ukcivilservant

Articles about the UK Civil Service and Regulation

‘Levelling Up’ – Lessons from Government Offices for the Regions

David Higham has published a very timely history and ‘lessons learned’ analysis of Government Offices for the Regions (b. 1994, d. 2011).

GOs were the most ambitious attempt by any post war government to tackle the centralised and departmentalised traditions of the civil service.  But they haven’t featured at all in the current debate levelling up debate.  This is a remarkable omission because GOs – like the current government’s plans for the Teesside economic campus etc. – were always about improving central government decision making, rather than devolving power to local areas.

GOs were formed initially from the regional offices of four big departments. Later, the post-1997 Labour Government tasked them with working alongside bodies such as Regional Development Agencies.  Later still, major cities such as Manchester increasingly urged a city-based rather than a regional approach.  Sounds familiar? 

GOs were finally abolished by the 2010- Conservative/Lib Dem coalition, supposedly because they were “no longer necessary … given the Government’s commitment to genuine decentralisation and devolution of power”.

David’s paper is a great read with the added benefit that he draws attention to several important learning points, and key lessons for the current government.  You can find it here.

Martin Stanley

Editor – Understanding Government

Should civil servants follow instructions to act unlawfully?

[This blog first appeared on the new Constitution Society website. I have been somewhat surprised that no-one has yet challenged my conclusions.]

The UK Internal Market Bill (IMB) continues to draw much criticism and opposition as it makes its way through Parliament – but what questions do its drafting and possible implementation raise for civil servants?  

Clause 45 of the Bill controversially provides that “The following [various regulations etc.] have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent …”. Three main questions arise from this.

  1. Should civil servants have refused to help Ministers draft this legislation?
  2. In the unlikely event that the legislation is enacted and comes into force, should civil servants refuse to enforce the regulations that are ‘incompatible’ with international law?
  3. What should happen to a civil servant who believes that the answer to either or both questions is ‘Yes!’, but the Attorney General and Cabinet Secretary decree that the answer is ‘No’?

Let’s start by looking at the Civil Service Code which summarises civil servants’ ethical responsibilities. It records that the service’s core values include integrity and honesty – but the key requirement is that officials must “comply with the law”. Unfortunately it doesn’t say which law.

Under the Constitutional Reform and Governance (CRaG) Act, the code forms part of civil servants’ terms and conditions  Civil servants may (but are not obliged to) complain to the Civil Service Commission if they feel that they are being required to act in a way which conflicts with the code. The Commission may then make recommendations about how the matter should be resolved, but the government is not required to comply with the Commission’s advice.

So, to Question 1: Should civil servants have refused to help Ministers draft this legislation? 

The short answer is ‘No!” Officials are not failing to comply with any law or any other duty when engaged in drafting the legislation. 

Question 2, however, is harder: Should civil servants refuse to enforce any regulations that are “incompatible” with international law?

I would defer to a well-reasoned legal opinion to the contrary, but I suggest that the answer is ‘Yes’ – they should refuse. They are required to “comply with the law” and that means every law, not just most of them. I fail to see how enforcing regulations that are incompatible with international law can be said to be complying with the law.

As an aside, I can imagine legislation which might force officials to break international law. “[Designated civil servants] may be required by their Secretary of State to enforce [specified regulations] and [the Civil Service Code] shall not apply to this instruction”. That’s not legal drafting but you get the idea.

On to Question 3: 

First, what might have happened to officials reluctant to help draft the IMB? They could have asked to be transferred to other duties but their managers would have been under no obligation to agree to such a request and, indeed, may have had difficulty finding someone else to do it. The official must then continue to do the work – or resign, as did Treasury Solicitor Jonathan Jones.

So then what should happen to civil servants who believe that they are being asked to work other than in compliance with international law, but the Cabinet Secretary, advised (arm-twisted?) by the Attorney General, tells them that domestic law (as in the new Internal Market Act) takes precedence? The Civil Service Commission might have a key advisory role but, absent that, I suspect that we are in employment law territory. 

Mandarins would in the past have expressed sympathy for those whose consciences caused them to refuse certain duties, and would have tried hard to find them other work, or offer honourable retirements. But the CRaG Act has given officials a statutory protection that was not previously available. Civil servants can now persuasively argue that their terms and conditions of employment incorporate the requirement to comply with all laws, and dare anyone to discipline them. 

Much would then depend on the numbers. A small number could perhaps be transferred to other equally valued positions. But it would be hard to quash a significant rebellion. Senior officials might point out that resignation was an option, but why would anyone want to take that route? Resignation is an unrealistic option for many staff with family and financial responsibilities, especially in the middle of the current economic crisis. And I suspect that Employment Tribunals and the courts would be sympathetic. 

Finally, here are some other interesting scenarios to consider:

  • Would a ministerial direction help? I think not. Directions are extra-statutory and (although they can be used to authorise expenditure outwith a department’s powers) they can surely not be used to contravene clear statutory or international law. 
  • What should happen if ministers, in the absence of an agreement with the EU, ordered HMRC to fail to collect import duties so as to speed flows through Dover and reduce food prices. As I understand it, this would be a clear breach of WTO treaties which forbid the application of favourable tariffs in the absence of free trade agreements. Unless there were covering domestic legislation, I would expect HMRC to refuse to obey such an order. 
  • How should the civil service in Scotland respond to Scottish legislation purporting to disapply UK law? Following my logic, they should ignore it and continue to apply UK law north of the border. This in turn suggests that it could be unwise for Whitehall ministers to argue (to the contrary) that domestic legislation (in the form of the IMB) can neuter international law, for that would appear to create an unwelcome precedent for use by devolved legislators. (Note, by the way, that the Scottish courts are even now being asked to rule on whether an independence referendum would require UK government permission to proceed under Section 30 of the Scotland Act.)

Martin Stanley

Editor – Understanding Government

Boris Johnson Added Bullying to the Ministerial Code

Newly appointed Prime Ministers update and re-issue the Ministerial Code during the first few weeks of their period in office. They then usually repeat this exercise on being re-elected.

All recent codes have included this general provision:

Ministers should be professional in their working relationships with the Civil Service and treat all those with whom they come into contact with consideration and respect.

All recent codes have also been accompanied by a short foreword. Theresa May’s first (2016) foreword made no reference to the way that ministers should treat officials in the workplace. But her second, January 2018, foreword contained this interesting paragraph (emphasis added):

Parliament and Whitehall are special places in our democracy, but they are also places of work too, and exactly the same standards and norms should govern them as govern any other workplace. We need to establish a new culture of respect at the centre of our public life: one in which everyone can feel confident that they are working in a safe and secure environment.

Boris Johnson went considerably further in 2019 when he included this paragraph in his foreword (emphasis added):

There must be no bullying and no harassment; no leaking; no breach of collective responsibility. No misuse of taxpayer money and no actual or perceived conflicts of interest. The precious principles of public life enshrined in this document – integrity, objectivity, accountability, transparency, honesty and leadership in the public interest – must be honoured at all times; as must the political impartiality of our much admired civil service.

All these documents may be seen in the Understanding the Civil Service online library.

Martin Stanley

Editor – Understanding Government

Four Constitutional Questions for the New Cabinet Secretary

The Constitution Society (whose new website was launched today) published this blog a few weeks ago. As constitutional issues seem increasingly prominent both sides of the Atlantic, I am republishing it here for those that missed it first time around.

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Simon Case, the new Cabinet Secretary, faces four significant constitutional questions.  His responses will have repercussions for years to come.

First, he must decide whether to encourage the creation of a Strategic Centre within Whitehall despite its consequences for Cabinet government.  We have already seen Downing Street take control of all government data, and require all Special Advisers to report to Dominic Cummings.  And surely there seems a lot to be said for the idea of the Prime Minister having a powerful team around him to help monitor progress on his key priorities, to intervene when progress has stalled, and make those all-important trade-offs which will, if unaddressed, lead to endless and fruitless debate?  (Social care is a good example.)

The problem with the current settlement was neatly encapsulated when Prime Minister Johnson asked Mr Case’s predecessor, Mark Sedwill, who was in charge of implementing a COVID-19 delivery plan. One observer recalled: “There was just silence.  Mr. Johnson looked at Sedwill and said, ‘Is it you?’  Sedwill replied, ‘No, I think it’s you, Prime Minister.’”  This exchange must seem extraordinary to anyone outside Whitehall, but it reflected the old reality of Cabinet government.  It was a system, not a command structure.  The Cabinet was meant to be a team of (almost) equals.  Each team member took responsibility when the ball, so to speak, was passed to them.  But there was no organising mind, least of all in the Cabinet Office, whose main function was to resolve disputes between the players. 

This has sometimes worked well during the COVID-19 crisis.  No-one needed to tell the Chancellor and his officials how to (or indeed whether to) organise a furlough scheme.  Nor did they need to tell Matt Hancock and his officials how to manage the NHS so as to cope with the first spike in COVID deaths.  But it all clearly fell apart when it came to lockdown and related policies

A strategic centre inevitably and intentionally boosts the power of the Prime Minister and reduces the power and influence of other members of the Cabinet – and their Permanent Secretaries – and so maybe even the Cabinet Secretary himself.  Previous PMs have been accused of acting presidentially, of course, but none of them supplemented their personal power base with significant institutional reform.  Case’s attitude to this will be crucial.

2

The new Cabinet Secretary’s second constitutional question will concern Speaking Truth to Power.  To what extent will he encourage Permanent Secretaries to challenge ministerial policy decisions?  Paradoxically, the ground for such increased questioning was laid by Francis Maude and others many years ago.   It is less clear that members of the present Cabinet welcome challenge to the same extent.

Feasibility Directions were introduced under Maude, then Minister for the Cabinet Office, in 2011.  Under Treasury guidance newly-issued at this time officials were instructed to require ministers to ‘direct’ them to proceed if officials ‘doubted that the government had the ability to carry out the proposed policy effectively and credibly.’  Whitehall watchers awaited the first Feasibility Direction with great interest.  Would it be seen as evidence, yet again, of ministers’ unrealistic expectations, driven by short term political considerations? Or would it be evidence, once more, of the need for ministers to be able to override their cautious, unimaginative and unambitious civil servants?

Permanent Secretaries ducked the question.  The first Feasibility Direction did not appear until 2018 when a minister took responsibility for the risks associated with accelerated introduction of new ‘T Level’ exams.   Why was this? A 2016 National Audit Office report asserted that Accounting Officers ‘appear to lack confidence to challenge ministers where they have concerns about the feasibility or value for money of new policies or decisions, not least because standing up to ministers is seen as damaging to a civil servant’s career prospects’.   And the retiring head of the National Audit Office, Sir Amyas Morse, announced in 2019 that he was concerned that the balance of power between ministers and senior civil servants had shifted, with officials increasingly unable to challenge bad decisions.

“There’s pressure to do things too quickly or to announce very high-profile world-beating projects. Allowing ministers to have a say in the appointment of senior officials has led to a position where ministers have a great deal of power over their civil servants. That’s unfortunate. They’re intelligent people. They understand that the consequences of disagreeing with a minister are likely to be pretty ugly.”

Senior Responsible Officers were a similar Whitehall innovation which was slow to take off.  SROs were from 2013 to be personally accountable, including to Parliament, for the delivery of major projects.  It was hoped that SROs would be forced to challenge ministers if a major project were being established without proper resources etc.   But the results have been patchy.  Some ministers and senior officials have learned to work well together within these new structures.  But it’s not clear that they have led to the intended revolution in project planning.  And parliamentarians seem, so far, to have taken very little interest in their new direct reports.

Crucially, however, SROs have recently been strengthened by the introduction of Accounting Officer Assessments .  The Treasury announced in 2017 that ‘Accounting Officers should personally approve, in advance, all significant initiatives, policies, programmes and projects’ and so be able to provide assurance to Parliament that those activities provide value for money, are feasible, and so on.  The assessments of initiatives and policies was, however, to be significantly less transparent than the assessment of programmes and projects.

 The guidance says (emphasis added):  ‘The analysis should consider the issue in the round. A ministerial policy decision cannot be sufficient justification alone for proceeding. The accounting officer’s job is to try to reconcile ministers’ policy objectives with the standards for use of public funds.[The assessment is] not usually published in full, but is shared with the Treasury.   A summary of the key points [of an] assessment of a major project should however be prepared and published.’

AO assessments on the face of it do real damage to the old rule that ‘officials advise, ministers decide’.  Again, though, they have as yet to make much of an impact. They did not appear to deter the number of ill-thought-announcements during the initial response to the COVID-19.  Optimists, however, would point out that officials are not obliged to prepare an AO Assessment immediately a minister indulges in some blue sky thinking.  But will this let-out allow officials to prevaricate far too long before offering serious challenge to ministers?  

And AO Policy Assessments will not automatically be shared with Parliament.  So it could all come down to the energy and inquisitiveness of MPs and Select Committees.  Will they – perhaps supported by the National Audit Office and the media – start insisting on seeing AO Policy Assessments?  If so, we could see a significant improvement in the way this country is governed – but only if Simon Case and his colleagues use their new powers and prepare the assessments in the first place.

The test may well come in this year’s Spending Review.  Faced with yet further cuts, departmental ministers will try to avoid either cutting existing programs or prioritising their wish list.  Mistakes will be made.  Will the new Cabinet Secretary support Permanent Secretaries who, despite being on five-year contracts, assert that ‘a ministerial policy decision cannot be sufficient justification alone for proceeding’ with a poorly funded programme – or will he leave them in a position where they have to choose between offering this resistance or prioritising their careers?

3

Five-year contracts, also introduced by Francis Maude, lie behind that new Cabinet Secretary’s involvement in a third constitutional issue: ministerial dismissal of Permanent Secretaries.

It is (or was) a firm rule that ministers cannot dismiss civil servants that displease them or that offer unwelcome advice.  If a minister cannot stand a particular official, the latter is usually moved to a different job.  Sometimes, though, this is impossible.  Other Secretaries of State may refuse to accept what they see as a tainted official, or there may be no available post which is senior enough within the Permanent Secretary pecking order.  The Permanent Secretary must then leave the civil service.

Such departures do not necessarily reflect badly on either the Secretary of State or the official.  Cabinet Ministers are entitled to work with someone that they find reasonably congenial.  And no-one gets to be a Permanent Secretary unless they have shown that they can work well, over a long career, with a large number and variety of Ministers of all political persuasions.  The departure is therefore usually pretty amicable, at least on the surface.

It was therefore concerning that the Johnson government has overseen the distinctly un-amicable loss of several Permanent Secretaries in 2020.  Apart from those mentioned elsewhere in this blog, there were other important factors in the background to this highly unusual development. 

One was that the senior ranks of the Civil Service will have been concerned about the way in which ministers were approaching the Brexit and post-Brexit negotiations following the 2016 referendum.  Their speaking truth to power will probably not have gone down at all well.  Another will have been the fact that Whitehall, as well as many public services, encountered Brexit and COVID-19 following years of staff cuts and lack of investment driven by austerity.  The whole of the UK public sector lacked resilience and spare capacity.  Its performance in some areas may very well have been poor, but ministers were hardly likely to realise that they and their predecessors were to blame for this.  In addition, of course, the government mishandled the early (and some of the later) stages of the COVID-19 crisis and will have wanted to deflect criticism away from ministers.

The first Permanent Secretary to go was Philip Rutnam at the Home Office who fell out so badly with Home Secretary Priti Patel that he refused compensation and instead claimed to have been unfairly and constructively dismissed because of her bullying.  He claimed that there had been a “vicious and orchestrated” campaign against him in the department.  He was followed by Richard Heaton who left the Ministry of Justice unexpectedly in the summer, even though his Secretary of State wanted to keep him following the end of his initial five-year appointment period. 

The manner of Jonathan Slater’s subsequent dismissal then caused little short of outrage amongst many observers as he was evicted from the Education Department with only five days’ notice.  Although this followed the department’s very poor handling of the education aspects of the COVID-19 crisis, it was widely assumed that the Prime Minister had required someone to fall on their sword but ordained that that someone was not to be the Cabinet Minister Gavin Williamson – a reversal of the normal acceptance of responsibility in these circumstances.

Last, but not least, Cabinet Secretary Mark Sedwill left in September following acres of press reports that he was to be sacked.  The Telegraph said that Downing Street regarded Sir Mark as “too much of a Europhile and establishment figure” to be in post through planned Whitehall reforms. 

The departures of Richard Heaton and Jonathan Slater were so clearly ordered by the Prime Minister as to call into question my assertion, above, that ‘ministers cannot dismiss civil servants’. The sackings may have been designed to show Permanent Secretaries that they have no job security and they should watch their step, though – as in all the best authoritarian systems – watching their step may well not save them.

It was, of course, also the case that the outgoing Cabinet Secretary was in no position to object to the two dismissals, as he was himself serving his notice period. It remains to be seen whether Simon Case will choose to withstand pressure from the Prime Minister and his aides, or whether he was chosen for his willingness to bend to Prime-Ministerial will.

4

The fourth constitutional question for Sir Simon is whether to resist Dominic Cummings’s and colleagues’ pivot away from good policy process towards data driven decision-making.

Mr Cummings’s thesis is that the government needs more policy advisers who have an ‘Odyssean education’ alongside assorted ‘weirdos’ and data scientists.  He claimed to be concerned at ‘the elevation of the courtier-fixer at the expense of the thinker and manager’ – though it is intriguing Simon Case is surely the archetypal courtier-fixer.  But if he really wants to reform British policy-making then he would be better advised to follow his own advice and start by learning from the wealth of data and analysis provided by those who have studied UK government over many decades.  It would point him in a quite different direction.

For a start, he would learn that better data and analysis would not have helped successive governments tackle the many ‘wicked issues’ such as how best to fund Social Care. 

Nor would it have helped various Chancellors withstand pressure to abandon the Fuel Duty Escalator (despite concerns about Climate Change) and overdue property revaluations (which have led to much unfair local taxation).  And I cannot imagine that a mission control centre could have stopped the ministerial panic that has characterised much of their response to Covid-19 – not to mention their handing of this year’s A-Levels.

The reasons why ministers make so many poor decisions lie much deeper than lack of data and out-of-touch officials.  Report after report, and book after book, have reached very similar conclusions.  They point to:

  • Weak parliamentary oversight including weak scrutiny of legislation.
  • Ineffective checks and balances within the executive (including the Cabinet) which allow mistakes to be made and encourage groupthink.
  • Political hyperactivism – when politicians individually and collectively gain ‘points’ from making new initiatives almost for their own sakes.
  • High turnover of both ministers and senior officials.
  • A culture of haste and determination to ‘deliver’.
  • Over-willingness to recreate policies and organisations rather than seek continuous improvement …
  • all exacerbated by failure to learn from past mistakes.

Sadly, therefore, much of this analysis suggests that the Johnson/Cummings partnership is heading in entirely the wrong direction as it strengthens the centre, emasculates the Cabinet, and ignores Parliament.  If the experts are to be believed, this will lead to less scrutiny, less debate, more groupthink and more mistakes.  But who needs experts?

Martin Stanley

Editor – Understanding Government

Picking Winners – and State Aids

This is a response to a request from David Higham and other fomer colleagues for my views on the current debate about Dominic Cummings’ reported wish to be able to offer generous ‘state aid’ (i.e. subsidies) to chosen high tech (and potentially high growth) companies.

Background:  I led the Business Department’s industry/education team in the late 1980s and a number of industry ‘sponsorship’ teams in the mid 1980s and then again from 1992 to 1998, including working closely with Michael Heseltine during his time as President of the Board of Trade.

Sponsorship teams focus on specific industries or groups of industries, and undertake a number of activities. Officials are expected to get to know key figures across the industry and so gain a thorough understanding of its strengths, weaknesses, challenges, opportunities and needs. Its interests can then be communicated to all relevant government departments.

Most industries do not need any sort of hard intervention either by way of regulatory favours or subsidies. Indeed, it was obvious to most outside observers that many industries’ fundamental problems were self inflicted through weak management and chronic underinvestment exacerbated by over-strong and/or short-sighted unions. Any government intervention was likely to make things worse, not better.

But some interventions were well justified, During the periods mentioned above, I can think of four types of subsidy that represented good to exceptional value for money.

  • First, in the 1980s, we heavily subsidised the provision of the first computers in schools.  There were two suppliers, Acorn (who built the BBC-B microcomputer) and Research Machines who built higher spec and more expensive machines.  The scheme was a huge success.  It not only excited huge numbers of teachers and pupils but Acorn went on to develop RISC PCs, and one of its subsidiaries became ARM Holdings whose processors can be found in most mobile phones.  RM now employs around 1,700 people providing educational IT, although it ceased manufacturing during the 2008 financial crisis.
  • We subsidised inward investment, most obviously by vehicle manufacturers.  But we never invested more than 25% of total cost.  Our support was most often directed at ‘saving jobs’ or ensuring that we got jobs as a result of investment that would otherwise go to other countries.  But we sometimes supported R&D, including most recently into battery technology and autonomous (‘driverless’) vehicles – though we subsidised Jaguar’s investment in autonomous vehicles as long ago as 1989.  I remember experiencing it on a French motorway.
    • Note, though, that it can be difficult to know how to respond to other countries’ bids to win investment in new vehicle plants, for instance. Serious bidding wars usually end with a seriously expensive winner’s curse. Luckily, the UK has been able also to point to the benefits of excellent macroeconomic and regulatory policies – at least until Brexit – and so spend less than might otherwise have been necessary.
  • We rescued (i.e. saved jobs in) Leyland Daf’s UK operations following its 1993 receivership including by funding 25% of an otherwise private sector investment in Leyland Daf Vans (LDV) in the West Midlands.. Three of the four rescued subsidiaries are still trading successfully.  LDV continued to employ significant numbers but closed during the 2008 recession.
  • Finally, and probably least successfully, we ran schemes which funded typically 25% of smaller firms’ investments in research, development and new products.  Many of these were bound to lead nowhere but even a low hit rate followed by exceptional growth would have justified the expenditure.

And here is a bad example:

  • There was a fierce battle, in the UK in the 70s/80s, between big bad IBM with their closed propriety systems, and ICL, keen on open systems and a proud successor to the earlier giants of British computing including English Electric Leo Marconi. I inherited the sponsorship team and initially continued to pour as much money as possible into ICL technology, and to arm twist the public sector to continue to buy its mainframes. But I eventually realised that the company was uncompetitive to the extent that well over 90% of its sales were to the public sector. In other words, any business that had a choice bought IBM. I understand that colleagues subsequently did their best to continue to support the company, and it eventually had to be rescued from collapse in order to keep vital systems running, such as those in DVLA. ICL was eventually bought by Fujitsu.

Lessons, Conclusions, Comments

All the above expenditure was approved under the current state aid regime, though it sometimes took a few weeks or months to persuade the European Commission of the merits of our case.  It helped hugely that were not one of the member states who spent the most on state aid, nor one of those who came forward with the least deserving applications.

Equally, though, we probably could have pushed the state aid boundaries further than we did.  Other countries ‘ administrations seem to have more supportive lawyers and economists.  Also, countries such as France and Germany have well-funded public sector investment banks which pre-date the state aid regime.  I understand that our attempts to set up similar institutions have been thwarted by state aid considerations, much to the annoyance of both ministers and officials.

Two of our successful investments were brought down by the 2008 financial crisis, which underlines the importance of having appropriate macro-economic and regulatory backgrounds, including competition policy, without which state aid will inevitably be wasted.

Despite my experience, I have no faith in ministers’ or officials’ ability to ‘pick winners’ even when our decisions had to be approved by external advisory boards.   (See Note below) I was accordingly a great fan of the requirement that 75% of program cost had to be funded by the private sector.

Note, for instance, that my ‘best’ investment was almost certainly computers in schools.   However – if we had been forced to support only one of the two companies  – we might have gone for RM’s higher end machines which would certainly have met with the approval of a previous generation’s Dominic Cummings.  But it was the initially lower tech Acorn computer that eventually led to world-beating technology.

Equally, my worst investment (though I inherited the policy) was support for ICL. Unfortunately that company was then seen as the UK’s answer to an American giant. It is a cautionary tale for those now seeking to build British high-tech companies to rival the American and Chinese giants.

(And I am anyway not aware that Silicon Valley benefitted from government finance. Weak regulation and a vibrant venture capital industry were much more important.)

More generally, I have absolutely no faith in ministers’ ability to withstand pressure to spend unwisely for political and constituency reasons.  ‘Saving jobs’ and ‘attracting inward investment’ can make sense, as I have explained above.   But such powers need to be tightly controlled (such as via the state aids regime) if they are not to degenerate into hugely wasteful expenditure in uncompetitive companies and/or international auctions which end up in governments paying far too much per job gained.

Equally, I have little faith in minister’s ability to focus support narrowly enough.  As Giles Wilkes points out, no-one is ever against:

  • Investment
  • Innovation
  • R&D
  • Entrepreneurship
  • ‘Hubs’, ‘Catalysts’ and ‘Accelerators’
  • Exports, and
  • How Germany Does Things

And I would add small firms to that list. 

The underlying problem is that ministers find it very difficult to refuse to extend the borders of even the best, highly targeted schemes.  Surely, they will argue, butchers and restaurants can be innovative too.  And how can we justify excluding firms that employ less than 500 people, or 50, or 5 …?

The result can too easily be cash sprayed at a large number of targets in the hope that some of it will generate rapid returns.  But it is far from clear to me why the government is likely to be any better at this than venture capitalists and other investors.  

In short, therefore, I would generally advise against adopting any policies which go beyond those currently allowed by the current state aids rules.  

Martin Stanley

Editor – Understanding Government

Notes:

Prominent examples of foolish government-inspired investments include:

  • The Rootes Hillman Imp factory in Linwood, many miles from main suppliers and where the local workforce had no relevant experience.
  • The aluminium smelter at Invergordon next to a nuclear power plant that was never built.

My colleague Michael Coolican wrote this in his book No Tradesmen and No Women.

‘[Many ministers are very clever but they] tend to be ‘big picture’ people who simply can’t deal with detail. If such qualities are mixed with a fair amount of dogmatism, a large dose of self-confidence, special advisers with inadequate experience, and a civil service unable to make good the deficiencies, then the way is prepared for the sort of poor government that has been much in evidence during the past fifty or so years …

Harold Lever saw at first hand how such factors affected the ability of the Wilson government to achieve anything despite the undoubted talents of its members … ‘These governments … overestimated their ability to shape and manage the complex drivers of a modern economy. They assumed they understood all the reasons for its shortcomings and so, unsurprisingly, were all too ready to lay hands on superficial remedies for overcoming them.’

Will there be Further Whitehall Wars this autumn?

There was a startling but hardly noticed announcement, a couple of years ago, that ‘a ministerial policy decision cannot be sufficient justification alone for proceeding’.  Priti Patel, Matt Hancock and the rest can apparently announce whatever they like – but civil servants shouldn’t take any notice unless they are convinced that the plans are ‘feasible’.  Here is how we got here.

Ministers are frequently accused of being too ready to seek political advantage by announcing impossible or badly thought-through policy objectives, or by allocating insufficient time and resources to otherwise achievable policy objectives.  Jill Rutter’s half jest summarised the underlying issues rather well:

Civil Servants say to ministers that “We won’t tell you it can’t be done if you won’t sack us when it is not done”.  Maybe it is time we recognised that this constitutional pact has run out of road?

The story began in 2011 when the Institute for Government recommended that it should be made easier for senior civil servants to challenge ministers’ policy decisions in the same way as they had for many years been able to challenge a ministerial spending decision.  (Officials would ask for a formal written ‘Ministerial Direction’ if the spending appeared to be irregular, or improper, or to represent poor value for money.)  Permanent Secretaries would ask for a Policy Direction if they were not satisfied that ‘clear, well-reasoned timely and impartial advice’ had been provided, and that the decision was in line with the aims and objectives of their organisation. 

Not surprisingly, this particular idea did not find favour with ministers who were shortly afterwards faced with an equally threatening suggestion of Procedural Directions.  These were proposed by the Better Government Initiative and supported by the Public Administration and Constitutional Affairs Committee and The Constitution Society.  In short, ministers would be held to account if they were to deviate from the processes laid out in the Cabinet Manual. 

One example, had this mechanism already existed, might have been Tony Blair’s failure to circulate pre-Iraq War legal advice to Cabinet colleagues.  Others might have been some of the decision-making either side of the Brexit referendum. Sadly, this attempt to fetter Prime Ministerial discretion was no more welcome to the government than had been the Policy Directions. 

But there was progress on the policy front.  Treasury ministers quietly, in 2011, introduced Feasibility Directions.  These allowed officials to require ministers to direct them to proceed with projects even if officials doubted that the project’s objectives could be achieved either at all, or within the timescale and resources stipulated by the minister. Here is an extract from the guidance:

‘Feasibility often overlaps with value for money and/or propriety. The judgement to be made is whether government has the ability to carry out the proposed policy effectively and credibly. Precedents, market testing and pilot studies can give confidence that a new policy or proposal will be feasible. Conversely, warning signs include novelty, high administration costs, high error rates and significant compliance costs. Where there is doubt about the quality of administration, the proposed course may well also be inefficient or improper.’

Whitehall watchers awaited the first Feasibility Direction with great interest.  Would it be seen as evidence, yet again, of ministers’ unrealistic expectations, driven by short term political considerations? Or would it be evidence, yet again, of the need for ministers to be able to override their cautious, unimaginative and unambitious civil servants?

It was therefore quite telling that a National Audit Office report five years later asserted that Accounting Officers ‘appear to lack confidence to challenge ministers where they have concerns about the feasibility or value for money of new policies or decisions, not least because standing up to ministers is seen as damaging to a civil servant’s career prospects’. 

The first Feasibility Direction did not in fact appear until 2018 when a minister took responsibility for the risks associated with accelerated introduction of new ‘T Level’ exams.  This was a perfectly sensible and uncontentious use of the mechanism. 

The seven year wait for the first Direction was no doubt one reason why the retiring head of the National Audit Office, Sir Amyas Morse, announced in 2019 that he was concerned that the balance of power between ministers and senior civil servants had shifted, with officials increasingly unable to challenge bad decisions.

“I still don’t think we’ve sorted out the question of the interaction between the political agenda and delivering good results and value for money.  There’s pressure to do things too quickly or to announce very high-profile world-beating projects. Allowing ministers to have a say in the appointment of senior officials has led to a position where ministers have a great deal of power over their civil servants. That’s unfortunate. They’re intelligent people. They understand that the consequences of disagreeing with a minister are likely to be pretty ugly.”

A small number of further Feasibility Directions were issued by the Business Secretary as his officials rushed to support the private sector during the 2020 COVID-19 crisis. 

Senior Responsible Officers were another Whitehall innovation which is taking a long time to take off.  SROs were from 2013 to be personally accountable, including to Parliament, for the delivery of major projects such as the National Cyber Security Programme.  It was hoped that newly appointed SROs might be concerned to ensure – before accepting their appointment – that they were not suffering from appraisal optimism, and that their project was properly resourced and had sensible timescales and objectives.  This would reduce the chances of their having to account to their Permanent Secretary and Parliament when things went wrong.  And it would ensure that a senior official – the SRO – was forced to challenge ministers if a major project were being established without proper resources etc.

In practice, however, little at first appeared to have changed.   SRO appointment letters were little more than that.  They specified neither the programme’s objectives nor its resources or timescales.  And most departments at first decided to appoint very senior staff as part-time SROs, rather than nominate those officials who were truly responsible for key projects. The SRO for the National Cyber Security Programme was for instance told that he would need to devote only two days a month to the role!

But SROs were strengthened by the introduction of Accounting Office Assessments – see further below.  The Universal Credit SRO appointment letter, for instance, requires the SRO to prepare an Accounting Officer Assessment ‘if the programme might depart from the four standards (regularity, propriety, value for money and feasibility), or from the agreed plan – including any contingency – in terms of costs, benefits, timescales, or level of risk’. The letter is also firmly linked to the Business Case, so the SRO is personally accountable for delivering the intended economic and net present values. Indeed, some of the Universal Credit material suggests that the relevant SRO was able to renegotiate the programmes timescales and be clear to Parliament what the reasons were.  So this particular (if isolated?) Minister/official dynamic appears to be working well. 

Finally, Accounting Officer Assessments were introduced in 2017.  Following a Public Accounts Committee recommendation, the Treasury announced that ‘Accounting Officers should personally approve, in advance, all significant initiatives, policies, programmes and project’ and so be able to provide assurance to Parliament that those activities provide value for money and are feasible etc.  The guidance went on to say (emphasis added):

‘The analysis should consider the issue in the round. A ministerial policy decision cannot be sufficient justification alone for proceeding. The accounting officer’s job is to try to reconcile ministers’ policy objectives with the standards for use of public funds.

The full accounting officer assessment should provide a frank examination of the key issues including any sensitive issues. It should address the essence of the policy which is being delivered, its purposes and its prospect of successful delivery or implementation. It is therefore not usually published in full, but is shared with the Treasury.   A summary of the key points from an accounting officer assessment of a major project should however be prepared and published.’

Will AO Assessments Make a Difference?

Ministerial Directions were once regarded as nuclear weapons – more effective in the silo rather than launched.  But they have come to be seen as a grown-up way of allowing ministers to account for political decisions to override strict value for money criteria.  SROs’ ability to launch Accounting Officer Assessments are similarly unlikely to be used very often, but they should in theory discourage ministers from announcing badly thought through projects such as Prime Minister Cameron’s ‘Big Society’ or Prime Minister Theresa May’s social mobility agenda.  Boris Johnson’s ‘levelling up’ might meet a similar fate. All the aspirations were no doubt sincere but there was no organisation or institutional weight behind them. 

The signs so far are not promising, given the number of ill-thought-announcements during the initial response to the COVID-19.  Officials are clearly not obliged to prepare an AO Assessment immediately a minister indulges in some blue sky thinking.  But I suspect that they will nevertheless prevaricate far too long before offering serious challenge to ministers.  And the Treasury’s guidance allows a fair bit of wriggle room later on:

Often, big intricate decisions have long lead times. In such cases, it is good practice to make the accounting officer assessment in principle at an early point, firming it up at suitable strategic points as the policy or proposal is developed. This makes for orderly evaluation of the key features of the policy, with no surprises at the final decision point. Apart from providing time to redesign a policy or proposal, early assessment may flag up how the proposal can be better designed to meet both ministers’ and parliament’s requirements …

Also, unlike AO Assessments associated with major projects, AO Policy Assessments, will not automatically be shared with Parliament.  I fear that the result is that they will not differ in substance from the traditional Mandarin warnings that ministers’ policy proposals are ‘brave’ – ‘courageous’ even!  So it could all come down to the energy and inquisitiveness of MPs and Select Committees.  They could – perhaps supported by the National Audit Office and the media – start insisting on seeing AO Policy Assessments.  If so, we could see a significant improvement in the way this country is governed.

The test may well come in this year’s Spending Review.  Faced with yet further cuts, departmental ministers may fail either to cut existing programs or to prioritise their wish list.  Mistakes will be made.  Will Permanent Secretaries, on five year contracts, assert that ‘a ministerial policy decision cannot be sufficient justification alone for proceeding’ – or will they prioritise their careers?

[This is a shortened version of a more detailed history on the Understanding the Civil Service website.]

Subsequent Debate

The IfG’s Alex Thomas sparked an interesting exchange with Jill Rutter and others after reading this blog. (Jill was one of the authors of the IfG’s 2011 report recommending the introduction of Policy Directions.) The debate revolved around the difference between Policy Directions (which weren’t introduced) and AO (Feasibility) Assessments (which were).

Jill stressed that Policy Directions were not intended to impede the introduction of policies which civil servants thought to be bad ideas. They were solely intended to come into play when officials thought that the evidence did not support a particular intervention as a reasonable way of delivering the ministerial policy objective.

Alex could live with the feasibility test as a way of reconciling ministers’ policy intentions with the sensible use of public funds. But ministers are already required to consider civil service advice before taking significant decisions. Ministers therefore take responsibility for the decision, not least if the they choose an option other than the one recommended by officials on the basis of evidence and analysis.. A further challenge, by way of requiring a Policy Direction, would surely further damage minister/civil servant relationships. The publication of the Direction would certainly enhance accountability by exposing the debate to public view. But it would damage the collegiate nature of minister/official relationships within Whitehall.

In reply, Jill wondered whether the relationship was already so decayed there is no option but formalisation. Both sides would lose something important – but she was not sure the relationship was now salvageable.

Martin Wheatley and Jonathan Potts rounded off the discussion by suggesting that the problem that Policy Directions were intended to address would be better solved through strengthened parliamentary scrutiny – a noble aim but not one likely to be achieved in the near future?

Martin Stanley
Editor Understanding Government

How (not) to Sack a Permanent Secretary

This blog is a reprint of my web page which explains how and why Permanent Secretaries can be dismissed, and seeks in particular to explain the concerns arising from the loss this year of the Cabinet Secretary and five Permanent Secretaries.

I do not claim to have detailed knowledge of the individual dismissals, and so would welcome additional information and corrections, either as comments on this blog or by email.

It is a firm rule that ministers cannot dismiss civil servants that displease them or that offer unwelcome advice (but see the comment below).  If a minister cannot stand a particular official, the latter is usually moved to a different job. Much more detail is here. It follows that, if a Secretary of State falls out with their Permanent Secretary, there then needs to be a triangular discussion involving the Secretary of State, the Cabinet Secretary and the civil servant.   Where possible, this leads to two or more Permanent Secretaries swapping places.

Sometimes, though, this is impossible.  Other Secretaries of State may refuse to accept what they see as a tainted official, or there may be no available post which is senior enough within the Permanent Secretary pecking order.  But, if it is not addressed, the poor relationship at the top of a department can lead to serious damage both to the minister and the department, and hence to the wider government. The Permanent Secretary must then leave the civil service.

Such departures do not necessarily reflect badly on either the Secretary of State or the official.  Cabinet Ministers are entitled to work with someone that they find reasonably congenial.  And no-one gets to be a Permanent Secretary unless they have shown that they can work well, over a long career, with a large number and variety of Ministers of all political persuasions.   Former Cabinet Secretary Robin Butler noted (in a letter to the Times in September 2020) that “It is especially important in the case of the head of the civil service that the appointee should be endorsed as politically non-partisan. When I was head of the service, I was authorised by the prime minister of the day to confirm informally with the leader of the opposition that those chosen for important civil service appointments were acceptable also to his party.”

Indeed, Permanent Secretaries often work with several Secretaries of State before finding one that doesn’t like them.  Simon McDonald, who was eased out of the Foreign Office in 2020, noted that in his five years as Permanent Secretary he had worked for 22 junior ministers, 4 Foreign Secretaries, 3 Prime Ministers and 1 Queen.

The departure is therefore usually pretty amicable.  There can be financial compensation for the official in the form of an early retirement package (though these are modest compared with private sector equivalents).  And prestigious jobs can often be found in higher education or the charitable sector. 

It was therefore concerning that the Boris Johnson government oversaw the distinctly not amicable loss of several Permanent Secretaries in 2020.  There were several important factors in the background to this highly unusual development.

  • The senior ranks of the Civil Service were undoubtedly very concerned about the way in which Ministers were approaching the Brexit and post-Brexit negotiations following the 2016 referendum.  Their speaking truth to power will probably not have gone down at all well.
  • The Prime Minister’s principal adviser Dominic Cummings made it clear that he had no time for most senior civil servants.  He was also keen to centralise decision making in or near Number 10, which will have been unwelcome to most Permanent Secretaries on both practical and constitutional grounds.  The Times and others reported that he had told political aides that a “hard rain is coming” after detailing the shortcomings of an “incoherent” Cabinet Office.
  • The government mishandled the early (and some of the later) stages of the COVID-19 crisis, completely disregarding well established good practice in handling crises.  But it will have wanted to deflect criticism away from ministers.
  • More generally, Whitehall, as well as many public services, encountered Brexit and COVID-19 following years of staff cuts and lack of investment driven by austerity.  It had also maybe not fully recovered from the turmoil of the LibDem coalition years. (19 out of the 20 Perm Secs had either left or been moved between departments between the 2010 general election and 2013.) By 2020, therefore, the whole of the UK public sector lacked resilience and any spare capacity.  Its performance in some areas may very well have been poor, but Ministers were hardly likely to realise that they and their predecessors were to blame for this.
  • Permanent Secretaries had, since 2013, been appointed on five year fixed term contracts. By 2020, therefore, it had become much easier to ease Permanent Secretaries out of their offices, whilst simultaneously sending clear messages to the others that they had better behave – or else!

The first Permanent Secretary to go was Philip Rutnam at the Home Office who fell out so badly with Home Secretary Priti Patel that he refused compensation and instead claimed to have been unfairly and constructively dismissed because of her bullying.  He claimed that there had been a “vicious and orchestrated” campaign against him in the department.

Clare Moriarty left the civil service in March 2020 following the abolition of her department (The Department for Exiting the European Union). It is not known whether she was would have accepted another appointment if indeed one had been offered, as she was recovering from a serious illness But many wanted her to stay. Civil Service World commented as follows:

“This is sad news,” CSW columnist and former senior civil servant Andrew Greenway tweeted. “I’ve often been critical of leadership in the CS. Clare was a perm sec who espoused the best of the service’s traditional strengths while pushing it towards the internet era. Her empathy and ability will be much missed.”  As this tribute implies, Moriarty developed a leadership style that felt refreshingly open and modern in a civil service that talks the inclusivity talk, but doesn’t always walk the walk. Many wanted to see her take her this model of stewardship to the very top of the organisation. It was a surprise then when news emerged a few weeks ago that – after seven departments and 35 years – she would be leaving the civil service at the end of March.  

Richard Heaton left the Ministry of justice in the summer, at the end of his initial five year appointment period.  I understand that the Justice Secretary wanted him to stay, but the application had to be considered by the Prime Minister (or more likely Dominic Cummings) and Mr Heaton only learned of his departure as it was tagged on to the statement by No 10 announcing the departure of Mark Sedwill – see further below. This was a pretty shabby way to treat anyone, let alone such a distinguished public servant.

Simon McDonald left the Foreign Office in the late summer, having originally said that he would stay on until 2021 to oversee the merger of the FCO and DfID – see further below.  He had worked for Boris Johnson as Foreign Secretary and then for Dominic Raab, neither of whom were regarded as strong or effective in the role, so there may have been tensions in their relationships. .  He had then, according to the media:- been forced to make U-turn on his claim to MPs that the UK made a “political decision” not to join an EU scheme to source ventilators to treat coronavirus patients. He later declared he had been “incorrect” in his comments to the Foreign Affairs Committee, prompting speculation he had been ordered to recant by Downing Street.  He had also undoubtedly opposed the speed of the merger that autumn of the Foreign Office and Department for international Development.  This was being planned for 2021so as to allow time to tackle a number of complexities, including the need to knit together two quite different cultures, pay systems etc . 

The manner of Jonathan Slater’s dismissal caused little short of outrage amongst many observers.  He was evicted from the Education Department in August 2020 with only five days notice.  Although this followed the department’s very poor handling of the education aspects of the COVID-19 crisis, including some impressive u-turns over the grading of pupils who had been unable to sit A-level and GCSE exams, very few thought that the errors should be attributed to Mr Slater alone, if indeed at all.   It was widely assumed that the Prime Minister had required someone to fall on their sword but ordained that that someone was not to be the Cabinet Minister Gavin Williamson. – a reversal of the normal acceptance of responsibility in these circumstances.

It was noticeable that, although the Head of Ofqual (the exams regulator) also resigned, she remained a civil servant and returned to her home department, the Cabinet Office.

Last, but not least, Cabinet Secretary Mark Sedwill left in September following acres of press reports that he was to be sacked.  The Telegraph said that Downing Street regarded Sir Mark as “too much of a Europhile and establishment figure” to be in post through planned Whitehall reforms. It is worth noting, too that Sir Mark’s previous career (mainly in defence and national security) was probably not ideal preparation for his new role, especially given the pressure of the Brexit negotiations and preparations, and the CIVID-19 pandemic. There will have been tensions, too, resulting from Dominic Cummings’ determination to centralise decision making in Number 10.  These issues are explored at greater length in a separate blog.

Comment

The departures of Richard Heaton and Jonathan Slater were so clearly ordered by the Prime Minister as to call into question my assertion, above, that ‘ministers cannot dismiss civil servants’. The sackings may have been designed to show Permanent Secretaries that they have no job security and they should watch their step, though – as in all the best authoritarian systems – watching their step may well not save them. It does not appear that Prime Minister Johnson has any interest in or loyalty towards the civil service as an institution of which he is, of course, supposed to be the custodian as Minister for the Civil Service.

It was, of course, also the case that the Cabinet Secretary was in no position to object to the two dismissals, as he was himself serving his notice period. It remains to be seen whether Simon Case (Sir Mark’s successor) will be able to withstand pressure from the Prime Minister and his aides, or whether he was chosen for his willingness to bend to Prime Ministerial will.

Let’s not forget, though, that this is not the first time that Whitehall has got excited about minister/Permanent Secretary relations. One persistent theme, as the 2010- LibDem coalition passed the mid-point of its term in office, was ministers’ dissatisfaction with Permanent Secretaries.  There were several ‘fallings-out’ and Perm Sec resignations, which at least went to show that Minsters did weald considerable power in this area if they chose to use it.  Indeed, there was by 2013 only one Perm Sec in post who had been in post in 2007, and 19 out of the 20 Perm Secs had either left or been moved between departments since the 2010 general election.  The downside, of course, was that the 19 were often inexperienced and/or working in departments whose issues, strengths, weaknesses and organisation they did not understand at all well – a fact which was all too apparent to their staff.  It was probably also a significant contributory factor in the poor performance of the coalition and subsequent governments.

Ivan Rogers resignation in 2017 was an example of a less-than-amicable but nevertheless necessary departure. His disagreement with the government’s Brexit negotiation strategy was so profound that he resigned before he was dismissed.

Martin Stanley

Editor – Understanding Government

Algorithms, Ofqual and Regulatory Independence

The A Level drama exposes an uncomfortable issue:-  the balance between regulators’ operational independence and decision making, and political accountability.

It is a tricky issue that has been around for decades. Most regulators would want decisions that impose significant distributional effects between classes or types of the public to be subject to greater political accountability.  Politicians, of course, would prefer the opposite.  This blog seeks to illuminate the debate.

Let’s begin by summarising regulatory best practice.

Some regulators are more independent than others

It is in everyone’s interest that regulators who make significant economic decisions (such as whether to permit a company merger or to allow gas prices to rise) do so without any political interference.   But it is clearly not possible for politicians to wash their hands of responsibility for the quality of education and health services, so the regulators of those services tend to operate in a more overtly political environment.  

All regulators need to communicate effectively with both the public and the main political parties.

Regulators take many decisions which deeply affect the lives and finances of millions of people.  They should not be swayed by party political considerations, but they do need to anticipate criticism and explain their decisions in clear uncomplicated language.  They should have clear and honest channels of communication with interested journalists.  And they should brief the relevant government departments –  and offer to brief Opposition spokespersons – whenever they announce particularly interesting regulatory decisions.

  • Early/mid-morning press-conferences, meetings and conversations will ensure that the regulator’s reasoning is widely understood whilst opinions are being formed, even if their judgment is not fully accepted.

Models, Spreadsheets, Algorithms

Regulators are often required to forecast the result of their decisions, and deploy various types of model to help them do so.  But models are guides and simplifications of real life – they are not real life. Decision makers need to be careful not to over-rely on them and fall into the seductive trap of relying on model outputs as “truth” when judgment and pragmatism would frankly give better and more legitimate results.

Numerical outputs are best seen as approximations and can be rough and ready in their predictive power. Most analysts who develop models will tell you that 80 per cent accuracy is about as good as you will ever get for a complex social science question. It’s not physics and exact science we are talking about here.

Let’s also remember – to quote Timandra Harkness – that algorithms are ‘prejudice machines’ – which is another big subject in itself.

Consultation

High quality decision-making must be underpinned by effective, open and transparent consultation.  It should seldom be necessary to depart from this process:-

  1. Ask questions, seek information and seek views from any interested party.
  2. Debate the issues with experts and representatives of key organisations as well as with others who offer interesting and/or challenging views.
  3. Announce a provisional (’minded to’) decision and seek comments on it.
  4. Make a final decision in the light of stage 3 representations.

This process can take several months if the subject is important enough.  Equally, it can be carried out in a matter of days if there is a need for urgency.

It is particularly important that the process should not be distorted by the volume of similar consultation responses, often encouraged by lobby and pressure groups.  Indeed, it is perfectly possible that just one isolated submission, making a vital and otherwise overlooked point, can help steer the regulator away from a faulty conclusion.

It is also vital that regulators should not be upset by vitriolic criticism but should remain willing to listen to that criticism in case it contains an essential truth that had been overlooked.   This is gf course much easier to say than to do, especially in today’s world so dominated by social media.  But it helps greatly if there is a mature, mutually respectful relationship between the department and regulator.

Ofqual’s Consultations  – and the Algorithm

It is not yet possible for anyone outside the government and Ofqual to understand whether they followed the above best practice, but here are some provisional observations. 

First, let’s not forget that Ofqual were tasked with solving a fundamentally impossible problem in awarding grades to students who had completed neither course work nor formal exams.  Its decisions would be very closely scrutinised, especially if they had distributional effects.  There would need to be close collaboration with ministers and their officials.

It is often the case that regulators are faced with a choice between options which have different distributional effects:  trade-offs where one group of the population benefits at the expense of another. Should gas/electricity standing charges be increased more than unit prices?  Should regional pricing be allowed?  Will increased competition benefit the affluent and IT-savvy, to the detriment of those who find it difficult to shop around?

It is an article of faith amongst regulators that politicians and not regulators must own such distributional effects.  Regulators can advise but such effects are by their nature political and require an element of democratic legitimacy. Increasingly, though, politicians have started asking regulators to take essentially political decisions, most obviously in energy regulation where Ofgem has been forced to accept a substantial proliferation in the number of general duties. Since the 1986 Gas Act, the number of duties has risen from eight to twenty-one.  And the position is broadly similar for electricity.  The prioritisation of these often conflicting duties should not in principle be left to the unelected regulator.

Part of the impossibility of the task facing Ofqual was that, as noted above, models are fine when all the decision maker needs is an 80% approximation. But, when you are talking about exam grades, every individual matters – you can’t simply say 80% is good enough. It leads to too much rough justice and unfairness, exacerbated in this case by teachers being forced to rank students who were in reality indistinguishable.  Ofqual’s board and DfE might therefore have been expected to ask (and might well have asked) whether alternatives to the model would have been acceptable and less prone to rough justice. Could teacher assessed grades be used subject to Ofqual checks – or even peer review from teachers in other schools using whatever evidence was available?  

It is hard to understand why the model and its assumptions were not shared transparently before the results.  Ofqual published a 319-page document explaining its methodology only after the A-level results had been published.   It is not clear why this could not have been published much earlier.  This would always be good regulatory practice, and was even more vital given the novel and political contentious nature of the task. It would have helped draw out the sharp edges earlier and hopefully driven different decision making.

The fact that Ofqual could not find a way to take up the offer by the Royal Statistical Society to review the model was particularly odd.  I have never heard of a regulator requiring its advisers to sign Non-Disclosure Agreements.

And yet … there was clearly enough information in the public domain to cause concern amongst those that tried to understand it.  So did Ofqual find it difficult to accept that non-expert criticism might be well-founded?  This is often the case with experts, of course, who feel that their professional honour is impugned whenever an amateur or outsider seeks to contribute to a debate.[1] [2]  But it does appear that input from former DfE official Jon Coles, IT consultant Huy Duong, and his statistician sister, as well as the Education Select Committee amongst others, should have given the regulator pause for thought.

On the other hand, there was an 11-person external advisory group (including Tim Leunig, a reportedly somewhat maverick Treasury Economic Adviser) whose discussions have been reported as ‘robust’ but leading to consensus.

If there were no apparently acceptable alternative, it follows that the key question is whether Ofqual and the DoE really understood and then fully discussed ahead of time and co-owned:

  • the way the algorithm locked in the school’s previous history,
  • the implicit skew in the model that favoured small tuition groups (most often found in the private sector),and
  • the forcing of lower grades (including ‘U’s) on those at the bottom of teachers’ ranking.

And, then, most crucially of all, had the Secretary of State been made fully aware of this model output well before results day?  It was pretty clear that this was a political nightmare waiting to unfold. 

Department-Regulator communications certainly seem to have broken down once the Secretary of State decided that he would no longer rely on the algorithm.  I can only imagine the near-panic in both organisations at that time, possible worsened by interference from No.10.  But it didn’t look good, and the supposed decision to use mock A-level results was clearly rushed and ill thought through

Two Lessons?

The FDA’s Dave Penman was surely correct when he said that ‘I don’t think it’s fair that civil servants are attacked … but I don’t think ministers should be either. The government needs to find out what went wrong [and learn from it] not make a knee-jerk decision to abandon officials’.  But I have two broader suggestions.

First, I suggest that it would be sensible for all departments and their regulators to sit down together to ensure that they have a shared view of which sort of decisions should be taken by the regulator, and which by Ministers.  They should also agree on how they would jointly handle criticism of contentious decisions, bearing in mind that agreed division of responsibility.

Second, this episode contains clear lessons for the whole of the public sector.  As Stephen Bush has commented:  “As politics becomes increasingly dominated by algorithms, what will matter ever more is transparency – about who is writing them, what goes into them, and what they mean for us all.”

Martin Stanley

Editor – Understanding Government


[1] A classic example was the Navy’s wartime resistance to the suggesting that convoys might reduce the losses being experienced by merchant ships crossing the Atlantic.  (War memoirs of David Lloyd George p1149) 

[2] One wonders whether something similar happened in the UK in the early stages of the current COVID-19 pandemic.

Dominic Cummings Should Read the Research

Whitehall is to have ‘a NASA-style mission control centre … with the aim of imposing the government’s will on the officials with whom it has often clashed [and featuring] television screens displaying ‘real time performance data’’[1].  

This is all consistent with Dominic Cummings’ thesis that the government needs much better policy and project support, informed by input from those with an ‘Odyssean education[2]’, assorted ‘weirdos’ and data scientists[3], supported by a rather different civil service.  It is also consistent with his determination to establish a strong strategic centre that can overrule both a weak Cabinet and a compliant Parliament – and if possible a weakened judiciary.

I must admit that I rather like mavericks, and I welcome many of Dominic Cummings’ innovations, as well as sharing his concern at ‘the elevation of the courtier-fixer at the expense of the thinker and manager’[4].  But if he really wants to reform British policy-making then he should follow his own advice and start by reading the wealth of data and analysis provided by those who have studied UK government over many decades.  It would point him in a quite different direction.

I’ll turn to the research in a moment but let me first point out that better data or analysis would not have helped successive governments tackle the many ‘wicked issues’ such as how best to fund Social Care.  As Richard Johnstone has commented, we keep repeating this question rather than engaging with the answer[5]

Nor would it have helped various Chancellors withstand pressure to abandon the Fuel Duty Escalator (despite concerns about Climate Change) and overdue property revaluations (which have led to much unfair local taxation).  And I cannot imagine that a mission control centre could have stopped the ministerial panic that has characterised much of their response to Covid-19[6] – not to mention their handing of this years A Levels.

The reasons why ministers make so many poor decisions lie much deeper than  lack of data and out-of-touch officials.  Report after report (summarised in the annex to this blog) reach similar conclusions.  They point to:

  • Poor pre-legislative consultation.
  • Weak parliamentary oversight including weak scrutiny of legislation.
  • Ineffective checks and balances within the executive (including the Cabinet) which allow mistakes to be made and encourage groupthink.
  • Political hyperactivism – when politicians individually and collectively gain ‘points’ from making new initiatives almost for their own sakes.
  • Whitehall arrogance, including serious weaknesses in the senior civil service.
  • High turnover of both ministers and senior officials.
  • A culture of haste and determination to ‘deliver’.
  • Over-willingness to recreate policies and organisations rather than seek continuous improvement …
  • all exacerbated by failure to learn from past mistakes.

In short:

  • “successive UK governments have attempted to do too much, far too quickly and without paying sufficient attention to the ‘do-ability’ of their policies”.

Sadly, therefore, much of this analysis suggests that the Johnson/Cummings partnership is making a terrible mistake as it strengthens the centre, emasculates the Cabinet, and ignores Parliament.  This will lead to less scrutiny, less debate, more groupthink and more mistakes.

I’ll leave the last word to Giles Wilkes who commented as follows on Dominic Cummings‘ thinking[7]:

“Alas, the world is both much simpler and more intractable. Few leave government really dumbfounded by the lack of a policy answer to a problem—most are instead worn down by the sheer political impossibility of doing it.

To quote a Twitter Guru[8]  “‘Difficult’ problems are ‘difficult’ because their small number (usually very obvious) solutions are all unpleasant to someone.”

Or in the words of Jean-Claude Juncker, “We all know what to do, we just don’t know how to get re-elected after we’ve done it.”

Martin Stanley – Editor – Understanding Government

ANNEX

Here are summaries of the most accessible commentaries on significant UK policy failures.

The theme of Patrick Dunleavy’s 1995  Policy Disasters: Explaining the UK’s Record  is that the UK is a state unusually prone to make large-scale, avoidable policy mistakes[9], which he defines as mistakes made when decision-makers systematically choose to ignore an abundance of critical or warning voices in order to persevere with their chosen policy.  Contributory factors include:

  • Weak regional government and highly centralised social security and health systems.
  • Weak parliamentary scrutiny of legislation.
  • Political hyperactivism – when politicians individually and collectively gain ‘points’ from making new initiatives almost for their own sakes.
  • Whitehall arrogance, including serious weaknesses in the senior civil service.
  • Ineffective checks and balances within the executive which allow mistakes to be made and encourage groupthink.

Michael Moran’s The British Regulatory State, published in 2003,  analysed six high-profile fiascos[10] and concluded that they were caused by (amongst other things) ‘club government, evidenced by a devaluation of formally acquired skills and explicit knowledge at the top of government and the craze for downsizing’.

Anthony King and Ivor Crewe’s 2013 The Blunders of Our Governments summarises 12 highly readable policy (and implementation) horror stories.  They point to failures of deliberation, accountability and restraint in UK policy-making.  Their examples of deficient deliberation include lack of pre-legislative consultation, and inadequate parliamentary involvement.  Other problems include the high turnover of both ministers and senior officials and a culture of haste and determination to ‘deliver’, all exacerbated by failure to learn from past mistakes.

“It’s a series of lessons with one overarching theme – that successive UK governments have attempted to do too much, far too quickly and without paying sufficient attention to the ‘do-ability’ of their policies”.

Undeservedly receiving much less attention, Richard Bacon and Christopher Hope’s  Conundrum: Why Every Government Gets Things Wrong – And What We Can Do About It  was also published in 2013.  They identify similar problems to other commentators but are less critical of politicians:- “If we are to have a democracy, then we need to take it warts and all …  By all means let us have [more expertise] but let us not suppose that this will yield a clear answer to every question.  

And they are more ready to ask: “Are Civil Servants Up To The Job?”.  Their answer to this question is that …

Ministers have a nearly impossible job.  And for civil servants the outlook might seem just as unpromising.  Civil servants need to be god managers to do their job properly but for 150 years they have been recruited on their … analytical abilities … not for their ability to make things happen. … most top civil servants don’t want to be managers – they have culturally disdained ‘management’ – and they also know that becoming a top manger will not guarantee their promotion to the top.  

The Institute for Government’s Report  All Change Report[11]  draws attention to Ministers preference for reinvention rather than continuous improvement.

“Government has a tendency to recreate policies and organisations on an alarmingly regular basis. New organisations replace old ones; one policy is ended while a remarkably similar one is launched. In this report, we demonstrate this through an in-depth examination of three policy areas where change has been especially acute: further education (FE), regional governance and industrial policy.

In the FE sector, since the 1980s there have been 28 major pieces of legislation, 48 secretaries of state with relevant responsibilities, and no organisation has survived longer than a decade. In the industrial strategy space, there have been at least two industrial strategies in the last decade alone – and we are now moving onto a third.”

As recently as 2019, Bob Hudson has argued that “We need to talk about policy failure – and how to avoid it[12], listing four broad factors leading to policy failure:

  • Overly optimistic expectations
  • Dispersed governance
  • Inadequate collaboration &
  • Vagaries of the political cycle.

Ministerial propensity for delay was rather nicely highlighted by David Lammy’s reaction to Boris Johnson’s recently announced Racial Inequality Review:

  • “There are 35 recommendations in the Lammy Review.  Implement them.
  • There are 110 recommendations in the Angiolini Review. Implement them.
  • There are 30 recommendations in the Windrush Lessons Learned review.  Implement them.
  • There are 26 recommendations in Baroness McGregor-Smith’s Review:  Implement them.”

Last, but not least, I strongly recommend Geoff Mulgan’s February 2020 “Bluff, Bluster” blog[13].  In short:

“There are four missing parts of the Cummings diagnosis and prescription.  Politics, systems, practicality and failure to learn.” 


[1] The Times 13 August 2020

[2] https://www.theguardian.com/politics/2020/feb/06/inside-the-mind-of-dominic-cummings-brexit-boris-johnson-conservatives

[3] https://dominiccummings.com/category/economics-finance/game-theory/

[4] https://dominiccummings.com/tag/heywood/

[5] https://twitter.com/RichRJohnstone/status/1282995840055992326

[6] https://www.civilservant.org.uk/skills-crises.html

[7] https://www.prospectmagazine.co.uk/politics/dominic-cummingss-naive-faith-in-the-power-of-the-state-whitehall-number-10-civil-service-spads

[8] https://twitter.com/dsquareddigest/status/1212855352783491077

[9] https://www.civilservant.org.uk/library/1995-Patrick_Dunleavy-Policy_Disasters-Explaining_the_UKs_Record.pdf Professor Dunleavy’s list included the Poll Tax, social security reforms 1985-8, the Child Support Agency, botched entry into, and forced exit from the Exchange Rate Mechanism, the 1987-9 recession and the Trident nuclear missile program.

[10] The Millennium Dome, Rail Privatisation, The Community Charge (aka Poll Tax), The Barings Bank collapse, BSE (aka Mad Cow Disease), and various IT Fiascos.

[11] https://www.instituteforgovernment.org.uk/publications/all-change

[12] https://blogs.lse.ac.uk/politicsandpolicy/policy-failure-and-how-to-avoid-it/

[13] https://www.geoffmulgan.com/post/bluff-bluster-brilliance-and-brains

Strategic Centre to Replace Cabinet Government?

Here’s the problem:-  Prime Minister Johnson is said to have asked the Cabinet Secretary, Mark Sedwill, to say who was in charge of implementing a COVID-19 delivery plan? One observer recalled: “There was just silence.  He looked over at Sedwill and said, ‘Is it you?’  Sedwill said, ‘No, I think it’s you, Prime Minister.’”

This exchange must seem extraordinary to anyone outside Whitehall, but it reflects the reality of Cabinet government.  Government in the UK is a system, not a command structure.  The Cabinet are meant to be a team of equals.  Each team member takes responsibility when the ball, so to speak, is passed to them.  But there is no organising mind, least of all in the Cabinet Office.  Its main function is to resolve disputes between the players. 

This generally works well.  Most important decisions can be taken following discussions between Cabinet Ministers, refereed as necessary by the Prime Minister or in Cabinet Committee.  And it is usually obvious which department needs to be responsible for which delivery programs.

And it has sometimes worked OK during the COVID-19 crisis.  Neither the Prime Minister nor the Cabinet Secretary needed to tell the Chancellor and his officials how to (or indeed whether to) organise a furlough scheme.  Nor did they need to tell Matt Hancock and his officials how to manage the NHS so as to cope with the first spike in COVID deaths.

But it all clearly fell apart when it came to lockdown and related policies.  Here, the Health Secretary, the Home Secretary (police, civil liberties), the Transport Secretary, the Business Secretary, and the Chancellor all needed to work together.   One of them needed to take charge, but no-one did so.  Mark Sedwill appears to have thought that the Prime Minster should have taken charge, but that is hardly Mr Johnson’s style.  Mr Johnson appears to have thought that officials should resolve all the inter-departmental tensions for him.  But he forgot that, while officials could certainly provide information analysis and advice, they couldn’t make what were bound to be highly controversial decisions.  If the delivery plan was so complex that it could not be led by a single Secretary of State, then there was no alternative but for it to be led by the Prime Minister himself, in effect managing his Cabinet colleagues.  He will have looked in vain for robust structures and levers to pull.  They aren’t normally needed, and they couldn’t be magicked out of thin air in a hurry.  Put simply, the UK government does not have anything approaching a strategic centre.

Should we therefore switch to a more Presidential system?  Or at least a more strategic centre as was recommended by the Institute for Government in its ‘Shaping Up’ report  ten years ago?

It would certainly speed decision making.  Ministers and officials can move very swiftly if they don’t need to consult other departments.  But it can take an age to get others to agree to even innocuous suggestions.  They have priorities of their own, and their own stakeholders to worry about.  Even worse, one Minister can be very unwilling to support another Minister’s great initiative, as they are probably both vying for the next promotion.

A strategic centre would also probably help to ensure that resources could be swiftly moved from one department to another where they are more urgently needed.  This is currently a very slow process, given Ministers’ and Permanent Secretaries’ natural reluctance to lose staff.  Even worse, they will if pressed eventually offer to lose staff that they don’t want to keep.

More generally, a strategic centre would weaken the sometimes excessive loyalty of senior civil servants to their particular political boss. 

Above all, though, isn’t it crazy that the Prime Minister doesn’t have a powerful team to help him monitor progress on his key priorities, to intervene when progress has stalled, and make those all-important trade-offs which will, if unaddressed, lead to endless and fruitless debate?  (Social care, for instance.)

Keen Whitehall observers will be aware that Dominic Cummings is prominent in supporting what is pejoratively called ‘centralisation’, including ‘COBRA style committees’ where Ministers and officials would work together on projects.  I can do no better than quote Jill Rutter’s reaction:

“He’s going to hate this from an ex civil servant – but I think it’s a pretty good idea..  Cabinet committees are pretty useless by and large with bored Ministers reading out departmental speaking notes usually written by junior, quite bored civil servants desperately trying to dig up a departmental angle on an issue of which they know little – or conversely fuming at a last minute ‘bounce’ on an issue in which their department has a big interest.  Ministers are expected to pay departmental roles in such committees and leave their broader political judgement at home.  This is the system that nodded through the Lansley health reforms.”

The problem is that strategic centres and COBRA-style committees would inevitably and intentionally reduce the power and influence of individual members of the Cabinet.  Much the same can be said for already announced decisions to have Downing Street control all government data, and to have all Special Advisers report to Dominic Cummings.  George Yarrow has pointed out that Adam Smith would not have approved of making a significant change to Ministers’ responsibilities, nor would it have been welcomed by previous administrations’ ‘big beasts’.  Former Chancellor Sajid Javid objected, of course, and was summarily dismissed. 

So we are left with a Cabinet which is entirely subservient to the Prime Minister, and presumably perfectly content to work within a command structure rather than within a Cabinet of equals.  It will be interesting to see if ‘centralisation’ continues and if so whether we then experience significantly better government, though some would say that we could hardly have a worse experience than recent years.

Martin Stanley

Editor – Understanding Government

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