An unholy mess, by Colin Talbot

13 Dec 07
Another day, another departmental disaster: can't the government get anything right? Colin Talbot takes an unseasonal swipe at civil service blunders and asks what's behind Whitehall's annus horribilis

14 December 2007

Another day, another departmental disaster: can't the government get anything right? Colin Talbot takes an unseasonal swipe at civil service blunders – and asks what's behind Whitehall's annus horribilis

The year draws to a close with the government in multiple crises, the Opposition Conservatives riding high in the opinion polls, against all the odds, and Gordon Brown's 'honeymoon' well and truly over. Given the Advent calendar-like daily dose of disasters that have befallen the government, it seems almost cruel to kick them while they're down. And in the season of goodwill too. But what the heck.

The attention of the media has been almost exclusively gripped by the high politics of the recent debacles. They have largely ignored the back story of a civil service machine that is tottering on the brink of catastrophic failure. Indeed, some would think it's already there. Just look at the litany of crises that are in whole or large part due to civil service failures.

In January 2007, we were greeted with the news that the NHS was headed for around a £1bn deficit, causing a slash-and-burn reaction in many trusts that were over budget. Although the ensuing cuts were relatively small compared with the massive increases of previous years the disruptive effect was profound. By November, the £1bn overspend had turned into a £1.8bn underspend. Again this was small compared with overall NHS spending totals but in its own way just as disruptive and demoralising as the previous deficit.

In March, the environment, food and rural affairs select committee condemned former ministers and civil servants for the rural payments fiasco, which had cost farmers more than £20m in extra costs and the Exchequer a £400m fine from the European Union.

Also in March, the National Audit Office released its first report into the sale of part of the Defence Evaluation and Research Agency – Qinetiq – and the huge windfalls for the former senior civil servants who negotiated a lucrative deal that allowed the chair, Sir John Chisholm, to make a 19,000% profit – or £22m – on an investment of £129,000.

In November, the NAO confirmed its original findings and issued a stunning rebuke to the civil servants who had let the top ten Qinetiq managers net more than £100m between them. The NAO concluded that the taxpayer could have earned many millions more from the sale and flotation if the Ministry of Defence had not been so incompetent.

In July, the NAO reported that the tax credit system had been defrauded by more than £3bn and had overpaid £6.6bn since it was introduced in 2003. Moreover, hundreds of thousands of people who had been overpaid had to pay the money back in circumstances that caused real hardship to the most vulnerable.

In September, the Child Support Agency admitted that in the previous financial year it had debts of £3.5bn, which had been increasing over the year at £20m per month.

And then, in November, Revenue & Customs lost two CDs. It could happen to anyone and the government immediately sought to blame a minor official. However, for the past couple of years, the Treasury select committee had been consistently warning that the combination of the merger of the Inland Revenue with Customs & Excise; the massive efficiency programme and job cuts; the failure to provide proper leadership at the top; and the somewhat reckless introduction of so-called 'Lean' techniques were piling up the pressure to the point where something could go very, very wrong.

Then there's poor Private Finance Initiative contracting; appalling IT schemes; messed up migration numbers – the list is almost endless.

And throughout this period we had the steady trickle out of the results of the departmental incapability reviews, as some unkind souls have dubbed them. These have shown remarkable consistency across Whitehall – they are all at best mediocre and at worst 'not fit for purpose' on any objective assessment of the results. However, in a recent response to the public administration select committee the government seems to have found the answer to this problem – reading between the lines it looks as if the capability reviews might be abandoned or watered down.

If it ain't broke, as the Americans say, don't fix it. But when it is palpably broke, the time is fast approaching where some serious fixing of our public administration is more than necessary, it is essential.

So why do we have these problems? There are numerous sources, of which the two principal ones are the essentially unreformed nature of the senior civil service and the, in some senses, over-reformed structures and systems.

As I have said many times before, our 'serial monogamist' civil service is almost unique in advanced democracies in having 'no constitutional personality separate and apart from that of the government of the day', as Lord Armstrong, the former head of the civil service, famously put it back in the 1980s.

In the dim and distant past, this did not stop civil servants 'speaking truth unto power', as long as it took place behind firmly closed doors. But with Margaret Thatcher's 'is he one of us?' doctrine, the already fragile autonomy of the civil service began to be dramatically eroded. Not by politicisation, as has often been alleged, but by managerialisation – the 'can do' mentality that when a minister says 'jump' the only correct response is 'how high, minister?' Serial monogamy has degenerated into serial subservience. In a highly centralised and adversarial system with relatively few checks on executive power, this is proving highly corrosive.

The result is that ministers can now launch just about any hare-brained scheme or re-disorganisation at the drop of a management consultant's hat. There is no-one to challenge them when they decide it is okay to merge two fundamentally different departments – the Revenue and Customs – and at the same time impose draconian efficiency savings, including massive job cuts based on staffing targets plucked out of the air.

There is not even anyone to make sure that changes to the machinery of government, which come along with monotonous frequency, are at least made to work properly. The machinery of government group in the Cabinet Office was disbanded a few years ago. The new Brown government has taken this to ludicrous extremes with a set of ministry structures clearly built around the whims of various ministers with no analysis or thought.

Earlier this year, the PASC recommended proper parliamentary scrutiny of any machinery of government changes. Within weeks, Gordon Brown came into Number 10 and promulgated yet another round of Whitehall musical chairs without so much as a nod at Parliament – the same Parliament he claims to want to empower more.

Unless the civil service is put on a statutory basis, with clear autonomy and accountability, this will persist. Unless it is subjected to radical personnel reform that ensures policy mandarins have some real-world experience of delivering public services, civil servants will continue to give ministers policy advice that is often naïve and unrealistic and fail to challenge ministers' more ridiculous ideas. The late US scholar Larry Terry called this the 'conservator' role of public servants – sometimes having to protect the integrity of public institutions against the wilder excesses of democratically elected leaders.

Let's end this unseasonal romp around the failures of Whitehall with a tale of what I call the 'Sellafield' ploy. I went to secondary school in Barrow-in-Furness and just up the coast there was the largest nuclear facility in the UK – Windscale. It's not there any more – or rather it is, but now it's called Sellafield, part of the unexpected fallout from the Chernobyl nuclear disaster.

This year, we have seen one of the smartest uses of the Sellafield ploy I have seen in a long time. In July, the Guardian ran a front-page story headed 'Public sector targets to be scrapped'. What followed was a masterful piece of spin in which Andy Burnham, chief secretary to the Treasury under the new Brown premiership, announced that Public Service Agreements were to be slashed from 110 to 30 in the forthcoming Comprehensive Spending Review.

Last week, the Treasury select committee published its report on CSR07. They accept that PSAs have indeed been reduced to 30. But they also note that these 30 PSAs only replace a similar number of 'cross-cutting' PSA targets in the previous 2004 spending review. The 'departmental' PSAs have indeed gone – at least in name. Instead, there are now around 100 departmental strategic objectives.

To the untrained eye, these DSOs might look remarkably like the PSA targets they have replaced, with due allowance for a certain amount of churn, which has happened at every spending review. But no, according to the Treasury, these new DSOs are in some mysterious way fundamentally different to the previous departmental PSAs. Otherwise, the government would now have 'reduced' PSAs from 110 in 2004 to around 130 in 2007. So DSOs are different, and Windscale is Sellafield and I still believe in Santa Claus. Merry Christmas.

Colin Talbot is the director of the Herbert Simon Institute for Public Policy and Management at Manchester Business School


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