By Suzannah.Brecknell

21 Mar 2013

Since Derek Jones began working on Welsh governance, the country’s administration has largely shifted from London to Cardiff. And now more devolution is on the way, Wales’s new perm sec tells Suzannah Brecknell

When Derek Jones joined the Welsh Office in 1989, after a decade working in Whitehall, the administration of Wales was largely based in London and consisted of “the secretary of state and some junior ministers”, he says: most policy originated in Whitehall and was simply implemented – albeit with some adaptations for local circumstances – by civil servants in Wales.

Today, as Jones settles into his job as permanent secretary for the Welsh Government (WG), he is leading a 5,300-strong organisation providing policy advice, legislative support and much more for, as he has it, an “increasingly independent-minded” national government with recently expanded powers. The change has been huge – and there’s more on the horizon.

A week before CSW met Jones, the WG had submitted its evidence to the Silk Commission: an independent review set up by the UK government to look at the medium- and long-term future of devolution in Wales. The commission published its first report, looking at financial powers, last November: it recommended reforms to the way in which funding for Wales is calculated, including handing the National Assembly greater borrowing and revenue-raising powers. And it’s due to release its second and final report in spring 2014, outlining which powers should be devolved to the National Assembly for Wales – Welsh ministers have pushed for a wider remit in several areas including policing, energy and public transport.

“There are uncertainties about timing,” says Jones, and “there is a good deal of politics involved, as ever; but the general direction does seem pretty clear: the National Assembly and Welsh Government will take on new powers and responsibility as devolution proceeds in the years ahead.”

Devolution lessons
These new powers and responsibilities represent both a challenge and an opportunity for the Welsh civil service, and Jones seems determined to meet both. He is no stranger to radical organisational change: he was a Cardiff-based director in the Welsh Office when the Welsh Assembly Government was established in 1999, following a 1997 poll in which 50.3 per cent of the Welsh public voted to pass some Whitehall powers to a National Assembly. Jones helped establish the new government: “It was a great professional challenge for those of us who were involved to create a democratic institution from scratch, and make it work,” he recalls.

The experience taught Jones three things. First, the importance of attention to detail: while “delegation and empowerment” of all staff are important, “when it’s a development of that scale and significance I think that the most senior people in the organisation need to have a good grasp of the detail”. Second, the benefit of taking a practical approach to policymaking: he found that role-playing how an assembly committee would work, rather than simply “writing procedures for the organisation in a very civil servic-ey way, with words on paper,” gave him and his colleagues a much better understanding of how different systems might work. Finally, he learnt that “the civil service not only must be, but is, very well capable of adapting to completely new ways of working.

“We’ve got a reputation of being a bit stick in the mud,” he coments, “but that was an example where colleagues had to make some pretty dramatic changes in the way they were going to engage with the political heartbeat of government in Wales.”

Viva la devolution
Jones believes that the civil service was successful in effecting that change: the proof, he says, is that the public is now much more supportive of devolution than it was in 1997. While the referendum to establish the Assembly was won by a tiny margin, a 2011 referendum asking whether the Assembly should be given more legislative powers returned a 63 per cent ‘Yes’ vote.

Jones is not, however, one to rest on his laurels. “I have become the perm sec of a good organisation,” he says, and his eyes narrow briefly as he continues, “but there is absolutely no need to settle for ‘good’ when you’ve got a real opportunity, even in these quite challenging times, to capture the advantages of small-scale governance.” It’s a theme he mentioned in CSW’s ‘Permanent Secretaries’ Round-Up’ last year, when he set out his ambition for Wales to become an “exemplar of small country government”. This, he says, means being agile, well-connected and focused on “delivery and real outcomes in communities”.

Jones associates the first attribute – agility – with one of former cabinet secretary Gus O’Donnell’s ‘four Ps’: pace. And the new Welsh perm sec certainly required speed from his staff when he returned to the WG in September 2012 – after eight years working for Cardiff University – and commissioned three reviews into the state of the organisation, all to report within a month. “I was arguably a bit unfair,” in setting such a tight deadline, he admits, but it meant he could make fast decisions and it showcased the skills of his staff. These were the “sort of reports that we could have paid a firm of management consultants a large sum of money for – but they were produced in-house to a high-quality, and done with pace,” he says.

Reviewing resources
The first review looked at whether the WG’s resources are properly aligned with ministerial priorities. The organisation has reduced headcount by around 20 per cent – 1000 people – in the last two years to meet budget reductions, and has done so entirely through voluntary redundancies. “When you do that kind of exercise through voluntary means, the people who leave might well be taking with them quite a lot of skills and experience,” says Jones. He felt “it would have been a bloody miracle” if resources and priorities remained perfectly aligned, but he adds that “there’s no fault in that: it’s just the situation”.

The report did find some mismatch, he continues: in particular, that the central support services (CSS) – HR, finance, legal and so on – were too big. These services consumed about a third of overall resources, “and that is a lot of resource when you’re fairly strapped” – so while the CSS has already shared in the cuts carried out to date, its budget and headcount is now to fall by a further 20 per cent. The money saved will be redeployed to “some fairly hard pressed areas around the business”, particularly to legislation work: the National Assembly gained new legislative powers in 2011, and its civil service needs to expand its capacity to support a more demanding and ambitious legislative programme.

The changes have been well received, Jones says: the leaders and teams within CSS “see the point [of the cuts programme] and they’re working with it rather than against it”. This may be, he says, another benefit of having conducted the organisational reviews in-house: that support reflects “the difference between developing a business on the basis of ideas stimulated from within the organisation, as opposed to trying to impose change from the outside.”

Still more change is likely to come for the staff in CSS, however. The second review Jones commissioned examined specifically whether these services could be structured more effectively. It recommended that there is a case for restructuring, and Jones has commissioned some further work to fully understand the implications of a restructure before he makes a final decision.

Reducing complexity
The final review was commissioned in response to messages that Jones, who’s spent time asking people what they want from their new permanent secretary, picked up from staff across the organisation. “A strong strand [in their messages] was the extent to which we seemed to have complicated our decision-making,” he says. “Nobody starts out intending to build a slow or bureaucratic system, but I think over time in an organisation like ours you can just accrete controls and processes – usually when something goes wrong.”

Jones thus asked the review team to consider ways to “declutter and simplify” these controls, and he hopes this will toughen up accountability as well as saving time and money. As rules and processes are slimmed down, he suggests, managerial decision-making becomes more important: managers can no longer say “it’s been cleared by a,b,c and d in the organisation”, but must take full responsibility for their decisions. Thus the organisation can move from “a kind of star-based” accountability – with lines radiating out to a number of approval points – to a clearer, “linear, decision-making process”.

The effort to declutter process is ongoing: all staff can now report unnecessary process – or “a piece of buggeration”, as Jones calls it – directly to the head of governance via a ‘bureaucracy hotline’. Jones hopes this will foster a “restless culture” constantly looking for ways to simplify and improve. True to his own advice about attention to detail, Jones himself reported a ‘piece of buggeration’ when his Blackberry failed to work on a business trip to Spain. He hadn’t been aware that he needed to get approval for his phone to work abroad, under a procedure which treated all foreign trips as holding the same level of IT risk. “In some countries there are good reasons for that sort of approval, but in many other countries it isn’t necessary,” he says, “so we simply decided that for the majority of journeys that colleagues are likely to make overseas, IT equipment can be fully enabled at all times. That will save us hundreds of ‘decision points’ in a year.”

Brilliantly networked
As well as being agile and focused on improvements, Jones wants his organisation to be well-connected. He says this refers largely to connections with external organisations. “I usually refer to it as a brilliantly networked small government, where my teams are knowledgeable about their clients, customers or stakeholder groups; where they’re well known in Wales by those groups; and where the flow of information and the level of understanding on each side of government is very high.”

The Welsh civil service already works along these lines, he says, but “not as consistently as I would like”. The problem is often simply that people are too busy, he suggests, so he insists that his senior team – himself included – leads by example to “carve out that quality time; to not just be terribly busy in the office, but to be in the world of Wales, finding out, explaining and often just being really good ambassadors for what it is the government is trying to do.”

It’s important to keep explaining government’s aims as well as learning about external communities, he says, because “too often gaps in understanding emerge, and it’s a well known fact that when you have a vacuum something will flow in to take the place, [which] usually makes life more difficult in government”.

What about internal connections? The WG, whose directorates cover wider policy areas than Whitehall departments, seems to be well advanced in this area; but Jones says that he gets “a little bit tired” of talk about joining-up and silos: he believes the civil service across the UK has already improved a great deal in this regard.

There is still work to be done, he says, but “we shouldn’t try to join up absolutely everything”. Doing so could end up with civil servants spending too much time looking inwards rather than out to their stakeholders, so they should instead focus on “a relatively small number of top priority areas where it is really important to capture the whole capability of modern, multi-functional government.”

It’s the economy, stupid
Asked to name some of those ‘top priority areas’, Jones lists just two – but they are big ones: the “economic and the social conditions of people in Wales: securing investment in jobs; and tackling poverty”. Like the rest of the UK, Wales is “mired in a really difficult recession,” he says, and this “comes on top of long-run structural weaknesses in aspects of the economy. Far too many of our communities are experiencing relative poverty”.

These priorities come from ministers, of course; but sometimes, says Jones, people have challenged him on them, arguing that the focus is too narrow. “The fact is,” he responds, “everything else the government is trying to do, whether it’s public health; educational attainment for our youngsters when they leave school; [reducing] drugs, crime, alcohol [abuse] or anti-social behaviour – whatever it is, it’s really difficult to achieve so long as those communities are still so relatively badly off.” If Wales becomes more “buoyant and prosperous”, then many of the government’s other aspirations will become easier to achieve. “So it isn’t a narrow agenda. Clearly there are a lot of things that we can do and are doing in health and education and so on right now, but the fundamental priorities are clear.”

Wales is not alone in focusing tightly on growth, but Jones believes that, in terms of governance, it is in a particularly good position to do so. He sees devolution, and the consequent ability to “tailor our economic and social and other programmes to circumstances in Wales”, as a real advantage, of which the WG makes good use (see news). Nonetheless, he’s conscious that when it comes to growth “we can’t do it on our own” since there are still key aspects of economic governance which are not devolved.

The WG is also keen to make good use of UK-wide schemes which might contribute to its own goals. Looking at investment in jobs, for example, Jones says the Welsh government will work “really hard” on its own programmes, but will also work closely with UK Trade & Investment and the Foreign Office’s networks to take advantage of UK-wide programmes to attract investment. “I suppose to that extent we have the best of both worlds,” he says.

Devolution tomorrow
Jones and his staff are likely to continue to enjoy this ‘best of both worlds’ situation, since the Welsh government is clear that it wants to remain within the UK. It does, however, want to accrue more devolved powers; and with the Silk Commission beavering away, it seems that these are on the horizon.

Any new powers for the Welsh Government will require new skills for the Welsh civil service – managing a large-scale government borrowing programme “skillfully and prudently”, for example. Jones says the Welsh Government is “taking a very proportionate view” of this, conscious that the changes will happen gradually over time. Nevertheless, “this is really a pretty exciting prospect,” he says. In the context of “some quite tough times of shrinkage for us, this looks like an agenda for enriching [civil service] job satisfaction, for growth and for professional opportunities”.

He won’t, however, take this opportunity for granted: “The reality is that we also have to earn the right to be the WG’s supplier of choice for policy advice in those areas, and for delivery.” So those three reviews he commissioned last year were not “simply a bit of good housekeeping by an incoming perm sec”, but also serve a more strategic purpose in helping him to prepare for opportunities ahead. “If I’m going to put a proposal to our ministers about growing our capability,” says Jones, “I will get the right answer, so long as they’re completely satisfied that we’re using the resources that we currently have at our disposal as efficiently as possible.”

It’s a wonderfully civil service-esque way of thinking – present the right evidence and you get the right answer – but it also reflects an underlying positivity about the relationship between ministers and civil servants, which not all senior civil servants in the UK might share. Asked about the challenges facing UK civil service leaders as a whole, Jones says that one big challenge is “to more comprehensively win the confidence of ministers in the service as high-quality policy advisers of choice, and an efficient and economical machinery for implementation of policy.

“It’s very obvious that that isn’t fully in place at the moment,” he continues, and “whilst there’s a load of other things to do as well, that seems to me to be at the core of the challenge.” He adds that this isn’t an issue all over the UK: “I’m not in the same situation here” – though he isn’t complacent about that. “It’s vital that we don’t take our current position for granted,” he concludes, “and that we work consciously all of the time to establish ourselves as a small country government service which has the confidence of our ministers.”

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