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How to reform the civil service – so it can cope with Brexit

14 September 2017

3:00 PM

14 September 2017

3:00 PM

This is the Speaker’s Lecture delivered by Francis Maude on the subject of ‘The Future of the Civil Service’.

I’m going to start with two quotes.  One is from a leading civil servant; the other from a politician. First:

Our system of a permanent politically impartial Civil Service is one of the jewels in Britain’s crown.

Second:

On one occasion he believed he had negotiated a compromise between civil servants from two departments concerning a programme related to both, only to have one tell him that his Minister had rejected the arrangement. “It never was the Minister,” he said, “but the bloody civil servant winding him up. It was so annoying you lost the will to live at some points in this process.”

Which was which? The first was me shortly before becoming Minister for the Cabinet Office in 2010 with responsibility for the Civil Service.  The second was Sir Bob, now Lord, Kerslake, shortly after stepping down as Head of the Civil Service in 2014.

I start in this way to make clear that I had no predisposition to be critical of the Civil Service.   Based on my experience as a Minister in the eighties and early nineties my expectations were high.  And the disillusionment was steep and distressing.

I stress that I became disillusioned with the Service, not with civil servants.  Any critique of this type will inevitably be traduced as an assault on decent public servants who supposedly can’t answer back.  It is not an attack on civil servants.  It remains my view that we have some of the very best civil servants in the world, both in Whitehall and on the operational side. But the Civil Service as an institution is deeply flawed, and in urgent need of radical reform.  And it is civil servants themselves, especially the younger ones, who are most frustrated by the Service and its culture and practices.

A quick word about what this is not.  I do not believe that the Civil Service has become politicised nor do I wish it to become so.  I never knew or wanted to know the political preferences of civil servants.  When I discerned a resistance to reducing the size and reach of the state I was generally confident that this was for reasons of self-interest rather than ideology.  And by the same token nothing that I propose here is, nor anything I sought to change in office was, about politicisation, although that was often alleged.  The accusation of “politicisation” is a terrific defence against any attempt by politicians to create a genuinely high-performing civil service that will actually deliver what a democratically accountable government, of any stripe, decides to do.  Civil servants must be impartial in the sense of being equally able and willing to serve a government of a different colour.  But that is emphatically not the same as being “neutral” or “independent”, as is sometimes claimed.

 

Diagnosis

Complacency

The Civil Service suffers from institutional complacency.  As the new Minister responsible for the Civil Service, every draft speech or article presented to me started: “The British Civil Service is the best in the world.” Yet the complaints by Ministers in all parties about the lack of institutional capability, inefficiency and failed implementation were legion.  When we queried the evidential basis for this assertion, it turned out that the only relevant assessment was a World Bank ranking for “government effectiveness”, in which the UK ranked number 16.  I remember a conversation where it was proposed that rather than seek to improve our performance against these criteria, we should create a different index which might better recognise those qualities in which the British Civil Service was thought to excel.  So I was amused to see this summer a new index assembled by the Blavatnik School at Oxford, in association with the IFG, and (it coyly states in the fine print) “supported” by the UK Civil Service.  The criteria are clearly selected to favour Westminster-type politically impartial systems – operational efficiency and effectiveness barely get a look in – and Singapore, which has a truly impressive bureaucracy, doesn’t even feature.  Yet even in this index we come last among the Westminster-type systems, behind Canada, New Zealand and Australia.

Is this just me?  Oliver Letwin, no enemy of civil servants, indeed married to one, recently bemoaned the quality of the work produced by policy civil servants outside the centre.  He made the point that the cream tends to float to the centre of government, to No10, HMT and the Cabinet Office.  This has often led PMs and Chancellors to discount their colleagues’ complaints about the quality of the service. Because the civil servants who surround them are among the best, deficiencies elsewhere are discounted as the fault of  inadequate Ministers.

It is significant that the longer Prime Ministers remain in office, the more jaundiced their view becomes.  Tony Blair recently reflected on this:

If you had a crisis, there is nothing better than that British system…But when it came to how do you do health service reform or education reform, or the early battles I had in reforming asylum and immigration policy, I found it frankly just unresponsive.

Are government failures always the fault of the of civil servants?  Of course not.  We all know there are myriad examples of failures caused by Ministers ignoring good advice.  I’ll say more later about the relationship between Ministers and civil servants, and perhaps as important the relationship between policy and operational civil servants.

But I and others have observed that all too often the first reaction of the Civil Service when something wrong is discovered is either to cover it up or to find a scapegoat, often someone who is not a career civil servant and who is considered dispensable. There seems to be an absolute determination to avoid any evidence that the permanent Civil Service is capable of failure.

Another indicator is that if a Minister decides that a Civil Service leader is not equipped for his or her task, this has to be dressed up as “a breakdown in the relationship”, with the unspoken suggestion that this is at least as much the fault of the Minister as of the civil servant.  It can never be admitted that the mandarin was inadequate in any way.

When I suggested that there might be room for improvement, the distinguished former Civil Service Head, Lord Butler, accused me of a failure of leadership.  Actually the leadership failure is to pretend that all is well when no one, even civil servants themselves, really believes that.

The Gifted Amateur Cult


Fifty years after the Fulton report lambasted the cult of the gifted amateur, there is still some way to go. While developing our Civil Service Reform Plan, a very senior permanent secretary  blithely stated to me that “the age of the generalist has passed”.  I didn’t contest this, as it seemed probably true. But it isn’t true nor should it be.

Most organisations have and value generalists. In the Civil Service the generalist is someone skilled at marshalling and analysing evidence, mobilising expertise, and developing solutions. But a generalist is not the same as a gifted amateur.  To be effective they need a serious investment in their skills. The doctrine “we don’t have generalists any more” has the malign effect that all civil servants feel that they are meant to be specialists or experts, and therefore feel prohibited from saying that they don’t know how to do something. Hence the tendency for officials to persist in trying to execute tasks for which they have inadequate skills or expertise, and feeling unable to be honest about it.

So what training should generalist administrative civil servants have? I was surprised to discover how the Fast Stream graduate entry operated.   Bright graduates thought they were joining the Civil Service; and were then surprised to find that they joined a specific ministry where training took a definite second-place to the job to which they were assigned. My modest reform to make the Fast Stream programme look and feel more like a typical two year graduate training programme met with surprising resistance, with four permanent secretaries,  including at the Treasury, showing up to tell me that it was completely impossible. Apparently, if the Civil Service trained its graduate entry the way high-performing private sector entities do, the government would fall apart.  If I insisted, as I did, that Fast Stream trainees did four six months postings in different parts of government, then they would be unable to do any useful work. The low importance attached to hard-edged skills was brought home to me when a graduate trainee said how surprised a colleague had been that she had opted to take a course in using spreadsheets. The surprise for me was that it was not a basic requirement for every graduate trainee to be able not only to use spreadsheets, but to do basic financial modelling. The Civil Service College in Singapore runs courses in letter drafting, speed reading and touch typing – basic skills in the digital age, and a big contributor to improved productivity. Repeated requests that the UK Civil Service should require the same met with blank incomprehension and inaction.

The second eye-opener was when I proposed that senior civil servants headed for very big responsibilities should be put through top management courses, typically three months, at top business schools. High performing organisations routinely do this; and I have seen people come out transformed into a bigger, more confident and capable leaders. So I proposed first that ten permanent secretaries should go through these courses before the 2015 election. The first objection was that this would be very expensive and that the Daily Mail would make a fuss. My response was to say: Bring it on. If the Mail really want to object to us spending £60,000 to train up someone managing a budget of tens of billions, I’d love to have the argument.

We eventually agreed to do this some 18 months before the election. I was told repeatedly that it was underway.  And yet by the election, instead of ten doing three months at Harvard, Stanford and Insead, one had had done one week at IMD in Lausanne. Not quite what we had in mind. I struggled to understand why there was so much resistance to a plan that seemed obviously beneficial and sensible, but also showed a  willingness to make a serious investment in our people. I concluded that the unconscious explanation is an anxiety about senior civil servants being put into an environment where they are sharing experiences and learning from their peers in the private sector. This would be to allow too much daylight into the mystique with which the world of the mandarin is surrounded.  The cost of this protectiveness is clear; and I’ve always been reluctant to blame heads of departments for operational failures when they’ve been given woefully inadequate preparation for the huge responsibilities they are asked to assume.

I think the same explanation holds for the well-documented reluctance to welcome and make the most of recruits from other sectors.  The Baxendale Report into external hires showed how little interest the Civil Service has had in learning from those who come in from other organisations; that they became, as one of them put it, at best country members of the club. There was little sense that the organisation adapted to the incomers or learned from them; all the adaptation was expected from those coming in.  Too often the incomers get spat out.  Yes, sometimes this tissue rejection is the fault of the external recruit.  But too often it is the system at fault.  As one distinguished business leader who came into government said to one of his successors:

“You will find that mandarins operate behind a wall. Eventually you will find a door.  But it only opens from the inside.”

Mandarins come out on top

Part of maintaining the mandarin mystique is that they pretty much always get the top jobs. Policy nearly always trumps operational and technical skills for the leadership roles. It feels like a class divide: there are the white-collar policy mandarins, and the blue-collar technicians who do operations, finance, procurement, IT and digital, project management, HR, and so on. All the attempts to create genuine parity of esteem have failed. This has to change in the future. Many government failures could have been prevented if operational and technical teams had the same access to Ministers as do policy officials. But there is far too much tendency to keep them at arms-length and below the salt, as the passive takers of policy ordained from on high which they are expected unquestioningly to implement. On the notorious Universal Credit programme, policy was developed in Whitehall; ‘implementation’ was in Sheffield; and IT development in Warrington.   Not surprising that hundreds of millions were written off in wasted costs, whereas implementers brought into the policy development process early could have pushed back on policy changes that inevitably complicated the project.  It was interesting that the PAC Report into UC stated that “the problems came to the attention of the Department as a result of a review commissioned by the Secretary of State”.  In other words it was the minister calling the attention of officials to the implementation car crash, which is not the way round it is meant to be.

Culture

As in most bureaucracies, the culture is hostile to innovation.   While pursuing Civil Service reform, I was often asked: when will this end? The answer of course is never. Reform and improvement is always a work in progress. There is no steady-state management any more in progressive organisations.  While the words encourage innovation the behaviour and incentives do the reverse.  Jonathan Powell, himself a civil servant before becoming Tony Blair’s chief of staff, summed it up well:

The system is stacked against civil servants who might want to get things done. There is very little upside gain for an official who succeeds in resolving a problem and a huge downside risk for permitting something to go wrong.

The best organisations learn more from the things that are tried that don’t work than from those that do. I introduced what I wasn’t quite brave enough to call the Francis Maude award for failure: to recognise a team that tried something new that didn’t work, stopped doing it, and ensured that the organisation learned from it.  There were 80 nominations; 79 for projects that had not failed, thus simultaneously missing and illustrating my point.  The Singapore Civil Service consider this willingness to innovate as so important that they elevate it to an obligation.  On the wall of the Civil Service College is this quotation:

What we want is for all officers to see it as part of their job to question the assumptions and past ways of doing things and suggest ways to improve and innovate.

Surely nobody could argue with that proposition. Yet it is the inverse of the behaviours that are rewarded and encouraged in our system.  Government is today one of the few remaining environments in which disruption is a dirty word.  There is an bias to inertia.  It needs to be replaced by a bias to action.  One aspect of this is that too often process trumps outcome, a failing identified by many of the external hires interviewed for the Baxendale Report.

And this is part of a broader problem. Behaviours, especially among the most senior, are frequently at odds with stated policies. We commissioned independent evidence-based reviews into the treatment of women, BAME, LGBT and people with disabilities, so that the Civil Service Diversity Plan would be hard-edged and practical rather than the tokenistic and generic draft I saw first.  They all concluded that while the Civil Service had model progressive policies, the reality too often was profoundly different. In the Women in Whitehall report, one woman said: “I was told that the reason I wasn’t being interviewed [for a promotion] was that I would have outperformed the man whose turn it was”.  It remains the case that too often promotions are made on the basis of personal patronage and time-serving rather than on merit and talent.  And while on diversity, there is I believe less personality and intellectual diversity than I recall from before.  There seems a premium on blandness.  High-performing organisations relish having a decent quotient of the quirky, difficult and maverick, and know how to manage and use them.  One of the very best officials I worked with was told that the only question mark over his suitability to be a permanent secretary was that he was “too colourful”.

Honesty and integrity are two of the Civil Service’s statutory values. Yet it is surprising how often Ministers are told things that are simply not true.  On two specific occasions I was told that the cost of implementing a change, in each case to civil servants’ own employment terms and conditions, was literally 100 times what turned out to be the actual cost. Quite often I would be told that the law precluded a particular course.  More often than not it was not true. Civil servants should “speak truth unto power”. But it must be the truth.  No sane Minister wants to embark on a course without the best and most candid advice on all its implications.  But it must be advice based on true facts and the best evidence there is.  Oliver Letwin summed this up:

On probing the causes of the unclear, jargon-ridden and ill-evidenced papers that too frequently came my way, I often found that the problem was not just a stylistic inelegance but rather an inability to think clearly about whether a proposition being put forward actually corresponded with the facts…sometimes – indeed, distressingly often – officials had put together a ‘view’ or ‘recommendation’ without knowing the essential facts.

And when, after receiving candid and well-evidenced advice, Ministers make a decision, it is the duty of officials to execute it.  Again, surprisingly often, this simply doesn’t happen.  On one occasion I asked a cross-departmental group of officials why a Cabinet Committee’s very clear decision had simply been ignored. The answer? “We didn’t think it was a very strong mandate”.  What? What on earth do you need? A Papal Bull?

In 2004, Tony Blair as Prime Minister, no less, announced in a speech that in future all Senior Civil Service appointments would be for a four year fixed term.  It didn’t happen.  It wasn’t until 2013, many years after Canada, Australia and New Zealand, that we finally secured a much lesser change: that permanent secretaries would in future be on a five year fixed term.

I thought this was just part of the unwritten sub-culture until discovering what we came to know as “the document of shame”.  This set out the criteria for selecting potential permanent secretaries, and was drawn up by consultants at the behest of the then leadership of the Civil Service in I think 2009.  It included such precious jewels as

  • knowing when to “serve” the political agenda and manage Ministers’ expectations versus leading their Department
  • Balances Ministers’…immediate needs or priorities with the long-term aims of the Department, being shrewd about what needs to be sacrificed
  • Tolerates high levels of ambiguity and uncertainty …and at times irrational political demands.

I had always assumed that sentiments of this nature were simply passed from one leather armchair in the Athenaeum to another. But that a willingness to ignore the decisions of democratically accountable Ministers was regarded as such an essential quality in a permanent secretary that it needed to be recorded in writing was astonishing.

The Future

So what is needed for the future?  

Culture

First is a change in culture.  This is both the most important and the most difficult. You change an organisation’s culture not by trying to change the culture but by changing people’s behaviours. The Civil Service of the future must have a culture with these qualities:

  • Honesty about itself – especially about its own performance
  • Truthfulness and accuracy in its advice to Ministers
  • A genuine openness to learning and influence from outside, including external hires
  • A genuine commitment to training and hard skills

There are proper experts in organisational change who will have views on what is needed to achieve all this. All I would say is that it has to start at the top of the organisation. There is no substitute for leadership by example.

Innovation and “Up or out”

I referred earlier to the innovation-hostile culture, and the bias to inertia.  One of the reasons for this is that bureaucracies, unlike most high-performing organisations, and indeed most militaries, have no “up or out” expectation.  This sounds brutal but shouldn’t be.  There comes a point in any demanding work environment where some people on a career path have reached a point from which they will not rise any further.  It doesn’t mean they all should all be pushed out; every organisation needs continuity, experience and an institutional memory.  But if you have too many people who have exhausted their ability to progress AND their ability to make a positive contribution, they tend to justify their continued presence in the organisation by questioning, delaying, or obstructing action.  They become part of the bias to inertia.  There’s an old saying: for every one person trying to make something happen there are four trying to stop it.  When I recounted this to some Israeli civil servants, they said: “Only four?”

So a lean effective organisation with a bias to action will guard against this.  That doesn’t mean rejecting large numbers as worthless. It means supporting, financially and otherwise, those who have run out of road to help them find the next thing they can do.  As I say, this is a very normal practice in high-performing organisations.  The British Civil Service must embrace it.  At the same time, it must rid itself of the tendency to solve the problem of underperforming officials by promoting them or moving them sideways, a practice known in America as “turkey farming”.

Parity of Esteem

Second is the need to value operational, commercial, financial and technical skills as highly as “administrative” skills. I think there is a simple solution to this.  Every line department should have a twin leadership: a policy leader and an operational leader. In the half or so of departments that have heavy operational responsibilities the permanent secretary would always be the operational leader; and in the other half it would be the policy leader. At the top of the Civil Service there would always be a full-time Civil Service Chief Executive, which we introduced in 2014, and a Cabinet Secretary. The Chief Executive would be the leader for the whole Service for its operational, financial, commercial and technical functions (which of course comprise the overwhelming majority of civil servants);  and the Cabinet Secretary would continue to be the leader of the mandarin stream. The all-important role of Head of the Civil Service would alternate between the Cabinet Secretary and the Chief Executive. Without something like this, which would be revolutionary in Whitehall terms, I see no prospect of parity of esteem ever happening. And without parity of esteem there is no prospect that the technical experts, whose advice on the implementation of policy is essential, will ever be in a position to make their advice count before, as it is so often the case, it is too late.  When it comes to appointing permanent secretaries, the pattern today is that the Head of the Service and other mandarins have excessive influence, leading inevitably to appointments being made in the image of the incumbent mandarin cadre.  We really struggled to deliver what every Prime Minister has wanted, which is to be offered a choice of candidates for permanent secretary roles.  This was eventually and grudgingly agreed by a Civil Service Commission led then, as now, by a former permanent secretary.

Functional Leadership

Third, the Civil Service needs strong functional leadership at the centre of government. This sounds boring and technocratic but it is really important. Let me explain what I mean. A number of functions are common across the whole of government. Every department claims that what it does is completely unique and distinctive, and of course much is genuinely unique. But most of their requirements for property, IT and digital, procurement, HR, finance and project management are common to the whole of government. And even when they are not, you still need one place where there’s a critical mass of technical expertise. Between 2010 and 2015 we led from the Cabinet Office an efficiency and reform programme that saved the taxpayer £19 billion in 2014-5 compared with the 2009-2010 baseline, which with previous years’ savings added up to a cumulative £50 billion. In addition to downsizing the Civil Service by over 20%, we renegotiated contracts with the government’s biggest suppliers, reformed procurement to open government contracts to smaller UK-based suppliers, improved dramatically the success rate of the government’s major projects, exited numerous properties and upgraded much of the rest, and Britain went from being a country which was a byword for expensive government IT car crashes to last year being ranked by the UN top in the world for digital government.

None of this could have been achieved without strong leaders of these functions at the centre of government, themselves technical experts, with strong Ministerial support, backed by spend and other controls to prevent departments from doing the wrong things.  On property the wrong thing might be taking a lease that looked right for that department but left another with costly unfilled space. Functional leadership coupled with spend controls would enable the space to be used optimally with the best result for the taxpayer. On procurement the wrong thing was every department buying its own commodity consumables. We found that some departments were paying seven times as much for their printer cartridges as others.  The wrong thing was every department dealing with the major suppliers to government separately so that each one was taken for a ride separately.  The wrong thing was every department running its own website, or more usually multiple websites, expensively, inconsistently and impenetrably.  The award-winning and world-leading gov.uk, replacing well over 1000 websites, would not have been possible without the strong functional leadership model.  The wrong thing was every part of government marking its own homework on the management of major projects, so that they were all said to be doing splendidly despite two thirds running well over budget and timetable.  Establishing the Major Projects Authority to provide consistent oversight, assurance and support nearly halved the failure rate.  The wrong thing was every department and agency having its own internal audit function that was internal to itself rather than a single service giving the Treasury genuine insight into how departments were spending taxpayers’ money.  The wrong thing was – and is – every departmental finance director being accountable only to the permanent secretary, with no serious line of accountability to the centre.  This has left the quality and reliability of basic management information pitifully inadequate, with an inevitable lack of accountability for departments.  Senior business leaders we brought into government as non-executives on departmental boards were shocked by the poor quality and impenetrability of government financial and management data.

To the extent that we could we created strong functional leadership.  It wasn’t perfect.  And we were heavily resisted by the Treasury which in the main with the exception of Danny Alexander was at best uninterested in and sometimes actively hostile to our entire programme of efficiency savings. We couldn’t even persuade them of the need for a powerful financial management function led by a senior CFO figure, although the Conservative Party had committed to this before the election.  We should have been more insistent on building new functions, albeit using many of the existing people, rather than trying to adapt the existing organisations.  In a makeshift way we made it work.  But we couldn’t make it permanent, and of course many of the departmental barons hated it.  Not Ministers, interestingly, most of whom were perfectly happy with what we were doing, and wanted to concentrate on what was genuinely the core business of their departments. But for much of the mandarinate this was an assault on their autonomy and empires.  And what we know about empires is that they fight back.

And boy, are they fighting back!  The mantra tends to be: “we definitely want to continue with the reforms.  But they’re now embedded in the departments, and it’s definitely now safe to relax the central controls.”  When you hear those words you know that what they really mean is that the reforms are embedded six feet under, and that the departments are cheerfully going back to their old ways.  So GDS, which became a model for other governments to follow, including in the USA and Australia, is becoming side-lined and underpowered. The powerful and revolutionary idea of “government as a platform” is dead.  The financial management function, for which the Treasury briefly and reluctantly created a dedicated full-time leader, has now reverted to being “led” from a big spending department by the departmental finance director – and excellent though he is, it means functional leadership in that arena is dead.   Imperceptibly, inch by inch, with a control dropped here or not enforced there, the old silos and departmental baronies are re-emerging, with nothing to restrain the old unreconstructed behaviours from taking hold once more.  There will be a substantial cost to the taxpayer in wasted spending, and to the citizen in service improvement foregone.  I have no doubt that a future Civil Service, like all big complex organisations, needs a vigorous model of stronger, not weaker, central functional leadership.

Are there other things needed?  Yes but probably beyond the scope of this lecture.  British Ministers’ offices are woefully under-powered compared with those in Australia, Canada or New Zealand.  That’s not only the fault of the Civil Service; Prime Ministers tend to be strangely negative about empowering their colleagues.  David Cameron did support our modest move in this direction, overcoming strong resistance from the leadership of the Civil Service when we proposed permitting EMOs, or Extended Ministerial Offices.  This model went as far as was possible within current statutory constraints, but was only a pale reflection of what Ministers in other Westminster systems enjoy.  And in any event this tiny modest advance has now been reversed. The empire struck back.

One final reflection.  I took no part in the Brexit referendum debate, thinking both sides’ cases wildly exaggerated, and for me the arguments were quite finely balanced.  I thought then that a vote to leave meant some certain short-term downside, with longer term upside opportunity.  I still think that.  But if we are to realise those upside opportunities, then as a country we need to maximise our competitive advantages.  One of those can be and must be a Civil Service that is genuinely the best in the world.  One that is lean, proactive, innovative, that makes the most of the amazing people with a passion for public service who join it, with a bias to action and a relentlessly truthful and open culture.  What I propose here are a few modest steps in that direction.

Francis Maude was Minister of State for Trade and Investment. Prior to that, he was Minister for the Cabinet Office.

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