Why do Modern Governments seem so Powerless?
Is Civil Service Reform the Answer?
This is the second of five notes about the reform of the UK civil service.
- The first note in the series describes the traditional "Westminster Model" of government in the UK, as augmented by the characteristics of the UK civil service first laid down by Northcote & Trevelyan.
- This, the second note, explains why government has become so difficult in recent years, and how successive Governments have responded in a number of ways, including by attempting to reform the civil service.
- The third note looks at civil service reform from the 1960s through to the present day, and explains why very little has in fact changed.
- The fourth note goes into more detail, describing various attempts to "reform" the UK civil service after the election of the Labour government in 1997 through to the Putting the Frontline First: smarter government proposals of December 2009.
- The fifth note in this series summarises developments from early 2010, just before that year's general election.
Overview
"To govern" is "to rule or control", but this is one thing that modern governments simply cannot do. The second half of the 20th Century saw several fundamental changes in the nature of British society, with reduced respect for authority being accompanied by rapidly increasing voter wealth and much improved voter health. It also saw the British constitution experience a number of major changes, including:
- Devolution (to the Scottish Parliament etc.),
- Extensive devolution to Regulators (such as the Bank of England for interest rates), and
- The UK joining what is now the European Union, and its subsequent expansion to take in members from Eastern Europe, with their quite different political cultures.
Both politicians and civil servants have struggled to cope with all these changes, which have exposed weaknesses in the UK civil service. This has in turn led to a number of attempts at “civil service reform”.
Changes in Society
It is ironic that many of the problems facing today's politicians stem from the successes of their predecessors. Indeed most of them have their roots in our ever increasing wealth and ever improving health.
For a start, UK society is now vastly more wealthy than 50 years ago. A typical post-war household literally had nothing worth stealing:- No car, no TV, no phone, nothing! No wonder it was safe to leave doors open along most British streets. But GDP has risen four-fold since then. Most homes nowadays have a wide range of marketable goods, and huge amounts of money to spend on non-essentials, including on drink and drugs. The crime rate has therefore soared, as drug addicts seek to get their hands on others' wealth, and drunks cause various sorts of mayhem.
Our wealth causes other problems:
- We can afford to eat much more, and travel everwhere by car, and so get fat and unhealthy, with consequences for the health service.
- There are now 10 times as many cars on the roads as in the 1950s, with obvious implications for transport and environmental policies.
- Much the same applies to the growth in cheap air travel.
Other problems are caused by the fact that the distribution of the new wealth is uneven. This is in truth hardly a new phenonomenon. A writer in 1590 observed that England's rapidly developing economy "has made of yeoman and articifers, gentlemen, and of gentlemen, knights, and so forth upward, and of the poorest stark beggars.". More recently, the top 5% of UK citizens increased their share of marketable wealth from 35% in 1991 to 44% in 1998. And in the US, from 2001 to 2006, the income of the median household - the point at which half of Americans have more, and half less - fell by 0.5% even though the economy grew by nearly 12%. Many in today's society accordingly feel totally alienated from the world inhabited by those who have well-paid careers. And many of us seek to catch up by borrowing as if there is no tomorrow. Credit card debt, for instance, increased from £34m in 1971 to £54,000m in 2005.
The other big success is our health, and not least the fact that we are all living so much longer than before. Life expectancy at birth is currently increasing at an astonishing 0.25 years per year. Healthy life expectancy is also increasing - but only at around 0.1 years per year. In 1981, the expected time that a typical man would live in poor health was 6.5 years. By 2001 this had risen to 8.7 years. Just imagine what pressure this is putting on the health and social services ...
... not to mention on pension schemes. The average age of men retiring in 1950 was 67. They had by then typically worked for 53 years and would live for another 11 years. By 2004, the average of men retiring was 64. They had by then typically worked for 48 years and would live for a further 20 years. As a result, the work/retired ratio had halved from about 5 to about 2.4. These are huge (and welcome) changes, but with equally huge - and politically unwelcome - implications for tax, pensions and benefits policies.
It is also noticeable that voters nowadays want to spend more and more money on holidays, clothes, durables, etc. whilst few seriously try to promote the benefits that result from the public provision of services. Voters therefore resent paying taxes, and the Government is under constant pressure to spend less, despite the problems summarised above.
In parallel with all this, society has become more complex and less deferential:
- Voters are much more likely to have been to university, to have travelled abroad, and to complain.
- The family is less important.
- Adult children are much more likely to live some distance from their parents
- 42% of children are now born outside marriage.
- The media are much more varied and much more influential, whilst the public are much more inclined to celebrate celebrity.
- Voters expect the quality of public services to improve and refuse to accept inadequate provision.
- They also turn more readily to litigation.
- The Human Rights Act and the Freedom of Information Act add to these pressures.
There have been other more subtle, but perhaps more profound, changes.
- The original welfare state was a system of mutual insurance - hence "National Insurance". It has slowly changed into a system of rights and entitlements based on need. This is morally attractive - but it is also open to abuse, which breeds resentment.
- The post-war generation believed in self-help. Much post-school education was through unions or organisations such as the Workers Educational Association. We now expect the state to provide, and 50% of our children go to university.
- Our increasing wealth and improving health - let alone the absence of major conflict - means that we really do have very little to worry about compared with our predecessors. But of course we still worry, and demand that the Government "does something about" all sorts of lesser risks, from dangerous dogs through to passive smoking.
Another interesting change has been the introduction of choice into health and education policies. This is in part because modern voters want to be able to choose between different approaches to medicine and education. But choice is also a very effective substitute for regulation in that it forces the vested interests in those sectors to take more notice of what their customers actually want. There are, however, some unwelcome consequences arising from the introduction of choice into public services:
- The availability of choice inevitably gives a relative advantage to the sharp elbows of the middle classes. They can move into the right catchment areas, and are better at demanding access to the right doctors.
- Choice also requires there to be spare capacity, which has to be paid for. Less popular schools and hospital have to be kept open - often at significant cost - so that they can improve and offer choice when their busy competitors become complacent and less attractive.
- Ultimately, however, persistently unpopular and/or expensive schools and hospitals have to be allowed to close, or else they have no incentive to improve. But such closures always provoke various forms of protest.
As if the above didn't cause Ministers enough sleepless nights, they find that their policy choices are these days highly constrained:
- There is "Europe" for a start. There is now literally no policy area in which Minsister and their officials can ignore what is happening on the other side of the Channel.
- Even fiscal decisions need to take account of competition from lower tax economies in Europe and elsewhere. Note, for instance, the huge growth in the (legal and illegal) importation of alcohol and tobacco from France and Belgium. And it is noticeable that the G7 average corporate tax rate fell from 44% in 1996 to 36% in 2005 - which inevitably causes other taxes to rise.
- Incidentally, floating voter (i.e. middle class) resistance to increases in income tax mean that VAT is now the only tax that can be increased to raise significant amounts of revenue. The VAT rate is therefore now 17.5% compared with 5% when it was first introduced. But this tax is regressive (it impacts much more on the poor than the rich):- another interesting example of the unequal distribution of the consequences of changes in the political landscape.
- Then there is "Globalisation". Eastern Europe, India and China are now major economic players. Indeed, both India and China's universities now each produce 2 million graduates a year.
- As a result, most economic decisions, and other decisions that affect business, must now take into account the mobility of businesses and jobs. There is, for instance, not much point in strengthening our environmental legislation if the result is that we drive polluting industries into countries where environmental protection standards are much lower than our own.
What has this done to Politics?
Many of the above changes begin to bring into question the basic Westminster/Haldane model of government. We are not nowadays disposed to accept that "Government knows best", nor the fiction that civil servants are no more than advisers to all-powerful Ministers. Behind the scenes, too, it is not difficult to get politicians from different parties to agree – at least in broad terms – what ought be done to improve transport policies, energy policies, pensions policies and so on. And voters are well aware of this:
- In 1987 85% said they could see a real difference between the parties. That figure is now 29%
- Party membership has fallen to c.150,000 (Labour) and c.300,000 (Conservatives).
All leading politicians are, however, equally agreed that none of them are going to ask the public to take the bitter medicine that would be needed many of today's political illnesses. For instance, no politician in his or her right mind is going to restrain the growth of cheap air travel, whatever the damage to the environment. Politicians nowadays therefore make extensive use of the media to attack the detail of their opponents’ policies, encouraging the likely losers to complain and ignoring those likely to gain, and/or the policy gains themselves. This not only slows or stalls all policy development, but seems to generate a triple credibility gap between Government and the media; between the media and its readers; and between Government and the people.
Policy development has therefore become less to do with analysis and more to do with reaching out, consulting, involving and then persuading opinion formers, including politicians, think tanks, lobby groups and the media. Ministers and civil servants often find themselves in a “permanent campaign”, for which many civil servants are arguably not well equipped. Which naturally leads the discussion on to ...
Weaknesses in the Civil Service
Friendly commentators say that:-
- Civil servants should nowadays be assessed much less on their IQ and much more on their ability to “get things done”, to foresee practical problems, to understand the man and woman in the street, to relate to the media:- to conduct the permanent campaign mentioned above.
- Civil servants need to research, and develop techniques for, working more effectively with Ministers.
- Civil servants also need to become better at relating to the wealth creating sector. Research is already available which helps us understand the differences between the two cultures, and overcome the resultant communications problems.
- The civil service need to promote different people than in the past. But if this is to happen then we have to face up to the fact – and do something about the fact - that we have in the past promoted people who are not suited to the senior positions that they now hold.
The following criticisms are also frequently laid at the door of the British civil service:-
- The 'not invented here' syndrome is widespread.
- There is very little policy benchmarking, despite big performance differences between and within departments.
- We never seem to learn, for instance as a result of National Audit Office reports.
- We employ hugely talented people, but assess their performance, and develop them, very poorly.
- We are very poor at planning.
- Because we are scrutinised so much, we are good at process, but not good at getting good results.
- We are good at managing up – esp. Ministers - not down. There are very few Ministers who will not pay genuine tribute to the talent of the majority of the officials with whom they came into contact. And yet there are very few Ministers who do not feel frustrated by the Whitehall machine.
We are not the only ones, of course, to have these weaknesses.
Michael Porter wrote that “British firms have a management culture that works against innovation and change. A penchant for tradition, a narrow definition of responsibility and a high level of concern for form and order are characteristic. That something is “not done” is a frequently heard phrase”. These charges apply equally to the public and private sectors.
And think of other professions:- doctors, lawyers, teachers. Individually, they are often very talented and dedicated, and often adored or respected by their patients, clients and pupils. But we all know that these professions contain significant numbers who perform very poorly, and which the professions themselves are slow to identify and even slower to deal with. It is “not done” for professionals to criticise each other, or even learn from each other.
Like other professions, we civil servants form a sort of informal club. We are trained and gain experience which encourages us to understand each other, and to help each other out, to the mutual benefit of each other and our Ministerial teams. Mutual criticism – unless very carefully handled – will destroy that essential team spirit.
And yet a failure to criticise and confront will - as we all know - lead to complacency and poor service. These problems are to some extent reduced if, as in the case of lawyers, clients are free to go elsewhere or if the result of mistakes is sometimes obvious, as in the case of doctors. But most clients do not have a choice of teacher or civil service adviser and the result is that performance is sometimes very poor, whilst attempts to address the problems are often controversial and/or ineffective.
Five Possible Responses
Christopher Hood of Oxford University argues that political and societal frustration with government (which includes both politicians and their civil servants) has led to five noticeable developments:
1. A Stronger Centre
We see this in:-
- greater power of No. 10 & the Treasury, and especially ...
- the power of the No.10 Policy Unit and the Treasury's Council of Economic Advisers.
It is these days a brave or foolhardy Secretary of State who ignores the relevant policy specialist in the Policy Unit. And many senior civil servants will spend as much, if not more, time with the Policy Unit and/or the Council of Economic Advisers as with their Ministers. It is hardly a surprise that several former members of these units are now Ministers, up to and including in the Cabinet.
2. Devolution
This has had a number of strands, including ...
- politically to Scotland and Wales
- administratively to regulators, agencies and quangos (hence the growth of the “regulatory state”)
- financially through incentives to local authorities, hospitals, schools to compete for funds or in the market
- "Lyons": dispersal of civil servants out of London and the South East
- Gershon: big cuts in Whitehall departments’ head offices, allowing resources to be transferred to the front line.
The growth of regulators and regulation has been particularly interesting. Who would have forecast, back in the mid-1990s, that Ministers would over the next decade empower various regulators to decide interest rates, decide whether we should be provided with potentially life-saving drugs, decide whether the London Stock Exchange should be sold to the Germans, decide whether the Royal Mail should face competition, and so on. These development have happened because Ministers have come to accept that they cannot be trusted to take unpopular but necessary decisions, even if the long-term benefits are clear. Put another way, Ministers have decided that they don't want the blame for such decisions. (A more detailed discussion of regulation, in all its forms, is on a separate website).
3. Intervene in the Detail
