Tony Blair’s education focus, responding to the financial crisis, and preparing for an independent Scotland: lunch with… Sir Peter Housden

Written by Richard Johnstone on 12 April 2018 in Interview

The former permanent secretary of the Scottish Government discusses career management, financial crises and referendums over sandwiches with Richard Johnstone

Photography by Louise Haywood-Schiefer

Who? Sir Peter Housden held senior civil service positions north and south of the Scottish border. After starting his career as a school teacher in Shropshire he joined local government, rising to the post of chief executive of Nottinghamshire County Council. In 2001 he became director general for schools at the then Department for Education and Skills before being promoted to the post of permanent secretary at the Office of the Deputy Prime Minister, later the Department for Communities and Local Government. He became permanent secretary of the Scottish Government in June 2010, leading the civil service in the devolved government at the time of the Scottish independence referendum in 2014. He retired in 2015.

The venue: The Civil Service Club
Good value fayre at the club for officials in Whitehall, which Housden chairs
CSW readers can access an exclusive discount on Civil Service Club membership here

The menu
A tuna mayonnaise sandwich and a cheese and pickle sandwich with chips
We drank
Greene King IPA, mineral water

We discussed

Why he joined the civil service

I was chief executive of Nottinghamshire County Council from 1994 onwards. In that job, and indeed in my previous job as director of education, you come into contact with a lot of civil servants. I thought: “That looks like an interesting thing to do.” I didn’t fancy another job to follow that one in local government, so putting those two things together I thought it would be interesting to join the civil service. In 2001 I became the director general for schools in the then Department for Education and Skills.

The department was at a stage where it wanted some leavening in terms of its civil service cohort. It was at a time when the civil service was looking outwards and wanted a different mix at senior level, and this was a time when two or three people came in together. So I applied for the job in the ordinary way, went through the Civil Service Commission. It was one of the best jobs in the world.

Implementing reforms in government

It was the absolute peak of Tony Blair’s “education, education, education” mantra. It was like working with a very strong following wind – my environment at that time had the whole world interested. It was a very pivotal movement when the academy reform programme needed greater traction, particularly with secondary head teachers. They were through the early successes with the literacy and numeracy programme and now had to have some leverage with secondary education [as the academies programme progressed], and indeed to develop a different set of relationships. That was the type of thing I’d been doing in local government, so I relished it; it was a fantastic time.

Tony Blair in those days had stock takes every six weeks, which he never flunked no matter how serious the international situation or other matters were. It would be quite a circus. On his side there would be Andrew Adonis, often somebody from the Treasury, on one occasion we had Gordon Brown himself, and officials from No 10. On our side, there was the secretary of state, the minister of state for schools, the permanent secretary, the director general, the chief advisor for schools. It was quite a set.

Becoming perm sec at the Office of the Deputy Prime Minister

Talent management in those days in the Cabinet Office was pretty good. A man called John Barker did it – he was also my predecessor as chairman of the Civil Service Club. A group of a dozen or so people at director general level had been loosely identified [as potential perm secs] and we had a range of activities designed to support our development. Having worked in local government, this department [which held responsibility for housing and local government and would later become the Department for Communities and Local Government] was a sensible vacancy for me to think about, so I applied.

It was pretty difficult at first, because this turned out to be just eight months away from John Prescott giving up his departmental responsibilities. The department, I think it is fair to say at that point, had low morale and my early months were preoccupied with John Prescott’s personal difficulties – remember this is in 2005, the period around his relationship with a member of staff, so it was full of those sort of propriety and ethics issues. That was a strange introduction to being a permanent secretary.

His role in the response to the financial crisis

In the period following the crash we had an extraordinary role in relation to housing, which had shot up the agenda when Gordon Brown became prime minister.

It was quite clear how mortgages were being funded – we of course had no say over the regulation of lenders, but it was quite clear that there was a lot of wholesale money being taken advantage of by lenders in the UK and that an asset price bubble was materialising in front of our eyes. I think, however, at that stage, people had grown quite used to the UK’s economy being buoyant and being actively managed by the Treasury and were not as cautious as I think people now would be in retrospect. But there was no mind or appetite to put any brakes on all of this, it was all going fine.

When it suddenly wasn’t going fine, I admired hugely what colleagues and ministers did to steady the ship at the centre, which was magnificent. Work was very quickly established, not just in the permanent secretaries’ meeting on a Wednesday morning – although certainly then – but at meetings chaired by Gus O’Donnell and Nick Macpherson that brought together all the key economic departments. We had a seat at that table because of housing.

It was an extraordinary group of people and we were being charged with developing policy solutions that would help. We were doing things, like on mortgage guarantees that were really pushing the boundaries of what would be acceptable in terms of public finance. And I as a permanent secretary had a particular responsibility. On one scheme, for example, a policy team was working away to develop a solution, and then a different set of my folk were advising me on my responsibilities as accounting officer  – what questions should I be asking and so on. It was good quality risk management, and I think the civil service, and ministers indeed, did magnificently over that period.

Becoming permanent secretary of the Scottish Government

It was the classic appointment – Gus O’Donnell was in our department on another matter one Wednesday afternoon, and said: “Can I just have a word?” The word was that Sir John Elvidge was going to retire in Scotland and would I be interested in being considered? You could have knocked me down with a feather. I was interested in what they were doing in Scotland – I had set myself the task the year before of finding out what both Wales and Scotland were doing in the spaces that we were responsible for in communities, so I had been to Wales and I’d been to Scotland and I’d been very impressed.

After talking at home – our kids were grown up so it was a perfectly practical thing to do, we’d been to the Edinburgh Festival, we liked Edinburgh, my wife likes rain – I said yes. I then met Alex Salmond twice, because he didn’t know me from Adam, nor I him, so we had two conversations, one in London and one in Edinburgh, and after which he said that’s fine with me, and that was it.

The differences between Whitehall and Edinburgh

There is a tradition in Scotland of quite an activist civil service, going back to the 1920s. On industrial policy, hydroelectric power, areas like that, they have a reputation of doing things that match the needs of the economy and society in Scotland, with quite a lot of autonomy from London. The civil service had also attracted over the years some very high calibre people. There were some very talented civil servants at all levels and a sense of energy and agency, people felt they could do things. Remember the SNP administration in those days was just three years into its term so there was a lot of go in the place.

The other thing that you really did notice, and this was an extension of the political set up, was it was extraordinarily disciplined and coherent. Cabinet met every Tuesday and ministers brought proposals to it that were discussed. You did have a genuine sense of collective decision-making, and I was in there for some extraordinarily high-quality conversations as they discussed a range of issues.

I thought that was very different compared to the waste of energy that was involved, in my time, by poor communication between ministers, advisors and officials [in Whitehall], and between departments, which is legion. That was next to invisible, almost negligible, in Scotland. People were close together and there was an expectation from the ministers at the top that you would work collaboratively. If you took a submission proposition to [education secretary] John Swinney around early years education, and it didn’t fully reflect the rounded view not only on health and education but the role of the voluntary sector and so on, then you’d get a flea in your ear.

“In Scotland, people were close together and there was an expectation that you would work collaboratively”

Tensions between governments in the 2014 Scottish independence referendum

Were there difficulties? Not in the slightest. I was working for the government of the day in Scotland as a member of the UK civil service, and I’d been appointed on that basis. Both Gus and after him Sir Jeremy Heywood and Sir Bob Kerslake fully understood that. They were very supportive.

What was clear was there were civil servants both in Scotland and the UK who had very strong personal views about the outcome, and you had to work very hard as a group to make sure that you were not allowing them to colour judgement, and you also had to work with minsters who were approaching the defining moment of their political lives, so there were important questions around propriety in those environments.

But both Alex Salmond and Nicola Sturgeon were absolutely clear they were fighting this referendum on the issues, and not going to be snagging themselves up with side arguments about propriety. We had a clear basis to challenge things that we were uncomfortable with. It was the type of place where you could say, “I don’t think you should do that”, right down to the independence white paper. I looked at some very early drafts of that and saw some of the material that had been prepared by advisors, and I wrote back – and this was very deliberate, knowing these were early drafts – to say: “Can I just take two or three places here and illustrate the type of things we cannot be saying in this white paper”. And when the challenge was later made to the white paper, we were able to produce that, the early doors laying down of guidelines was exactly what the auditors in Scotland were looking for, and they were content. Of course, the political class took the view that suited them on the matter, but in terms of scrutiny we got through that in a manner I was delighted with.

How the Scottish Government prepared for a ‘yes’ vote

What we’d identified quite early on was there was an enormous common path forward towards greater powers for Scotland. The question wasn’t going to be whether Scotland got them, but how many of them. Very early on it was clear that the Calman settlement [of devolved powers agreed in 2009] was going to be superseded, so whether it was “yes” or “no” there was going to be change. You could identify in each policy a stairway up to full legal responsibility, and on that stairway, even if you got to the top you might well go into a joint arrangement with the UK due to economies of scale, expertise or whatever. It wasn’t that difficult to map out and understand what would be involved.

Had a “yes” vote been the result it would have required a very significant process of transition, discussions and negotiation, but we were as ready as we were ever going to be for that moment.

The history of the Civil Service Club

It has a very interesting history. The building was originally a fire station. It was taken out of use in 1922, and was just used as offices and storage space during the war. And after the war it was gifted by Princess Elizabeth, as part of her accession to the throne, to be a club for the benefit of civil servants of all grades. This was a part of a series of things that the government and the Crown organised to mark her accession to the throne. In 2017, we got a wonderful signed photograph of Her Majesty – we’ve got an old one from when the building was gifted and we’ve got a new one that is going to go up alongside it, so we treasure that relationship.

Membership is good at the moment, and the thing that is worth saying is the value for money in food and drink here is unparalleled in the middle of Whitehall, so if you’re on a night out and want to meet up somewhere to have a drink and still have something left in your wallet, this is a good place to come, and I think people do that.

What makes a good minister

I think the challenge of being a good civil servant is: can you work with whoever comes through the door? Ministers grow or diminish over their tenure and have different priorities – your job is to form a relationship with that shifting sand where you can. Trust and integrity are the only important totems of all of that, and never to forget that actually they do a very distinct job, and the boundaries that statute lays down and the codes are there for a purpose. That is a very strong platform in which to work.

You’re a human being just like they are, you do care about them, but you just have to be clear about the context in which you are caring about them. I had the issue of having to ask John Denham for direction over a local government review in 2010, and that was unpleasant. He wasn’t best pleased, but it needed to be done, and it was. He understood the rules, and worked his way through politically what he wanted to have done. We worked quite happily after that, but that didn’t make it any less challenging in the heart of the issue.

About the author

Richard Johnstone is CSW's deputy and online editor and tweets as @CSW_DepEd

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