Wilding of Her Majesty’s Treasury, had been launched by the Prime Minister in May 1982 (during the Falklands Conflict). Its aim was to promote in all Departments an organisation and a system in which managers at all levels have
- a clear view of their objectives and of their performance in relation to them
- well defined responsibility for the value-for-money provided by their resources
- information and advice about exercising their responsibilities.35
What was new was the emphasis on staff owning their activities and all the costs and implications that flowed from them. Costs mattered as much as results; they fell to you and your "cost-centre". The latter term was quite new in 1982. Wilding did indicate that it was difficult to apply the language of objectives and "vfm" (value for money) to areas of policy/advisory work, and suggested that common sense would be necessary there, but for all that, this was a kind of revolution. FMI became part of the operating style of the British Civil Service and has remained. The language of "objectives" and "performance indicators" has been well learned. As has the key FMI question "where is the money going and what are we getting for it?"
In some Departments, especially the Department of the Environment, Ministers introduced sophisticated information systems to enable them and "senior managers" to evaluate the effectiveness of their programmes. The MINIS system at DOE - "a kind of bureaucratic Domesday Book"36 introduced under a Secretary of State, Michael Heseltine, with an interest in management techniques became a standard for many others to follow.
There was one final piece of unfinished business that the government of Margaret Thatcher dealt with in the first phase of reforms. While Whitehall was digesting the effects of "Raynerism" and of the FMI the Civil Service Department, one of the remaining Fulton creations, was found by the Prime Minister to be unnecessary. Its head, Sir Ian Bancroft, resigned and in late 1981 the Department was abolished, its staff split between the Treasury and a new MPO or Management and Personnel Office. The Headship of the Civil Service, that Sir Ian had held was now shared between Sir Robert Armstrong and Sir Douglas Wass.37
In 1985, Sir Douglas having retired, the new and by now undisputed Head, Sir Robert, produced his equivalent of the Bridges Rede lecture, this time to the Building Societies Institute. It was called "Management in the Civil Service" and made the important point that numbers in the service had fallen dramatically, as a result of the different reforms, and largely by "natural wastage" - very few people had been made redundant compulsorily. The figure had fallen by 115,000 over five years. But his whole tone was different from Bridges
The Civil Service has always set much store on maintaining good relations
with the public we serve and in providing good value for money...Today our
approach is becoming even more professional and commercial...
Management in Government, as in business, is responsible for achieving results
through people, getting jobs done to an acceptable standard within given timescales
and the resources available...38
The period from 1982 up to 1987 was dominated in Civil Service terms by the work of the new MPO, headed by Miss (later Dame) Anne Mueller. A "Top Management Programme" was introduced, in order to train Grade 3 officials, the under-secretaries - who might have spent all their careers in policy work - as managers. This brought together, on a concentrated course, participants from the Civil Service and from industry. The emphasis in the time of Fulton had been on civil servants learning new social science skills -economics etc - now it was management skills per se that were being taught, and preferably either by business people themselves or by management consultants.
The word "Management" does not occur in the Northcote-Trevelyan report and it does not appear in Fulton until paragraph 8 on the second page. By 1985, as the quotation from Sir Robert shows, it was the key term and the key skill. The tide of management was coming in and ‘administration’ began a long retreat before it.
In the MPO there were many other smaller-scale programmes. A "Forms Unit" advised on improving the forms that the public had to complete to receive benefits or pay taxes. A "Consultancy Inspection and Review Unit" was able to focus expertise on areas of difficulty. A "Joint Management Unit" took the FMI forward. "Policy Evaluation" and "Multi-Departmental Reviews", the "Central Unit of Purchasing", the "Enterprise and Deregulation Unit", all were programmes involving small numbers of staff (for example in July 1986 the Joint Management Unit had 4 staff, the CUP 11) but pushing forward the same set of connected ideas. Recruitment was still managed by the Civil Service Commission at Basingstoke - with 350 staff - still running the major examinations for staff at Executive Officer and above. In particular they recruited the "Fast Stream", called Administration Trainees39 and recruited at 22 or so with good degrees, given special training. Miss Anne Mueller herself, the head of the MPO, often spoke at training events for the new ATs and she used to point out to them that the service they had joined was undergoing a kind of revolution.
The government during the period of 1985-7 was racked by the Westland debates of early 1986, and the resignation of Mr Heseltine, and additionally by the debates about the Falklands conflict and the case surrounding Mr Clive Ponting. Following that, the Head of the Civil Service produced his memorandum on the duties and responsibilities of civil servants to Ministers on 25 February 1985 setting out that40
Civil servants are servants of the Crown. For all practical purposes the Crown in this
context means and is represented by the Government of the day...the Civil Service as
such has no constitutional personality or responsibility separate from the duly elected
Government of the day.
It seems unlikely that the Armstrong memorandum, reminding officials of the permanent constraints on their position and of the unchanging nature of their role subordinate to democratically-elected Ministers, could be bettered as a statement of classic truth41. All the waves of reforms did not change the situation, however much they changed people’s attitudes towards what they thought it was.
It would hardly have been possible to imagine, in late 1987, with the retirement of Sir Robert Armstrong as head of the Civil Service that the changes introduced by the government of Margaret Thatcher had hardly started. But in retrospect the period 1979-1987 was one where the Conservative government had barely got into its stride in reforming the Civil Service. With a new occupant of the Headship, Sir Robin Butler, and the re-election of the Conservative government for the second time in June 1987, the process began to accelerate.
Notes
30 Hugh Stephenson, ‘Mrs Thatcher’s First Year’, Jill Norman, 1980, pp. 29-30.
31 Hennessy, Whitehall , p.592
34 Robert Armstrong, ‘Management in the Civil Service’, Chartered Building Societies Institute, September 1985.
35 Richard Wilding, ‘The Need for Change and the Financial Management Initiative’, Summary of Video-tape. The FMI was officially set out in Cmnd 8616, Efficiency and Effectiveness in the Civil Service, 1982. The video was a talking head with a text held in front of the speaker, primitive by today’s standards, but it was a first nonetheless. It was circulated to all Departments and NDPBs.
36 Hennessy, op cit., p. 607. MINIS was a management information system for ministers.
37 Sir Robert was Cabinet Secretary, Sir Douglas Permanent Secretary of the Treasury.
39 There was lengthy discussion in the 1980s and 1990s as to the appropriateness of this title, and "Policy Management Trainee" at times suggested.
40 Cited in ‘Civil Servants and Ministers : Duties and Responsibilities’, Cmnd 9841, July 1986
41 It has now been superseded by the Civil Service Code, see Guidance on Guidance, 1996, p.31.