Cracking the Code

January 25, 2008

Dick Sorabji, Deputy Director
Public Finance

A decade of reform and growth in public services has transformed public expectations. Basic services delivered in silos are no longer enough, people expect solutions designed to fit their lives; they want to feel empowered, not managed. Whitehall is now the major barrier to these aspirations.

The problem is not a lack of talent, but the internal dynamics and culture programming the civil service to work in a particular way. It is like a genetic code, or DNA. The larger and more complex the organisation, the harder it is for leaders to make it deliver policies that conflict with this DNA.

Civil service DNA points upward to Ministers, not outwards to people; defines policies around departmental silos instead of people or projects; gives disinterested advice, rather than being accountable for success.

As NLGN explain in Changing Whitehall’s DNA, there is now an opportunity to reform without diverting energy from the public’s concerns and so being punished at the ballot box. Public Service Agreements (PSAs), created by Chancellor Brown, are like a fragment of DNA that once implanted could spread reform throughout Whitehall.

Since 1997 Gordon Brown has refined PSA targets, cutting them from 600 to 30. The early targets were silo based built to fit Whitehall fiefdoms. Almost 90% were process targets allowing Whitehall to micro-manage local delivery. With the second Comprehensive Spending Review in 2007 all 30 PSAs were designed around people and projects, breaking the link to Whitehall departments. They also reflect what we know of Gordon Brown’s vision for Britain.

Brown has given named Cabinet Ministers responsibility for delivering each PSA. He has created a new civil service role, the Senior Responsible Officer (SRO), charged with implementing Ministers’ decisions on PSA delivery. Both roles cut across Whitehall silos. To handle the inevitable departmental turf wars, Brown reformed the Cabinet Committee system last year, aligning committees with PSAs and making Cabinet Ministers who chair them accountable for “resolving inter-departmental disputes”.

These reforms can change Whitehall’s DNA by changing the pressures shaping civil service careers. Success can now be measured against projects instead of departmental status. As a result accountability for delivery is increased, but the need to deliver directly is reduced. Reform will reward civil servants who deliver by devolving; it will reward effective strategies over ‘big government’ strategies; it will reward consistent progress over newsworthy initiatives.
Of course Ministers also want bigger budgets and constant initiatives. The Prime Minister’s reform of Ministerial accountabilities has the potential to re-direct that instinct. Cabinet Ministers’ accountability for PSA delivery and Cabinet Committee Chairs’ duty to resolve turf wars creates a new way to measure political success; where delivery counts more than activity.
New rules for civil servants and Ministers connect new ways of managing Whitehall to new ways of managing politics within the heart of government.

But these reforms are fragile and without nurturing they will not last. The old Whitehall organism will reject this fragment of DNA, downgrading and delaying PSA targets when they trigger hard choices. That temptation must be made more costly. If the new programming is to spread through the body politic it must be incubated with the light of public scrutiny and accountability.
New roles for Parliament and local government can lock in the new way of working. The forthcoming Constitution Reform Bill is the chance to ensure that the new organisational culture takes root.

Ministerial accountability for delivering projects can be raised through introduction of Parliamentary Question Times for each PSA target. Ministers should be required to report annually to Parliament on the PSAs for which they are responsible. Select Committees should assess PSA progress made by Ministers and SROs. Parliament should hold an annual debate on PSA progress led by the Prime Minister.

The role of the SRO should be strengthened gaining the same duties as the Principal Accounting Officer (PAO). Uniquely amongst civil servants the PAO must report to the National Audit Office (NAO) on the proper use of public funds, irrespective of the views of Ministers. SROs should report to the NAO annually with their personal judgement on whether Whitehall has done all it can to maximise delivery. Select Committees in Parliament should regularly scrutinise the work of SROs.

These changes will drive reform from the top, changing the culture of Whitehall to encourage delivery and discourage departmental silos. A bottom up approach is also needed and the new local area agreements (LAAs) can deliver it.
The cross-cutting goals of PSAs come together in tangible services at a local level. It is here that silo based national targets and micro-management do most harm. Using PSAs it is possible to distinguish between issues where the government has promised national common standards and those where people expect local choice.

In future as councils develop LAAs any proposal to change, or delete, national performance targets for councils, or their public sector partners, should be automatically approved where pre-stated conditions have been met. Councils must demonstrate local public support; they must have support from leaders of the local arms of relevant national public services and their proposals must be consistent with relevant PSAs.

Central and local officials will have genuine disagreements as to whether these conditions are met. This is an opportunity to accelerate improvement in both local and central government through external challenge; the mechanism that Whitehall has applied so well to other public services.

Parliament is the natural site for external challenge. Disagreements should be referred to the relevant Select Committee of the House of Commons for final arbitration. The National Audit Office and the Audit Commission should be given a new duty to offer technical support to these Select Committees.

Because Britain is a centralised state these reforms can be delivered swiftly without diverting government from its immediate priorities. Public scrutiny and external challenge will consolidate the delivery and people focus of the PSA regime, so spreading the new DNA throughout Whitehall.

However, the lasting benefits of Whitehall reform take time to become visible in people’s services. Without early political gains this opportunity may not be seized. For Gordon Brown changing Whitehall’s DNA delivers three quick political wins.

The Prime Minister’s vision is now a political issue. Yet close reading of Brown’s PSAs offer both an analysis and a response to the challenges of globalisation and the knowledge economy. Highlighting them through Parliamentary scrutiny could showcase the clarity of Brown’s vision for Britain.

Political opponents claim that Brown is a centraliser, yet his most thoughtful speeches on the state suggest the opposite. He argues that “command and control …is not the way forward” and the state must be “devolving further and faster to local government”. Extending PSAs to drive devolution will show that his words were the prelude to action.

Most importantly, changing Whitehall’s DNA can also deliver David Cameron’s emerging vision of “post bureaucratic” government and localism. If Brown does not build on his PSA reforms he may find that Cameron makes them his own, giving substance to the Conservative promise of a different vision for Britain.


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