Making Government work better

I am delighted to be here at the Institute’s official launch. I remember when David first mentioned to me the idea for a new organisation that would be able to offer training, and ideas to all political parties as well as the civil service.

I thought this was a great idea. And I have been fully supportive from the start.

I would like to thank everyone who has been involved in turning the vision into reality; David himself of course but also Michael Bichard, David Halpern and all who have worked so hard behind the scenes.

I was particularly interested to hear what David just said about his time as a minister and the examples he gave of areas that could be improved in order to make government work better.

A lot of that rang true.

It started me thinking about how I would design government and the civil service if I could start from scratch. I will not stray into wider public sector reform issues tonight. Nor will I get into the debate on central versus local democracy. There is a hefty body of literature around these issues - including the recent Cabinet Office paper led by Liam Byrne entitled “Working Together”, which I commend to you. I would need much more than the time I have this evening to do justice to all the ideas, like customer insight, personal budgets and – a particular interest of mine - behaviour change, that such a speech would require.

What I do want to be clear about is the challenging context for government and the civil service over the coming years.

We know, for example, that we will have to continue to grapple with complex policy issues like climate change and rising levels of obesity. Such issues have in common two features; they will not be solved quickly and they cannot be solved by departments working in isolation.

We also know that our ageing society will place additional pressures on our public services, especially in the areas of health and social care. Research shows that, increasingly, people are relying on the state, rather than their own families, to look after the elderly.

And of course we know that the growth in public expenditure over coming years will need to be lower than we have seen in the last decade. This means the civil service will have to deliver more with less. Government will need to take extremely difficult decisions about priorities, trade offs and the balance between personal and state responsibility.

We know that public expectations will continue to rise - our customers will want their public services to be as good as the best private sector ones, with the same levels of choice and convenience.

That is not to say that in some instances, public services aren’t setting the standards. Jobcentre Plus, for example, has responded commendably to the recent surge in demand for its services. Its productivity has increased significantly.

And we know that advances in technology will transform the way people work and socialise. As service providers we must exploit the opportunities that these advances bring – using new ways to engage with, but also influence, our customers. The recent Digital Britain white paper sets out some ideas for how we can make best use of these channels whilst also overcoming the issue of digital exclusion.

So, if that is the context in which we will be working over the coming years, how would I, ideally, like to see government and the civil service operating?

Let me begin with our structures.

Some commentators on civil service reform advocate a complete redesign of the entire machinery of government. I can understand why they think this. It is certainly true that central government, in particular, is organised by department, many of which were established a long time ago when the world, and our public sector priorities and challenges, were very different.

It would require a brave leadership team to embark on radical change in this way. And they would need to be extremely confident that the long term benefits would outweigh the inevitable disruption in the short and medium term.

Whilst I believe that reform of our organisational structures might, indeed, ultimately help to make some parts of government work better, I don’t see it as the number one priority. Wherever you draw the departmental boundaries there will still be a need to operate across the divides.

Far more important is to ensure that existing structures deliver our agreed outcomes. I think the key to more successful delivery of cross-cutting objectives lies in the way our money is allocated.

If, at the beginning of spending periods, we were to assign budgets directly to cross-cutting objectives we could remove a significant barrier to cross-departmental working and our organisational structures would become far less significant. And if specific ministers were also put in charge of particular cross-cutting objectives it would give them greater ability and authority to operate across those boundaries.

Where we have clear, strategic objectives, our organisational structures are also less problematic.

As a long-in-the-tooth civil servant, it’s obvious to me that the responsibility for the setting of these strategic objectives lies with Cabinet and Government ministers. And I agree with David that when these objectives are cascaded to departments there should be absolute clarity about who has responsibility, and who is accountable, for each stage of the process, from initial policy development to final frontline delivery. I will say a bit more about that in moment.

Our role in the civil service is to provide policy advice on how these outcomes can be achieved – advice that should be based on objective information and robust, multi-disciplinary analysis that has been informed by international comparisons and external challenge. And no policy discussion will work unless it involves key people with responsibility for delivering that policy.

For the most part, this is what we do. Where we develop policy well in the UK civil service, we do it better than anywhere else. In today’s world, we operate in a “market place” of ideas in which Ministers can access advice from think tanks, special advisors, the internet as well as the civil service. Our unique role is to synthesize the evidence base and provide impartial advice to the Ministers we work so closely with.

Our challenge is to ensure that best practice is applied across the whole policy agenda.

But, I do agree that in some areas, especially where issues straddle several departments, there is sometimes confusion about where the lead responsibility for the policy development lies. We can improve this.

Every Government will have its own preference for the way policy is developed. And there is a variety of models to choose from. Sometimes the central strategy unit will take the lead, at other times, responsibility will rest with a particular department. Increasingly matrix teams are being established, drawing in colleagues from across Whitehall, to ensure that policy development is more joined-up than before.

The key to making any of these models work is to have clarity about who is doing what from the outset.

Regardless of which model is used, I would expect the Centre to be playing both a support and challenge function - working as honest brokers to ensure that departments develop policies that will meet the strategic objectives of government as a whole, within agreed resource limits.

So, in essence, my ideal framework for government is quite simple. Ministers set the strategic direction, money is allocated to cross-cutting objectives as well as departments, and officials, working closely with the people who will be responsible for actually delivering the policy, provide the advice on how those objectives can be met.

Let me move on to what that “how” might look like and, in particular, what I think the role of the civil service should be in actual policy delivery. Remember, I’m still starting from scratch here…

I believe that we can apply a simple test when thinking about service delivery.

And the public must be at the heart of that test.

We should always ask what arrangements will deliver the best services for the public and the best value for the taxpayer.

And it is quite right for ministers and others to ask the same question. We cannot assume that the civil service has an automatic licence to operate. Indeed, we should encourage competition wherever possible.

But where the civil service does do delivery – it must be clear on which arrangements will be most effective. And here I want to return to the issues of clarity and accountability that I touched on earlier. We have an interesting array of arms length delivery bodies in the UK:

• non-ministerial departments
• non-departmental public bodies
• agencies
• trading Funds
• and so on and so on

Some are staffed by civil servants. Some are not. And the more I look into these bodies, the more convinced I am that the current situation owes far more to history than it does to operational effectiveness. We need to have a better understanding of which types of bodies work most effectively for the specific tasks they need to carry out. That could be an interesting area for the Institute to explore.

It would seem sensible to distinguish, at one extreme, an arms length body that needed to deliver certain outcomes but precisely how these were achieved was unlikely to be of political significance. In this case, a very arms length body, that was given clear objectives and lots of operational freedom, would work well.

At the other extreme, delivery of, for example, particular health outcomes might involve difficult political choices in terms of how the service was provided.

In the first case, the head of the arms length body could be very accountable for performance - with pay linked to clearly specified outcomes and taking full responsibility for operational failure.

In the second case, the head of the delivery body would need to work much more closely with ministers and share accountability.

So, I have covered some of the things that I think would make government and the civil service work better.

But I certainly don’t want to leave you with the impression that everything is currently broken.

There are lots of reforms underway that I would want to continue, even if I was presented with a blank sheet. These reforms are already improving the civil service and ensuring that we are fit to meet the challenges of the world around us.

I would not, for example, want to reverse the progress we have made to be more open and transparent about our performance in the civil service. So I would not stop the Capability Review Programme.

In fact, I am hugely proud of what the capability reviews have achieved so far. They have made departments look hard at themselves and address areas of weakness. They have driven real improvements across government.

I will not go into more depth this evening about the next phase of capability reviews – that is a speech in itself. But I would like to thank Michael Bichard for the work he has done with me over the last few months to improve the process. I am sure that the three broad themes which will run through the revised model – innovation, collaboration and delivery - are the right ones to make sure we continue to stretch and improve departments.

We have also raised the quality of our professional functions, in particular in the areas of finance and HR. This has been driven by a combination of the Gershon recommendations and the capability reviews. We have shown that we can meet efficiency targets –saving £26.5 billion against a Gershon target of £21.5 billion – and deliver more with fewer civil servants.

And I would not change the fact that we have made increasing diversity in the civil service one of our priorities.

I am passionate about this.

It is great that we have a workforce which is broadly representative, in gender and ethnicity terms at least, of the society we serve.

But we can not stop there.

We have to get that same representation running right through all levels of the civil service. We need to raise the aspirations of every member of staff once they are in the organisation. We need to ensure that we have the best talent and the most diverse range of perspectives around the table when key issues are being discussed and key decisions are taken.

I want the civil service to be an organisation where staff can express diverse views and opinions. We need more people in positions of influence who can question the received wisdom.

I would also continue to develop our relentless focus on leadership. We have made good progress on the civil service side of this.

Two years ago we introduced basecamp, for all staff entering the senior civil service. We use this to set out our expectations for colleagues joining the leadership of the civil service. It’s like a rite of passage.

And I also bring together, twice a year, all permanent secretaries and director generals in what we call the “Top 200” group. These meetings are fostering collaboration and joint working across departments.

But I do not think we can talk about leadership teams in the civil service without also considering ministers. And I hold up my own hand here too. The capability reviews that I mentioned a moment ago do not consider the role that ministers play in departmental capability. But of course they do incorporate ministers’ thoughts on civil service capability.

From my experience, departments are most successful when ministers and senior officials work as a team, united in a shared purpose of delivering clearly defined, strategic objectives. In order to develop this type of strong leadership I think we should create more opportunities to bring ministerial teams and senior civil servants together.

There have been some interesting ministerial developments in recent years, in particular the introduction of what are now fondly known as GOATs. Using Lords ministers to harness external talent in this way has been very successful in some areas, most recently, for example, Stephen Carter’s work on Digital Britain and Lord West’s work on the national security strategy.

I welcome the Institute’s focus on ministerial training. As I have described, in the Civil Service we have placed a lot of emphasis over the past years on developing our senior leaders. So it’s good to see that the Institute will now offer similar training and development opportunities for ministers and shadow ministers.

Allow me a very quick aside here. I read with interest the recent report from Demos stating that the average tenure of ministers in the UK is 1.3 years. Without wishing to comment on their specific recommendations, I do think that it might be worth the Institute doing some research of its own into the relationship between performance and the length of time ministers and senior civil servants spend in post.

Finally, I would not change our values: honesty, integrity, impartiality and objectivity.

Indeed, in my ideal world, I would like to see these strengthened further by having them enshrined in legislation.

And I will continue to encourage civil servants to operate with a fusion of these traditional values and my “4Ps” - Pride, Passion, Pace and Professionalism

Where our traditional values make us strong and trustworthy, my 4Ps make us flexible and forward-looking and ensure that we respond swiftly to the changing needs of the world around us.

At this stage in the political cycle, when an election has to be called within a year, the civil service comes under particular pressure and increased scrutiny. We are invariably accused of being either too close to the party in power or obstructive of the policies they want to introduce.

I am confident, because of our values, that the civil service will always serve the government of the day with absolute integrity and impartiality.

Our unique set of values determine the way we operate. At a time when other peoples’ values are being called into question – ours become more pertinent than ever. They mean that we are a reliable force, in even the most tempestuous times.

I look forward to working in partnership with the Institute to ensure that the civil services plays its role in helping government work better and meet the challenges of the 21st century.