Select Committee on Public Administration Minutes of Evidence

Examination of Witnesses (Questions 1060 - 1079)



  1060. Let us just come on to that in a moment. Just to clarify the secondment point, I have not yet grasped why it is that recruiting somebody from outside on the basis of an advertisement is likely to lead you to a less well-qualified person to do a job than it is if you try to obtain that experience, that you would otherwise have brought in from an advertisement, by putting a man out on secondment and getting him back. My experience, having been in the Civil Service a little while, was that many people who went on secondment treated it as an extended holiday, or, alternatively, as a wretched nuisance, that got in the way of their otherwise fairly high-flying career development, and that only a few of them really benefited from it, and that the number of skills brought in by secondment was extremely small. The number of people, certainly at the higher reaches, I will come on, I can see people nodding their heads, as it were, but I would like you to explain, if you would, why it is that secondment is so much better?
  (Sir Christopher Foster) It is just not that easy; it should not be a holiday. I think the principle should be that somebody in the centre needs to go out into a real job, which stretches him and enables him to acquire new skills: to understand management, or finance, or how to deal with people, or what it is really like to be in the front line dealing with the public. The fact that so often these secondments fail, both ways, you get the wrong people doing the wrong job, is, I think, a criticism of the process, not of the objective. I would argue that, if you relied almost entirely on advertisements to fill posts you would be even more likely to get them wrong.

  1061. Before I move on to the question of the other qualities that we are looking for in the Civil Service, I know that Sir Robin wants just to come in on this secondment point?
  (Sir Robin Mountfield) I do not agree about the holiday. So far as inward secondments are concerned, I have been convinced of the value of these since my days in the DTI, in the early seventies, where we used to get in six or eight of what we called industrial advisers, at the old under-secretary level, for a period of two or three years. They actually did a lot of the negotiation of selective financial assistance, now one may approve or disapprove of selective financial assistance, but they did a wonderful job, they integrated extremely effectively with the Civil Service, and they went back claiming that their own careers had been enhanced significantly by the experience. I, myself, did a year seconded to the Stock Exchange, in the late seventies, which convinced me, if nothing else did, that the private sector is not the source of all knowledge and wisdom. But I am, generally, hugely in favour of secondments, where they can be sensibly arranged, and I think we need to do more than we do. One thing I think is sometimes forgotten is how difficult it is to arrange, partly for the reasons that you imply, that people do not like to be out of the promotion stakes, and so on, at a particular point in time, they certainly do not like to be away for a couple of years or more, and that is true of people in the private sector at least as much as the Civil Service. And the real danger is that you do not have a job to do, you do not have a job to go to, it is not a real job, it is a manufactured job, and I think effort needs to be put into identifying jobs that people moving either way can actually do effectively, because it is the hands-on experience that is really important.

  1062. That is a big undertaking?
  (Sir Robin Mountfield) It is a very big undertaking.

  1063. Which is why I am so wary of secondments. Can I come on to another point that you began to raise, which was this question of standards in public life, really, that are connected to a permanent cadre, for instance. You did say, and I wrote it down, that—I am not quoting yet—a permanent Civil Service is necessary, or a permanent core Civil Service of 80 or 90 per cent, I think, you have given us a figure, is necessary to maintain high standards of truth-telling. Which, logically, suggests that non-permanent civil servants who are people who have responded to advertisements in mid career are less likely to tell the truth, and, of course, I am sure you do not mean that, but I would be grateful if you could tell me what you do mean?
  (Sir Christopher Foster) I do not think I would put it like that, but, I think, in the commercial environment, there are very different imperatives, the imperatives of the profit motive are very great. Keeping within the law, fortunately, normally is also very important. But I think there are at least three respects, really, in which one expects the public sector to do better. One, I think, is in relation to employees; of course, many private employers try to be good employers, but I think the public expects the Civil Service to be an even better employer.
  (Sir Robin Mountfield) Except in pay.
  (Sir Christopher Foster) Except in pay. Rather in terms of trying to improve conditions of work, avoiding discrimination by race, sex and age; it is not perfect, what is intended does not always happen. But there is a feeling, I think, that this is still more important in the public sector than it is in the private sector. Then there are certain obligations towards the citizen, in terms of openness, and fairness of treatment, which you will not find in much of the private sector, where they serve customers insofar as they think they are profitable. Beyond that they may develop ethical standards, and some do, but there is, I think, an expectation that when the public service deals with the outside world, the standards should be high even though in practice people may not always reach those standards. Thirdly, I suppose one comes to the crucial elements of political impartiality and objectivity. The idea that one helps ministers to explain themselves in the House, or in public, clearly, and in a way which tells the truth about a particular proposal, in sufficient detail, I think, are very, very important standards. In any decent business, people within the business tell the truth to each other. Transparency, as it is called, is a very, very important value, and people will get fired very quickly if they start being secretive. But it is the relationships with Parliament, and public opinion, which make such a difference. There is also the belief that civil servants should challenge ministers if they think some proposals are not as sound as ministers would like to think they are. These values are different from the ones that come naturally to the people in the private sector. In my experience, people who come in to the public from the private sector usually pick up these standards and values of the Civil Service fairly quickly. But if the number of permanent staff fell too low, I think you would get a changed environment, more like that, as best as I understand it, in certain parts of the American public services.

  1064. I must admit, I virtually completely disagree with everything you are saying, but rather than develop my own views I will just point out that I am sure many members of the public would prefer to be treated more as consumers than rely on Civil Service failures. I am sure someone standing in a passport queue, for example, would feel that he would like to be treated as a consumer, rather than rely on the Civil Service to be fair to him.
  (Sir Christopher Foster) The problem there is one of resources.

  1065. One area where I was very interested in what you said was where you were relating the idea of a permanent cadre to political impartiality. Do you think that the increase in the number of people coming in and out of the Civil Service, including advisers, is a threat to impartiality?
  (Sir Christopher Foster) Not now; no, certainly not. But yes, if one were to move to such an open Civil Service that 80 to 90 per cent of appointments, or something of that kind, were filled on that sort of basis,—

  1066. But you have asked for 80 to 90 per cent to stay.
  (Sir Christopher Foster) That is right; 80 to 90 per cent moving in and out would be at the opposite pole.

  1067. And what we are trying to find out is what the balance should be; but you have set the limit at 80, at one end, that is 80 per cent permanent cadre, of course, everyone would agree that you might have come to a—
  (Sir Christopher Foster) There are a number of reasons, not only this one.

  1068. So how have we have got this gap in-between where these two numbers end up?
  (Sir Christopher Foster) You cannot say; nobody can say precisely what the proportion of permanent staff should be. All one can know is that at one end of the range you have got a reasonable chance of maintaining important values. If you were to swing right over and go to a very great openness, I think the dangers I have mentioned would arise.

  1069. How far down, where are we going to arrive at the point where these dangers arise; or do they arise at 80 per cent, where we are 20 per cent outsiders?
  (Sir Christopher Foster) It is very much "suck it and see". I think that the way one goes about this is, one puts a lot of work into career development, and—

  1070. But we are not there now, we are not at risk now, we are not close to—
  (Sir Christopher Foster) I do not think so, no. I do not know what you feel, Robin; are we there?
  (Sir Robin Mountfield) I do not think I can do the arithmetic quite like that, because I think the idea of a permanent civil servant really encompasses somebody who comes in, in their late thirties or early forties, but with a career expectation, or, at least, an expectation of doing a series of posts, rather than a single post. I think the risk attaches much more to somebody who is brought in, perhaps as a result of ministerial encouragement, to do a particular job; that is, I think, where the potential risk is, I do not think it has yet happened to a significant extent. But if you get people who come in because they are associated with a particular policy then I think that is where the possible risk of politicisation could creep in. I do not think we are there yet, but I do think that it needs to be watched, that area of politicisation.

  1071. Can I come back to you, Sir Christopher, for a moment, on the points you made on training, because somebody listening might come to the conclusion that what you are really suggesting is that we have a lot more accountants and that we have a lot more lawyers, since these are the two primary categories where we are short of people to advise.
  (Sir Christopher Foster) I am not suggesting that.

  1072. You said we need more financial advice, and you said we need more people who can cope with lawyers, which is generally, I am afraid, people with legal training. I know that you will say that is not what you are saying, but, to the extent that it is true, is not that the clearest possible area where it would be useful to have people, not necessarily a core cadre, but people you could bring in from outside? And let me just illustrate that with one very brief example. I was involved with some of the privatisations in the middle and late eighties; what those departments doing the privatisations really needed were people who were brought in from the City, for three years, at three times the pay of the civil servants, perhaps, with whom they were sitting, who had done a few flotations, and knew how to set it up and how to work with the lawyers; and those kinds of people are in short supply.
  (Sir Christopher Foster) I am delighted you asked that question. As one of those people who was brought in from the City, on numerous occasions, to do that sort of thing, may I urge that I do not mean bringing in more lawyers or accountants. As many of those on a permanent or a temporary basis will be brought in as ministers want. But the difficulty for ministers is the handling of such people, to know how far and when to listen to a lawyer, when lawyers say things are impossible, do they mean impossible, or do they mean very difficult, is there another way through, does one have to accept as a minister that one cannot legislate as one wants, that one is instead constrained by Europe, or by some other restriction. Some are people who started out as lawyers, others may have started out as history or science graduates, who have developed or been taught a real understanding of legal processes. The private sector is beginning to develop such people, because, if you are not careful, you can get run off your feet by legal opinions. Similarly with science; again, it is not just more scientists one wants, as one knows, scientists find it very difficult sometimes to talk to ministers, or talk in a language that is easily understandable. They very often live in a world of extreme clarity to themselves, but not one which is easily related to the concerns of the public or the concerns of ministers. And, again, my judgement—it is very much the judgement of the Smith Report—is that that is another area where a new kind of intermediate expertise is needed and for which specialised training is needed which certainly is not the same as saying we want more scientists.

  1073. My last two, quick questions, of Sir Robin. One is, you have said that these competitions for permanent secretaryships are largely, or there is an element, I think, of kidology about them; is that why they were done?
  (Sir Robin Mountfield) No, I do not think so. I think the intent was genuine; and there are, of course, some special permanent secretary posts, I mean the legal posts, and so on, where—

  1074. We were thinking about the other one?
  (Sir Robin Mountfield) I am talking about the generalist "head of department" posts. And I think it is extremely unlikely that you will find significant numbers of people who are able to translate at that level from the private to the public sector. It is not like a company recruiting a chairman from another company, the shift of culture is different from that, and that is why I think people making that transition need to make it earlier in their career and gain some experience before they reach the top.

  1075. Can I ask you, very quickly, one other area, where I was a bit confused about what you were saying; at one point, you said, "We've moved too far in the direction towards hire and fire, or towards fixed-term contracts," but you also said, later on, that the Civil Service had become very closed in the sixties and seventies, and, indeed, in the eighties, and that we were, I wrote down what you said, "belatedly in the process of reopening our doors." And I was not quite sure whether you were suggesting really that we were too open, or not open enough?
  (Sir Robin Mountfield) No, I think we have still got some way to go, particularly at mid-career recruitment. But what I was commenting on—

  1076. Mid-career recruitment?
  (Sir Robin Mountfield) Mid-career recruitment, but not for particular posts and on fixed term; that seems to me the least satisfactory way, apart from those specific cases where you need a particular skill for a particular purpose for a particular time, there will always be cases of that kind. But that is the hire and fire aspect that I do not think answers the need, and I think it is much more a question of getting people to join the career stream at various points in their lives.

  Mr Tyrie: Thank you very much.

Mr Lepper

  1077. We took evidence, some sessions ago, from Michael Heseltine, and two comments of his I would be interested in your views on, particularly in view of what you have been saying about the public/private balance, conflict, contrast, whichever. He said the Civil Service had learned the art of caution, and that that was incompatible with a fast-moving, entrepreneurial society. What do you make of his judgement there?
  (Sir Christopher Foster) I think he was absolutely right that the Civil Service had learned the art of caution, and, of course, among the reasons why it has done so is Parliament and the Public Accounts Committee, and the fact, this still remains the case, that bad news is very much more of a trouble and that good news is worth no praise. And, BSE and foot and mouth disease, and all these other things, I think one cannot be surprised that civil servants, in one respect, are very, very cautious, and, when it comes to the crunch, ministers usually wish they were being even more cautious, when the really difficult things happen. So I think there is a way in which the whole public service is set up. I think it will be a marvellous day when we have tuned PSAs to such a pitch that the targets which people are actually set are realistic but stretching, and one can actually say that they can take effective and calculated risks to achieve a target, I think that is a tremendously important aspiration. But as long as Derek Lewis, who satisfied all his targets in the Prison Commission, can still be fired because of something which was nothing to do with a target, it was an escape, you will have very a great difficulty in persuading a good many civil servants in that sort of post not to be risk-averse. I think there are other aspects; risk aversion is one thing, entrepreneurship is another. My experience, and Robin's, is that always a certain number of civil servants are entrepreneurial, in the sense that they are innovative, able to do things that are new, one does want a lot of those people; these are people who are innovative, which is not quite the same as taking a risk, because you have got to manage risks, if you are innovative, you can say, "Well, there are various things we can do to try to lay off risks." So I think one needs to separate those two aspects of it.
  (Sir Robin Mountfield) I agree with that. I think Michael Heseltine's analysis is right. This is primarily because civil servants want to protect their ministers from risk, rather than themselves; though I think the increasing exposure of individual officials to blame-seeking and blame attribution is a factor that bears on this. And, although both the present and the previous Chairmen of the PAC have gone out of their way, and rightly, in my view, to emphasise their willingness to accept well-judged risks that go wrong, provided they were taken in good faith and sensibly, in practice, I do not believe the PAC communicates itself in that way. And that is a very, very powerful influence on the behaviour of civil servants at all levels, far more, I think, than people generally realise.

  1078. So Public Service Agreements themselves, which you have both referred to, in a way, we need to think in a different way about them, the politicians need to think in a different way about them?
  (Sir Christopher Foster) I think it is marvellous that they exist. They are one of the best innovations we have had. They have galloped ahead, over the last couple of years, or so. The linking with the three-year public expenditure cycle is superb; but, in my judgement, there is further to go. What is a PSA? It is a promise, so to speak, it is a promise by somebody or other, a minister, or an agency, that it will achieve something or other in a stated time at a stated cost. Now in my experience of the private sector, as I have found on the six boards I have either been on or close to, the whole business of a board agreeing its annual budget, its business plan, its sighting shots, indeed the whole process, is extremely intense and detailed, it involves an awful lot of dialogue, of people saying, "Surely you can do a bit more?", "No, no, that's too far; all I can really do is that and no other." You gradually negotiate your way through. As I remember my first experience under Arnold Weinstock, ages ago, it is an art form: how you actually get to a point where people have just about been stretched to the limit, but still feel they can keep meeting their targets. The public sector needs to develop similar processes to get to the point where you can be reasonably confident, except in extremely adverse circumstances outside people's control, that they can actually hit the targets without too many squeals of pain. That is something we have got to achieve; but I do not think, I do not know whether Robin will agree, we are not quite there yet.
  (Sir Robin Mountfield) I think I am more sceptical about the PSAs. I think they are an interesting development of a quite long-standing process of target-setting in British government, and I think that a lot more thought needs to be given to the technology of setting targets. We have had a long history of it, particularly since the establishment of agencies, and the balance, for example, between achievable targets, for which people can be blamed if they do not reach them, and aspirational targets, where they tend to get blamed but should not be, because they are deliberately stretching, that is a very difficult area. Another very difficult area is one which is characterised by a saying attributed to Einstein, I do not think I can get the actual words right, but something like "what counts cannot always be counted, and what can be counted does not always count". What that means, I think, in this context, is that, very often, people set targets for those things that are not important but are measurable, and skew the performance, the actual management priorities are skewed away from the important towards the measurable. A simple example, in the election pledges of your own party, Mr Chairman, would be the commitment on waiting times, and one might think that waiting times are rather less important than the number of people who get cured, which one would think would be the purpose of the health service. I cite that as perhaps a rather flip example. But you see the risk, that one diverts the proper focus of management by wrongly setting the targets; it is hugely important that those are right. And another great risk, to my mind, is to go too far in the direction of setting targets which are outcome-related, rather than output-related; it sounds fine, of course it is right directionally. For example, Michael Bichard, I know, commented favourably on his performance being judged by the levels of literacy in the schools; well, that is fine, but a number of other people have an influence on that besides the Permanent Secretary of the DfEE, and his performance may be relatively marginal in that. Now a number of things that he can do to contribute to that are measurable and properly attributable, but I think the balance between those two influences is very important, and I think I would like myself to see a lot more, very serious work devoted to the technology of target-setting before we get too far stuck in one particular methodology.
  (Sir Christopher Foster) I wish we could get into that more deeply. Can I make just a couple of quick points there. Of course, targets can be wrong and inappropriate. In private sector situations, too, to some extent, one has to be sure that the target aimed at is not distracting one from an even better target which one fails to notice. But I think all these difficulties are negotiable, can be worked through. I absolutely agree there are better targets than waiting times. Nevertheless, it seems to me that the right and appropriate vehicle, is the PSA, improved, refined, with better targets and better processes. Of course, there will be some things that you cannot quantify, of course, there always are, but I do not believe, do you, Robin, that one should go back?
  (Sir Robin Mountfield) Not at all, no; that is not what I am trying to say. But I am rather sceptical that the PSAs themselves are quite as revolutionary a step as they have been sometimes presented to be.


  1079. This is the sort of avenue which always says, quite rightly, that we have been here before; but, sorry, David, just before we lose this, if the argument is the technology of target-setting has to be improved, where in Government should that be happening?
  (Sir Robin Mountfield) I think there is a number of ways that could be done. For example, somebody could let a contract to a university department, or some management consultants, or something, to deliver some thought, or the PIU could be commissioned to do a piece of work on it, there is a number of ways in which that could be tackled.
  (Sir Christopher Foster) I would give rather a different answer, complementary, up to a point. If I have a dream about this, and I am very well aware how difficult all these things are and how ideas on how to organise the centre of government are two a penny, and often terribly wrong, it is that in the Treasury we have got a source, or potential source, of a great deal of financial, microeconomic, and other sorts of information. I am all for keeping the Treasury as it is and developing it. But what one needs, I think, is something else at the centre, in and around Cabinet Office—I am not going to be specific—probably reporting to a committee chaired by the Prime Minister, in which the performance, at least, of the really important programmes, the health service and a few others, are presented having been analysed by some kind of PIU, it is a marvellous innovation, but it is not actually a performance unit, some sort of performance analysis unit.
  (Sir Robin Mountfield) I was not implying that the PIU should do the monitoring of targets but they should explore the methodology.
  (Sir Christopher Foster) But somebody needs to advise that committee within Cabinet Office, just as in a chief executive's office there are some people who pool together what the finance director says, what the human resources director says, what other directors say, and dialogue with the major programmes, periodically, and say, "Health service, this is what you said you were going to do; how are you getting on and doing it?" I think that needs to be a highly systematic process. It cannot be delegated to a university or the Treasury on its own, in my judgement. In some sense it needs to be an activity of a strong centre of government, in which all sorts of elements, including the Treasury, but not it exclusively, combine in order to do that. I do not know what the trick is in establishing such a strong centre, I do not know quite how it should be done, but there is something there from which I think would be a great benefit.

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