Examination of witnesses (Questions 960-979)|
WEDNESDAY 24 JANUARY 2001
HIGHBURY, CBE, THE
CLARK MP AND
HESELTINE, CH, MP
960. What is the obstacle?
(Dr Clark) There are obstacles. There are clearly
understandable cultural difficulties. The people who have gone
into the Civil Service traditionally expected a job for life.
That is changing radically. There are problems about pay, problems
about pensions. They are nitty-gritty issues. I believe we should
be able to overcome them if we change our mind set in the way
in which we look at this.
961. Is not the heart of the matter the final
salary unfunded pension scheme? Once a civil servant has been
in there ten years he is never going to want to push off; he is
locked in. Similarly, to get people in from outside costs a huge
amount for them to get any kind of attractive pension.
(Dr Clark) There are problems of course.
Mr Turner: They should unitise the pension schemes.
962. Is it not the case that the PSA's fundamental
weakness, excellent initiative though it is, that Parliament still
allocates its budget by department? Is that not one of the issues
that we need to get away from, departmental budgets and the whole
question of the Treasury rules that go back to the 1920s and beyond?
Is that not a fundamental blockage now in trying to get an entrepreneurial
spirit into the Civil Service?
(Dr Clark) Yes, I think it is. When one stops and
thinks, there are two departments that go into every other department.
There is the Treasury that goes in with big boots, one might say,
and then there is the Cabinet Office which goes in with advice
and information technology to try and advise departments how to
make best use of their scarce resources. I feel that we really
need to think very carefullythis will be a red hot issue,
I guessabout changing the Cabinet Office to an office of
the Prime Minister. I think that may be the only way you can drive
through horizontal management. As a follow-on from there, you
make a designated budget to make that a cross-departmental large
963. In Michael's book he calls the Cabinet
Office "a bran tub".
(Mr Heseltine) The worst department that I ever served
964. "A glorious confusion of responsibilities".
(Mr Heseltine) Oh, it was just a dumping place. I
have forgotten now what it was I got rid of. We had occupational
health people and HMSO. HMSO was an absolute scandal. That went.
We had a car pool. I was not prepared to take them on. They are
still there; of course they are. I took one look at the thing
and I said, "There is practically nothing here we need to
be doing. Let us privatise the lot." It was a race against
the election. I knew that the next government would not do it
so I had to do it.
965. So when you heard David Clark describe
this new role for the Cabinet Office and you look at your memory
of it, is this a vision that you can subscribe to?
(Mr Heseltine) I am glad you think things have improved
(Dr Clark) I did not say that.
966. I saw you nodding somewhere in that exchange,
Lord Simon. Do you have a different view on the role of the Cabinet
(Lord Simon of Highbury) If you have great departments
of state which are vertically organised, as the previous questioner
was asking, how do you get better horizontal management of resource
and application of strategy despite that vertical structure. The
answer is that you have to have a strong centre. The question
is, as we were saying earlier, how you organise it. Do you make
the strong centre partially representative of the Treasury financial
system and partially representative of what is the co-ordinating
centre of government, the Cabinet Office, and partially strategic,
which is presumably what the Prime Minister's office does, and
all the young chaps think about strategy and formulation of the
plan for the future. Somehow you have to pull all those three
together. Having them operating separately is not getting a synergistic
view of resource allocation coming through the single department
budgetary system however good the Treasury is. This is because
you are not marrying together the strategic political objectives
with the flow of resource. Somewhere that has got to happen within
the system. It either happens informally or formally. At the moment
it is not formally structured in organisational terms.
(Dr Clark) I used to think about it like this. We
had the Strategic Policy Unit in Number Ten to try and think strategically.
We had this strategic media unit, whatever they call it, to try
and bring together the corporate message of government. The one
thing we were always lacking was a strategicand I use the
word "strategic" heremanagement policy for government,
not for the Civil Service but for government, to try and cope
with this horizontal issue. That is the key issue we are facing,
(Mr Heseltine) I just want to make one important qualification.
Of course the Cabinet Office consists of its own activities but
also a very significant body of people seconded from other departments.
I wish to distinguish absolutely between what I said about the
Cabinet Office permanent activities and what you might call the
secondees who are amongst the cream of the Whitehall officials.
I personally do not go along with the idea of a Prime Minister's
Office. I think it is quite incompatible with Parliament and the
way things happen. It will simply involve the Prime Minister in
everything that goes wrong.
967. Like the President.
(Mr Heseltine) Yes, it is a presidential system and
we are not a presidential society. This Government has not yet
seen the rough end of politics. The economy has been very benign
for the last three years and so the idea of all this centralism
and the Prime Minister can take all these political decisions
has grown up. It is when the Prime Minister's back is against
the wall and everything depends upon his or her determination
that the rough end of politics bites. It is very important for,
if you like, the Prime Minister to be able to get above the fray
and to be able to dispose of Cabinet Ministers without them being
able to say, "But you told me to do it, sir". I personally
saw the process at work. I have never seen it successful. If you
want a strategic view of government of some sort then you put
one of your best ministers in charge of getting it. If you do
not put the minister in charge you are not going to get officials
to do it. If you put a lot of special advisers in to do it they
are going to be resented and rejected by the officials anyway,
and I happen to think that all these special advisers, the political
ones, are going to be the Achilles heel about this Government's
neck before long. I would get rid of all those. One of the worst
things that has happened has been the politicisationand
we have played a part in it, nothing like the present Government
but we did have the political advisersof government. I
would get them all out. Special advisers are quite different.
968. You are tempting us down a path that we
do not want to go down just now.
(Mr Heseltine) It is not your field.
969. We are one of the most deregulated countries
in terms of regulations but also one of the most complained about,
mainly because of the language of regulation and parliamentary
draftsmanship. We had a regulation yesterday at the Joint SI Committee
which was 15 lines long, one sentence. Is that not part of the
problem of the modernisation of government, that we are using
language within government and mechanisms that are totally disconnected
from the ordinary lives of people? Is that not an issue that if
we are going to modernise government we need to tackle? Is that
not one of the reasons why when a minister is coming in from a
business environment the experience is not a very happy one?
(Mr Heseltine) I was responsible for the bonfires
of controls and I never, if I now reveal the full truth, had that
much faith in it as an initiative. It is quite interesting that
today I saw that there is a survey that this country has come
out top as one of the best places to do business, and one of the
reasons why it is one of the best places in which to do business
is the lack of regulatory climate that exists here. Anyway, all
of us pay lip service to getting rid of waste in the public sector
and cutting this, that and the other, and I really was not persuaded
that there was that much mileage in it, so I put the gamekeepers
in charge of the game and I brought John Sainsbury in, because
he was extremely articulate on the subject of what we could deregulate,
and he brought in a lot of other people. After John we had Francis
Maude. I would not like to claim that we had actually done that
much but I was totally persuaded by the end of the day that there
was not that much more that one could do. There were one or two
quite interesting things. There was a huge battle between the
Treasury and the Department of Social Security over the fusion
of the VAT collectors and the National Insurance people. They
fought like tigers when we tried to bring these two things together.
The fact is that in a civilised society you are going to have
regulations and you are not going to starve people and you are
not going to burn them and you are not going to allow the kids
to be mucked around by paedophiles or whatever it may be, and
any politician that thinks that you are going to get rid of the
whole edifice of a modern, sophisticated society is just making
populist statements. There is a limited amount that you can do.
The other thing about this regulatory thing is that so much of
the total numbers of regulations that are paraded in the more
extreme newspapers are simply the regular updating of inflation
rates or whatever it may be, the social security rates or the
local government orders that Parliament has said will be updated
every year, so there is a great raft of these things that has
to go through every year almost automatically. They are not regulatory
at all in the sense that they are bureaucratic intrusions. We
did our best and we did do some good work with building societies
and things like that, but there is not a great reservoir of controls
out there that you can safely get rid of.
970. Michael has answered almost all my questions
without my having to ask them. Perhaps I could ask David Clark
something. When we were talking about making government work better
at the centre and about the horizontal business and the apparent
extension in prime ministerial power in a number of different
ways, setting up task forces, and all the political and special
advisers and so on, did it seem to you in your experience of government
that the Cabinet system was increasingly under stress and that
we were heading towards a presidential style of government?
(Dr Clark) Again I think there is a difference between
the strategy, which is politics, and the delivery of policy advice,
which clearly is the civil servants. I take slight issue with
Michael. I accept that you can argue the case about whether there
should be a Prime Minister's Department and we can make the point
that we are not presidential, but Prime Ministers' Departments
do operate in Australia and Canada quite effectively. In a sense
you therefore have the collegiate nature of Cabinet ministers,
which I think was Michael's point in a sense, that this Government
has not yet felt the full ill winds of politics and therefore
the Cabinet members and the collegiate nature of the Cabinet has
not yet been put under stress. I think that is fair comment. In
addition to that there is the issue of the strategic management
of how you get departments to work together. It really is a nightmare.
This is Andrew's problem about why do we not have more industrialists.
These things are management but it does mean at a local level
that you are probably going to take some very adventurous thing
that Michael was trying to do and perhaps think about it. As I
say, you can say to local government, "If you can put a decent
bid in and you think you can do it better, why do you not run
this service for us?", and bring things under this proper
management structure straightaway. The problem is trying to get
civil servants to work out how they are going to share their budgets.
You need some strategic management.
Mr Trend: We have recently (referring to Mr
Heseltine's advice before he even gave it to us) asked for an
organogram for the Cabinet Office, and we got one and it was completely
Mr Tyrie: Could you make it a task, Lord Simon,
to produce us an organogram that is comprehensible?
971. What it is possible to see as time goes
by is who has got the power and who has got the ear of the Prime
Minister, how they are working through the system in a horizontal
way, the different networks that are at work in government which
seem to me anyway to undermine the idea of collegiate development.
(Dr Clark) The Cabinet Office has another disadvantage.
Because it is an advantage to have the cre«me de la cre«me
of civil servants seconded in, it does mean they are in for two
or three years and then they go, so there is not often a collective
memory in the Cabinet Office that you may have in another government
department. That is a problem which again we have got to try and
tackle and overcome if we are going to have a proper strategic
management. I come back to my point that these are very radical
reforms, possibly from the outside if we are going to tackle this.
972. I do not necessarily subscribe to the view
which has been mentioned by one or two people that people who
go into the Civil Service do not expect a job for life. I think
certainly at the lower end of the scale, people in local government
would probably expect a job for life, and indeed I have seen many
people in that experience. What concerns me is one of the statements
you made, Michael, that some left to go into the private sector
at the top. Is that not one of the problems, that the people we
need to keep within the Service itself do leave for the private
sector, not necessarily because they have got problems with the
service delivery but more specifically because of the attraction
to the private sector because of the increase in their wages that
they could probably get?
(Mr Heseltine) You are taking a very God-like view
of your rights to control people's destinies. I think people are
free to make decisions and they will go where the pastures appear
greener for them, and so they should. The challenge should be
for the Civil Service to create jobs and career structures and
remuneration packages which can attract people back as people
leave. That would be very good.
973. Are you satisfied that the career structure
is actually in place because you also mentioned that people are
brought in from outside from the private sector into the Civil
Service and presumably on that basis they were headhunted?
(Mr Heseltine) Yes. I had no trouble with that. I
can think of one or two people who said no but there were special
circumstances then. I found it relatively easy to get the sort
of people I wanted, on a short term basis I have to say, but two
of them stayed actually. Peter Levene stayed. He came in 1984
and he was there at the end in 1997 in various roles. The public
sector is the most wonderful place to work. It is a very exciting
place providing the job definition is attractive and it can easily
be. In a sense you may be back on the thought that I was trying
to expand on, that when you get into the executive agencies you
probably do get lots of people saying it will be a nice, safe
place to be. If you recruit people whose attitude of mind is,
"This is a nice, safe place to be", you will get nice,
safe people and that is not quite compatible with what we have
been talking about, which is a rather more adventurous and dynamic
society. It is very easy for politicians to talk about adventurous
civil servants. They do not want adventurous civil servants. They
want civil servants who do as they are told because otherwise
you have got someone doing things on your behalf that you are
accountable for that you do not want done. It is very important
to understand exactly what you want from civil servants. What
I want from civil servants is the effective delivery of targets
which are politically set.
974. How many civil servants would you say had
left the service because of a dispute with yourself whilst you
were a minister?
(Mr Heseltine) Dispute with me? It is not possible
to have a dispute with me. I am the most reasonable man.
975. Andrew Tyrie raised a point about Civil
Service pension arrangements as to whether that was an insuperable
block to this free movement in and out. I thought I saw Lord Simon
nodding vigorously in assent. Would that be a common view, that
that is a real issue to be grappled with?
(Lord Simon of Highbury) I was nodding when Andrew
was asking the question and listening to Michael Heseltine's answer.
I thought the direction was going to be a conversation that we
need more flexibility in the reward structures. Because we are
coming out of a long term career structure into a much more flexible
structure within the Civil Service which the private sector had
to come to terms with earlier. I do not think for a second that
the Service has come to terms with it yet. When I look at the
report of the reforms that have been undertaken over the past
year, the Report 2000, Richard Wilson's excellent document,
I think it is very strong on leadership, very strong on the planning
system and very strong on performance management. But if you read
it, it is relatively weak on incentive and payment because it
is very difficult to change the structure quickly. It needs quite
a lot of courage at ministerial level and it needs quite a lot
of inventiveness. I am not saying that you can pay the public
sector like the private sector. You cannot. It would be too expensive
and you would not find the grounds. But I think there has to be
more flexibility and one of the flexibilities is the way that
pensions are handled. That is why I was nodding. I think it needs
a lot more work than that to think about how to make the system
more adaptable to transfers.
976. I remember many years ago when I was a
young lad in the Labour Party listening to ministers like Tony
Benn who used to get up on the rostrum and say, "I have got
civil servants who will not do this, will not do that". The
question here is: can civil servants resist the political will
of their political masters? Is that a fallacy or do civil servants
try and buck the system when it comes to the political decisions?
(Lord Simon of Highbury) Can I answer from very limited
experience as a minister? Just as in the private sector you will
find occasions when your advisers are trying to tell you that
what you want to do is probably not the best course, I found it
usually the same as in the private sector: you listened to their
advice and if you continued to disagree with them you told them
what you wanted to happen and they would do it. I had absolutely
no feeling or experience that what I wanted to do was being baulked
by the Civil Service at all. What they do want to do is make sure
that you have understood the risks of the decision that you are
taking. They are very good at that. But if you have been trained
in risk management, which most people in the private sector have,
then it should not be a problem. But I would say that civil servants
spend a lot of time on risk and they do not take very many. Risk
management is the greatest difficulty within the system. Michael
said earlier that they are cautious and they are cautious because
they have never had a lot delegated to them and have never learned
much to take risk and be responsible and accountable for it. The
answer is that I never found them thwarting the political decision
you wanted to take but sometimes cautious about its outcome.
977. Is that the reason why we are getting so
many political advisers now in government?
(Lord Simon of Highbury) To try and move the system
(Lord Simon of Highbury) I have never had one so I
would not know. I found it quite reasonable to move the system
979. As a minister, Michael or David, would
you rather have a civil servant advise you or one of these special
advisers or a political adviser? What would be the best? Is the
Civil Service being pushed to one side because it has been political
in the past?
(Dr Clark) I think they give completely different
advice. I found it reasonably easy to take a decision because
I knew the buck stopped with me. You try to listen to the advice
from your civil servants and also listen to the advice from your
political advisers. I had two political advisers. One was young,
very much Labour Party, and the other was a very respected former
Professor of Politics, probably the leading expert on freedom
of information in the United Kingdom. When he spoke he did it
with such authority that even civil servants were pushed to challenge
him. You have different forms of advice and certainly civil servants
always accepted what you asked them to do at the end of the day.
They made it quite plain on occasions, especially on appointments,
that they did not agree. I found it was one issue where they would
keep putting forward names which were the great and the good and
I did not always think they were the right sort of people. I think
the whole post-Nolan and Neill (and in my day Peach) situation
is that I put much greater power into the hands of the civil servants
when it came to making appointments. That is up to ministers to
be quite clear that the names they are considering are acceptable
and have been cleared for integrity. As I say, we used to put
them through the Peach system so that we could make our own decisions.
I do not think the Civil Service were greatly enamoured by my
White Paper on freedom of information. I thought that did make
the whole relationship between the minister and the civil servant
and the general public a very different relationship. It was a
very challenging relationship. I just got the feeling that they
were not exactly enamoured by it. I am not talking about my own
civil servants who were dedicated, a separate group of people,
but the other departments, other Permanent Secretaries in their
weekly meetings were not enamoured by that aspect of it.