Memorandum by the Strategy Unit (NC 04)
This short briefing note:
describes the new Strategy Unit which has merged the Performance and Innovation Unit and the Prime Minister's Forward Strategy Unit;
explains the rationale for strategic policy-making at the centre of the UK government;
describes how and why the PIU, FSU and SU were set up;
summarises the projects they have carried out, and their impact; and
gives details of the current work programme.
THE STRATEGY UNIT
In June 2002 Sir Andrew Turnbull announced his plans to clarify and simplify organisational arrangements in Government, in advance of taking up his post as Cabinet Secretary in September 2002. Amongst other changes he announced the aim of providing a clear focus for strategy work at the centre of Government by merging the Performance and Innovation Unit with the Prime Minister's Forward Strategy Unit into a single Strategy Unit.
The new Strategy Unit will carry out long-term strategic reviews and policy analysis which can take several forms:
long-term strategic reviews of major areas of policy;
studies of cross-cutting policy issues;
strategic audit, (eg where does the Government stand in relation to its main objectives?); and
working with departments to promote strategic thinking and improve policy making across Whitehall.
The Strategy Unit will report to the Prime Minister through the Cabinet Secretary.
The following pages set out the history, achievements and, where appropriate, current work of the two units that will form the Strategy Unit.
THE PERFORMANCE AND INNOVATION UNIT
The Performance and Innovation Unit was set up by Sir Richard Wilson, the Cabinet Secretary, in the second half of 1998. Senior officials and ministers, including the Prime Minister, believed that Government needed to rebuild its capacity to do long-term thinking and strategic policy work. There was also a need for better ways to tackle issues that cut across departmental boundaries.
The unit's first director was Suma Chakrabarti (now Permanent Secretary at the Department for International Development). Its first projects covered topics including e-commerce, the rural economy and the future role of Government regional offices. Geoff Mulgan took over as Director in 2000.
The PIU's design built on lessons learnt from similar bodies in the UK and abroad, as well as early lessons from the Social Exclusion Unit, which was set up at the end of 1997.
In the past many different models of strategic policy making have been used in the UK and elsewhere. The closest previous equivalent to the PIU was the Central Policy Review Staff (CPRS) which was established by Edward Heath in 1970, and which continued in existence under Prime Ministers Harold Wilson, Jim Callaghan and Margaret Thatcher. This brought together civil servants and secondees from outside Government to review policy on issues ranging from the future of the motor industry to energy efficiency.
In other countries a wide range of different models are used for strategic policy work. Many maintain very substantial policy staffs within Prime Ministerial offices. Others follow a similar approach to France, which complements a strong in-house capacity with think-tanks such as the Commissariat General du Plan and the Conseil d'Analyse Economique.
The PIU has drawn on the best features of these different models to ensure that it complements the day to day work carried out by other parts of the centre of Government:
the unit's work has consisted primarily of time limited projects, with teams given the time and space to develop forward looking policies rather than reacting to short-term pressures;
the unit has been staffed with a roughly equal mix of civil servants and non-civil servants;
there has been an emphasis on analytical rigour and analytically driven solutions;
most projects have had a sponsor Minister to act as a sounding board and give political steers;
project teams generally included civil servants from the departments which will take responsibility for implementation;
the unit has taken an open and outward looking approach, engaging with stakeholders inside and outside Government. It sought to be receptive to new ideas for improving policies and services, and publishes much of its work on the web;
a majority of reports have been published as statements of Government policy with clear indications of how conclusions will be taken forward and on what time-scale; and
a significant number of projects were designed to tie in with spending reviews run by the Treasury.
The PIU has been based in the Cabinet Office, reporting to the Prime Minister through the Cabinet Secretary, and overseen by a steering board including No 10, Cabinet Office and Treasury. Much of the unit's work was initiated from No 10. However many proposals for projects came from other departments, and some were carried out jointly with departments. About half of the projects currently underway were initiated by departments. In addition, some reports are also published through departments (for example the PIU's work on migration was published by the Home Office).
WHAT HAS BEEN ACHIEVED
The PIU's work has covered a very wide range of policy areas. These include e-commerce, rural policy, the future of the Post Office, recovery of criminal assets, adoption, e-government, trade policy, migration, global health, resource productivity and workforce development. There have also been a number of reports on modernising central GovernmentAdding it up (on the use of modelling and other methods), Wiring it up (on better mechanisms for joined-up Government) and Reaching out (on Government's presence in the regions and localities). There have also been a number of shorter projects on topics including delivery and social mobility. A recent example was a review of the implications of "social capital" for government policy. A full list of published documents can be found at the end of this briefing.
These reports have had a significant and practical impact and most of their conclusions have been put into effect. Examples include:
the establishment of a new agency to recover criminal assets (legislation this session);
new legislation on adoption (legislation this session);
establishment and subsequent strengthening of the E-Envoy's office;
the Government wide strategy for e-government;
a changed approach to migration;
establishment of the Experience Corps and other measures to increase labour market participation by the over-50s;
contributing to the establishment by the United Nations of a global fund for HIV, TB and Malaria;
the reshaping of Government regional offices and the establishment of the Regional Coordination Unit;
the establishment of over a dozen pooled budgets and several dozen shared PSA targets as a result of Wiring it up;
the establishment of the delivery unit in No 10 (drawing on the PIU work on "Better Policy Design and Delivery");
the establishment of universal banking services and associated changes to the Post Office network;
the allocation of £100 million to support renewable energy in the autumn of 2001 and a strategy for building up the renewable energy industry, and defining a new approach to energy policy;
the development of a radical new "demand-led" strategic framework for Government policy on workforce development.
In addition a number of reports which were not published as statements of Government policy have nevertheless had a substantial impact in shaping the Government's agenda. One example is the report on rural economies, which prepared the way for the approach now being taken by DEFRA in the wake of foot and mouth disease, and for the conclusions of the Policy Commission on Farming and Food in January 2002. Other examples include the work on social mobility, leadership and customer satisfaction in public services. Copies of all past PIU reports can be downloaded from the website.
Current projects include the following (working papers and project plans can be found on the website):
workforce development (stage 2) (team leader Carol Sweetenham);
ethnic minorities and labour market (team leader Shamit Saggar);
risk management (team leader Hugh Pullinger);
voluntary sector law and regulation (team leader Simon Morys);
childcare (team leader Charlie Massey);
waste (team leader Paul Hollinshead);
sport (team leader John Clark);
strategic futures (team leader Suzy Walton);
electronic networks (team leader Piers Dennison).
THE PRIME MINISTER'S FORWARD STRATEGY UNIT
In the summer of 2001 the PIU was joined by a sister unitthe Prime Minister's Forward Strategy Unit. The Prime Minister was keen to build on the PIU's successful track record by extending its approach. The FSU provided a complementary capacity for doing more private work, generally working bilaterally with departments rather than on cross-cutting issues, and reporting directly to the Prime Minister and Secretaries of States.
The FSU used very similar working methods to the PIU, but also involved external independent advisers on some projects. These included Lord Birt, Adair Turner, Penny Hughes, Arnab Banerji and Nick Lovegrove. Examples of recent work include a strategic review of long-term options for transport policy, and work on the future supply of health care (a complementary review to the work led by Derek Wanless on demand for health).
Geoff Mulgan was director of both units and will be the director of the new Strategy Unit. He is supported by a shared senior management team of Jamie Rentoul, Stephen Aldridge, Catriona Laing and Sarah Graham.
The staff of the PIU and FSU totals between 50 and 100 people at any one time. They come from a very wide range of backgrounds including all major Government departments (including the devolved administrations); businesses ranging from Ford and Glaxo to KPMG and McKinseys; other parts of the public sector, such as the Financial Services Authority and the Welsh Development Agency; voluntary sector bodies such as the Kids Club Network and Age Concern; universities such as Newcastle, Warwick, Harvard and LSE; think-tanks such as the Institute of Economic Affairs and the Institute of Public Policy Research; other governments around the world, including Germany, the United States, Canada, Australia and France.
It is expected that the new Strategy Unit will be approximately the same size as the combined units although its size will vary with its workload.
THE APPROACH OF THE SU
The work of the units has been grounded in a distinctive approach to policy work. This includes:
a strong focus on evidence-based policy and analytical rigour. Most projects began with thorough examination of statistical trends, causal relationships, evidence of what works, lessons to be learnt from UK and overseas experience, as well as evidence of public concerns and needs;
a strong emphasis on creativity and challenging conventional wisdom. The presence of significant numbers of people from a wide range of backgrounds helped in this respect;
a cross-departmental approach. Much of the work of the two units involved bringing together teams from different departments and helping to broker agreement where there are conflicts;
ensuring effective implementation. All PIU reports that were published as statements of future Government policy set out how conclusions will be taken forward, by who, and to what time-scale. Subsequently, Ministers regularly reported back to the Prime Minister on progress. In some cases the PIU also runs parallel teams with departments to ensure a smooth hand-over process;
futures work. Extensive use has been made of modelling, forecasting and scenarios, to ensure that Government is better prepared for the impact of long-run trends as well as short-term shocks, and to test the robustness of policies in the light of different futures. A small strategic futures team has helped to co-ordinate the Strategic Futures Group which brings together the strategy and forward planning units from all Government departments and from the devolved administrations. The team has undertaken work on future challenges; advised government on methods for futures work; and run seminars on a very wide range of topicsexamples include the future structures of central governments; risk; transport; electronic networks. Presentations and issues papers from these seminars can be found on the PIU website, along with a report mapping lessons to be learnt from futures work around the world.
For further information and updates please check the PIU website: www.piu.gov.uk (please note that this will shortly be renamed).