This the third of three notes that summarise developments in 2013.
1. The year began with complaints about the civil service,
2. including persistent complaints about the quality of Permanent Secretaries,
3. before taking a closer look at the Education Department,
4. and then moving on to the debate about the need for wider reform ...
5. and an important report from the IPPR,
6. which led to HMG taking a number of decisions aimed at improving civil service accountability.
7. Ministers were then reported to be disappointed with the performance of Sir Bob Kerslake, their own appointment as Head of the Civil Service.
8. And the NAO expressed severe disappointment with HMG’s management of the introduction of Universal Credits, only the day before …
9. The PASC recommended the creation of a Parliamentary Commission to look at the relationship between Minsters and civil servants.
7. SIR BOB KERSLAKE
The Daily Mail reported in July 2013 that ‘Doubts were swirling last night about the future of the head of the civil service, following rumours that David Cameron and Britain’s top mandarin want him out. Sir Bob Kerslake is taking the flak for the perceived failure of mandarins to modernise and their continued refusal to obey many instructions from ministers. The civil service chief is understood to have lost the confidence of the Prime Minister and Sir Jeremy Heywood, the Cabinet Secretary. This week a progress report on the Government’s civil service reform plan found that only seven of 18 targets had been met since it was unveiled last year. There are rumours Mr Cameron has asked Sir Jeremy to move Sir Bob aside amid fears he was not pushing the agenda hard enough.’
If confirmed, this would be an ironic outcome for the man who had been specially chosen as a reformer (note i), who had made it clear that he thought that Ministers’ reform plan (note ii) was badly designed (note iii), and who would have entitled to refuse the challenge once the Plan had been implemented (note ii).
Note i. John Lehal, in January 2012:- ‘If you talk to permanent secretaries about the scale of change, the changes in role and the changes in the way services are provided, there is no question that this is already an ambitious programme.” Too many reform programmes in the past have “hit the target but missed the point”. This reform agenda can have a transformative effect, if it is bold in tackling head on the challenges our Civil Service faces. Put simply, it’s not about numbers, it’s about behaviour. Incremental change in the Civil Service won’t cut it. These challenges require transformative behavioural change — which needs leading from the centre, needs investment and needs to work. Having restructured the Department for Communities and Local Government and experience running the Homes and Communities Agency and local authorities in Hounslow and Sheffield, there are few better qualified than Sir Bob to lead our 450,000 mandarins through this next period of reform. … risk-taking needs to be celebrated, not feared.’
Note ii. The first set of proposals in the Reform Plan would require politicians to hold back on announcing exciting proposals and would require civil servants to block politicians’ manifesto promises unless the civil service thinks the plans are feasible etc. (The tension between the two is often caused (a) by the gap between policy aspiration and the implementation plan, and (b) by Ministers tendency to will the ends without willing the means - or even understanding the need for them).
Note iii. The Mail on Sunday reported in May 2012 that ‘Whitehall was shaken last week by a heated row between the Government and the Civil Service over how to reform the bureaucratic machine. Steve Hilton, the Prime Minister’s passionate senior adviser who leaves for a one-year unpaid sabbatical in the US this week, even stormed out of a meeting with the head of the Civil Service, Sir Bob Kerslake, in frustration at the latter’s approach. At the heart of the row is the Civil Service reform White Paper.’ Sir Bob’s colleague, ex-Accenture change management specialist Ian Watmore, had sensibly bailed out in June 2012.
It was interesting that Bob Kerslake told Civil Service World in June 2013 that the Government was likely to implement a further set of civil service reforms as it pursues ‘unfinished business that didn’t make it into the 2012 Civil Service Reform Plan’. But the few hints that were available did not suggest that he had any dramatic changes in mind.
8. AND THEN CAME THE NAO REPORT ON UNIVERSAL CREDIT …
In September 2013, the NAO published a devastating report on DWP’s ‘over-ambitious’ Universal Credit program managed by a team with a’ fortress mentality’ in which ‘only good news was allowed’ (according to an NAO Director speaking on the Today Programme). This led to the responsible Secretary of State, Ian Duncan Smith (IDS), quickly blaming the incompetence of his officials, followed in turn by unattributable briefing against DWP Permanent Secretary Robert Devereux. It was of course quite impossible for anyone outside government to tell whether IDS’ criticisms were justified, or whether IDS had set unreasonable objectives and/or refused to deploy sufficient resources and/or imposed an unrealistic timetable – or a mixture of all four. Those outside Whitehall were left to feel that there was probably some truth in this anecdote published a few years later:
There were many problems with Universal Credit, which brought together six different means tested benefits for people of working age, each with its own rules, entitlements and administration. These necessarily reflected the many reasons why people claim benefits, including unemployment, sickness, low pay, childcare responsibilities and housing needs. Merging them all into one benefit merely shifted the complexity behind the scenes. It did not get rid of it.
Here is the NAO’s own summary of its report:
- The National Audit Office has concluded that the Department for Work and Pensions has not achieved value for money in its early implementation of Universal Credit. The Department is not yet able to assess the value of the systems it spent over £300 million to develop and has been forced to delay the national roll-out of the programme to claimants.
- Today’s report concludes that the Department was overly ambitious in both the timetable and scope of the programme. The Department took risks to try to meet the short timescale and used a new project management approach which it had never before used on a programme of this size and complexity. It was unable to explain how it originally decided on its ambitious plans or evaluated their feasibility.
- Given the tight timescale, unfamiliar project management approach and lack of a detailed plan, it was critical that the Department should have good progress information and effective controls. In practice the Department did not have any adequate measures of progress.
- In early 2013, the Department was forced to stop work on its plans for national roll-out and reassess its options for the future. The programme still has potential to create significant benefits for society, but the Department must scale back its delivery ambition and set out realistic plans.
- Over 70 per cent of the £425 million spent to date has been on IT systems. The Department, however, has already written off £34 million of its new IT systems and does not yet know if they will support national roll-out. The existing systems offer limited functionality. For instance, the current IT system lacks a component to identify potentially fraudulent claims so that the Department has to rely on multiple manual checks on claims and payments. Such checks will not be feasible or adequate once the system is running nationally. Problems with the IT system have delayed national roll-out of the programme.
- The Department will not introduce Universal Credit for all new claims nationally in October 2013 as planned, and is now reconsidering its plans for full roll-out. Instead, it will extend the pilots to six more sites with these new sites taking on only the simplest claims. Delays to the roll-out will reduce the expected benefits of reform and – if the Department maintains a 2017 completion date – increase risks by requiring the rapid migration of a large volume of claimants.
- The spending watchdog found that the Department took some action at the end of 2012 to resolve problems, but was unable to address the underlying issues effectively. The source of many problems has been the absence of a detailed view of how Universal Credit is meant to work. In addition, poor control and decision-making undermined confidence in the programme and contributed to a lack of progress. The Department has particularly lacked IT expertise and senior leadership, with frequent changes in senior management.
The NAO report certainly (‘though only implicitly) highlighted the unpredictable consequences that might flow from the Government’s 2012 Civil Service Reform Plan. Would officials who were faced with unrealistic Ministerial demands (a) refuse to sign them off (thus damaging their relationship with their Minister), or (b) sign them off and take the risk of the project failing down the line?
And - as noted above - it is not as though the problems with Universal Credit were unforeseen:
The Treasury were always highly sceptical, arguing that "there was a good reason why there were lots of different benefits, and that is because every family is different. IDS was messianic in his desire to see this through, but like many false messiahs his miracle won't work."
And here is what Professor Colin Talbot wrote in his blog in 2010:
“This Government could do with a notice hung in every Ministerial office saying “It’s the implementation, stupid.” This is going to especially apply to the welfare reforms unveiled by Ian Duncan Smith today [25 Nov 2010]…… […] The bit of the [Welfare Reform] White Paper  that ought to send a chill down the spines of all involved in implementing Universal Benefit is as follows: “The Department for Work and Pensions will be responsible for the delivery of Universal Credit and will make extensive use of online technology to allow people to better manage their claim and understand the benefits of entering paid work. We expect to start taking claims for Universal Credit from October 2013.”
Oh dear. Thirty odd benefits consolidated into a single system, with all the IT requirements, retraining, process design and a host of other implementation issues are going to be solved in just under three years. Really? Are they serious? Fortunately, Whitehall has such a brilliant track-record of implementing big IT projects….
Moreover DWP has very little experience of providing this stuff on-line. At present the best systems they have are on-line form filling, where the completed forms are then printed off and someone deals with them as good old paper files. They are going to jump from where they are now to integrating 30 odd systems into a web-based system in just three years? Seriously?
And of course implementation will require co-operation across several government departments, including DWP, Treasury, Communities and Local Government, etc – and again, we all know how good Whitehall is at joined-up government… Here’s just one example from the White Paper: “Recipients who have earnings from employment will have those earnings automatically taken into account. We intend to use HM Revenue & Customs proposed real-time information system to identify earnings and to calculate the net Universal Credit payment due by applying the appropriate taper to the gross payment. This means that those recipients who receive earnings through Pay As You Earn will not need to inform us for payment purposes if the amount of their earnings change.” Good luck with that.
Just think about the implementation muddles the Government has managed to generate around the relatively simple proposed change to Child Benefit and multiply that by thirty and you get some idea of the train wreck on the horizon. Just read Chapter 4 of the White Paper, and weep at the naïve optimism. And of course, all of this requires primary legislation before they can even start to specify and sign-off development plans for the systems and technology needed to make this all work.
Please don’t misunderstand, I am broadly sympathetic to the idea of simplifying benefits. I agree with the aim of people being better off in work than on benefits. I agree there are some people abusing the current systems and this should be stopped as much as possible. But the potential for disaster and what Ian Duncan Smith charmingly calls “perverse disincentives” and other disasters in this rushed reform are legion. I hope I’m wrong, but that really would be the triumph of hope over experience.”
Darzil Northshield later added this sensible comment:
“I always find it a massive warning sign when totally changing business processes is described as in IT project. It’s a business reorganisation facilitated by IT. An IT project is something like “upgrade network”, “upgrade email”, etc. It doesn’t matter if it’s government or corporate, any time a business change is called an IT project it’ll struggle, because it needs to be a business project first.”
By way of postscript, here is a telling summary chart published in 2020.
9. … FOLLOWED BY THE PASC RECOMMENDING A PARLIAMENTARY COMMISSION
The Public Administration Select Committee published a very strong report next day (Truth to power: how Civil Service reform can succeed). Remarkably, it contained only one recommendation – highlighted in its summary - which is worth reproducing in full, below:
"The Civil Service is one of the great institutions of state, critical to the continuation and stability of government, and it needs to change to meet the changing demands placed upon it. The Government recognises this and last year, launched the Civil Service Reform Plan (updated in July this year by the One Year On plan). The Government describes this as a programme of "incremental change". Some of the reform proposals, such as the introduction of more "personalised" appointments in the Civil Service, including a much greater ministerial role in the appointment of permanent secretaries, are controversial. Many fear such changes challenge the Northcote-Trevelyan settlement, which established an impartial and permanent Civil Service with officials appointed on merit alone. We wish to make it clear that the Civil Service Commission has our fullest support on this matter. The Government has not however identified any fundamental problem with the Civil Service and the Minister, Francis Maude, says he does not believe that fundamental change is necessary.
We conclude that "incremental change" will not achieve the change required. Unless change is clearly heralded and given high profile leadership by a united team of ministers and senior officials, it is bound to fail.
Tensions between ministers and officials have become all too evident in recent years. We recognise that many ministers feel their decisions are being deliberately blocked or frustrated, but this points to a more deeper problem in our system of government. There is a fundamental question about why ministers feel some civil servants are resistant to what they want and this question has not been considered in any systematic way. Failing organisations demonstrate common characteristics, such as a lack of openness and trust, which are very evident in some departments and agencies. In our deliberations with ministers and civil servants most recognise a prevalence of these behaviours. We remain unconvinced that the Government has developed the analysis, policies and leadership to address these problems. We have found that both ministers and senior civil servants are still somewhat in denial about their respective accountabilities. The present atmosphere promotes the filtering of honest and complete assessments to ministers and is the antithesis of 'truth to power'. It is a denial of responsibility and accountability. There is a failure to learn from mistakes and instead a tendency to look for individuals to blame.
The Haldane doctrine of ministerial accountability is not only crucial to Parliament's ability to hold the executive to account. It is at the core of the relationship between ministers and officials. We repeat our recommendation from 2011 that the Government should consider whether the Haldane doctrine of ministerial accountability remains appropriate for the modern age, and how it could be updated. The Fulton Committee, which reported in 1968, was expressly excluded from consideration of the relationship between ministers and officials. There has been no independent examination of the Civil Service since then, despite the huge changes in the UK and our place in the world since then. The Government's limited proposals do not set out how a sense of Haldane's indivisibility between ministers and officials can be created. Departmental civil servants are in an invidious position with conflicting loyalties towards ministers on the one hand, and to the permanent secretary on the other. This is made much worse by the rapid turnover of lead officials, which is incompatible with good government.
This Report is exceptional. We make only one recommendation: the establishment of a Parliamentary Commission into the Civil Service, in the form of a joint committee of both Houses. The independent evidence in favour of some kind of comprehensive strategic review of the nature, role and purpose of the Civil Service is overwhelming. Our critique of the Civil Service Reform Plan and its limited implementation underlines this. The objections raised by the Minister for the Cabinet Office, and by the leadership of the Civil Service, are unconvincing and can be seen as part of what Francis Maude has described as the "bias to inertia" which he says he is seeking to address. On the one hand, the Government insists that the present reforms are "urgent". On the other hand, they are too modest and piecemeal to address the root causes of the frustrations which ministers feel beset them or to lead to the kind of transformational change that many believe that the Civil Service needs. Sustained reform has to be initiated by cooperation and supported by external scrutiny and analysis that leads to a comprehensive set of recommendations for change. This cannot be done by ministers and officials who are, as they say themselves, so pressed by far more immediate and high-profile economic, political and international issues.
We cannot emphasise enough the importance of this recommendation, reflected by the unanimous support of the House of Commons Liaison Committee. Such a Commission could draw on the extensive experience of government and the Civil Service in Parliament and its conclusions would enjoy cross-party consensus. The Commission should undertake this work alongside current Civil Service reforms, not as an alternative. It should focus on the strategic long-term vision for the Civil Service, for which the Government, in its One Year On report, has recognised the need. The fact that more radical measures that challenge the Northcote-Trevelyan settlement are also being discussed underlines the need for Parliament to oversee proper consideration of issues that are fundamental to the way our uncodified constitution operates. The Civil Service does not exist solely to serve the Government of the day, but also future governments. It is right and proper that substantial reforms to the role of the Civil Service should be scrutinised by Parliament. Such a Parliamentary Commission could be established before the end of the year, and report before the end of the current Parliament, so that after the 2015 general election a comprehensive change programme can be implemented."
It was greatly to the credit of the FDA, the senior civil servants trade union, that it welcomed this recommendation.
The next note in this series (Note 12) looks at subsequent developments later in 2013.