14 October 2005
Cabinet secretary Sir Gus O'Donnell announces 'big-bang' approach to performance assessment
New Cabinet secretary Sir Gus O'Donnell this week announced the introduction of a rigorous performance assessment regime for central government, but disappointed experts who demanded greater external validation.
Just six weeks into his role as head of the civil service, O'Donnell has managed to persuade sceptical Whitehall permanent secretaries and ministers of the need for comparative Departmental Capability Reviews, similar in scope and ambition to local government's Comprehensive Performance Assessments.
The aim of the initiative, which has been personally endorsed by Prime Minister Tony Blair, is to improve the way departments deliver policies, he said.
DCRs will be overseen by the Prime Minister's Delivery Unit, which will examine the strategic and leadership functions of each department and assess how well they run their human resources, information technology and financial management functions.
The delivery unit will pilot the assessment system – which will also rate how well departments deal with the public – at an as yet unnamed department from the end of this year, with a view to full implementation across Whitehall from 2006/07.
Public Finance understands that O'Donnell is also keen to introduce the system across government agencies at a later date – a move that would leave almost all major public bodies subject to some form of performance assessment.
O'Donnell announced the introduction of DCRs at his first appearance before the Commons public administration select committee on October 11.
'We are going for a “big bang” approach in the sense that they weren't there before now and I'm going to roll them out,' he declared.
He told the gleeful committee, which has long called for increased Whitehall transparency, that the results of each assessment would be published. He added that they would answer criticisms that Whitehall has imposed scrutiny regimes on the rest of the public sector without subjecting itself to the same disciplines.
However, he stopped short of announcing an externally validated system similar to the CPA regime. The delivery unit will house the assessment teams, O'Donnell said, but it would draw on the expertise of organisations with experience of performance assessment.
An explanatory note from O'Donnell to PASC chair Tony Wright claims 'this will not be Whitehall reviewing itself', although peer reviews – involving permanent secretaries assessing other departments – will form part of the regime.
A spokesman for the National Audit Office told PF that O'Donnell had approached comptroller and auditor general Sir John Bourn to discuss the NAO's potential role.
However, O'Donnell told MPs that it was likely that the Audit Commission, which manages the CPA regime, would be more influential. 'The Audit Commission has been doing this work for years. The National Audit Office hasn't been doing capability reviews, so the natural place to look would be the Audit Commission,' he explained.
James Strachan, Audit Commission chair, said: 'As we have seen… with the CPA, the mix of external review and challenged self-assessment has been a powerful driver of real improvements in local services and value for money for the taxpayer.
'Increasingly it has been asked: if it works for local government, why not apply something similar to central government? Sir Gus has clearly answered that.'
Guy Lodge, a research fellow at the Institute for Public Policy Research, who has long called for a Whitehall assessment regime, said he welcomed O'Donnell's announcement as a 'giant step in the right direction'.
'But this is not quite the “big bang” that Sir Gus presented,' he said. 'Ultimately, an external assessment regime should be the aim – although I accept the door has been left ajar and that could follow.'
O'Donnell has pledged to restore public trust in Whitehall decision-making, but Lodge said he had 'missed an opportunity to make the performance assessment process independent and transparent in the way that the public would like it to be'.
'We also need some clarification on what happens if a department performs badly,' Lodge told PF. 'What sort of regime will be put in place to help organisations and individuals improve?'
O'Donnell, who told MPs he has never favoured sacking civil servants, provided scant information on how punitive the system would be.
However, his note to the committee states that the delivery unit, Cabinet Office and Treasury would 'provide targeted support to make any improvements required'.
Each review team would, with the help of individual permanent secretaries and their departmental boards, produce an 'action plan'. 'The department's permanent secretary… will then account to me for the department's progress against that plan,' O'Donnell said.
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