Making inroads: DfT perm sec Bernadette Kelly on social mobility, rail franchises and the laser-like attention of No 10

Written by Tamsin Rutter on 19 June 2018 in Interview
Interview

One year into her permanent secretary job, Kelly tells Tamsin Rutter why transport is the best department, about “racy” jobs in deregulation and infrastructure, and why she shed her Brummie accent

Photography by Louise Haywood-Schiefer

When Bernadette Kelly heard that the role of civil service social mobility champion might be up for grabs, she immediately made a beeline for it. The Department for Transport perm sec appealed to cabinet secretary Sir Jeremy Heywood. “And Jeremy said, ‘Oh, let me think about that. I need somebody authentic’,” she tells Civil Service World. “I think he meant not posh, so I reminded him I wasn’t posh.”

Heywood could perhaps be forgiven for misjudging Kelly’s origins. When she first joined the civil service more than 30 years ago “it felt very posh and very elite” and, as the Birmingham-born daughter of a bus driver who didn’t have “the air of natural self-assurance that lots of other people seemed to have”, she didn’t really want to draw attention to her background.

“I think it’s a bit of a shame if people still feel they need to fit into the prevailing norm instead of being proud of who they are”

“Here I am,” she recalls, “finding myself in this environment that feels different. How am I going to be a success in this environment? I know, I’ll fit in. So I won’t talk about the fact that I went to Hull University and not Oxford or Cambridge, I’ll drop my Brummie accent so that I sound a bit more like everybody else.

“That was fine, but I think it’s a bit of a shame if people still feel that the response needs to be to fit into the prevailing norm instead of being proud of who they are.”

Though government is now aiming to become Britain’s most inclusive employer by 2020, many new joiners still feel like Kelly did more than 30 years ago. The civil service’s reputation precedes it: the 2015 Bridge Group report on the Fast Stream, for example, pointed out that just 4.4% of successful applicants were working class, making the graduate programme less diverse than the University of Oxford.

But Kelly feels that it’s an exciting time to be taking over the champion role from HM Revenue and Customs chief Jon Thompson, who had to divest himself after becoming head of the operational delivery profession. The civil service is shortly to announce details of the work it has done to establish measures to benchmark diversity in terms of socio-economic background. The idea, Kelly explains, is to use “a basket of four indicators” – staff will be asked to disclose extra information in the Civil Service People Survey about their parents’ occupation, parents’ educational achievement, the type of school they attended, and whether they received free school meals.

Socio-economic background is one of the most sensitive and complicated characteristics to measure, and this kind of assessment has not been done before. “I think it’s a very powerful thing to do but I don’t think it will be without its critics and challenges as well,” says Kelly. But she adds that, for employers, understanding the socio-economic make-up of their workforces is the first step to diversifying them. By 2020, according to a pledge in last year’s Civil Service Diversity and Inclusion Strategy, government will be able to compare itself to other employers on socio-economic diversity.

The civil service is also looking at socio-economic backgrounds through the lens of the professions. The project management profession, for example, can attract a more diverse range of candidates than the traditional policy Fast Stream, Kelly says. “That’s another powerful way of unlocking people’s entry into the civil service and their perception of the civil service as an employer.”

And it’s not just about data: Kelly’s also a big advocate of social mobility networks and champions, and of government’s growing culture of storytelling and blogging about past experiences. “There are a lot of people who are really enthusiastic about this,” she says. “What I hope we can do is create an environment where people wouldn’t contemplate feeling slightly shy about their origins.”

Racy jobs

Things were more formal when Kelly joined the Department of Trade and Industry as an executive officer in 1986. “It was so much more hierarchical, the civil service, back then,” she says. “I remember being introduced to everybody in my team and the director – but the director was Mr Williams and obviously extremely grand. I’m not sure I saw Mr Williams again at any point in the subsequent year.”

Kelly, conversely, shunned the personal perm sec’s office she was offered on gaining the top job, and settled into a desk in a room among her team.

Her second job – by that point she’d joined the Fast Stream – was a “racy and exciting” one in the Enterprise and Deregulation Unit, which was tasked with spurring departments on to lifting unnecessary burdens placed on business. Kelly loved being part of a small team providing that “shock to the system” for the civil service. “It was really countercultural at that point,” she says. “To this day there is an awful lot in the civil service that drives us to regulate but this was the first time, really, people were asking the question: why are we doing this?”

“I prefer to be in a department. Because I actually much prefer to be really delivering something than to be sitting at the centre, asking people whether they’re delivering things.”

Some jobs in those early years were like that – “facing up to cabinet ministers… doing things that felt very much at the centre with lots of political exposure” – and others less so. “A year later I’d find myself, frankly, in a rather quiet backwater doing something on company law that even I struggled to get a huge amount of excitement going for,” Kelly explains.

After stints in the Treasury, and as principal private secretary to the secretary of state for trade and industry and also on secondment at chemicals company ICI, Kelly arrived in 2005 to the Prime Minister’s Policy Unit, a No 10 team looking at how to address issues cross-departmentally. It was towards the end of Tony Blair’s time in office, during “the TBGB years, as we call them... when things were really not friendly!” Kelly remembers. She found it fascinating, but also learned something about herself.

“I prefer to be in a department,” she says. “Because I actually much prefer to be really delivering something than to be challenging, sitting at the centre, asking people whether they’re delivering things.”

She adds that people who’ve worked for most of their careers at the centre of government don’t always understand how their demands, “many of them very reasonable”, land in a department. Kelly believes that having experience in both the centre and departments has given her some insight into how to make requests “in a way that is helpful to a department rather than a bit random and disruptive”.

Her experience in No 10 also taught her that the prime minister can only ever have so much bandwidth. Kelly variously held briefs in policy areas including deregulation, transport and housing, where “there were all sorts of interesting things going on but only a small number would ever make their way up to Tony Blair’s inbox”.

“Therefore for vast swathes of departments and government, so long as you’re not messing up, you can get on and do the job,” she says. “And then every so often the sort of laser-like attention of No 10 will arrive and it can sometimes be a really positive thing... or it can be quite terrifying if things are going wrong.”

Her favourite No 10 job was leading work to reform the planning regime for major infrastructure. She worked across several departments to identify problems with the planning system that hampered the delivery of projects, in transport and energy in particular. Secretaries of state, alongside the chancellor and the prime minister, were then signed up to a series of reforms intended to bring together various pieces of legislation and streamline processes. Kelly formed an intergovernmental team, which subsequently became part of the Department for Communities and Local Government, to take a bill through parliament. This became the Planning Act 2008, which introduced the Community Infrastructure Levy to raise money from developers to pay for new facilities, and created the Infrastructure Planning Commission – the decision-making body for certain major projects until it was disbanded by the coalition government in 2012.

“It’s really rewarding for me that I’m now in a department that is absolutely relying upon that regime to achieve its goals, including, for example, the planning consent for airport expansion,” Kelly says. As a project of national significance, permission for a third runway at Heathrow must be granted, in accordance with the Planning Act 2008, via a Development Consent Order – with a final decision to be taken by the Planning Inspectorate, which replaced the IPC, and the transport secretary.

Crisis points

From 2008 to 2010, Kelly was director of planning and then housing at the Department for Communities and Local Government; she then she moved to become director-general for markets, at the Department for Business, Innovation and Skills. In 2015 she joined DfT, and now tells the new recruits she meets as perm sec on a weekly basis that it’s her “favourite department – and it happens to be true”.

It is, incidentally, what she told Lord Andrew Adonis, then chair of the National Infrastructure Commission, during an email exchange about his views on the government’s handling of the soon-to-be-nationalised East Coast rail franchise. She’s “disappointed” Adonis chose to share carefully selected excerpts from their private messages with a journalist, but is “very comfortable” with everything she said to him in those emails.

“We can’t be in a situation where our gender pay gap is being reported every year as the worst in government. That doesn’t feel like a good place to be”

Moving from BIS to DfT, Kelly discovered more differences between the departments than she thought she would. “Firstly we have this enormous capital and project delivery portfolio,” she says, valuing the DfT’s tier one projects – the most expensive ones – at around £140bn. “A lot of what we do is through what I think of as our three FTSE 100 companies: Network Rail, Highways England and High Speed 2 Ltd. So working through really big commercial organisations to deliver enormously complicated and often very politically controversial projects. I think that’s quite dissimilar to the sorts of things that I’ve done in the past. So it actually feels less like a policy department, it feels more commercial, more operational and more project orientated.” Kelly was also surprised by the sheer variety of what the transport department does [see box].

Kelly’s first DfT job was as director-general, Rail Group, a role created in response to the Brown Review into franchising following the West Coast Main Line fiasco of 2012. The department had been forced to scrap its decision to award a contract for running the line that connects London to Birmingham, Liverpool, Manchester and Glasgow to FirstGroup after rival bidder Virgin Trains mounted a legal challenge over irregularities in the competition process. The review made a series of recommendations for the department, including strengthening project management capability, and appointing one person to be responsible for all rail franchises.

DfT, Kelly says, has moved on from West Coast. “I came into the department at a different point in crisis, the point at which electrification projects were stalling very badly,” she says. “Therefore what I was very relieved and happy to inherit was a franchising team, led by Peter Wilkinson, which is incredibly professional and capable. The rebuilding of our franchising capability was something that was fully in place by the time I arrived in the department.”

She does, however, concede that rail franchising is still one of the department’s most important and sensitive challenges, which continues to absorb a lot of her time and ministers’ attention. It is rarely out of the political spotlight, with recent criticism directed predominantly at the operators of the East Coast Main Line linking London and Edinburgh, and at poor service within the Thameslink, Southern and Great Northern network, which contains many commuter routes into the capital.

Govia Thameslink Railway, the company which operates the latter, has long had a reputation as the UK’s least punctual train operator: a recent National Audit Office report found that since it took over the franchise in 2015, 7.7% of services were delayed or cancelled compared with 2.8% on the rest of the network. This was largely due to staff strikes over the introduction of driver controlled-operation of passenger trains, sometimes referred to as driver-only operation, where drivers rather than conductors are in control of the opening and closing of train doors. Unions say this is less safe and puts future rail jobs at risk.

Kelly, who told the Public Accounts Committee that the department did not anticipate “anything like” the level of industrial action that took place, stresses that DfT is slightly removed from the “very difficult industrial relations climate” between the train operating companies who are the employers and trade unions RMT and Aslef.

But she adds: “It is true that as part of modernising the railway, new working practices and new technology is being introduced and obviously as the department that pays for a lot of the investment in the railway and is also responsible for letting franchises, we’re very keen to see that modernisation. And that includes things like driver-controlled operation of trains.” She says the department has a role in working closely with train operators to ensure that “they’ve got a workforce that’s properly skilled, fully engaged and where industrial relations disputes are not the norm”.

The department is also currently looking at ways to evolve its franchise model, Kelly says. The decision to nationalise the East Coast franchise was taken in May, after joint operators Virgin Trains and Stagecoach announced they could no longer meet their contracted payments after vastly overestimating their forecasts on passenger growth. It is the third time in 10 years that a train operating company has had to break its contract on that line, and transport secretary Chris Grayling has decided to move the franchise to a new public-private partnership between Network Rail and a private operator in 2020. He wants “much closer alignment between the infrastructure management and the train operation and that’s exactly the sort of direction in which we’re taking franchising more broadly”, Kelly explains.

“Where the railway doesn’t work well, typically you get a period where train operators say it’s the problem of the infrastructure, Network Rail, and Network Rail say it’s the train operators. Frankly that’s not in the interests of anyone and certainly not of passengers, so what we are trying to do is bring about that much more joined-up approach to delivering train services for passengers. And also making it more accountable because people get really frustrated if they don’t know who to talk to when they’ve got complaints.”

Kelly on DfT breadth of work

“Our agencies are doing things like issuing driving licences and providing test examiners; we run the fourth emergency service, the Maritime and Coastguard Agency; we sponsor a police force. We promote walking and cycling, we’re about to do a big accessibility strategy for transport. So there’s a real variety of big and small, policy and operational, commercial and strategic work that we do.

“In the policy space I think the really exciting emerging area is the work we’re doing on the future of mobility, which is one of the Industrial Strategy grand challenges. New technology, and new business models like Uber, are absolutely transforming the world of transport. For the department, the challenge is to understand how that change is likely to happen and then ensure that we get better, more efficient, more accessible, environmentally cleaner transport.

“It’s a really growing part of the department. One of the things I said as soon as I arrived was that I wanted DfT to do more in the space of thought leadership. We set up a strategy team working on future of mobility and there’s a whole work programme now building up. It’s exciting, in such a fast-moving area of the economy, that the department that can spearhead that work.”


Inroads on gender

Another reason DfT has been making headlines of late is because its gender pay gap, at 16.9%, is the biggest among government departments – a “real disappointment” for Kelly. It’s mainly because the workforce of its largest agency, DVLA, is predominantly female, at administrative grades, and based in Swansea where staff don’t get London weighting. “I do think disaggregating departments and agencies is quite important, because actually that way you can take appropriate action to make changes,” Kelly says. “I don’t think we’re the only department that’s found that the structure and grading mix of its agencies has impacted very significantly on the gender pay gap.”

But it’s also because transport is a male-dominated industry, and the department reflects the sector. Kelly has four brothers so she’s used to all-male environments – “that’s par for the course, that’s how I grew up” – and when she was appointed DfT gender champion in 2015, the department had the worst gender balance in government besides the Ministry of Defence. She’s really keen for the department to signal that it’s committed to gender equality, and has commissioned internal analysis to better understand the gap. “We can’t be in a situation where our gender pay gap is being reported every year as the worst in government. That doesn’t feel like a good place to be,” she says. “And to be honest, I don’t think it’s an accurate reflection of where we really are on this either.”

The department was named among The Times Top 50 Employers for Women 2017, which Kelly says is testament to the positive story DfT now has to tell. Some of this story is about HR processes: name blind recruitment, for example, or work done alongside Harvard Business School on ways to attract more women to niche, traditionally male professions such as vehicle inspection and marine surveying.

The department, its perm sec argues, has made “massive inroads” on flexible working and last year appointed the first ever director-general job share in government between Polly Payne and Ruth Hannant. “They are doing one of the toughest DG jobs around,” Kelly says. “They’re DG rail and they’re facing into one of the most male-dominated industries in the country. So I knew that when I made the announcement there would be a bit of ripple in the industry, and a bit of scepticism about this, but I was absolutely confident that Polly and Ruth were the right people to do that job and I think they’re pretty rapidly winning the doubters over as well.”

Kelly is also keen to learn from best practice in other departments. She wants to pinch the idea of “first response officers”, whom colleagues can approach for advice if they feel they’ve been a victim of misconduct before escalating problems to a line manager or HR – the Maritime and Coastguard Agency has already started appointing “respect ambassadors”. She’s also keen to do a culture audit of DfT: a more qualitative version of the People Survey as outlined in the Civil Service Diversity Strategy. She wants to be able to prove that the department is making progress, to build on her wealth of anecdotal evidence. Each week’s new entrants to the department are asked to share their first impressions. “The one thing that every single time comes up at these meetings, and I don’t lead people to give particular answers, but they always say it feels incredibly welcoming and it feels inclusive,” Kelly says.

Bernadette Kelly CV

1986: Joins the Department of Trade and Industry as an executive officer
1987: Joins the Civil Service Fast Stream
1987: Appointed to the Enterprise and Deregulation Unit, Cabinet Office
1997: Graduates with an MBA from Imperial College London
2000: Made principal private secretary to the secretary of state for trade and industry
2002: On secondment at ICI
2003: Made director of company law, Fair Markets Group, DTI
2005: Joins the Prime Minister’s Policy Unit at No 10
2008: Becomes director of planning at the Department for Communities and Local Government
2009: Made director of housing at DCLG
2010: Moves to the Department for Business, Innovation and Skills as director-general
2015: Moves to the Department for Transport as director-general, Rail Group
2017: Appointed permanent secretary of DfT

About the author

Tamsin Rutter is senior reporter for Civil Service World and tweets as @TamsinRutter

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