Last updated: 02/11/2007

About the civil service

The evolution of the United Kingdom Civil Service 1848-1997

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6. Next steps

The above title does not appear in the memorandum from the Prime Minister’s Private Secretary that set under way probably the biggest Civil Service reform programme of the Margaret Thatcher governments. The note was sent to Sir Robin Ibbs, who had taken over as head of the Efficiency Unit from Sir Derek Rayner in 1983 and it asked him, under the title Improving Management in the Civil Service not only to monitor what had been achieved but what could be done next:

The Prime Minister recognises that great strides have been made in improving management in the Civil Service during the last few years...now she sees the need as being to build on what has been achieved and maintain and where possible accelerate the momentum of improvement. She would like the Efficiency Unit to carry out a scrutiny...talk to a number of Ministers and Permanent Secretaries, as well as to other managers... The Prime Minister would be grateful if you could supervise this scrutiny and report to her on its findings by February 1987.

The report42 that summarised the findings of the small team that carried out (between 3 November 1986 and 20 March 1987, or 90 working days) this most significant of all scrutinies was published in February 1988, by which time Sir Robin Butler was the new Head of the Civil Service. Although it is always referred to as the "Ibbs Report", his name does not appear, and instead those of Kate Jenkins, Karen Caines and Andrew Jackson do. The two words that were picked out were Next Steps (as implied in the Prime Minister’s reference to great strides) and it was under this generic title that this initiative took flight.

They made seven points of diagnosis:

  1. 95% of the civil service are delivering services; they generally welcome the management changes to date
  2. senior management is dominated by policy staff with little experience of service delivery
  3. senior civil servants are ruled by ministerial and parliamentary pressures
  4. Ministers are overloaded and inexperienced in management
  5. Departments still focus upon activities and not on results
  6. there are insufficient pressures to improve performance
  7. "the Civil Service is too big and diverse to manage as a single entity".

and recommended:

  • "agencies should be established to carry out the executive functions of government within a policy and resources framework set by a Department"
  • "a full Permanent Secretary should be designated a ‘Project manager’ to ensure that the change takes place"
  • "there should be clearly defined responsibilities between the Secretary of State and the Permanent Secretary on the one hand and the Chief Executive of the agency on the other".

During 1987 the Civil Service worked to prepare a number of candidates to become the first agencies and to identify the people that would run the programme. All was revealed in the Statement to the House made by the Prime Minister on 18 February 198843. She stated that there would be established executive agencies, headed by a Chief Executive, accountable to a Minister, generally remaining in the Civil Service. They would run the "executive functions of government. As distinct from policy advice..."

Her statement also stressed that there would be a continuing programme of establishing agencies, rather than a ‘big bang’ approach, and that to replace the MPO a new "Office of the Minister for the Civil Service" (OMCS) would be established. He was not named in the statement, but soon after Peter Kemp, a Treasury official, was named as a new Second Permanent Secretary, head of the OMCS and the Next Steps Project Manager.

Peter Kemp was not an Administrative Class civil servant in any sense, having joined as a direct-entrant principal, never having attended a university, and from an accountancy background. For an elevated official like a Permanent Secretary to consent to use the title of "Project Manager" was unorthodox. If one of the aims of the original Next Steps report was, as they said in paragraph 50 "the release of managerial energy" then the following account by Diana Goldsworthy, one of his team, confirms that it happened44

The Project Manager had a very small team - initially only three people - to help him. There was a feeling of excitement and comradeship among those who were setting up the initial agencies. They believed, as one Chief Executive later described it, that in turning the Next Steps ideas into reality they were genuinely breaking new ground.

The first candidates for Agency Status were varied, ranging from the Queen Elizabeth II Conference Centre, with 65 staff, to the Employment Service, with 35,600 staff. Peter Kemp very early on, in his evidence to the Treasury and Civil Service Select committee of the House of Commons in May 198845 stated that it was his ambition that 75% of the entire Civil Service should be working in agencies within ten years, in other words by the year 1998. While the setting up of agencies was only an indicator of the programme rather than its raison d’être, it was undoubtedly important that there should be some successful launches of the new agencies quickly. By July 1988 there were 29 candidates for agency status, across most Departments of Whitehall and on 1 August 1988 the first Agency was launched, the Vehicle Inspectorate of the Department of Transport, with Ron Oliver as the first-ever Chief Executive.

The Project Team rigorously went through a series of steps to determine whether an activity could be turned into an agency.46

  1. Does the work need to be done at all?
  2. Could it be done in the private sector?
  3. Could it be done by the private sector under contract?
  4. If it is to be done in government, can it be separated out from policy problems?
  5. Is there already a degree of autonomy?

If the answer suggested an agency was viable, then the team would start to develop the Framework Document that defines the relationship between Departments and their agencies. At a later point, an Agency Chief Executive - ACE - would be selected and appointed.

The role of Chief Executive held new challenges for those appointed. The traditional facelessness was no longer possible, and over time a number have achieved public fame or notoriety. Where there have been difficulties in their role, as with Mr Derek Lewis at the Prisons Service it has often been precisely because of the dilemmas involved in the overlap between "policy" and "execution". At the time of writing all such posts are normally opened up for competition, and most are now on fixed-term contract. There is some evidence that people who become Chief Executives are more "professional" in the Fulton sense and less generalist in their backgrounds than those who achieve other senior levels in the rest of the Civil Service.

As at March 1997 - there were 130 agencies employing 313,323 staff and a total of 386,473 working on Next Steps lines. To quote the latest Next Steps Team publication, "Some 74% of the total of those working in the Home Civil Service currently work in agencies"47. One can say with certainty that by the summer of 1997 Peter Kemp’s prediction of 75% will have been met, one year early.

The executive agencies vary enormously in scale, from the Social Security Benefits Agency, with 74,925 staff to Wilton Park of the Foreign Office, with 35. A list from say "F" to "I" would cover

  • Fire Service College
  • Forensic Science Agency NI
  • Forensic Science Service
  • Forest Enterprise
  • Government Property Lawyers
  • Government Purchasing Agency
  • Health Estates
  • Highways Agency
  • Historic Royal Palaces
  • Historic Scotland
  • HM Land Registry
  • HM Prison Service
  • Industrial Research Unit
  • Insolvency Service
  • Intervention Board

Another 27 organisations were in March 1997 Agency candidates.48

The political response to Next Steps has always been positive and Mr Major’s government has pursued it with equal vigour. The relevant Parliamentary select committee now views it as "transferable technology" which any government will wish to adopt49. This is important since all select committees represent a bipartisan approach, from MPs of all political parties.

As a result of the continuing application of the "Prior Options" process, all agencies are due to be periodically reconsidered in terms of the original Next Steps questions, and a number, 16, have been either privatised (eg the Transport Research Laboratory and Her Majesty’s Stationery Office) or abolished, as with the Resettlement Agency.

In spring 1997 Next Steps is still proceeding, almost ten years after it began, and it has a life of its own. Its original head, Sir Peter Kemp, retired in the summer of 1992. His project has now been almost completed.

What it has meant for the civil servants working in the agencies has certainly been a release of energies and enthusiasms, with greater identification developing with their agency rather than with an amorphous and distant department of state. It has , therefore, been largely a successful and effective reform, with some costs perhaps in the loss of a corporate sense of the Civil Service. Ministers, and the House of Commons have not always found it practicable to distinguish the areas of execution from those of policy, and the skills needed to handle that interface remain classically those of the policy civil servant rather than a 1980s-style businessman or a 1960s-style professional. And it is arguable that Next Steps has recreated the distinction between mechanical (=executive agency) and intellectual (=central core departments and policy) work that underpinned Northcote-Trevelyan and was one of the things Fulton objected to. The Civil Service College, which was one of the first ten agencies created, has from the personal experience of the author, been immensely liberated - if never entirely freed - from the restraints of Cabinet Office control, while at the same time its presence within government has enabled it to play an active role in all the changes described here.

Margaret Thatcher left office in November 1990. The initiatives described in this part of the paper were still, and most are still continuing. She was succeeded by John Major, whose Prime Ministership requires a section on its own.

Notes

42 ‘Efficiency Unit, Improving Management in Government : the Next Steps’, HMSO, February 1988.

43 See Diana Goldsworthy, ‘Setting up Next Steps’, HMSO, May 1991, p.16 for the text.

44 Goldsworthy, op cit., p. 21

45 Evidence given on 18 May 1988. ‘Eighth Report of the Treasury and Civil Service Committee’, Session 1987-8, 25 July 1988.

46 ibid, p.25. These were later described as the "Prior Options" steps and to be repeated whenever the future of an agency was being reviewed.

47 ‘Next Steps Briefing Note’, March, 1997

48 ibid, p.46

49 ‘Treasury and Civil Service Committee, 5th report’, House of Commons 1993-4. "Next Steps Agencies represent a significant improvement in the organisation of Government and any future Government will want to maintain them in order to implement its objectives for the delivery of services to the public"

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