By Lucy Phillips
10 June 2010
Sir Nicholas Montagu, a leading civil servant for more than 20 years, today set out his principles for handling ‘a more difficult financial situation than we have seen in any of our lifetimes’.
Speaking at the CIPFA conference in Harrogate, the former chair of the Inland Revenue said that change was ‘expensive, distracting and unsettling’. For the public sector currently, it was also ‘inescapable and with quite a negative overlay – achieving economies and efficiencies’.
Montagu drew on his experience at the IR between 1997 and 2004, when the organisation took on responsibility for tax credits and child benefits and grew from 55,000 to 83,000 people. He said successful change management could be achieved through good communication, charismatic leadership, valuing staff and building solid partnerships.
He added that it also involved a ‘boring side’, namely bureaucracy. ‘A little risk management saves an awful lot of the cleaning of the fan later,’ he cautioned.
With as many as 750,000 public sector job losses likely, according to the Chartered Institute of Personnel and Development, Montagu likened the task ahead to ‘getting turkeys to vote for Christmas’. He admitted: ‘You won’t get them all’, but said openness and showing proper respect and understanding of people’s concerns would help bring the workforce along.
He added: ‘If it is a question of shedding people, wherever you can you need to make your best offer first. That is showing value. Haggling and being pushed up undermines an awful lot of what you are trying to do.’
Montagu, who was also a leading architect in the privatisation of the railways, suggested that the public sector could save billions of pounds by ‘mandating all financial transactions in and out of local and central government to be on a direct debit or credit basis to a bank’. But he conceded that this was ‘too brave’ a move and ‘a step too far even in these straightened times’.
The former civil servant agreed with earlier speaker Colm McCarthy, an economic adviser to the Irish government, that means-testing child benefit would be ‘a natural candidate’ for savings. With ‘modern and improving systems’ it would not be a bureaucratic nightmare, he said. ‘I think it could be done.’
Montagu also called for public sector ‘earned autonomy’ to be extended beyond some areas of the NHS, condemning the ‘welter’ of monitoring and regulatory bodies. ‘Regulation and monitoring are unwelcome overheads,’ he said.
