ukcivilservant

Articles about the UK Civil Service and Regulation

The DPP Should Be Allowed To Talk About Resources

These are some thoughts in response to some interesting questions that arose following soon-to-retire Director of Public Prosecutions Alison Saunders’ interview in the Observer in which she said that her organisation and the police were critically short of the skills and resources required to combat crime … to which The Secret Barrister responded

“Gosh. If only this Alison Saunders, talking honestly about the chronic under-resourcing of the Crown Prosecution Service, had been DPP. Instead for 5 years we’ve had that obliging civil servant blithely insisting that all was well as the CPS burned.”

I chipped in with the standard line that civil servants may not publicly attack Ministers’ resourcing decisions – or any other Ministerial decisions for that matter.  This generated some challenging further comments and questions.

  • The Secret Barrister pointed out that “Alison Saunders went out of her way to pretend that there were no problems. That was the issue that really grated.”
  • Michael Heery pointed out that officials in the health sector have gone much farther than DPP in talking about the effect of cuts.
  • Jonathan Potts asked “Is the answer for the DPP to be not a civil servant?
  • AJP Wood asked “Surely Civil Servants already aren’t allowed to be anything other than honest per the Civil Service Code?:- [Civil Servants] must not deceive or knowingly mislead ministers, Parliament or others.”
  • And ex-Home Office Lorraine Rogerson noted that previous DPPs were not from a Civil Service background. Prosecution decisions constitutionally independent. The AG also independent. Cutting funds undermines independence. But it is a public service & has also to be accountable. AG’s role, influence and relationship with DPP (and championship of prosecution services) crucial. DPP has to maintain a network of support as well as being independent.

So here are some further thoughts from me.

First, it is very hard to understand, let alone defend, the artificial borders between various parts of the public sector such as

  • the principal government departments,
  • non-ministerial government departments (NMGDs) such as HMRC, the CPS, the CMA, Ofsted and Ofgem), and
  • various non-departmental public bodies (NDPBs) such as NHS England, the Environment Agency and the Financial Conduct Authority.
  • And then there are local authorities, various types of school, the police, the BBC, and so on.

There is even, as Lorraine Rogerson points out, a distinction between those NMGDs that have operational independence but a close relationship with a Minister (such as HMRC and the CPS) and those that are even more independent (such as the economic regulators).

Second, I do not find it difficult to defend the obligation of near public silence that is imposed on those – such as Permanent Secretaries – that give policy advice to Ministers.  It is better, as AJP Wood suggests, that they should say nothing rather than make misleading statements about the abilities of their organisations.

But, third, I think that we should now be quite grown up and allow the (civil servant) Heads of NMGDs (such as DPP Alison Saunders) to have the same freedoms as the (non-civil servant) Heads of NDPBs (such as the NHS’ Simon Stevens).  Of course they shouldn’t mount all out attacks on those that appoint and fund them, but Parliament and the public are surely entitled to hear their honest opinions about the strengths, weaknesses and resources of their organisations.  Simon Stevens seems to have walked this particular tightrope with some skill, and has gained resources for the NHS.

The case for such openness is strengthened by the fact that an independent prosecution service is a cornerstone of the justice system and indeed the constitution. However, as many – not least The Secret Barrister – have pointed out, the Criminal Justice system has been shamefully denied resources. Expecting the DPP to remain mute like a senior Mandarin is therefore quite wrong; the whole point of the role is independent decision making.

And there is a wider governmental question here.  Oppositional voices, challenge, and creative tension should all be welcomed and indeed promoted if good services with integrity are to be delivered and improved.

I would therefore like to see Alison Saunders’ successor – whilst technically remaining a civil servant – insisting on the same freedom of expression as his colleagues in the health service and other important pubic roles.  This would also free him from worrying about breaching the Civil Service Code, whether explicitly or implicitly.

Many thanks to Lorraine Rogerson for helping me write this blog

Martin Stanley

Editor:  The UK Civil Service and Understanding Regulation

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Gas & Electricity Prices – Devastating Increases for Low Income Households

The multidisciplinary competition team at the University of East Anglia has just published a fascinating report into Fairness in UK Retail Energy Markets. Here are some highlights, plus links to further reading.

First off, our median domestic energy spending (as a % of income) is not high by historic standards. This chart (from 1977 to 2014) shows that the anomalous years were from 1992 to 2008 when energy expenditure was relatively low.

CCP1

But the above chart – and the blue line in the next one – eliminate the effect of inflation. The orange line – below – shows that energy bills have doubled, in cash terms, since 1992.  No wonder voters have been upset!

CCP2

And the poorest have been hardest hit. The highest decile spend around 6.6% of their income on energy; the lowest around 16%. Even small increases in energy bills can devastate their budgeting

CCP3

For added emphasis, this next chart shows how the various income deciles spend their money. Energy is absolutely the largest utility cost for poorer households. The rich seem to spend most of their money on transport – presumably commuting, posh cars and weekends away, all of which consume energy in ways not caught by the above charts.

CCP4

Comment

The above charts are taken from Chapter 2 of a joint report by UEA”s Centre for Competition Policy and the UK Energy Research Centre. Click here to read/download the report.

The authors politely refrain from describing the reasons why energy prices have risen so fast – which is mainly because of government policies.  This is explained in this web page and, more generally, in  the energy pages of the Understanding Regulation website.

Ofgem are currently designing a price cap for single variable tariffs, much used by less affluent consumers.  I will add news of this to the above-mentioned web pages, when it is announced.

Chapter 3 of the CCP/UKERC report explores the relationship between the regulator Ofgem and the government.  I will summarise this chapter in a separate blog.

Finally, in interpreting the above charts, it is interesting to remember that domestic energy consumption (in kilotons of oil equivalent) has been falling since around 2000 – as shown in this chart (not from the report).  The energy price crisis would have been much worse if this had not happened.

CCP6

 

Martin Stanley

Editor Understanding Regulation

Bullying and Performance Management

Dame Laura Cox QC today published her report into bullying and harassment in the Palace of Westminster.  It contains some very helpful general advice and definitions, especially for managers (a) who receive complaints of bullying, or (b) who are concerned that they may be accused of bullying when trying to improve the performance of their staff.

Apart from two comments, the following text is taken almost verbatim from Dame Laura’s report.

What is Bullying?

The report contains two useful definitions of bullying:

  • Behaviour that cannot be objectively justified by a reasonable code of conduct, and whose likely or actual cumulative effect is to threaten, undermine, constrain, humiliate or harm another person or their property, reputation, self-esteem, self-confidence or ability to perform.
  • Offensive, intimidating, malicious or insulting behaviour, an abuse or misuse of power through means intended to undermine, humiliate, denigrate or injure the recipient.

The report notes that bullying or harassment:

  • may be by an individual (perhaps by someone in a position of authority such as a manager or supervisor) or involve groups of people.
  • may be obvious or it may be insidious.
  • may be persistent or an isolated incident.
  • can also occur in written communications, by phone or through email, not just face to face.

Whatever form it takes, bullying is unwarranted and unwelcome to the individual.

Performance Management

Staff who are facing criticism of their performance may feel that they are being bullied by their manager.  The report offers this sensible advice:

  • When introducing new standards of performance, a good manager will usually involve all the members of the team in agreeing them, rather than seek to impose them without discussion and with accompanying threats of disciplinary action if they are not met.
  • Positive contributions and improvements in performance will be monitored, acknowledged and rewarded openly, rather than dealt with arbitrarily, involving obvious acts of favouritism, or just ignored altogether.
  • A failure by someone to achieve the required standards will be dealt with initially as a performance-improvement issue, the employee being treated with civility throughout and with the provision of appropriate support, rather than pressure to conform being exerted using sarcasm, ridicule, threats or humiliation, often in the presence of others in the team.
  • An under-performing employee should know from the start that their performance is under investigation, and why, rather than learning only after the event that it has been under investigation for some time, and that disciplinary action is now imminent.

Comment: This advice is sensible but I would add that I think it unfortunate that HR professionals generally refer to formal performance management warnings etc. as ‘disciplinary action’.  The word ‘discipline’ implies serious fault – such as bullying – and should, I think, be reserved for genuinely bad behaviour.  Under-performing staff need to have their performance managed – if necessary to the point of dismissal – but they will often be in the wrong job for their skills and experience. I don’t think that they should be ‘disciplined’.

The Need for Full Records

The report notes that:

  • Patterns of behaviour are extremely important in tackling bullying. It is always right to consider whether the “perpetrator” was under acute pressure and just having a bad day, for example, and whether this was just an isolated outburst with no lasting effects and the behaviour was out of character, or whether such incidents had happened before.
  • It is therefore important for organisations to maintain reliable records and to log reported incidents and their outcomes accurately, and to have systems in place to enable patterns to be picked up and their historical and systemic significance understood.

Comment:  The implication of the above advice is that an isolated outburst is bullying and should be recognised as such.  But, if reported to the employer, it should not lead to formal disciplinary action against the bully, if he or she appreciates that their behaviour was unacceptable, and if the behaviour is not repeated.

Martin Stanley

Editor      The UK Civil Service and Understanding Regulation websites

West Wylam Colliery Medal

I would be delighted to hear from anyone who can help explain the background to this 1894 medal.

It was awarded by the men (not the owners) of West Wylam Colliery, (near Newcastle upon Tyne) to a fellow miner, Thomas Gribben, who saved another man’s life.

If you can help, please email me at 68rtsw8@gmail.com .

Martin Stanley

thomas gribben full

Would Civil Servants Refuse To Tax Non-EU Imports following a Hard Brexit?

There has been an interesting exchange between Dr Richard North and George Peretz QC concerning the implications of Brexit without a prior withdrawal agreement.  It is clear that it is now far too late for us to be able to apply border controls and charge tariffs on post-Brexit imports from the EU, even if we wanted to.  But would we then also have to allow all other imports to arrive duty-free?

In short:

  • Both Dr North and Mr Peretz agree that WTO treaties require the UK to remove tariffs from all its imports if we continue to import goods from the EU without tariffs and customs checks. This would no doubt be disastrous for many UK industries – and maybe for the Exchequer.
  • But Dr North says that the UK could ignore the WTO until the successful conclusion – many years later – of other countries’ challenges to our decisions.
  • Mr Peretz says that the UK could not and should not act in such flagrant breach of its international commitments.

I would add that UK civil servants may not accept instructions to do things which are very  likely to be illegal or improper, and this includes actions which would contravene our treaty obligations. So I do not think that HMRC and other officials could be asked to impose tariffs on, say, Chinese imports whilst simultaneously allowing EU imports to arrive duty free.

In more detail:

Here is Dr North’s argument:

“[Mr Peretz notes that WTO rules] “make it hard for the EU to give the UK benefits that it doesn’t give other third countries”. … if the UK’s policy response to the problems of ‘no deal’ is to waive tariffs and checks on imports from the EU, it will also have to waive them for imports from (for example) China and the US in order to avoid well-founded claims of discrimination”.  Noting that this is “unlikely to be politically attractive” (as well as potentially hazardous), what he doesn’t take on board is the very nature of the WTO as a body dedicated to facilitating international trade. As such, the WTO relies on negotiation as its main tool and regards the treaty law as a adjunct, to be used when all else fails and then only to achieve an effect. It is not a legal authority which regards the rule of law as a sacred principle or any part of its duty implementing the letter of the law.

Reflecting this, many of the WTO treaty provisions (and their predecessors in GATT) are not actionable merely on evidence of a breach. The WTO Agreement sets the additional test of requiring the aggrieved party (or parties) to have suffered injury – known in technical terms as “nullification or impairment”.  Given this requirement, one can imagine a post-Brexit UK which, in order to keep goods flowing and to prevent the ports being clogged, decides to maintain its existing checks on what were EU third countries but decides to waive checks on EU produce which, until very recently it did not check at all.

In those circumstances, where the UK is maintaining the status quo, one has to ask whether any of the erstwhile third countries are materially disadvantaged. And, if they feel they are, their option is to go through the dispute procedures, potentially taking several years before an actional judgement is made, which in any event only allows the aggrieved parties to impose sanctions which have an effect on the target county similar to the damage originally sustained.

One can easily imagine the situation where the UK will take the political judgement that it should waive WTO rules. And even if it is later found to be in breach, such modest sanctions as may then apply – some time in the distant future – are nothing compared to the damage that might otherwise have been caused.

Similarly, if the UK decides to invoke the national security exemption, its lawyers will doubtless be able to keep any complainants tied up in the minutia of international law and WTO precedents so that, by the time anything is resolve – if, indeed, it is – the crisis will have been long past.

Crucially, this means that many of the headline effects of Brexit will not materialise – or are capable of mitigation to such an extent that they will scarcely register as much more than minor perturbations. The really damaging effects will be longer-term and far less visible, the cumulative effect discernible only from periodic trade statistics.

Here is Mr Peretz’s argument:

[Dr North] is of course right to point out that WTO enforcement requires a complaint showing harm, takes years, and results only in permission to take action if the defendant government fails to respond. … But … he ignores three important political points …

First, the UK Government has always had a firm policy of complying with its international obligations, whether enforceable or not. That is a real constraint on policy.

Second, there will be real political consequences for the UK if it proceeds in a way that is in breach of its WTO obligations. Such conduct is not consistent with the Government’s stated aim of being a leading free-trade voice in the WTO. And nor is ignoring your international obligations a good look when negotiating free-trade agreements with numerous third countries in a hurry (as the UK will have to do in the weeks after a no deal, given that it will have fallen out of all the EU’s existing FTAs).

Third, his suggestion that the UK might seek to take advantage of the “national security” provisions of GATT – when the UK has, rightly, been one of the leading critics of President Trump’s abuse of that provision – is pretty odd in political, as well as legal, terms.

I would add only that a fundamental element of the UK constitution is that government departments are headed by ‘Accounting Officers’ who are directly responsible to Parliament (not to Ministers) for ensuring “regularity, propriety, and value for money” – and the first of their basic “dos and don’ts” is “don’t break the rules”. I would accordingly be very surprised if any Accounting Officer has told Ministers that tariffs could be imposed on non-EU imports in the circumstances described earlier in this blog.

Some further reading may be found on my “No! Minister” web page and, more generally, in the “Speaking Truth to Power” area of the UK Civil Servant website.

Martin Stanley

Free Trade is Not Always the Right Answer

Parts of the current Brexit debate remind me of a similar Michael Heseltine inspired debate back in 1994, when I and others were advising him on industrial policy. One of my contributions to the debate can be found by clicking here.

In short, I was concerned that the most ardent free traders did not recognise that it had often made sense for the UK and other countries to protect ands subsidise our industries:

  • in the face of imperfect markets, foreign protection, and overseas product standardisation, and
  • so as to help industry get to market first, and to overcome barriers such as high research costs.

I concluded that “Our consideration of trade issues needs to be more thoughtful.  We need to analyse our success and our failures, and the success and failures of our competitors … Above all we need to think in dynamic and strategic terms, deploying negotiating and tactical skills, rather than starting from static and unreal assumptions and assertions.”

For the avoidance of doubt, the paper was for internal use only, and contains the unspoken assumptions that the Single Market – driven forward so strongly by Mrs Thatcher – was an unalloyed blessing as it removed so many non-tariff barriers which had previously locked us out of many European markets. It also assumes that the EU’s State Aids regime was generally very sensible. If it has any modern relevance, it may help explain why post-Brexit trace negotiations will be complex and difficult, and will need to involve industrialists and officials who have deep knowledge of their sectors both at home and abroad.

(A previous blog explains how non-tariff barriers such as product standards can be such effective weapons in the hands of governments that want to exclude competitors from their markets.)

Martin Stanley

Editor – Understand Regulation website

 

 

 

Regulating Schools, Hospitals etc.

I have published a new web page focusing on the regulation of the UK public sector.

The public sector is – quite rightly – very highly regulated. But this regulation comes with great cost and may often have gone too far, or have been badly designed.

This problem was recognised by the Cabinet Office in the late 1990s when its Regulatory Impact Unit, working closely with other departments, began to publish a good deal of useful guidance and other material.

Baroness O’Neill then drew attention to the pervasive tendency of government to allow holding to account to morph into managing from afar. Managers of many hospitals, schools etc. had begun to focus almost exclusively on meeting targets as distinct from providing excellent and locally appropriate health care and education.

She also stressed that, in this area as well as others, there is a crucial difference between releasing information and informing the public. The wholesale release of vast amounts of data does not of itself inform anyone.

Follow this link to read the web page … Understanding Regulation: The Public Sector

And please do send me any information or publications which might usefully be added to this web page.

Martin Stanley

Editor, Understanding Regulation
@ukregulation

Can Civil Servants Really Speak Truth to Power?

Civil servants are proud of their duty to ‘speak truth to power’ – that is to provide honest, impartial and sensible advice to Ministers. But it can be difficult to do this without damaging the official’s  relationship with Ministers.

There is little or no internal training or advice on how to offer persuasive advice, not least because no official training material can admit that some Minsters can be very difficult clients. I have therefore added a new section to my Civil Service website.

The first set of pages explain why it can be difficult it can be to speak truth to power, and in particular why it might have become more difficult in recent years:

There are then some hints and tips about:

Last, but not least, I examine the extent to which civil servants are free – or even under a duty – to say “No! Minister”.

Those particularly interested in these last three pages might also like to read and respond to the IfG’s current discussion paper on Accountability in Government.

As ever, comments and corrections would be very welcome – to 68rtsw8@gmail.com please.

Martin Stanley

Sainsbury, Asda & Yellow Pages

There’s a perceptive piece by Ed Conway in Today’s Times, but he unfairly suggests that regulators don’t understand digital disruption.

The misunderstanding begins with his misinterpretation of the 2006 ‘Yellow Pages’ investigation. The Competition Commission was well aware – to quote Ed – that “the Internet was fast disrupting everything”. But the CC recognised that Yellow Pages were still an important advertising channel for many small businesses – and faced limited competition.  The CC did not therefore “impose a pretty aggressive price cap”.  The CC in fact inherited an aggressive (RPI-6) price cap which had been in place since 2001 and, reporting in December 2006, ordained that this should end in 2008 and be replaced by RPI only.  I think that hindsight would give this decision pretty good marks.

Fast forward to 2018, and we see the competition from the Internet everywhere – and Ed’s piece summarises the problems very well.  The tech giants raise all sorts of regulatory problems (which I summarise here) but I am not convinced that competition policy (aka anti-trust) has become irrelevant. Ed himself notes that “Every other industry has seen what happened to newspapers and music. They are on the defensive, and what is the most straightforward way of defending yourself? Size”.  But agglomeration is a short term fix.  It reduces competitive pressure and in particular reduces the pressure to innovate.  The Amazons of this world will not be beaten sluggish conglomerations of incumbents.

Which is why the Sainsbury’s/Asda merger is so fascinating.  There is an argument that it will not substantially reduce competition because there is already new competition from Aldi, Lidl and others. If so, then let the merger happen.  But, if not, it would be unwise to allow the merger and reduce the competitive pressure on the incumbents just when they need to be ramping up their efforts to stop their customers defecting to Amazon.

Either way, I am sure that the regulators understand the issues very well.

Martin Stanley

Editor, Understanding Regulation

Twitter:-  @ukregulation

 

 

Dear Mr Gauke. Sacking Independent Decision Makers Encourages Cowardice and Indecision

All British governments from – and including – Mrs Thatcher’s have recognised that it makes sense to hand much tricky decision-making to independent bodies.

Lower energy prices are politically popular, but damage investment. Liberal prescribing of new expensive drugs is welcomed by patients, but unaffordable by the NHS. Parole cuts prison costs and is often humane, but carries risk of re-offending.  These judgment calls are best made by independent bodies, not least so that you – Minister – cannot be criticised. Their decisions can of course be challenged on appeal or by judicial review brought by those affected.

You absolutely do not want such regulators and other agencies to be scared of being challenged in court and/or upset by media criticism when they lose an appeal.  You want them to take difficult decisions involving fine judgments and to learn whenever they are over-ruled.   A regulator who always wins on appeal is a regulator who always shrinks from difficult decisions, and  who never takes on a big company with a large army of lawyers.

The problem in the UK is that (with some honourable exceptions) we have too often suffered from regulators and other decision makers who have been too scared of challenge and so too indecisive – remember Private Eye’s ‘Fundamentally Supine Authority‘ – and possible Ofgem’s previous management’s reluctance to tackle the big energy companies?

The courts found that the Parole Board had erred in the Warboys case because

  • The (criminal court) judge’s sentencing remarks were not in the Parole Board dossier (not their fault)
  • Information about the other 80 possible victims was also not in the dossier (not their fault)
  • In particular, the (civil court) judge’s decision was not in the dossier (not their fault). (He found Warboys to be ‘clinical and conniving’, and noted that the rape kit in Warboys’ car suggested there would have been other later victims.  But Warboys never accepted such responsibility.)
  • The Parole Board had not made detailed inquiries about the other possible offences.  This was their error albeit made to some extent on advice, fearing that it would be wrong to imply guilt for an offence for which he had not been charged.

None of these reasons suggest that the Parole Board was badly run or incompetent.  They made a close-call decision which was rightly challenged and overturned.   That is the way the system is supposed to work.  You should have supported the Board, not criticised nor sacked its highly respected Chair.

(Secret Barrister’s  very clear summary of, and comment on, the Warboys decision is here.)

Martin Stanley

Understanding Regulation

 

 

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