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Baroness Blatch: My Lords, I am grateful to the noble Baroness for that clarification. Given that teachers can now train in their own time, and pay for it, does the reference in the Statement mean that it will be a requirement in the future?

Baroness Blackstone: My Lords, no, it will be up to the individual teacher to decide whether he or she thinks that it is worth investing in his or her future. I would hope that the great majority of teachers will want to do so on a voluntary basis, but of course they will be encouraged to do so.

I think that the noble Baroness welcomed the idea of supporting small schools by developing a team approach to their teaching and building up contacts between them. There will be additional funding to help that. I believe that that will be particularly valuable to schools in rural areas.

I turn to some of the additional points made by the noble Lord, Lord Tope. He commented that he valued the proposals in the sense that they are not just about rewarding people at the top, but about rewarding people lower down the system--young teachers, as well as experienced teachers who perform well in the classroom. It is right to point out that primary schools will benefit from these proposals in that respect.

The noble Lord said that he saw the value of the proposals from the point of view of retention, but was not so clear about recruitment. I believe that the proposals for fast tracking those who are able will help recruitment. The fact that teachers who perform well will be rewarded more highly--those who reach the top of the profession will be able to receive salaries as high as £70,000--should achieve that.

He asked about the pay for trainee teachers. Under the scheme we shall pay those undergraduates or postgraduates in the system who wish to work as the new teacher associates. Again, I believe that that will help recruitment. We recognise the case which has been made for trainee salaries, but we judge that the right incentives to boost recruitment are those announced at the end of October. They are in the annexe to the

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document, including major new financial incentives for those who will teach science and mathematics, subjects in which there are shortages.

The noble Lord asked about rewards linked to appraisal outcomes, not just results. Pupil outcomes are only one of many components of appraisal. It is important that we do not get into a system where we simply pay by results. That is not the intention of the proposals.

He also asked how extra funds would reach the schools. Would that be through the SSAs; and how would they be directed to teachers? We shall be consulting on a more technical document to be introduced in the new year which will go into those kinds of questions. Therefore I hope that the noble Lord will forgive me if we delay an immediate response. However, we wish to ensure that there is ring-fenced funding to make it absolutely clear that those schools which have good teachers who have proven that they deserve this extra reward will have the funds to be able to provide it.

Finally, the noble Lord hoped that we would listen to teachers and others. It is a consultation document. We shall be consulting until the end of March and of course we shall listen. We very much look forward to hearing the views of anyone who has an interest in improving the quality of our teachers and the standards of their performance in the schools; and, I should add, we shall welcome any views from Members of your Lordships' House.

5.15 p.m.

Baroness Young: My Lords, I apologise to the noble Baroness as I was not in my place when she started her Statement. I share her view that we all want to help teachers improve because they are absolutely essential to education.

Perhaps I may ask two questions. First, it is very difficult to keep up with all the publications emanating from the Government even in the educational world. Last year there was an announcement that there would be a superteacher scheme. I believe that there were to be 5,000 superteachers. How do they fit into this scheme? Are they separate, or part of it? I do not understand how it would work if one were in a school.

Secondly, I may have misunderstood what the Minister said. If I have got it wrong, I hope that the noble Baroness will forgive me. In reply to a question, I think from the noble Lord, Lord Tope, I thought she said that the scheme set out in the Green Paper was not a payment for results. If one sets out objectives for teachers which are met, what is that but a payment for results? I may have misunderstood. It seems to me that if one sets out objectives which are met, it must be a good result if one receives extra payment for it. Can we have clarification on that point?

Baroness Blackstone: My Lords, I have some sympathy with the noble Baroness on keeping up with the large number of documents published. As a House of Lords Minister she has much experience of that. We are asked to cover for our whole department's work and not just the policy area for which we are responsible.

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I can clarify the superteacher issue. It was a term of art for advanced school teachers. They are not different from what is set out in the Green Paper. The announcement about them was made earlier. As I said when responding to the noble Baroness, Lady Blatch, and the noble Lord, Lord Tope, that part of the Green Paper has already been started. We have given it further clarification and developed it in the Green Paper. I hope that that solves the noble Baroness's problems.

Baroness Young: My Lords, can the Minister state where in the Green Paper we find that important piece of information?

Baroness Blackstone: My Lords, a chapter in the Green Paper is concerned with the issue of rewarding those teachers whom we want to keep in the classroom.

On the point about payment by result, I am sorry if I did not make myself entirely clear. Of course we want to reward teachers where they are fulfilling the objectives that we all share. However, I was referring to the more limited issue of pupil performance as set out in the performance tables that were covered earlier this week. I hope that that clarifies the point.

Baroness Uddin: My Lords, I welcome this Statement by the Government of comprehensive intention as a breath of fresh air. I believe that after 18 years it will bring back respect and dignity to the profession, and parents look forward to the outcome. A recent Ofsted report on education in Tower Hamlets leaves no place to hide. It concludes that there is continuous shameful under-achievement. I am therefore delighted to welcome the proposal for performance-orientated pay. I believe that that will boost parents' confidence. They can look forward to an improved result in their children's education. Perhaps I may ask the Minister how it is intended that the general teaching council will be reflective of the student population across the country.

Baroness Blackstone: My Lords, I am grateful to my noble friend for her welcome of the proposals in the Statement and, indeed, for what is set out in the Green Paper. We are consulting on the general teaching council, as we promised in the legislation which went through earlier this year. I am willing to admit that some pressure from the Opposition meant that we agreed that the majority of the members of the General Teaching Council should be teachers. However, we shall be making further announcements later about the introduction of the GTC.

Baroness Uddin: My Lords, in view of the fact that ethnic minority teachers are so few and far between, how are we to ensure that there is ethnic minority representation on the general teaching council?

Baroness Blackstone: My Lords, it is extremely important that teachers from every kind of background right across the system--primary, secondary and special schools--are adequately represented on the GTC. I shall

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certainly pass on my noble friend's comments about the importance of having good ethnic minority representation on the GTC to my honourable friend the Minister for School Standards who is responsible for it.

The Public Service: Select Committee Report

5.21 p.m.

Debate resumed.

Lord Beloff: My Lords, it would be highly improper for me to address the subject of our debate--the report by the committee chaired by the noble and learned Lord, Lord Slynn of Hadley--in his absence. Therefore, until he arrives, I must find something else to talk about.

There has been a departure this afternoon by the usual channels from what we thought had been agreed; namely, that on days when there are two short debates, neither is interrupted by a Statement but the Statement is put between them. That is for the convenience both of those who are interested in the Statement and those who are interested in either debate. I hope that representatives of the two Front Benches in the House will pass on that message to the respective Chief Whips.

Since the noble and learned Lord, Lord Slynn, is now in his place, I can begin with what I was supposed to begin with; namely, congratulating him on a most interesting and informative report.

When I read it--and this may be true of some other noble Lords--I was naturally reminded of times and battles long ago. In 1961, I published a book about relations between the Foreign Service and the rest of the Whitehall establishment based upon research which I had been enabled to make by the intervention on my behalf of Lord Normanbrook, whose rule over the Civil Service probably ante-dates the memories of many people here.

On the other hand, I now find in this report that that very important topic is neglected. I think it was a mistake to omit consideration of that because if it was important in 1960 and 1961, when I was doing that research in Whitehall, it is even more important now that we are members of the European Union.

That is referred to as though that was a problem on its own rather than a problem which stretches across the whole of the public service. It must be important that public servants in any department are capable of talking language which is understood by those in another.

Perhaps I may give one very simple example. When Her Majesty travels abroad nowadays, she is often asked to do things which would bring benefit to British overseas trade. In regard to that, for advice as to what would be appropriate, she must rely on the DTI. On the other hand, the Foreign and Commonwealth Office is always asked to estimate in advance the political dangers which may be incurred in a particular country, either physically or, more often, in the light of the sensitivities of some governments to certain remarks. If

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those two departments are not capable of talking to each other, it is possible that Her Majesty might be embarrassed.

Some years later--that is, some 30 years ago--when I was Gladstone Professor of Government and Public Administration, I was assisted by William Armstrong, later Lord Armstrong of Sanderstead, to set up in Oxford a weekly seminar in which distinguished members of the public service, nominated by him, would come and talk to the students. They would explain about the public service both as part of their general education in government and no doubt also in the hope--and this has been referred to by the noble Lord, Lord Newby--that some of them would seek careers in the public service.

I regret that that activity has been abandoned in the University of Oxford. The Gladstone chair is now referred to as a chair of politics, not of government and public administration. Indeed, as the noble Lord, Lord Newby, said, the public service does not seem to attract either the attention, the respect or the hopes of many young people.

My hope is that the noble Lord, Lord Butler, who is to follow me in this debate, now himself a senior academic in the University of Oxford, will take up that idea of William Armstrong and start seminars of that kind again. It is extremely important that that should be done.

However, it is important in another sense; I believe that that relegation of interest in the public service, of exploration of its organisation and its ethos, is in danger well outside the walls of the university. I believe that anxieties on that score are inadequately reflected in some of the statements, recommendations or observations in the committee's report.

We did go over some of that ground in a debate to which the noble and learned Lord, Lord Slynn, referred on the privatisation of the recruitment process for the public service. I thought that that was nonsense at the time and, as usual, my observation has proved to be correct. It is not a satisfactory method. I have very little sympathy, on the whole, with Her Majesty's Government, but they may be prepared to look again at that matter. But of course, it is not simply a matter of recruitment. As has been mentioned, it is a matter also of conditions of service and so on.

It may be--my contacts are not what they were in the days of William Armstrong--that the committee has underestimated the degree of anxiety felt by those recruited for what they thought was a lifetime career by the constant emphasis on bringing in people from outside and the notion that there should be a backwards and forwards movement. As the noble and learned Lord, Lord Simon of Glaisdale, said, that may be appropriate inside the American legal system which recruits to Washington, but it is not appropriate if one believes in the foundations of the British constitution where the Civil Service is concerned; namely, that it should be a single body with a highly developed sense of public service which cannot be assimilated to the criteria of the private sector. We all know that bringing in Ministers from business has not been an unmitigated success under various governments; bringing them into the Civil Service has yet to be proved to be successful.

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Noble Lords will not be surprised that I, too, echo the misgivings expressed by the noble and learned Lord, Lord Simon of Glaisdale, in relation to special advisers. I have not been able--studying the careers of major figures in governments of the past--to believe that they would have required anything beyond the advice given to them by the civil servants in their departments. It may be that with all this business of faxes, the Internet and all that nonsense, they require a degree more secretarial assistance than used to be the case--I do not suppose many Cabinet Ministers write many letters with their own hand. But, surely, one secretary per Minister would be enough. He could carry out all the normal secretarial chores of sending flowers to the Minister's mistress or boyfriend, as the case may be. However, for serious work and, above all, for advice, it is surely right that there should be an almost exclusive position to retain the persons who have come up through the service; who are cognizant of its many ramifications; and who are, as the committee's report suggests, in some respects the repository of the constitutional tradition which they are meant to serve.

It may be said that such people might not be very good at projecting the Government's policies. That may be so; but projection is rather less important than getting the policies right. It may well be that concentration upon projection may lead to neglect of the importance of getting the policies right. The time has come--in this I agree with the report--to introduce a Civil Service Act which will settle the boundaries for some time of what is political and what is administrative and, because of the changing circumstances in which governments operate, as the committee suggests, there should be an annual report back to Parliament on what is going on.

We say--and it has been echoed by the noble Lord, Lord Newby, and others--that we have the best Civil Service in the world. That was true. I sometimes wonder whether, if these tendencies are not checked, it will continue to be true. If it is not true, we will lose one of the few advantages we have in competing for influence on the world scene.

5.35 p.m.

Lord Butler of Brockwell: My Lords, I endorse the congratulations to the noble and learned Lord, Lord Slynn of Hadley, and the Select Committee on this report. By examining the philosophy of the division between the public and private sectors, as well as the way in which that division has been operated in practice, the committee performed a valuable service.

Before commenting on the substance of the report, I should like to pay my own tribute to the late Lord Bancroft, whose concern for the public service was, as the noble and learned Lord, Lord Slynn, said, a progenitor of the Select Committee. When I was at the beginning of my career in the Treasury, Lord Bancroft was my establishment officer and over many years I sat at his feet. His concern for the integrity of the public service was deep and lifelong.

As the noble and learned Lord, Lord Slynn, said, the incident which gave rise to the Select Committee was the privatisation, under the previous government, of the

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Recruitment and Assessment Service, which recruits staff to the Civil Service. Many in your Lordship's House felt that this was a privatisation too far in the belief that it put in the hands of a private sector company a function essential to the preservation of a high quality and impartial Civil Service. Hence the Select Committee's review of what properly belongs to the public sector and what to the private sector. I shall return to the issue of the Recruitment and Assessment Service.

In passing, I should perhaps say that in one respect the Select Committee does less than justice. In saying that there has been insufficient parliamentary scrutiny of the changes to the Civil Service, the Select Committee perhaps neglects the work of the Select Committee on the Civil Service in another place under Mr. Giles Radice which scrutinised these reforms throughout and produced a number of useful reports to which the Select Committee of the noble and learned Lord, Lord Slynn, referred.

The Select Committee recognises the difficulty of defining what functions must belong to the public service beyond the most basic functions of passing laws and ensuring an independent judiciary, but it suggests that an attempt should be made. In their response to the report the Government say that the decision on which option is best for a specific function should be taken case by case on a pragmatic basis. I agree with that. But now that I am licensed to be a little more controversial, it is possible to suggest some guidelines, drawing on the experience of recent years.

In terms of incentives to efficient performance, it must be acknowledged that the public sector has some disadvantages compared with the private sector. It does not work with its own money. It cannot, in practice, go bust and it labours under the proper burdens of political accountability which Parliament imposes on it. There are some who would say that those obstacles to efficiency are so fundamental that the state should do the minimum and as much as possible should be privatised.

That view is too simple. There are some situations in which the private sector also has limitations and I offer three examples. The first is when the service is a monopoly. There is not much reason to think that a private monopoly is better than a public monopoly, notwithstanding what may be done by regulation; indeed, it may be worse. The second is where the recipients of the service do not pay for it, as is true of many public services so the market cannot work. The third, and in my view the most important, is when the service involves acts of judgment between citizens and where fairness of process is of the essence. I do not think, for example, that many people today would advocate a return to the tax farming of the Roman Empire. The market is an entirely inadequate discipline of such activities. I cannot see any alternative to that of democratic accountability, which works through the public sector and ultimately to Parliament.

My anxiety, as I said in evidence to the Select Committee, is that recently governments may have gone too far in putting in the hands of non-elected quangos functions for which elected governments should be

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accountable. It is almost as if electors have lost so much confidence in those whom they elect that they would prefer to see decisions taken by people who they do not elect. I was therefore glad to see that the committee says:

    "It is not justified to delegate to a quango or the private sector solely or principally so that Ministers can avoid being accountable".
If we leave aside the areas where there are clear borderlines between the proper functions of the public and private sectors, there are extensive grey areas where the function could, in practice, be in either. Here I agree with the Government in that I think it is best to be pragmatic. What works best is best. In many cases, there may be advantages in allowing there to be competition between the private and public sectors, as in the market testing programme under the last government. In areas where functions remain within government, I believe that there has been shown to be advantage in replicating the pressures which produce efficiency in the private sector, such as profit and loss accounts, empowerment and personal incentives. I welcomed the Select Committee's acknowledgement that the introduction of agencies has, in practice, raised standards.

At all events, I reject, as did the committee, the implication that you can have efficiency or integrity but not both. That is a false dichotomy which is insulting to many people of integrity in both the public and private sectors. It seems to me not only possible but obligatory to aim for both efficiency and integrity in public services.

If I then apply those arguments to the privatisation of the Recruitment and Assessment Service, I would have thought that privatisation entirely wrong if it had removed the assessment or selection of candidates to the Civil Service to a firm in the private sector. But I agree with the noble and learned Lord, Lord Slynn, that if the way in which the private sector firm handles the mechanics either impinges on that assessment or has failed to improve the efficiency with which the recruitment process is undertaken, the licence given to the private company should not be renewed and that the function should be brought back within the public sector.

The Select Committee's report contains an important passage about the ethos of the Civil Service and says, correctly, that the attitude of Ministers to the Civil Service is crucially important. Here I must say that I disagree with the noble Lord, Lord Newby, though what a pity it is for the Civil Service that his career in it was not more prolonged. It seems to me that it has been a source of reassurance to the Civil Service and a vote of confidence in it that, after 18 years in opposition, the new Government have shown so strikingly their support for a permanent, non-political Civil Service.

Of course, it is to be expected that there will be some transitional frictions and there are further reforms to be made; indeed, history never stops. After a period in which the emphasis has been on strengthening the vertical management of the Civil Service, the new Government are giving attention to the horizontal links and central co-ordination. That is quite right. But overall, and with very few qualifications, the Government have shown by their actions that they

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believe in a professional and non-political public service. That is something which the Civil Service should take comfort from and something which, in my view, we should applaud. The Government's actions have spoken louder in this respect than any words could do.

I should like to assure the noble Lord, Lord Newby, that, on the basis of a very short experience, some of the most outstanding young students in my college are this year and at this very moment taking the examination and applying to the Civil Service, not at all, I think, as a result of my influence. Perhaps I may also respond to the noble Lord, Lord Beloff, and say that debate on governments is alive and well in Oxford. There are seminars which were run, first of all, under David Butler, and now under Professor Vernon Bogdanor, which contribute greatly in that respect. There is also a club which sounds very much like the club to which the noble Lord referred called the Redcliffe-Maud Club, named after my predecessor as Master of University College, which meets frequently to debate these issues. Therefore, I do not believe that the noble Lord need think that interest in such matters is dead in Oxford.

Finally, I should like to comment on the case for a Civil Service Act. On balance, as the noble and learned Lord, Lord Slynn said, the Select Committee was in favour of this, although it set out the pros and cons very fairly. As perhaps is clear from my evidence quoted by the Select Committee, I feel luke warm about such legislation. If I read the Government's response correctly, they are also luke warm as they only "note" this recommendation, which is very often an indication that they are not terribly enthusiastic about it.

The noble and learned Lord, Lord Nolan, put it pithily when asked by the Select Committee about such an Act. He said:

    "We have quite enough Acts already".
I realise that the motive of those who favour such legislation is to entrench the essential elements of a non-political Civil Service and protect it against a future government. Of course, I welcome that. However, I am concerned that such legislation should not prevent the Civil Service from responding to changing circumstances and public expectations. The way in which the legislation is drafted in that respect, if it were proceeded with, would be a matter of the greatest importance.

5.47 p.m.

Baroness Turner of Camden: My Lords, I welcome the opportunity of participating in a debate on the report of the Select Committee on the Public Service. I joined the committee part-way through its investigations. However, I was a member during the time that the committee looked at the effects of the development of the system of executive agencies. We were, I think, very much aware that there had been significant changes in the way in which the Civil Service operates, but we had not appreciated--certainly I had not--just how much had changed. Our report sets out in some detail the way in which it has changed since 1967. Indeed, it is a very valuable record.

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I joined the committee aware that agencies--of a more or less autonomous kind--had developed, in order to undertake part of the work formerly done by a unified Civil Service. As has already been indicated, those changes had taken place against a background of privatisation when the view of the then government had been that, essentially, competition was good for everyone, and that, if there was no "market", one had to be created.

Recruitment policy seemed to us to have changed. An attempt was being made to bring the Civil Service and its personnel policies more into line with what was happening in private industry, where "jobs for life" and the security that that concept brings to staff were rapidly disappearing. We wondered what effect this would have on the well-known and much admired Civil Service ethos. We were also concerned about the line of accountability from agencies to Parliament, and about ministerial accountability generally. With those considerations in mind, we set about seeing a large number of witnesses whose interviews are recorded in our full report. Under the wise leadership of our chairman, the noble and learned Lord, Lord Slynn, we also decided that we had to look at the workings of an agency on the ground. For that reason, we went to Leeds--not only to look at the workings of the benefits agency there but to look at the operation of a benefits office in an under-privileged area.

We had previously seen representatives of the Civil Service unions as well as organisations looking after the interests of benefits recipients, senior civil servants, academics and many others. The visit to Leeds was, for me, one of the most interesting and useful things that we did.

We were all impressed by the level of service and the efficiency with which the work was undertaken. The visit to the benefits office, however, was very revealing. It was in an under-privileged area of the city. The staff, under a very competent manager, seemed to be doing their best to offer a good and compassionate service in very difficult circumstances. Attempts had been made to make the place "user-friendly", with armchairs and a carpet on the floor, but it was repeatedly vandalised. The staff dealing with claimants had to do so from behind a double layer of plate glass. Threats to staff from angry claimants were apparently quite common. We were seeing the result of what the Prime Minister has described as "social exclusion" and, as a result, the staff were having to deal with angry and alienated people. They were doing their best but were having to handle a very difficult situation.

As our report makes clear, we had a number of concerns about the changes that have taken place. I believe that a situation in which people compete for their own jobs with outsiders is not conducive to maintaining a high level of staff morale. I was interested to hear this afternoon that the noble Lord, Lord Beloff, seemed to be of a similar view. We learnt that the famous Whitley system for dealing with Civil Service terms and conditions of employment had been change beyond recognition. Each semi-autonomous agency now has responsibility for its own negotiations and for the terms and conditions of its staff.

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I questioned the union representatives about this. It was clear that they are not happy about it, but they have endeavoured to adjust. There are now at least 120 different bargaining groups within the Civil Service--instead of just one national one dealing with Civil Service terms and conditions cross the board. Of course, that means that there can be widely differing rates for the same grades of employment, depending on the location of the agency set-up. The unions made the point that the administration of such a system was bound to be more costly, since each side has to field a team for each site instead of there being one dealing with issues nationally across the board, as there used to be.

Another aspect of concern to us was whether staff were sufficiently protected should an individual feel the need to whistle-blow on some dubious or unsafe practice undertaken by a superior. As has already been said, we looked at the possibility of the introduction of a new Civil Service Act, which would contain a code of good practice. However, the Government--while welcoming much of our report--have been rather vague in their response to that recommendation. They clearly believe that the legislation they have recently introduced adequately covers whistle-blowing and gives protection to such employees.

Overall, as our report shows, we were impressed by the dedication and commitment of staff. Of course, I am talking about one particular area--the DSS and the Benefits Agency--in which I have a particular interest. We were concerned, since this agency has to deal with some of the most deprived and under-privileged people in our society, that the level of service should be as high as possible. What we saw convinced us that, generally speaking, a very good job is being done, often in very difficult circumstances. The staff have to administer rules which have been decided upon by politicians, but they are the first in line if members of the public--the claimants--are dissatisfied.

The agency system, in the instances we examined, did seem to have improved efficiency. That was the view of a number of organisations concerned with looking after claimants. The unions regarded the agencies, as they put it, as "morale neutral". They did have concern, however, about what they saw as a lowering of morale, which they attributed to quite different reasons. They believed it was mainly due to the lack of security that now exists within the Civil Service. Once the Civil Service had offered stable employment, but no longer.

This of course is mirrored elsewhere. I personally do not applaud it as I believe that most people need stability in order to plan for themselves and their families. This applies as much to the Civil Service as to other employees. Our concerns about the possible eventual undermining of the all-important Civil Service ethos remain, although it is fair to say that there is, as yet, little evidence that the changes which have taken place have undermined that ethos. However, I think that this situation needs to be carefully watched.

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5.55 p.m.

Lord Burns: My Lords, I, too, congratulate the noble, and learned Lord, Lord Slynn of Hadley, and other members of the committee on a thorough piece of work. They have shown great stamina over quite a long period of time in putting together their report. I, too, welcome the work that they have done.

It is right that the work should have been undertaken. The issues, which are very important, do not always receive the attention they deserve--other than from a small number of people who are particularly interested in such things.

My own experience of the Civil Service has not been typical. I joined the Treasury in 1980 on a four-year contract and stayed for 18½ years. During my transition from academic life, I was warned by many commentators that I should beware of the combination of the charm and the scheming of Treasury mandarins. In the end, I found that transition extremely easy. Treasury officials are indeed charming, but they are also enormously able, supportive and collegiate. They are deeply committed to their work. There is no doubt that the public service ethos is very much alive and well. Officials are willing to take on a lot of responsibility.

I agree with other noble Lords that we are very fortunate to have so many able people who are sufficiently attracted by the quality and responsibility of the work that they are willing to sacrifice the financial rewards which they could, without doubt, easily command elsewhere. Whatever changes are made to the Civil Service, it is vital that we continue to be able to attract such talented people.

My response to the noble Lords, Lord Newby and Lord Beloff, would be much the same as the response given by the noble Lord, Lord Butler; that we still manage to attract an enormous number of very able and talented people. Obviously, one's experience goes back only a limited period and it is difficult to compare the different generations when one does not know them equally well. However, throughout my time in the Treasury I remained completely in awe of the large number of very able people who we attracted to do the job and of the load that they were able to bear.

I want to address three issues. First, the whole question of whether there has been too much change within the Civil Service and some of the causes for that. Secondly, the suggestion that the relationship between Ministers and officials is no longer all it might be. Thirdly, how we might strike a balance between the confidentiality of official advice and some of the benefits of greater openness.

My period as Permanent Secretary coincided with a period of great change within the Civil Service. The report that we are discussing today describes this change very well. I would like to pay tribute to my noble friend Lord Butler of Brockwell who led the Civil Service through that period. It is important that we recognise that it was his desire to combine innovation with the traditional values and standards of the Civil Service, which brought a great deal of comfort to many of his colleagues during that period of very rapid change.

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As the House is only too well aware, not all change is necessarily always seen as being for the better. Sometimes change takes place which, in retrospect, we judge was not wise and was not an improvement on what had gone before. In general, there are many pressures to change which are proceeding all the time and one has to be aware of them. Organisations have to adjust. In the Civil Service, as in the wider world, we have been adjusting to a large number of pressures. I should like to mention a few of them in a general tone of sometimes being in favour of change.

It has been pointed out clearly in the report and by noble Lords today that, whether in their role as consumers, patients or whatever, the public have become much more demanding about the kind of services they want. They demand prompt, reliable, high quality and convenient services at a time of their choosing. That explains why so much effort is being devoted in the Civil Service to trying to find managerial solutions which will improve the chance of delivering those high quality services to citizens. That includes the Next Steps Agencies and the Citizen's Charter, which have been trying to follow other organisations in delivering a higher standard of service than used to be the case.

Secondly, the pressure of technological innovation, much of it through advances in information technology, has opened up immense opportunities to deliver these improvements without putting impossible pressures on budgets. The public sector is aware that it has to do all it can to harness those technologies, but this has implications for the numbers of people employed and the structure of the jobs that they do. This often leads to quite difficult change as one goes through that process. But, again, much of it is directed towards being able in the end to produce and deliver the kind of services that people need.

Thirdly, we have seen improvements in how to manage and organise processes in order to deliver greater efficiency in organisations all over the world. Many of these lessons have been taken on board in terms of looking at the Civil Service. Conventional management thinking has moved away from traditional systems of centralised and hierarchical control. There is now a much greater emphasis on decentralised systems. When one works with and talks to some of the young people coming up through the Civil Service, it is interesting to note the extent to which they want to have clear objectives. They want to know how they will be assessed; they want to have responsibility; they want to have a say in the jobs that they do; and they want to have more influence themselves on their career profile. All of this has important implications for the kinds of personnel systems that one operates. Some of the traditional centralised systems do not enable one to offer that kind of opportunity.

We have seen in many other organisations some of the pressures for more open, longer term relationships with the world outside. The traditional public service culture of secrecy and "Whitehall knows best" has had to change. This has meant greater openness. It has meant being prepared to explain much more and to have more two-way movement between Whitehall and the rest of

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the economy. That does not necessarily imply, as the noble Lord, Lord Beloff, suggested, a huge amount of change or that it need be necessarily immensely disruptive. We have seen some of the great benefits that have come about from having some of our civil servants go out to work in the private sector for a period of time and then come back, bringing extra wisdom and breadth of view to the job they are doing. That is very much to be encouraged. Similarly, we see some of the benefits of traffic in the other direction.

Finally, in all organisations throughout the world we are seeing a trend towards the buying in of more services and to establishing contracts with other organisations to supply parts of what might have been done centrally in the past. It would be very surprising if this move did not have relevance and the Civil Service did not also attempt to see what advantages might come from that. Things do not always have to be produced within one centralised system.

I am in no doubt that the public sector, along with other organisations, will have to adjust to many of the forces. It may not necessarily be to the same extent as other organisations. Nevertheless, the Civil Service cannot be left untouched by them. While I agree with many of the warnings contained in the report, it is important that we do not attempt to put a ring-fence around the public sector and say that change should never happen or make it difficult for necessary management change to happen.

It is right that the Civil Service should operate within a broad framework that Parliament approves and that from time to time Parliament should maintain a scrutiny over what happens and offer its views. But I am nervous about the tone that occasionally emerges that whatever we do we must always maintain everything within the public sector in the way that it has been done in the past, regardless of how the rest of the world has moved on or the lessons that have been learnt from other activities. That would be a mistake.

My second point is about the relationship between Ministers and officials, a point mentioned by the noble Lord, Lord Newby. Like a number of things in life, this is often said to be not as good as it once was. People always seem to have the idea that once upon a time there was a golden age when things were rather better. Obviously, my experience does not go back that far. What I can say is that I have experienced many excellent working relationships during my time in the Civil Service which seemed to me to strike just the right balance that one would like to see between Ministers and officials. Essentially, the deal is that in return for the privilege of being involved in the policy debate and having a chance to put views--sometimes forcefully--officials will then do their best to make policies work and subsequently keep their personal views about the decision to themselves. The deal is that Ministers are willing to listen to advice even when it is uncomfortable and accept responsibility for the decisions they have taken. Across a wide range of government business, my experience is that that is very much the way the world works.

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Sometimes, for various reasons, it does not quite work that way, but usually it does once the parties have got to know each other and their working styles. Sometimes there are periods of settling in with new Ministers. After a period in Opposition, Ministers come with very clear ideas, often worked out in detail, about how they want to do things and they are very intent on putting them into place. Sometimes mischief makers will have warned them that officials are likely to be obstructive. Not surprisingly, special advisers and other outsiders tend to be given an even more important role to play in the early stage because they have often worked quite closely with the Minister when he was in Opposition.

I saw it to a degree when I first went to the Treasury in 1980, which was shortly after the change of government. One saw it a little in the early stages of this Government. Officials can feel frustrated if they feel they are being asked simply to implement policy rather than to be part of the whole advice and implementation process. Sometimes, in the early stages, Minsters do not fully appreciate that officials can argue quite strongly against the case and yet when a decision has been taken still be quite assiduous in putting it into practice afterwards. However, those frustrations do not last very long. In my experience, things settle down. It is a mistake to imagine that some of the tensions that one might get at an early stage with new Ministers will necessarily be sustained.

I agree with the noble Lord, Lord Butler of Brockwell, that the transition to the new Government has gone remarkably smoothly. It owes a great deal to the efforts of everyone involved and particularly to the amount of preparation that was done beforehand both by shadow Ministers and senior officials.

The third point I want to make is about openness. There is a general trend towards getting some more daylight into the process of ministerial decision making, although not all of it is intended. I fully understand the argument for maintaining the tradition that the advice of officials to Ministers should not be made public for a very long time. There are real worries that to do so would undermine the effectiveness of the organisation in defending and implementing decisions. I accept that confidentiality makes it easier for officials to provide advice which is "fearless and frank" if they know that it will not be publicly available soon. At the same time, there are pressures for more accountability and openness. There is a growing pressure for more clarity about the roles and responsibilities of civil servants in practice as well as in principle.

The tradition of the faceless official is changing. Officials are no longer invisible or voiceless. They speak in front of parliamentary committees. They sometimes appear on television in "fly on the wall" documentaries. They are profiled in the press. If they are lucky, or unlucky, they might appear in the memoirs of Ministers. Sometimes we read accounts of contemporary history where the assistance of some of the key players is quite clearly in evidence. Of course, the paradox is that if something goes seriously wrong and there is an inquiry, all the advice will become

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publicly available anyway. It is only if things go well that no one reads the papers which lie behind the work that has been done.

My view is that we must find a way of meeting both needs in a more systematic way and to go further in meeting the legitimate demands for accountability as to how decisions are taken. At a minimum, we need to be much more ruthless and systematic about disclosing the analytical background to decisions and, over time, to make further strides in making material more publicly available, which does not harm the relationship. That would be good for officials and Ministers and would do more than codes or Acts in throwing light on which of the parties is doing the job that it should be doing well.

6.9 p.m.

Lord Gillmore of Thamesfield: My Lords, it was a great privilege to serve as a member on the Select Committee on the Public Service under the distinguished chairmanship of the noble and learned Lord, Lord Slynn of Hadley. I am glad that, several months after the report was published, it is possible for your Lordships to hold a debate of substance. Meanwhile, the Government have published their response. While that was broadly positive, not all the Select Committee's recommendations were accepted.

It is not surprising that in the past 20 years or so there has been an enormous change in the Civil Service. It would be surprising if change had not been on such a scale, yet despite the heroic efforts of many senior civil servants--notably the noble Lord, Lord Butler of Brockwell--those changes were not widely known and, where they were known, they were not widely understood. It is a matter of great satisfaction that the report shows that the Civil Service has weathered that storm of change, which included a substantial reduction in the number of personnel, with great resilience.

The old virtues of integrity, loyalty to the Crown and to public interest, dispassion, political impartiality, administrative thoroughness, freedom from corruption and a keen regard for fairness and equity have survived wholly intact. In some instances, as the noble Lord pointed out, the standards of service delivery to the public have actually improved.

Although all that is reassuring, it is important none the less to note that there runs through the report a thread of warning signals about the future of the Civil Service. They are warnings about the dangers and risks ahead and areas that require close vigilance. Those points of vulnerability include, in no particular order of importance, the risk of fragmentation and structural division; the danger to morale of piecemeal, ill-considered changes; the fudging of clear lines of ministerial responsibility and accountability; and the erosion of the essential confidentiality between Ministers and civil servants, without which the readiness to proffer unwelcome advice--speaking truth unto power--will be jeopardised.

I will dwell for a moment on the relations between Ministers and civil servants to which the noble Lords, Lord Burns and Lord Newby, referred. It relates to the Haldane principle of ministerial-Civil Service

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partnership, where Ministers conduct business in the presence of officials. It follows that any distancing between Ministers and officials is dangerous and to be deplored. That is not to say that officials have a monopoly of advice. Clearly they do not, and officials accept that is so. However, in times when views are--perhaps more often than in the past--sought from outside, it is vital that Civil Service advice should be taken. That is not an option. It is and must remain a ministerial duty of loyalty.

It is most welcome that the ministerial code published in July 1997 states without equivocation:

    "Ministers have a duty to give fair consideration and due weight to informed and impartial advice from Civil Servants".
However, loyalty between Ministers and civil servants has an equally important facet. Loyalty, as any 20 year-old platoon commander in the British Army will tell you, is a two-way business. The noble Lord, Lord Butler, welcomed the way in which the Government had praised the way in which the Civil Service had handled the transition in May 1997. But I do not believe that the report is entirely fanciful when it describes a tendency among politicians to denigrate the public service or to damn it with distinctly less than faint praise.

Many references have been made this evening to the late Lord Bancroft. One is reminded of his memorable phrase that

    "the routine words of praise delivered through gritted teeth deceive nobody".
Good government requires the loyalty not just of civil servants to Ministers but of Ministers to civil servants. That is not a matter of sentimentality or of slavishly following tradition. It is essential to the proper functioning of the system and to the maintenance of ethos and morale in public service. It too is a duty, not an option. As the report makes clear, that duty is shared by all Ministers--not just the Minister for the Civil Service, who is the Prime Minister, or the Parliamentary Secretary for the Office of Public Service.

The report recommended that the responsibility to sustain and uphold the ethos of an impartial, dedicated and non-political Civil Service should be spelled out in the ministerial code. It is a matter for regret that the Government, in their response, do not appear to have accepted that recommendation. I hope that Ministers will be prepared to think again.

6.17 p.m.

Lord Croham: My Lords, my interest in and concern about the Civil Service started 60 years ago, so I am grateful to the noble and learned Lord, Lord Slynn of Hadley, for the way in which he conducted the Select Committee and presented its report this afternoon. It seems a long time ago since our debate started, so perhaps I may be excused for returning to some of the points that the noble and learned Lord made.

When we began the inquiry, there was great concern in many quarters about the effect of some of the changes in government in recent years--changes in departments, which can happen all the time, and the consequences of the next steps agencies. Fear was expressed that the derogation of power over recruitment, grading and pay

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to agencies meant that the service would become fragmented. The fact that Ministers were sometimes passing questions to chief executives meant, it was suggested, that they were trying to get out of their responsibility for everything that went on in departments. There was also a fear in many quarters that the next steps agencies were merely steps on the way to privatisation, which is why at some point in our inquiries the question arose whether there was a natural boundary that should not be passed when moving from the public to the private sector.

On many of those points, the committee felt, having heard witnesses, that the fears expressed were exaggerated. There was clear evidence that agencies had improved efficiency and economies in their operations--and that was the primary motive. It is also fairly clear from the evidence we obtained that Ministers are not ducking out of responsibility for operations. If any serious question arises, they accept responsibility and are prepared to haul things back from the agencies if the political situation should require that.

Some of our witnesses were concerned about another question; namely, whether these developments and other changes might have impaired the capability of the Civil Service to give effective policy advice, or damaged the qualities and attitudes which have been looked for in the Civil Service. I am glad that the noble Lord, Lord Butler of Brockwell, paid tribute to my late friend and colleague Lord Bancroft who would have served on the committee had his health permitted. Lord Bancroft would perhaps have been rather more concerned about the state of the Civil Service than some of the speakers today. He was always concerned about staff and I think he felt that many of the developments that were taking place were perhaps more serious than some speakers have indicated.

As regards the policy point, it was clear to the committee that the work of the agencies is well integrated with the rest of their departments' work. Therefore the creation of the agencies does not appear to have fragmented the policy advising capability of the service. The cohesion of the service as a whole is now bolstered by the creation of the senior Civil Service to which special rules apply. That is a good step but it became necessary in my view because a lot of unpicking has occurred in the 20 years since I left the Civil Service. It was well integrated 20 years ago.

However, there are other reasons for a degree of concern about the Civil Service ethos of which others have spoken. Ministers of all parties have consistently stated that they look for and support certain qualities in the Civil Service; namely, impartiality, integrity, honesty and objectivity, with selection for promotion on merit, together with the more general ethos of public service. That sentence is taken from the Government's response. However, I am afraid that from time to time actions belie this attitude, in part because Ministers of all parties seem to fear that, if the Civil Service has to serve a party in power for more than one term, it becomes indoctrinated by it. Therefore in compensation there is a temptation to inject more and more political elements into the system.

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The fear that civil servants become politicised is unjustified. That is evidenced by the present Government's response to the Select Committee report. The Government pay tribute to the way in which the Civil Service coped to their satisfaction with the changeover after the 1997 election. This is of no surprise to any civil servant or ex-civil servant. It was demonstrated to the committee by the way Permanent Secretary witnesses, both before and after the election, clearly acted as spokesmen for the Ministers of the time. That made it impossible for the committee to explore with them any issues of Civil Service morale, which Ministers tend to take for granted, but about which witnesses independent of government--some of whom were ex-civil servants--expressed some concern.

But despite the knowledge that civil servants have always dealt properly with a change of government, a few steps were taken last year which in my view mark the first serious inroad into Civil Service political neutrality. I refer to the appointment of a number of politically committed individuals to executive posts in which their defined role is to give a political slant or spin but in which they will have executive control of ordinary civil servants. Those civil servants will be working in units which will have a consistently political stance. Their performance and possibly their pay will be judged on how well they meet the wishes of the specialist adviser who is their boss, and their impartiality will certainly be compromised in other people's eyes. This could have adverse consequences both for morale and esteem.

A regular civil servant in charge of a team knows when something will break the rules of impartiality and how to deal with the situation. However, an executive appointed to a political role is unlikely to have much concern for the ethos of political impartiality. So far it has been only a small step but its importance should not be underestimated. It is the first time that special advisers have been given executive authority over civil servants. It is a step which was deliberately not taken in 1974 when the concept of special advisers was first introduced on a significant scale. They were not given command over ordinary civil servants. If this became a precedent and its scope increased with successive changes of government--just as last year there was a substantial increase in the number of special advisers--it would not be long before we had a political Civil Service. We may want to go in that direction but we should not do so inadvertently.

Political impartiality has been one of the essential elements of the Civil Service ethos and it is an essential condition for the continuity of the service when governments change. It also represents the most important distinction between the Civil Service ethos and the public service ethos. The public service ethos reflects the tradition in this country that public servants do not use public authority or public funds for their own benefit, or that of their families or friends, or of bodies in which they have an interest, or indeed for their political parties, unless there is explicit parliamentary approval for their actions. This is not an ethos which applies only to paid public servants. It applies to all in

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public life who claim to operate in the public interest, whatever their political attitudes. It applies to all of us in this House. However, a permanent Civil Service needs political impartiality as well. The Select Committee believes that the Civil Service ethos has not been compromised by the creation of executive agencies. I agree with that but I fear that there are other dangers.

6.26 p.m.

Lord Brooke of Alverthorpe: My Lords, before I discuss the Select Committee's report I must declare an interest. I am a pensioner of one of the Civil Service unions and paradoxically I also do some work with Andersen Consulting's public sector group. I, too, congratulate the noble and learned Lord, Lord Slynn of Hadley, and his colleagues on the report and on providing us with the opportunity to debate it today. The debate is overdue. I sympathise with the committee as its work was interrupted by a general election and, due to the pressure of business, this debate takes place some time after the report was published.

Since then many developments have taken place with the new Government coming to power. Understandably, those developments are not addressed in the report. Therefore the Select Committee's remarks concern mainly the previous administration's record. If I may say so--again, for perfectly understandable reasons--one feels that the report looks to the past rather than tackling current and future developments within the Civil Service. I do not intend that remark as a criticism, as for the reasons I have mentioned it was not possible to tackle the report in any other way. However, I hope we shall soon be able to address the significant changes which are at present taking place within the Civil Service. I refer to the consequences for the Civil Service of the establishment of the Scottish parliament and the Welsh and Northern Ireland Assemblies, the future role of the Government's offices in the regions and their relationship with the regional development agencies and the role of the new task forces which have been established since the Government came to power. I refer also to the need to examine "cut across policies" and to shift away from the vertical structures of the 1980s and the early 1990s. Revised rules on PFI have now been issued which have significant possibilities for the Civil Service in the future.

Nonetheless the report contains many issues of principle. Once again I congratulate the Select Committee on the way in which it has addressed those issues. I share the view expressed by many other speakers; namely, that I find the report acceptable. The report contains a number of issues which I am sure the Government are happy to embrace, although some questions remain as regards a number of them which have been mentioned by previous speakers. Those matters will need to be re-examined.

I welcome the noble and learned Lord, Lord Falconer of Thoroton, to his new post and wish him well. I know that he will be anxious to give genuine support to his civil servants and to the Civil Service in general. He will want to do everything that he can to raise morale and to motivate. I hope that the new Government will be able to give civil servants a sense of vision of what

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constitutes good public service in a way that we have not seen or heard of much in recent years. That ideal has taken some battering.

The noble and learned Lord will also want to maintain the ethos and unity of the Civil Service. Both are rather difficult to define precisely. Having spent much of my life around Whitehall, I understand them, as do most noble Lords present this evening. The Select Committee is keen to preserve both--and we share that ambition.

I have also spent much of my time around the Civil Service network in the rest of the country. It is important that we do not lose sight of the fact that sometimes there is a tendency to be a little elitist in the way in which we address issues of this nature. We must remember that the vast bulk of civil servants are not employed in Whitehall but in many different locations throughout the UK. I tend to share the view about their attitude to ethos, as expressed by the noble Lord, Lord Mackay of Ardbrecknish, when he gave evidence to the Select Committee. At paragraph 271 of the report he is reported as saying that "ethos" is not sensed in quite the same way,

    "out in the Benefits Office in Truro or in Wick".

In my opinion, the unity of the Civil Service is not quite as strong as sometimes we tend to make out when we put on the rose-tinted spectacles and look to the past. Yes, there is unity, but it is an interesting kind of unity. I was recruited, not into the senior Civil Service, but down at the bottom end. I started as a clerical officer. I was recruited by the Inland Revenue over 30-odd years ago. I was a civil servant, but quite frankly my first loyalty then was to the Inland Revenue rather than to the Civil Service as a whole. That was the case with many civil servants who were recruited when I was and it is also the case now for many civil servants. Their first loyalty is to the department, or now the agency, within which they serve.

Looking to the past, we had hundreds of grades, with people remunerated in different ways. Different grades are not something new; we had them in the past. We had different pay arrangements in different parts of the Civil Service. We must ensure that we keep a balance when we talk about ethos and unity.

As a trade union official, I spent quite some time opposing some of the changes that were put into place, as the noble Lords, Lord Butler and Lord Burns, know only too well. As time has passed, the union movement has learned to live with those changes. Some of those changes were introduced by the previous administration. I want to pay my respects to the previous administration in that regard because some of the changes which they introduced have been good for the public service overall, although they also made some mistakes.

Generally speaking, agencies have been a success. There is a limit to how far one can continue to create agencies, but in the main agencies have been a success. We have seen the devolution of management functions and responsibilities within agencies which, I believe, has overall led to an improvement in management performance at a range of levels within the Civil Service, way beyond anything that we had in the past.

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Without the introduction of agencies and the devolution of certain functions, I do not believe that we would have been able to move in that direction.

I share the Select Committee's view that we must ensure that there is proper accountability to Parliament. There is no question about that. However, we must also look for ways of ensuring that there is proper and full accountability to citizens. I am not sure that people are quite so unaware of the changes which have taken place within the Civil Service as has been suggested. There was plenty of debate in the other House, plenty of campaigning by the unions and a good deal of coverage in a whole range of areas about what was happening in the Civil Service. I believe that the population at large now know that we have new agencies. People know that they have new rights, charters and better opportunities to take the Civil Service to task if it fails to perform adequately. Those are all moves in the right direction.

We must ensure also that we constantly seek to increase the rights of citizens--or "customers", as they are now called by some civil servants--to ensure that proper democratic accountability is operating, not just in Parliament, but also more widely. Ten years ago I used to suggest to members of the Select Committee on the Treasury and Civil Service that when questioning civil servants they ought not to construct their questions on the basis of what was said at their surgeries and in letters sent to them as MPs, but that instead they ought to survey and poll their customers. I know that that is not particularly popular at this end of the Palace, but I believe that it would be worth while. As Members have never done that, they have never been properly equipped to take to task some of the civil servants who appear before them. Interestingly, many government departments and agencies now carry out polls and conduct research work among taxpayers and "customers" to see how their services are received. Regrettably, we do not always have access to that kind of detail, although it would help us all. An effective freedom of information Act would be another interesting tool available to us in the context of extending democracy and widening people's knowledge of what we do.

I hope that the new Minister will not only maintain the Civil Service drive for greater efficiency, put in train by the previous administration, but do even better. I sensed in the Select Committee report some unease about value for money and efficiency. I hope that I have misread and misunderstood that. It is important to recognise that that must stay at the forefront of what constitutes public service; otherwise the public service will diminish even further, and none of the speakers this evening would wish to see that happen.

I pay tribute to the previous Conservative government for their work on agencies and getting better value for money. In my opinion, the Civil Service is more highly regarded by the general public now than 20 years ago. Credit is due to the other side for having put much of that in train.

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Now we have to see where we go with the present Government. I hope that they will be bold. I hope that they will persuade civil servants to move forward with them and that they will offer them opportunities in a variety of ways.

One of the down-sides of the previous administration's contribution was that they focused so much on segmentation and on creating agencies--small, individual units--that they failed to see what was happening with technology. They failed to recognise the opportunities that could have been taken on board to improve performance and get better value for money by creating new relationships between agencies and departments and implementing cross-cutting policies. In their last couple of years in office the previous government turned their attention to that issue. I hope that the new Government will do even more on that front. There are great prospects for achieving better policy and for effecting fuller savings and more efficient operations than in the past.

I look forward to the White Paper on better government. Along with the development of IT, I hope that these proposals will play a significant part in the White Paper. I hope, too, that the Government will spend a great deal of time talking about achieving even better management than we have had previously. It is vitally important to the Civil Service, as well as policy-making.

Another issue that was not taken up in the report and on which we need to continue to work is investment. The Government are committed to high-scale investment in health and education. However, I hope that we shall find new ways and means of bringing better investment to departments, agencies and NPPBs. Without that investment, the comparisons that many people draw between the public service and the private sector will continue to be unfavourable as regards the public service. We have people with remarkable aptitudes, but in many areas we are working with old tools in comparison with what is available in the private sector. We need to find ways and means of achieving better investment.

I am not advocating privatisation, although I do not believe that it should necessarily be taken off the agenda. The Government should be prepared to explore all the opportunities and avenues open to them in order to provide the best government, and in particular to find better investment in the public service. That means exploring partnerships even further, not merely with the private sector but with the voluntary sector, and seeking investment from other quarters.

Finally, we have people who can meet all the needs of government in terms of policy development. However, we cannot deny the perception that has arisen in recent years that Civil Service policy-making has fallen somewhat short of the requirements of the country. In the past, policies were developed by political parties, the Civil Service and academics in the universities. In recent years that has tended to change. We have seen what might be described as a vacuum filled to some degree by business and business leaders,

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initially from the Conservative Party. We have seen the growth and influence of the think-tanks; and we continue to see the growth of political advisers.

I draw comfort from the evidence given to the committee by the noble Lord, Lord Butler, that at the end of the day the Prime Minister has the right to call for support and advice from the best quarters when he needs it. That is not solely the Civil Service. I hope that it is predominantly the Civil Service; however, like the noble Lord, Lord Burns, I believe that we must be flexible in our approach. We must be prepared to look wherever we can in order to receive the best support, advice and assistance that are available in order to achieve the best available government.

Civil servants have an opportunity, given some of the changes announced during the summer, to move back into those areas of policy-making where there has latterly been a shift. I was pleased to hear the announcements in July that two new major committees are to be established within Whitehall. They will provide an opportunity for examining prospects and policies and an opportunity for innovation and new policy development in the longer term by civil servants. I believe that those creations will be well received and supported by civil servants. They are necessary for them. I also share the view that they need the opportunity of more cross-fertilisation with life beyond the Civil Service. We need to give greater encouragement to that kind of interchange. I am not without hope and confidence as regards the future of the Civil Service. The service needs to continue to adapt and move with the times. However, we need to make sure that we do not lose sight of the basic principles enunciated in the report.

Within the Civil Service there is significant talent that is not yet being fully utilised. The younger civil servants I meet are more like those described by the noble Lord, Lord Burns. I believe that they would wish to have the opportunity to grow and flourish, rather than see themselves pushed into corners.

6.45 p.m.

Lord Allen of Abbeydale: My Lords, It is with some diffidence that I rise to make a modest contribution to this debate, given that it is many years since I was officially involved in these matters and that such knowledge as I had is well out of date. Indeed, I go back to the regime of the late Lord Normanbrook, to whom the noble Lord, Lord Beloff, referred. However, it is a subject which remains of deep concern to me.

As the previous speaker pointed out, the time taken to arrange this debate means that there has been a whole range of changes since the report was published, including the role of the Minister, to whose speech we are all looking forward. I confess that I get a bit lost among the proliferation of new enterprises, but one of the changes that caught my eye was the announcement just before the summer break of a new centre for management studies involving the future of the Civil Service College. I get the impression that, somehow, the college has never quite matched the high hopes that we had for it in furthering the well-being of the service

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when I surrendered for its use the premises at Sunningdale which we had been running as a civil defence college. I doubt whether the Minister will have time to dwell on that point in his reply, but perhaps he will write to me at his convenience.

I have been well aware for some time that we have long since strayed from the simple concept of a unified service which stemmed from the Northcote-Trevelyan Report. Indeed, as a member of the Fulton Committee, I must take a share of the responsibility for that committee's report, which, unsatisfactory though it was in many respects, did I suppose mark the beginning of major changes. I have to admit that the present admirable report brought home to me that the developments in recent years were even more sweeping and far-reaching than I had previously realised. I do not think that my noble friend Lord Burns need be too apprehensive in regard to the public service being ring-fenced against change.

The Government's reply to the report manages to complicate matters for the simple-minded reader by re-arranging the committee's conclusions in a different way. I noted that there was no comment on the reference by the committee to its earlier report on the recruitment and assessment services to which my noble and learned friend Lord Slynn and other speakers referred.

The previous government lost quite a lot of marks with some of us for simply ignoring the conclusion reached in a vote by this House and going ahead regardless. Although I suppose it will take quite a long time before a proper judgment can be made, I should like to take the opportunity of asking how long the contract will run with the present operators and whether this Government intend to implement the undertaking given by the previous government to carry out regular reviews. I believe they used the word "audits".

I should like to pick out two points arising from the report. The first concerns performance-related pay. When I joined the Civil Service, assistant secretaries, for example, worked their annual way up a scale of £1,150 to £1,450 a year and permanent secretaries were paid £3,000 a year, and that was that. I appreciate that performance-related pay is now part of the culture, but I notice that the committee found that the devolution of responsibility to departments was contributing to a sense of disunity within the service. The Government's reply rather brushes this aside, but I gain the impression from elsewhere that there is a good deal of dissatisfaction with the fairness of the present system, including suggestions that sometimes there has been shown to be bias against women and members of the ethnic groups. Indeed, I believe that one major department has given up the system for the time being. I realise that there can be no ready cure for the basic complaint that anyway there is not enough money to go round, but I should be interested to know whether the Minister regards the present arrangements as satisfactory and whether it is thought that they do indeed provide motivation.

Secondly, I found the committee's report not totally reassuring on the matter of career planning and how that is linked with delegation of powers to departments. Are there opportunities for those who think they would

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benefit from operational experience to get a move to a next steps agency without taking the risk that their parent department might lose sight of them? Do such moves take place on any scale? And what are the arrangements for picking out from among the lower orders of the 3,000 senior civil servants the leaders of the future and planning their careers across departmental boundaries? The Government's reply in this context is soothing but not very specific.

There is then the question of appointments to top posts from outside, to which a number of noble Lords have referred. The committee, as we were reminded, found no evidence so far of any adverse effect on morale but warned that such appointments should not be overdone. I should like to echo that point. With the contraction of the service, the number of top posts is, if anything, likely to diminish. If too many of this smaller number were filled from outside, the long-term effects, as this fact gradually became known to potential recruits to the service, could be quite serious.

I shall end on a brighter note. I had feared that career civil servants might increasingly come to be regarded by Ministers primarily as managers rather than as advisers on policy. I can only say that, watching the activities of my old department in recent legislation and elsewhere, and listening to what the noble Lord, Lord Williams of Mostyn, has said about the support he has had from officials, I am in no doubt that Home Office civil servants--and I am sure they are not alone in this--continue to play a very active part in the working out of new policies, of which there is no shortage, as an announcement about forthcoming legislation earlier today reminded us.

6.53 p.m.

Lord Hayhoe: My Lords, I cannot rival the history of the noble Lord, Lord Croham, but I joined the Ministry of Supply something over 55 years ago at the most junior technical appointment level that existed at that time, receiving the princely salary of £156 a year, which is rather different from the rates of pay prevalent now. I first met Ian Bancroft when I was posted as a Minister of State to the Civil Service Department, having left the Civil Service and moved into the world of politics, which I think has served me rather better than the Civil Service would have done. Ian Bancroft was then head of the Home Civil Service and Permanent Secretary at the Civil Service Department. From my earliest acquaintance with him, continuing through the years as one saw him sitting on the Cross-Benches in this House, my admiration and affection for him grew all the time and I am glad to echo the comments that have been made about him. I only wish that he were present to be taking part in this debate.

Perhaps I may, as a member of the Select Committee--though I joined it rather later than the noble Baroness, Lady Turner--echo the well-deserved tributes paid to the noble and learned Lord, Lord Slynn of Hadley. He was a superb chairman. At one stage we were in great disarray and I was not clear that we would ever be able to come together and produce a report. By a masterly precis, which he put together, as far as I could

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see, over the luncheon interval, he got us all back in line and we moved forward to achieve what I think is a well-angled report about a very important subject.

Twelve months have elapsed since we were about ready to publish the report in December last year. At that time we wondered whether we should delay publication because it was confidently predicted that the Government were to produce a White Paper at any moment. I am glad that we did not delay because the White Paper is still awaited. Perhaps, in replying, the Minister can confirm that it has now been subsumed into a White Paper on better government which is predicted to be published some time next year.

Like the noble Lord, Lord Allen of Abbeydale, I wish to say a few words about performance pay. I have come across this on a number of occasions and my doubts about its usefulness have increased. In our report we refer to the evidence given by Professor Hennessy, who described the performance pay system introduced into the higher ranks of the Civil Service as "ludicrous" and went on to say:

    "If I thought that Deputy Secretary X was going to work that much more effectively and zealously because of a merit payment of £1,000 at the end of the year, I would be deeply worried about Deputy Secretary X because that is not what should get them out of bed in the morning to do a good job for the state".

I entirely agree. Although senior civil servants, when asked about performance pay, loyally said that they thought it might have some marginal usefulness, I very much doubt that that is the case so far as the higher ranks of the civil service are concerned. In my experience, the people who occupy those positions will not be moved much either way by the thought of a small merit bonus at the end of the year. Indeed, like Professor Hennessy, I should be very saddened if that affected their motivation.

The main point I wish to make is on a subject which has been referred to throughout the debate. A theme of our report, much mentioned by earlier speakers, centres on the question as to whether the immensely important public service ethos which has permeated and animated the senior ranks of our Civil Service following the Northcote-Trevelyan reforms of the last century has been undermined and seriously damaged in recent years. It is generally agreed that a radical and fundamental revolution in public administration has occurred, in a somewhat haphazard fashion, over the past 20 or 30 years. As we say in paragraph 168 of the report,

    "there has been little or no coherent rationale underlying the changes made in the Civil Service in recent years".
Perhaps a university thesis will be written to show that there was such a rationale, but none of us knew about it at the time.

Fears have been expressed that privatisation, market testing and the next steps agencies, with their associated emphasis on management skills and value-for-money, have undermined in some way the old Civil Service virtues. I was delighted that these fears, which were abroad at an early stage in the work of the committee, were not supported by the main thrust of the evidence that we gathered.

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I wholly agree with the noble Lord from the Benches opposite that so often when we talk about the Civil Service we think of a small group of a few thousand, in the main senior people with access to Ministers who have an impact upon the formulation of policy; whereas there is a real civil service out there composed very largely of young people, particularly women, who are not very well paid but who do an enormous number of routine tasks all over the country. I was glad to hear the reference to staff who work in social security offices who often face terrifying behaviour by claimants who bang desks and the like. We must never forget the very loyal service that they give when distributing the benefits that Parliament has laid down.

Another threat to Civil Service morale and values at a senior level came with and from the new Labour Government following last year's general election. New Ministers with their spin doctors and policy advisers--close and trusted friends and colleagues--caused quite a flutter in ministerial corridors in Whitehall. I take one incident. There was that insensitive, if not positively disgraceful, treatment of Jill Rutter, whom I knew when a Minister in the Treasury in the middle of the 1980s. She was head of information. Other information officers suffered a somewhat similar fate. It appeared that senior civil servants were ignored or excluded from policy discussions at that time.

I am glad that there is now a code of conduct for political and special advisers and that the non-party political status of the Government Information Service has been made absolutely clear. Fears about politicisation have happily proved to be somewhat exaggerated, although I do not believe that one can ignore the comments of the noble and learned Lord, Lord Simon of Glaisdale, who highlighted some of the potential dangers in this area. As the noble Lord, Lord Burns, explained, it is perhaps inevitable that when governments change some, but not all, incoming Ministers are slow to appreciate the quality and independence of their senior civil servants. But as time goes on quality should show through and a better balance between what may be described as the "regulars" (the Civil Service) and the "irregulars" (special advisers, et al) will be achieved. The warning of the noble Lord, Lord Croham, on this issue is one of which I hope the Government will take very careful account.

I come to what is perhaps a more controversial point. Paragraph 254 of our report refers to the evidence of Sir Christopher Foster and Mr. Frances Plowden who spoke of

    "the erosion of the Haldane principle of Ministerial-Civil Service partnership which used to be the keystone of their relations".
This matter was referred to explicitly by the noble Lord, Lord Croham, and implicitly by my noble friend Lord Beloff. Between 1979 and 1990 Conservative governments led to a diminished role for the Cabinet and Cabinet committees. An increasingly presidential-type regime was imposed that undermined to an extent the independence of departments and the value of collective decision-taking. To have collective

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responsibility imposed when collective decision-taking is denied is not a happy situation. Perhaps that has reference to events in our very recent memories.

From 1990 to 1997 my right honourable friend the then Prime Minister Mr. John Major sought to restore Cabinet government, at least as far as concerned reports in the press. A fractious and small disloyal minority in his party made life very difficult for him. Rumour has it that the present Prime Minister prefers the Thatcher model of neo-presidential power. If that is true, a further erosion of the Haldane principle is likely and the role of the Civil Service will be diminished at a time when I believe it should be enhanced.

I end by observing that the noble and learned Lord, Lord Slynn of Hadley, in opening the debate, said that the report was no show-stopper, or words to that effect. I agree with him. But the report and the supporting documents constitute a rich and varied quarry of quotations and information to be hewed out by students of government and public administration in the future. To the small number of our fellow citizens who follow these matters with care and attention I can only commend the report as a very valuable contribution to debates on these matters.

7.7 p.m.

Lord Hunt of Tanworth: My Lords, I do not believe that anyone expects the last speaker before the gap to score many runs. I shall keep my remarks appropriately brief. I am very glad to join in congratulating the noble and learned Lord, Lord Slynn of Hadley, and his colleagues on the Select Committee on a most useful report and on introducing this very interesting debate. As a former civil servant I was naturally glad, even if not totally surprised, to note that the Select Committee reached the view that the service had managed to maintain its ethos of fairness, integrity, political impartiality and rigour despite the many changes that had fallen about its head. I also agree with the Select Committee that that ethos is vulnerable, and I shall concentrate my remarks on that.

We could have quite a different Civil Service; for example one based on the American model. However, if we want to maintain our traditional model it must be nurtured and respected. That respect must be earned, but if earned it should be given. The Select Committee emphasises the risks of fragmentation that arise from the creation of executive agencies and the devolution to them of the settlement of pay and conditions of service, the filling of senior jobs from outside, fixed-term contracts and problems over accountability. It is important not to lose the esprit de corps that comes from belonging to a unified service where a sense of proper behaviour or seemliness is acquired by a process of osmosis rather than a formal Civil Service code.

It is good that the Select Committee, having looked at the executive agencies, sees no sign of losing that ethos yet. And I emphasise the word "yet" because in some cases executive agencies will, and perhaps should, develop their own style and their own ethos. I believe that it will become increasingly necessary not just to nurture but to monitor how the ethos is living in this new and very different world.

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The changes to which I have referred and on which the Select Committee concentrated were the result of deliberate internal government decisions, usually with cross-party support. But I believe that during the 30-year period which the Select Committee examined there were also two external developments--not the responsibility of government--which have a bearing on the prevailing ethos.

The first is the cultural revolution of rising expectations, a product in part of the pressure for personal autonomy and self-realisation which gathered increasing force in the 1960s. That led not just to a challenge to the public service but to a much wider challenge to professionalism in general. Like other institutions which exemplify values over self-realisation, the public service has had to adapt to this new dispensation, which tended to see professional values as impediments to personal development. The very idea that some people--be they doctors, lawyers or civil servants--know best became profoundly inimical to fashionable social norms.

The second extraordinary development is of course greater transparency in government--we do not have full transparency in government--coupled with the growing influence and interest of the media. That has made it much harder for civil servants to shelter behind the traditional notions of ministerial responsibility. But identification can be carried too far.

I do not seek to argue that any of these changes, whether the internal changes in the Civil Service and its organisation or the external changes in the climate, are in themselves undesirable. Indeed, I think that most of them are probably highly desirable, but cumulatively they must make it harder to sustain the public service ethos. I think it is a great achievement of the Civil Service to have done that so far.

Accordingly, I support the recommendations of the Select Committee, including those relating to areas which I have not spoken about. Like the Select Committee, I am on balance, but only just on balance, in favour of a Civil Service Act to buttress the Civil Service code, provided it is always understood that there are ethical attitudes of seemliness, fairness and proper behaviour, which may be very difficult to put into legal language but which will remain just as important, provided that the Civil Service Act is not drafted--and other speakers have made this point--in a way which would impede flexible responses to developing situations.

It seems to me that although we want to maintain our traditional Northcote-Trevelyan Civil Service we are in a way on a process of evolution towards a new kind of Civil Service; more professional, more performance oriented, more open to outside advice and less arrogant. But the trick is to combine that with the old ethos of integrity and impartiality. I believe that that is happening, but the crucial thing will be for governments--for the present Government or any other government--to continue to show that this is what they want and what they value.

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7.14 p.m.

Lord McNally: My Lords, there is an American saying that there has not been so much talent round one table since Thomas Jefferson dined alone. I have the feeling today that there has certainly not been so much Whitehall experience brought to bear on a particular subject for a very long time as there has been today. I of course approach these matters from a different vantage point from many of the distinguished Cross-Benchers who have contributed to this debate.

In a 32-year career since leaving university, I have been a think-tank employee, a special adviser, a Member of Parliament, a party apparatchik and a PR executive. I can already suspect that your Lordships are thinking, "This is a man who can't hold down a steady job". But in all those 32 years and in all those jobs I have had direct contact with civil servants, and my interest in the Civil Service even pre-dates that.

At university, when I was not involved in student politics I studied social history, and I have to say that Northcote and Trevelyan were collectively among my political heroes. The Northcote-Trevelyan report, along with the great Reform Bill, are two of the great taproots of our democracy. It was an extraordinary achievement of that time to persuade government to give up patronage in favour of an independent civil service. I consulted a few old textbooks and found that at the time many pundits predicted that governments would not do that because the power of patronage was too powerful a weapon for them to give up. Perhaps it is an encouragement to us all to learn that vested interests can sometimes seek power for the greater public good.

I join my colleagues in tribute to the noble and learned Lord, Lord Slynn, and his colleagues, for producing this report. Of course the spirit of Lord Bancroft has dominated this debate. Towards the end of his life he said:

    "At this point in my life there are very few matters, apart from my family, about which I can feel passionately. One of them is the future integrity of the public service and in particular the Civil Service".--[Official Report, 8/3/96; col. 573.]

I think that some of that passion has come through to some of his colleagues this evening. Lord Bancroft asked us to make our report a second Northcote-Trevelyan. I do not think that that was ever a realistic ambition for this report, but I think we have done some useful ground clearing so that the necessary look-to-the-future is on the basis of fact and not on prejudice.

Much of the debate tonight has, of necessity and by priority, been about the senior Civil Service and I should like to make a few remarks about that. Before doing so, I should like to associate myself with the remarks of the noble Baroness, Lady Turner, and the noble Lords, Lord Brooke and Lord Hayhoe. I am not exaggerating when I say that, certainly for me, the visit we made to Leeds was a traumatic experience. Anybody who has any idea of comfortable, cosseted, tea-drinking civil servants just waiting for their index-linked pensions should go to a benefits office. It literally is the front line and often quite young people are given immense responsibilities on our behalf in dealing with some of

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the most difficult problems in our society. So sometimes when the term "civil servant" trips off the tongue it is worth remembering those who carry out that work on our behalf.

Over the past 20 years the Civil Service has been severely tested by rapid change. Some of that insecurity, stress and pressure has not been on the civil servants alone; it has been common in many industries and professions, such as banking. We cannot expect to protect our Civil Service from change; it is how we manage that change.

One successful period of change has already taken place. As a number of Members have commented, our report was held over during the period of transition from one government to another. There were question marks over the capacity of the Civil Service to embrace change after 18 years of often strong-minded government, perhaps dominated by the concept of, "Is he one of us?". Had the Civil Service changed? Was it capable of managing the transition? I am pleased to see that the Government's response states:

    "The impartiality of the Civil Service--its ability to serve the elected Government of the day, and to provide continuity through changes of Government--has recently been tested ... the Government believes that the Civil Service has fully passed that test".
I think that all members of our committee share that judgment. But that does not mean that there were not some worrying signs in the former administration. I believe that one or two civil servants stayed in the same post for far too long. It is a temptation that may arise again if a government stay in office for any length of time. In some ways it is for the civil servants to protect themselves by moving on from a specific job rather than becoming adopted by one Minister, in some cases moving departments with the Minister, thus staying so long with one Minister that they cannot return to the parent department. That is a danger. When we talk about influences on the Civil Service, civil servants should beware of that danger.

I turn to the question of political advisers. I spent five years as a political adviser to the noble Lord, Lord Callaghan, first in the Foreign Office and then in Downing Street. I was pleased that the Government welcome the fact in paragraph 23 of their response that the committee,

    "received no evidence that the system of political advisers had been abused or had caused resentment from the established Civil Service".
That was certainly true. However, the relationship between political advisers and the Civil Service has to be kept under review. There is the danger of what Professor Peter Hennessy has called "politicised over mightiness" of political advisers, or the fear that,

    "notions of public service can seem marginal or even positively harmful to the hard pressed".

In our system, it is strange how one action has a result elsewhere. The introduction of Short money--the supplying of money to Opposition parties--created a shadow civil service. In a way which was not true 20 or 30 years ago, young men and women in Whitehall and Westminster working for opposition parties will gain experience of policy making, speech writing,

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parliamentary questions and all the procedures with which full-time civil servants are familiar. Some of them will move into Government spheres if and when there is a change of government. As the noble Lord, Lord Hunt of Tanworth, indicated, in the years to come we shall have to work with a hybrid system in relation to advice to senior Ministers. No major political party will give up its resources as regards supplying professional advice. We have to get the balance right.

I again quote Professor Hennessy:

    "We live in an era when the Armani-clad minds in the penumbra of fad and fashion-prone private think tanks"--
those who know Peter Hennessy will recognise the language--

    "can be preferred (especially if the advice comes gift wrapped and suitably politically tinted) to that more sober, sometimes inconvenient fare served up by the tweed clad minds in the career bureaucracy".
I am not sure that I recognise either the Armani suits or the tweed clad minds. However, I am sure that the noble Lord, Lord Gillmore, is right: getting the balance right between advice from the Civil Service and political advisers is a responsibility of Ministers. Ministers must want a career-based, politically neutral, Civil Service to continue.

Perhaps the safest thing is not so much to ring-fence the Civil Service as to ring-fence the political advisers either by a statutory number of political advisers or a statutory amount of public funds that could be spent on political advisers. There would not then be the danger of a gradual encroachment on the role of the permanent Civil Service by political appointments.

To underpin the independence of the Civil Service, I believe that a Civil Service Act would be welcome. I also believe that what the noble and learned Lord, Lord Nolan, in his Radcliffe lecture described as, "Government in the sunshine" would be best strengthened by a freedom of information Act. I was pleased that the noble Lords, Lord Burns and Lord Brooke, seemed to be in support of greater openness in government.

The report defends the special characteristics of our Civil Service: the lack of political bias; integrity; impartiality; objectivity; loyalty and freedom from corruption. It is right we should seek within our Civil Service to have the right social mix. A number of speakers have expressed the suspicion that existed in the 1960s and 1970s, certainly in the Labour Party, that our Civil Service was too narrowly socially based. There was a feeling of hostility and suspicion about its workings. From what I can observe of this transition, that seems to be less felt. Changes have taken place. A recent New Statesman article stated:

    "The lazy lunches in the Pall Mall clubs have almost completely gone, as have the shooting weekends in Scotland. Sherry sales are well down. The new Whitehall is an arena where John Major's spiritual children indeed prosper, a place where the academically bright from beyond the public school have their best shot at real power, a venue for advancement for a bureaucratic Mittelstand comprising folks who find their way around a website at least as adeptly as they navigate a wine list".
That can only be progress. The noble Lord, Lord Allen, referred briefly to the social mix. I believe that there is a social duty on Civil Service recruitment to make special

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efforts to ensure that there is also an ethnic mix. I understand that over the past six years changes have been made in selection procedures for the fast stream appointments. Racial bias in the tests used has been analysed, and focus groups and other research have been used to try to make the selection systems fairer. However, representation from our ethnic minorities in our senior Civil Service is still very poor. I understand that the Commission for Racial Equality has been working to secure a timetable and action plan covering key issues in relation to fast stream appointments.

We are in a period of social and constitutional change. No one ducks the need for the Civil Service to adapt to new circumstances. The principles of my student heroes, Northcote-Trevelyan, are still valid. However, to remain valid they need civil servants, Ministers and a Parliament who are determined to preserve and strengthen them where necessary. Our Civil Service is both a buttress to our freedom and an asset to us all.

7.30 p.m.

Baroness Miller of Hendon: My Lords, I join with other noble Lords in congratulating the noble and learned Lord, Lord Slynn of Hadley, and his committee on this comprehensive report and the painstaking assimilating of a daunting amount of evidence.

In my opinion, it was appropriate also that the committee should have been chaired by a Cross-Bencher, a distinguished judge which, to my mind, symbolised the almost unique reputation for impartiality of our non-political Civil Service. It is right that we should give all credit not only to the noble and learned Lord but also to the members of his committee, even those who did not serve throughout the whole of its time, for what must be regarded as an entirely dispassionate and objective report.

I agree also with the noble Lord, Lord McNally. He commented on the very high quality and experience of all noble Lords who have spoken in the debate this evening. It is late now and I do not propose to take up much of your Lordships' time with a detailed review of all the report's contents and conclusions. In fact, many of the points made in the report have been covered already by many more experienced noble Lords this evening who have an intimate knowledge of the Civil Service.

I should like to mention one or two key points which have been made in the report. The foundation of the non-political nature of the Civil Service was laid down 195 years ago by the Northcote-Trevelyan report. That report ended the system of appointments to the Civil Service by patronage. The committee welcomes, as I do, the statement in the July 1997 edition of the Ministerial Code that has already been quoted this evening by the noble Lord, Lord Gillmore of Thamesfield, that:

    "Ministers have a duty to give fair consideration and due weight to informed and impartial advice from civil servants".

However, giving fair consideration and weight to the advice of civil servants, whether the Minister accepts that advice or not, does not detract from the overriding duty of a Minister to accept responsibility for what his department does or does not do. A Minister cannot be

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heard to say that he was misled by his civil servants or that somehow it was their fault. I do so agree with the noble Lord, Lord Gillmore of Thamesfield, that loyalty goes both ways between Ministers and those in the Civil Service.

I believe also that if a person is in receipt of a ministerial salary and enjoys a ministerial chauffeur-driven limousine and all the other perquisites of high office, if something goes wrong, even if he considers that it is not his fault, it certainly must be his responsibility. That applies equally when a Cabinet Minister hives off part of his historic duties to an agency or non-governmental body such as the Bank of England. On every Minister's desk there should be a plaque of President Truman's favourite aphorism, "The buck stops here".

Another new trend is the shedding of the professional departmental press officers and their replacements by outsiders. I believe that there is a difference between a press officer who is seen by everybody as merely being the mouthpiece of his political master--the messenger, if you will--and someone who combines fact with political propaganda so that it is very difficult to tell where one ends and the other begins. Someone who, in many cases, actually helps to formulate the policies is supposed merely to "sell" to the public.

That brings me to the proliferation of the many special advisers that we now find in Whitehall. That matter has been noted by many noble Lords this evening. I believe that it is right and proper that senior Ministers should have access to political advisers paid for at the public expense: first, because a Minister needs someone to look over his shoulder, advising him of the political consequences of his policies and to help formulate policies without being involved in the day-to-day burden of running a department; and secondly--to my mind, much more important--because it enables the professional civil servants to distance themselves from politics, as I found for myself when I had the honour of speaking from the Dispatch Box on the other side of the Chamber.

But what concerns me is the increase in the number and cost of those special advisers. That matter has also been mentioned by many noble Lords this evening, in particular the noble and learned Lord, Lord Slynn of Hadley, when he opened the debate. It is a matter which needs to be carefully watched. The number of special advisers funded by the public under the present Government has increased from 38 to 64. A year ago, the cost was put at £2.6 million compared with an average in the last Parliament of £1.4 million. Four of them enjoy salaries of over £70,000 per annum, including one at over £100,000 per annum, all of which are more than is earned by the Secretaries of State in the other place.

And then there is the so-called Strategic Communications Unit. I am still not sure whether that unit deals with strategy about communications or communications about strategy, but its function seems to ensure that Ministers remain on-song. When the Minister replies, perhaps he will tell me which of my

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two interpretations is the correct one. In any event, the cost of that department for 1998-99 will be in the region of £500,000.

In the report, the committee refers to both the advent of political advisers and the creation of autonomous executive agencies under the jurisdiction of various departments. In the face of that, the committee emphasises that,

    "to safeguard the Northcote-Trevelyan principles in terms of both recruitment and conduct clear guidelines need to be set out which protect the neutrality and independence of the Civil Service whilst opening up access of Ministers for political advice".
The noble Lord, Lord Croham, made the point that there is a great danger in blurring those lines of responsibility. My noble friend Lord Hayhoe and the noble Lord, Lord McNally, made the same point. I very much hope that we shall hear from the Minister, in his reply, that the Government intend to take up that important recommendation and will give us an idea as to when those new definitive guidelines will be published.

As the committee reminded us pointedly in its report, the overall responsibility for protecting the ethos and morale of the Civil Service lies in the first place with the Minister for the Civil Service; and that, of course, is the Prime Minister. That is with whom that particular buck stops.

The committee received evidence from many knowledgeable witnesses, including many Members of your Lordships' House. All spoke in the highest terms of the way that the Civil Service has coped with the changes that have taken place in the way that the country is governed and the way in which its affairs are administered. Others, involved in or with the executive agencies, including the Council of Civil Service Unions, told the committee of the improvement that has been achieved in the delivery of services following the creation of those agencies. I am pleased to note that endorsement of the policies of the previous government in the creation of the method of managing the Government's public responsibilities. I know that the noble Lord, Lord Brooke of Alverthorpe, will not be surprised that I am most grateful to him for acknowledging that.

I was interested to see the committee's view that the creation of those executive agencies has given rise to questions of accountability. As the committee pointed out, accountability sometimes--I stress sometimes--rests on the novel assumption that the chief executive is responsible rather than the Minister; further, that the Minister's responsibility to Parliament is satisfied by acting as a sort of mouthpiece for the chief executive, often by simply appending a letter from him to a Written Answer.

The committee strongly recommends that, as there are now a variety of interpretations of the nature of the devolution of accountability, there is,

    "a need for the relationship to be precisely defined"--
to which I would add, "and consistently in all cases".

The committee considers that it is,

    "unrealistic to imagine that a minister will not become involved when an operational matter suddenly raises a policy issue ... so that it is impossible to devolve absolute accountability to Chief Executives".

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I do not believe that anybody would disagree with that. The committee asks the Government to affirm that the position of the agency chief executive is no different from any other civil servant, so that it would prevent it being thought that Ministers can pass responsibility for operational matters to chief executives.

Having had the opportunity to consider the report, will the Minister tell us whether the Government are both prepared to make that affirmation and to ensure that the Civil Service code should be amended to define the responsibility of Ministers for their executive agencies, as recommended by the committee?

Finally, the committee reported--I can do no better than quote its words--that,

    "The evidence ... has shown that the current Civil Service has coped in the highest traditions ... with the change of Government which occurred in May 1997".
Its report also said that it had received much evidence testifying to the continuing high standards of efficiency, integrity, impartiality and intellectual rigour which characterise the Civil Service. The committee paid tribute to the Civil Service for maintaining those qualities so well. So do we on these Benches and, I believe, the whole House.

7.41 p.m.

The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, like other speakers in the debate, perhaps I may start by making two points. First, on behalf of the Government I pay a real tribute to the noble and learned Lord, Lord Slynn of Hadley, for the work that he and his committee have done in producing the report. It is a serious piece of work which will be read for a long time to come as a major contribution to the study of the Civil Service and also what its ethos and qualities should be. On behalf of the Government I am genuinely grateful for the work that has been done.

Secondly, I pay tribute to the quality of the debate that has just taken place and express my extreme diffidence in replying to it. As the noble Lord, Lord McNally, pointed out, the wealth of experience behind the views that have been expressed on the report would make anybody diffident in responding to them.

I am glad that the noble Baroness, Lady Miller of Hendon, ended her speech by reference to paragraph XXXI of the committee's report. It is its last recommendation and basically ends on an extremely optimistic note in relation to the Civil Service. When listening to the debate today one could have been forgiven from time to time for thinking that the Civil Service and the public service are under some sort of threat. That is profoundly not the view that the noble and learned Lord, Lord Slynn of Hadley, and his committee expressed. Though it is perhaps repetitive, it is worth reading again:

    "The evidence we have received has shown that the current Civil Service has coped in the highest traditions of the Civil Service with the change of Government which occurred in May 1997. We have also received much evidence testifying to the continuing high standards of efficiency, integrity, impartiality and intellectual rigour which characterise the Civil Service. We pay tribute to the Civil Service for maintaining these qualities so well".

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Those views were echoed by the Prime Minister when he paid tribute to the Civil Service shortly after this Government came to power.

We should therefore approach the debate not on the basis that there is danger and trouble, but on the basis that the Civil Service has proved itself to be very effective in the past few years and since this Government came to power in withstanding any sort of attack on its ethos and in fulfilling the highest traditions of public service. It is important and valuable that the Government express--and I do so today--that they are fully committed to maintaining the key principles of impartiality, integrity, honesty and objectivity which underpin a permanent Civil Service. I make clear also that this Government hold the Civil Service in the highest esteem and that I accept what the noble Lord, Lord Newby, said; that is, that one of the things that undermines the ethos of the Civil Service is if it believes that it is not held in the highest esteem. That is not the position. This Government hold it in the highest esteem.

Perhaps I may deal also with the point in relation to special advisers. I agree with the noble Baroness, Lady Miller of Hendon, that it is appropriate and sensible for Ministers to have special advisers. Nobody has seriously suggested that that is not the case, with the exception of the noble Lord, Lord Beloff, and the noble and learned Lord, Lord Simon of Glaisdale. With the greatest respect to their arguments, I believe them to be wrong. It is entirely appropriate that a Minister, in fulfilling his office, should be assisted by a special adviser to give help both in relation to the political direction of the advice that he is given and also in relation to the presentation of policies with which he is concerned.

From my experience--it is not in any way contradicted by the report of the committee--there is no danger to the impartiality of the Civil Service. Moreover, as has been made clear, the Civil Service code requires Ministers to give due weight and fair consideration to the advice that civil servants give to them. It is an arrangement between special advisers on the one hand and the Civil Service on the other that can provide a better overall service to Ministers than the position without them.

The matter must also be put in context. How many special advisers are there? There are 70, not 64 as the noble Baroness, Lady Miller, modestly suggested in her speech. There are in the region of 3,500 senior civil servants and in the region of 450,000 non-senior civil servants. That sort of ratio is a wise and sensible one; it is the sort of ratio where the two can work together effectively.

The committee said that it received no evidence that the system of political advisers had been abused or had caused resentment from the established Civil Service. Indeed, that is my experience. Of course, there may be difficulties, as has been referred to in the course of the debate, when new governments come to power. But there can be no organisation where a whole new layer comes in when there is not some difficulty in relation to the early stages. It would be wrong and unwise therefore to draw any conclusions from whatever initial difficulties there may have been. The arrangements complement each other and serve the country well.

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It is important to emphasise that the ethos of the Civil Service and the specific qualities it brings are so precious that it is extremely important that its preservation is monitored. How that is done is obviously the responsibility of Ministers. In relation to the response given by the Government, we made it clear that we accept an obligation to monitor the preservation of the ethos and values of the Civil Service, and I repeat that undertaking.

I appreciate that it is for a political government to do more than pay lip service to those principles. I hope that by our actions we prove that we accept the principles, that we value the ethos and that we will do all we can to ensure that the virtues of the Civil Service continue. That is our basic position and it is one that practically every speaker shares.

I believe I have dealt with the major thread that ran through the debate and through the report. Perhaps I can deal with a number of more specific points raised by certain speakers. First, in relation to the Recruitment and Assessment Service, it is not appropriate or necessary for me to go over the debates that took place in 1996. For better or worse the decision was made by the previous government to privatise the Recruitment and Assessment Service. The result of that privatisation was that the mechanics of recruitment are now in the hands of a private company. That private company has a series of contracts that expire in the year 2001. Obviously the Government will keep those arrangements under appropriate review. I do not think that there is much more that I can say about that tonight.

Secondly, questions were asked as to what was the appropriate sort of activity for the Civil Service to perform, and what the appropriate activity would be for intermediate agencies and private enterprises. In the course of their response to the noble and learned Lord's report, the Government have not attempted to try to produce their own definition of where the lines must be drawn. I noted with interest the persuasive proposal put forward by the noble Lord, Lord Butler of Brockwell, as to where the line should be drawn. I had not heard such arguments before and it would be wrong for me to comment on them and say whether they are right or wrong. I agree with the noble Lord that there is a huge grey area here. Indeed, the way to approach it is not with a bias for or against privatisation or for or against executive agencies, but to do so on the basis of what it is that effectively delivers the particular service, having regard to a number of factors, one of which is the need in a particular case to provide the appropriate degree of accountability.

As far as concerns the executive agencies, the conclusion of the report was that they had broadly been beneficial. The noble Lord, Lord Croham, acknowledged that they had not led to an inappropriate fragmentation of the Civil Service. We accept the point made by a number of speakers in the course of today's debate; namely, that there should be proper accountability in relation to these matters. As regards the constitutional position, the chief executives of those executive agencies are all accountable to a Minister, who, in his or her turn, is accountable to Parliament.

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Therefore, although it is sensible to raise such a point, I do not believe that there is any real doubt about the fact that there is the appropriate amount of parliamentary responsibility.

I move on to the question of the Civil Service Act and whether or not the Civil Service code should be put into such an Act. The Government's response to the noble and learned Lord's report was that, in principle, we accept the idea of a Civil Service Act. I believe that the noble Lord, Lord Butler of Brockwell, was being somewhat unkind to us when he said that our response to it was lukewarm. We have said unequivocally that we should have it. I think the noble Lord may have taken the fact that we have put no time limit on when it is coming as indicating lukewarmness. He, of all people, will know that we have a very busy legislative programme ahead of us. As to how busy it will be, that will depend upon the difficulties created in this place in that respect. As noble Lords will understand, I can give no commitment as to when such a Civil Service Act might appear. However, in principle, we think that it is a good idea. I also agree with the noble Lord, that, when such an Act is produced in Bill form, the drafting will be incredibly important and great attention will need to be paid to it.

The noble Lord, Lord Butler, also said that the Government should not delegate functions to non-elected quangos merely to avoid democratic accountability. I entirely agree with that view. Government are committed to using quangos only where strictly necessary; for example, where some sort of independent arm's length body is the appropriate one to deal with the particular function which is to be delegated.

Throughout the debate two other matters were raised which I believe require particular attention. First, the question was raised as to whether the Civil Service was continuing to attract the right quality people. Some views were expressed tonight that the people who are now going into the Civil Service were not as good as in, "my day". There is a feeling in that respect, which I am sure is felt by practically every generation. Indeed, when I was a young man at university, all the best people became barristers and civil servants. I believe that that remains the position, but perhaps that is not necessarily so in the case of barristers. The entirely commendable changes to access to justice may well reduce the number of barristers.

As far as concerns civil servants, from my experience as a Minister--which is short and unrepresentative--it would appear that the quality of new entrants to the Civil Service is extremely high. In fact, I can do slightly better than simply rely upon my own experience. When looking at the figures in relation to the fast stream of the Civil Service, one can see that something in the region of 7,000 applicants were received in 1997 for 170 places. Therefore, although that does not necessarily indicate the quality of the people applying, it indicates that there is still very high demand for what are very good quality jobs. I very much believe that the standard of new entrants now is just as good as it was in my day, in my father's day and indeed in my grandfather's day. So such fears may be exaggerated, but I do not put that

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forward scientifically. We are also encouraged to some extent by the fact that the noble Lord, Lord Butler, brings news from Oxford that there are at least one or two people from his college applying to the Civil Service. Moreover, despite the fears of the noble Lord, Lord Beloff, we understand that there is still active talk going on--for example, by way of seminar and dining--in which government is discussed.

The second important point raised is whether there has been too much change. I believe that the noble Lord, Lord Hunt of Tanworth, dealt with that aspect. I do not think that the change which has taken place over the past 30 years has in any real sense been voluntary. The Civil Service has obviously decided what it has to do, but the idea that the service could or should have done nothing for that time about the changes in the world which went on around it just has to be stated in order for us to realise how ridiculous it is. Broadly, although one would not necessarily agree with all the changes, one can say that the Civil Service as a large organisation has responded well in the way that it has sought to cope with the many changes which have occurred. In particular, I have in mind the ones to which the noble Lord, Lord Hunt, referred; namely, the greater expectation of the people as to what they expect from their elected government and from a permanent Civil Service.

I believe that the noble and learned Lord, Lord Slynn suggested that perhaps we should put a stop to change and consolidate. I do not believe that the question of change is entirely in our hands. Indeed, we must move by reference to how society moves around us. Therefore, in a sense, you cannot say that we will have a bit of change for 30 years and then stop for a period of time. One has to be realistic about what is possible.

The noble Lord, Lord Allen of Abbeydale, asked me specifically about the Civil Service College in the light of the central management arrangement that was set up in July. I was given a note in that respect by the Civil Service which I have now lost. I apologise to the noble Lord, but perhaps I may write to him in relation to that point.

I have not answered all the points that have been raised tonight. However, I should like to make one final point. The one thing that seemed to arise throughout the whole debate was the fact that every speaker recognised the importance and the vulnerability of the ethos and virtues of the Civil Service. I end by saying that the Government recognise that and that we will do all we can to protect those qualities.

7.58 p.m.

Lord Slynn of Hadley: My Lords, I am most grateful to all noble Lords who have listened to and participated in this debate. It has been one of the most informed and constructive debates that I have heard since I came to the House. In fact, it was so good that I wish we could have had the debate on the report before we wrote it; so many important points have been raised. It is just the kind of discussion that Lord Bancroft, whose absence from our committee and in today's debate we greatly

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regret, would have wanted. Indeed, so many points have been raised that it would be undesirable and perhaps even unnecessary for me to try to deal with all of them.

However, the extent to which we all recognise that the key to the strength of the Civil Service relates to and depends upon the health of the Civil Service ethos has come out very strongly in the debate. I wholly agree with the noble Baroness, Lady Turner of Camden, and the noble Lords, Lord Hayhoe and Lord McNally, about the significance and importance of our visit to Leeds. I wish that all your Lordships could have been there that day to see what has to be dealt with on the ground.

As has become obvious, our task was to report on things which we saw had gone wrong and to give warning signs of things which might go wrong and which needed to be monitored; accountability and the importance of ensuring that the role of the special advisers, which is very important, should be kept in legitimate areas. I was so persuaded by what the Minister said about the usefulness and importance of having specialist advisers that I shall apply for one or some when I sit on the Judicial Committee of your Lordships' House. They would be an extremely valuable adjunct to the work we had to do. With the risk of fragmentation, obviously that was important. As to that, I absolutely agree with what the noble Lord, Lord Hunt of Tanworth, said about the importance of monitoring.

I want to comment briefly on three points which were raised but with which I am not entirely happy. With great respect to the noble Lord, Lord Butler of Brockwell, it is not right to say that we underestimated the anxiety of those who had come into the Civil Service with the expectation of an on-going career for life. We were very conscious of that. We examined the matter without it having been raised by others, and all who came to us recognised that nowadays a career for life no longer exists in the private sector and cannot be justified in the public sector.

Secondly, I do not believe that it is right to say that we asserted or assumed an antithesis, a clear distinction between efficiency and money on the one hand and integrity and loyalty on the other. I have said today, and as is said in the report, the qualities of the ethos are as essential to the private sector as they are to the public sector. As was said by the noble Lord, Lord Brooke of Alverthorpe, efficiency is essential to both.

I must insist that we did not say--and I did not say today--that the changes which have taken place have not been discussed in Parliament. I said that they had not been discussed except in Parliament. It is quite obvious that during the years when changes have been taking place there have been important discussions in your Lordships' House and the other place.

I accept the comment of the noble Lord, Lord Beloff, that it might be possible to look at the link between departments when there are forays abroad and that there should be an increased facility with foreign languages. We went into that, to some extent, in relation to the European Union, even though I agree that it could have been taken on a broader basis if we had been looking at the Foreign and Commonwealth Office.

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I wholeheartedly agree with what was said by the noble Lord, Lord Allen of Abbeydale, that a lot had happened without people being aware. When one goes into the whole history of what happened, it is absolutely plain that there have been extraordinary developments of which people were not really aware.

I am very grateful for the comments on the contents of the report. I am very happy that the noble Lord, Lord Butler, will be able to distribute in Oxford a copy of our report as a working document for seminars in government, politics and whatever else. That gave me a heartening confidence in what has happened.

I am very grateful that the Minister read out the last paragraph of the report. It really sums up the beliefs that we reached at the end. We can be reasonably content with most things, but we should certainly not be complacent. Finally, I join in with all the tributes paid to the Civil Service by Members on all sides of the House. Again, I thank your Lordships for participating in the debate.

On Question, Motion agreed to.

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