GovernUp: ten reform priorities for the new Prime Minister
The 2010-15 Coalition Government made important progress in the areas of governance and Civil Service reform. Since 2015, however, this modernising agenda has largely stalled or even been reversed. The challenges and complexities of delivering Brexit have demonstrated more clearly than ever the need to support ministers, deliver policy effectively, and ensure that the crucial skills and expertise are in place for all the new capacities implied by post-Brexit administration.
The new Prime Minister will come into office amid a genuine political crisis. Rather than postponing the modernisation of government, he must prioritise structural changes at the heart of his administration as the key to delivering Brexit and getting a grip on the domestic agenda. In 2015, the GovernUpproject produced six reports and 31 policy proposals, constituting a radical agenda for modernising the Government at every level. Our ten-point plan, below, builds upon the steps taken in the Coalition years and our original GovernUpresearch to set out the most urgently needed reforms.
1. Prioritise reform of government itself as the key to delivering all other policy objectives
Inevitably the focus of leadership or party manifestos is on policy. But ensuring that government can deliver is critical to policy success. The British system of public administration was designed in the 19th Century and, despite its strengths, is no longer equal to the challenges facing our country. Modern governments face immense fiscal pressures, a rising demand for services, growing public expectations and the need to improve international competitiveness. But all have found difficulty in matching strategic vision with execution. One of the first tests of the new Prime Minister’s resolve will be whether he can modernise the core of government to create the capacities which will be needed to deliver Brexit and get a grip on the domestic agenda. The success of the Government will likely hinge on the nature and reach of these reforms.
One administration after the other has encountered problems delivering major projects, often arising from inadequate skills and confused accountability. Sub-optimal government wastes resources and hinders attempts to tackle entrenched social problems. Recent, external analyses suggest that:
· Internal and structural difficulties mean that “up to 53 per cent” of the crucial relationships between Secretaries of State and senior Civil Servants are “dysfunctional”, leading to policy implementation problems.
· The top tiers of the Civil Service are still, by design, dominated by “generalists”. Departmental leadership teams lack the mix of professional background and experience to plan and manage their business.
· Improvements in Whitehall’s ability to respond to policy change have not been matched by an increase in the overall ability actually to solve policy problems.It is telling that longstanding issues such as social care and housing have not yet been meaningfully resolved, and while there have clearly been major political obstacles the system has not helped to overcome them.
· There is still friction between the twin objectives of effectively delivering on government promises and ensuring value for money.The Government does not reliably ensure that spending plans and effective administration are consistently aligned with policy priorities.
· The dominance of the Civil Service by people with similar backgrounds and professional experience may have been a contributing factor in recent government policy failures.
Significant attempts have been made by successive governments to improve delivery and performance. A number of reforms were introduced by the Coalition Government, but any attempts to consolidate and build further upon these changes have effectively stalled and even reversed under the current administration as Brexit has consumed its attention.
Far from going away, the need for reform has increased. Growing pressure for more public spending and rising demands for services are not matched by current rates of economic growth. While public finances are healthier now than they have been for a decade, the general economic outlook is worsening,while spending pressures are rising. Finding efficiencies now is more difficult than in 2015, as the easiest-to-achieve savings have already been made. There will therefore be a premium on identifying new savings which do not require reductions in spending on frontline services, particularly given the fiscal implications of some possible Brexit outcomes.
Tomorrow's government will need to be leaner, smarter at commissioning from a wider and growing range of suppliers, better able to organise itself to meet societal challenges, and more responsive to citizens. These are not second-order issues. Whitehall reform is not an optional extra: it will be key to the success of future governments. But the system is resistant to change. Only if the Prime Minister, as Minister for the Civil Service, makes reform a priority, and puts his full weight behind it, will there be meaningful changes and commensurate advances in the ability of the Government to get a grip on public services and deliver on its policy promises.
2. Establish a new Department of the Prime Minister
The centre of government should now take control of some critical policy areas directly, while providing a strong lead on domestic reforms and post-Brexit preparations throughout Whitehall. The new Prime Minister will also want to closely oversee ongoing Brexit (re-)negotiations, and this responsibility should be absorbed from the Department for Exiting the European Union, repurposing that department around No Deal and Future Relationship preparations. These new responsibilities must be matched by a reorganised official structure around the PM.
GovernUpproposes a radical new framework: replacing the institution of Number 10 with a Department of the Prime Minister, inspired by similar ministries in Australiaand New Zealand.There were steps towards the creation of such a department under Gordon Brown and David Cameron, with Jeremy Heywood briefly appointed as ‘Downing Street Permanent Secretary’ for two years before becoming Cabinet Secretary. The abandonment of these developments was premature. A new Department of the Prime Minister would ensure capacity for setting government direction, tackling big issues like Brexit, and unifying operations around core messaging and strategy development without slipping into an informal ‘kitchen cabinet’. The reform should be built around the following key elements:
i. Appoint a senior Minister outside the Commons as the Prime Minister’s Chief of Staff, a position which is critical to ensuring that the new department operates correctly and that the PM’s agenda is delivered. He/she should be an experienced, first-rank political professional, not a talented young politico – Leo McGarry, not Sam Seaborn. The Chief of Staff should command the confidence of the PM, the respect of mandarins and the fear of political staff.
ii. Appoint a heavyweight as the Director of an expanded government Policy Unit at the core of the new department. Some of the most effective reforming governments have been able to leverage the experience and influence of the person in this or equivalent roles: John Hoskyns was head of the Policy Unit for the early years of the Thatcher Government, for example, and notably brought to bear insights from the private sector that helped shape her reform agenda.
iii. Establish a new dedicated Strategy Unit as a counterpart to the Policy Unit, and appoint a long-range thinker as its Director. Where the Policy Unit’s imperative is creating and maintaining a core mission for the government’s immediate agenda, the Strategy Unit is about thinking for the future. The challenges and opportunities from technological advancement, environmental change, and long-term cultural and political trends play out not at the scale of individual political administrations, but over decades and centuries. Since the closure of the Prime Minister’s Strategy Unit in 2010 and the Sustainable Development Commission in 2011, the Government has had reduced capacity for long-term thinking and predictive policy development. A unified internal Strategy Unit, built to complement the Policy Unit and borrowing the best elements of the original Strategy Unit, the Welsh Commission for Future Generations,and the Scottish Future Forum, would powerfully reinforce the new department’s ability to make future plans and think strategically about coming challenges, as well as drawing new talent to the heart of Government and creating a hub for agenda-setting policy work.
iv. Re-separate the positions of Cabinet Secretary and National Security Adviser, so that the Cabinet Secretary is fully focused on ensuring that the system delivers the Government’s domestic policy agenda, and the National Security Council is headed by a person dedicated to its work full-time.
v. Ensure the progress of reform by establishing a quarterly Whitehall Effectiveness Survey to inform Cabinet-level discussion on government performance.
3. Create a new department at the centre of government to drive performance, efficiency and delivery
Beyond the new Department of the Prime Minister, the current distribution of spending oversight and performance responsibilities around Whitehall needs an urgent rethink. The current configuration of departmental remits has some advantages, but also leads to a siloing effect that can impede the delivery of the Government’s main policy objectives. As things stand, for example, Treasury spending reviews do not clearly align with wider objectives, creating the serious risk of policy failures. More effective government entails the need to make sure departments work strongly together on government priorities which require joint action, and a pooling of officials and experts with real expertise in driving projects forward and getting results, working toward what a previous GovernUp report described as “a unified strategic core”, built around a single, powerful ministry with responsibility for the professionalism, effectiveness, and spending decisions of government.
Such efforts have usually been split between the Treasury and the Cabinet Office. But this division of responsibility – and of overriding primary interests – does not work. The weaknesses inherent in the current system have been made abundantly clear in the last few years. The Treasury does not have the capacity for real oversight on the particulars of spending, failing consistently to ensure that financial plans match up with policy and delivery intentions. The current administration has also seen the Cabinet Office highly focused on Brexit, impeding its ability to prioritise the delivery of a wider domestic reform agenda and take a broad view on government activity.
A single, dedicated function at the core of government should be created, taking on the spending oversight and delivery remit, whose primary function is the enhancement of the administration’s grip and efficacy, and whose success would be measured solely by its ability successfully to implement a coherent government-wide policy agenda.
This could be achieved either by beefing up the Treasury’s spending oversight role,or – more radically – transferring those functions to a new performance-focused ministry built out of, or superseding, the Cabinet Office. The Secretary of State for the new department would be a far more senior position than the Chief Secretary of the Treasury which the role would replace. The short-lived formation of a Department for Economic Affairs in 1964-70, where the Treasury retained most of its power over tax and spend, is not analogous. Rather, there are several extant contemporary models for a separation of Treasury powers. In Belgium and Germany, separate departments handle spending and macroeconomics.In New Zealand, many finance functions are managed collaboratively by a powerful State Services Commission. The Irish Department of Public Expenditure and Reform is distinct from, but shares a ministerial team with, its Finance department.GovernUp’s recommendations are perhaps most similar to the Australian structure, where the Treasury reserves control over much macro-economic policy, leaving a separate Department of Finance to drive forward the realisation of domestic policy goals. Here there has been inevitable institutional resistance to such ideas,but a new PM has a unique opportunity to effect change.
In the Treasury, the role, first established in 2013, of a full-time Chief Financial Officer should be reinstated, and strengthened by the appoint a highly experienced, finance-qualified professional to oversee improvements in administration-wide financial management. This innovation was reversed, without much explanation, in 2017.
4. Don’t create new departmental fiefdoms – break them down
Other major alterations to the structure and number of existing government departments have been suggested to the candidates to be the next Prime Minister. These ideas should be rejected. Significantly reducing the number of Cabinet Ministers carries with it the serious practical political problem that it would also reduce his patronage. Whatever the theoretical benefits, it is simply unrealistic. While creating a Department of the Prime Minister and a new department dedicated to performance, efficiency and delivery, as suggested above, would be meaningful changes, and should therefore be regarded as the exceptions to prove the rule, other major departmental reorganisations for cosmetic or political reasons should be avoided. They generally waste time, sap energy and distract from real issues. What’s needed is not to create new fiefdoms, but to break them down, ensuring far more effective cross-departmental working.
Civil servants should not work in silos but rather, whenever possible, in cross-cutting teams. Cabinet committees should be beefed up to drive action to tackle problems that cut across departments. They should be empowered to trial legal joint ventures to marshal resources, focus action and ensure accountability against clearly defined outcomes.
One of the best approaches to ensuring joined-up working is the establishment of interdepartmental working groups. These can draw in senior officials, ministers, and representatives from outside Whitehall (where appropriate) to address overarching policy areas and tackle cross-cutting issues that cannot simply be constrained to single departmental remit – for example, criminal justice reform, or Brexit preparation and information-sharing.
5. Strengthen support for Ministers
Government Ministers depend on their private offices for many things: they can serve as a support system, a bridge to the departmental Civil Service, and as a key way of getting to grips with a new department and sorting through the administrative workload.
The Coalition Government introduced Extended Ministerial Offices, despite Civil Service resistance, to allow experts to be recruited directly to support ministers. EMOs were not intended to set up internal frictions between the objectives of Civil Servants and Ministers, but to enhance the capability of Ministers, constructively challenging assumptions on all sides. This kind of capacity-building becomes particularly important during a hung parliament, or when the Government only enjoys a narrow parliamentary majority: EMOs are able to take on Parliamentary engagement, preventing derailment and freeing officials for other work.
However, EMOs encountered considerable resistance. Central controls deterred ministers from setting them up, and in 2017 Theresa May’s administration scrapped them. This innovation should not only be restored but deepened. Ministers need more support and alternative sources of advice, and the system should more easily allow outside experts to be brought in through a transparent appointments process, establishing beyond doubt the nature of each role and the qualifications of those chosen to undertake it. Extended Ministerial Offices should also dispense with the condition requiring that a member reports back to the Prime Minister’s Implementation Unit, so that EMOs are genuinely focused on support for ministers and facilitating delivery within their own departments.
This is not solely about recruiting more political advisers, although ministers still have far fewer of these compared to countries with similar parliamentary systems such as Australia, but also about securing the advice of policy experts, business leaders, and finance professionals as a critical complement to the sources of information and insight that would otherwise only be available to ministers via the Civil Service. If ministers are expected to have deeper and longer-lasting accountability for the decisions taken on their watch – a measure that could both strengthen government choices and public confidence in our main institutions – they ought to be fully supported.
6. Accelerate the digital transformation of government business and services
While the world is transformed by the internet age, government – in its practices, structures, bureaucracy, and norms – has remained more or less the same, despite efforts to raise the profile of technological innovation and service delivery over the course of this decade. The UK should stop playing catch-up, and seek instead to become ambitious world-leaders in technological and digital innovation. As Baroness (Martha) Lane-Fox has said, the Government should now be in the business of building “the definitive public institution for our digital age.”
Properly harnessing the potential of digital technologies can create new efficiencies in service access, provision, and administration as everything is built outward from shared, accessible, and unified digital platforms, provided from the centre. Far from disempowering communities, this will make it easier for the people local to and best positioned to understand problems to address them directly. In this way, government creates the tools and then adopts the role of “conductors and convenors” rather than the central managers of society. With less need for administrators, communities and public service providers of all kinds can reallocate their resources toward recruiting the right people, investing in solutions, and taking action, as in the example of Buurtzorg’s community care innovations in the Netherlands.
Innovations at this scale will require serious upskilling, within government and throughout society. New approaches, such as economic protections and incentives for people who are retraining to find jobs in the digital economy or a National School for Technology to equip public servants and establish best practice for schools and college, should be explored.
To help plug the skills gap and begin the process of transforming government, the Government Digital Service and the GDS Academy should be elevated and given stronger powers so that they can require progress from other departments, implement the long-promised unified digital platform for access to public services and information, and deliver on the GDS’ own ambitious technological innovation strategy. A binding digital services target, used in several European countries, should be instituted: government agencies should effectively be banned from asking service users for the same piece of information more than once, depending instead on an efficient underlying information technology infrastructure,including a unified digital identity system that sidesteps the privacy concerns of citizens while making service access simpler for everyone.
7. Reform the Civil Service
Previous GovernUpresearch identified a significant skills gap within the Civil Service, one that the 2010-15 Coalition Government took some important steps toward addressing, instituting regular capability reviews and finding new ways to inculcate private sector expertise. The National Audit Office noted in 2017 that there remains a clear capabilities gap in the current Civil Service, and that current government plans to address that gap are not going to be rapid or large-scale enough to keep up with the challenge. Last year the Chief Executive of the Civil Service stated that his institution had “lost much of [its] capability to implement and deliver”, but that since 2015 significant moves have been made, amid the complexities of Brexit, to address this, leaving some crucial remaining areas for further reform, such as setting up the better incentives for officials to acquire needed skills. However, efforts to increase the numbers of officials with delivery skills and improved management capabilities have had limited success,and HR retention is a major obstacle, with some departments losing a quarter of their staff every year.
The Civil Service should be smaller, better remunerated and equipped with world-class skills. The barriers between Whitehall and the outside world should be more porous, with more secondments to and from the private sector and more capacity-building and training from business experts: a healthy career interchange with other professions, not a one-way exodus of the most talented officials. As things stand, Civil Service recruits from beyond the public sector are three times more likely to resign than internal appointees, suggesting an insular and inaccessible work culture. Layers of Civil Service management should be reduced. Pay should be performance-related, and the pay ceiling for the most important jobs should be scrapped.
The Civil Service also bears the significant burden of bringing coherence to the wider government, with an emphasis on the fostering of highly-talented generalists who can be redirected from department to department at need, propagating best practice as they go. But this level of churn also means far fewer of the dedicated specialists who are often best-placed to solve policy problems and drive forward reforms. A new ‘Deep Stream’ recruitment and talent allocation policy would prize the sustained experience of officials within particular departments and policy areas. The aim would be to draw into the Service a new generation of highly talented outsiders who are assigned to an appropriate policy area for much longer-term placements than is currently normal. Deep Streamers would be able to preserve crucial institutional memory between parliaments and administrations, with clear career progression pathways that allow them to make best use of their expertise.
The introduction of a Civil Service Chief Executive, supporting the work of the Cabinet Secretary in tackling the scale and complexity of contemporary government, was a significant step forward at the centre, but the person in this role has no formal authority beyond the Cabinet Office and over Permanent Secretaries in other departments. These capacities should be added to that role. There should also be a professional Departmental CEO in every government department, working with the Permanent Secretary to facilitate effective management, mirroring the relationship between the Chief Executive and Cabinet Secretary. These posts could well be filled by outside appointments from the private sector.
The Civil Service is on many measures world-leading,but its traditional strengths, such as its impartiality and integrity – which must be preserved – should not be a reason to ignore its weaknesses, which will become increasingly exposed as the challenges to modern government increase.
8. Set and publish clear objectives for Cabinet Ministers
One of the simplest approaches to motivating efficiency and achieving policy objectives is to maximise the clarity of those objectives. Publishing the administration’s requirements of a given department over a given period in an unequivocal and accessible way will not only increase the transparency and accountability around the work happening in those departments, but also ensure that everyone involved understands and has agreed to the targets that are being set.
The requirement for Single Departmental Plans was launched in 2016 with the intention of unifying various departmental objectives into a single, accessible document against which actual departmental achievements could be measured. These plans have since been updated on a regular basis, with the most recent round published in June 2019. As things stand, the plans are neither comprehensive enough to aid in the scrutiny of government nor simple enough to act as a beyond-doubt guide to the department’s role in the government’s wider strategy.The published plans do not include information about spending allocations and do not ultimately resemble the internal roadmaps that are actually in use to structure the work within individual departments. They therefore cannot be used meaningfully to evaluate the Government’s work, and do not really connect that work to the administration’s wider objectives.
There are alternative approaches. Since 1987 the Australian Prime Minister has tended to write an open “charter letter” to Ministers to set out what specifically is wanted from them. The Howard premiership made particular use of these letters, and they were seen as one of the more effective tools of government management from that time, leading to the adoption of a similar approach at the regional level in, for example, New South Wales. Similarly, Tony Blair would write publicly to Cabinet Ministers to establish their objectives and his expectations, and “mandate letters” are now used in a comparable way by Justin Trudeau in Canada. Succinct, unequivocal, and built outward from the core priorities of the elected government, these letters became a powerful reference point for ministers and officials and a straightforward way of evaluating departmental performance.
The new Prime Minister should do something like this for every Cabinet minister, making clear from the top of government what is expected, and how departmental performance is going to be evaluated. Departments should also be required to set out their spending plans against these objectives. This system could work as a supplement to or a replacement for the current regime of Single Departmental Plans.
This will pay dividends in terms of the overall coherence of the Government’s policy programme, as well as clarifying beyond doubt the objectives and priorities of each ministry.
9. Reboot departmental boards
Departmental boards were given a stronger role by the Coalition Government. Secretaries of State became board chairs, and the number of non-executive directors (NEDs) was increased. However, their effectiveness has varied depending on the commitment of ministers and permanent secretaries. Comparisons between the performance of departmental boards and best-practice examples from the private sector point to a lack of independence and authority needed to effectively challenge, scrutinise, and propose solutions.
Boards should be given a renewed remit to drive through the next wave of Whitehall reforms. This remit should be sustained through all government departments, and not only the ones who are willing to experiment with the idea. Non-executive directors need to be properly empowered – Secretary of State appointments with the ability to delay or veto bad decisions, and specific responsibility for particular departmental projects – so that they feel comfortable questioning the choices and approaches being taken and their expertise is put to the best possible use. Serious consideration should also be given to the idea of requiring that independent outsiders should be appointed as board chairs, rather than the role falling to the Secretary of State in each case.
10. Equip ministers for the job
Ministers receive no formal training, peer-to-peer support, mentoring or appraisal. Many assume positions of immense responsibility with little or no experience outside politics or of running large organisations. Being a minister is a job like no other, but the unique pressures of the roles are a reason to improve support for them, not to deny the problem. Ministers – and, where possible, their advisers – should have access to mentors, senior leadership training and the support of external experts as necessary: a far deeper preparatory offering than is currently the norm, which, at best, may consist of some professional development with the Institute for Government.
Indeed, by making such training mandatory for all new ministers, the new Prime Minister will draw out any remaining stigma associated with the need for the inculcation of the skills that are needed – something that GovernUphas argued for since 2015.
Initially, training for new ministers should take the form of familiarity-enhancing briefings or away days organised by the Civil Service, in addition to a formalised and more comprehensive version of the kinds of preparation many new ministers receive from former ministers within their own political party. These simple changes could mean better-prepared and more confident new ministers quickly populating their posts while a more thorough training scheme – which should maintain the insights of former ministers – is devised.
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