Cabinet Office minister Francis Maude is overseeing a wide range of organisational, process and management change programmes – at breakneck speed. He takes Matt Ross on a gallop through his reform agenda.
Ever since the election, civil servants have been racing to respond to the new government’s agenda. Policymakers have gone into overdrive to put the Coalition Agreement into action, while HR and finance departments scramble to react to October’s spending review; soon, frontline managers and staff will feel the full force of the coalition’s reforming zeal.
Look more closely at the feverish activity across government, though, and it becomes clear that much of it is driven not simply by new policies and budget cuts, but by programmes of management and process change initiated and directed by the Cabinet Office. From his base next door to Number 10, Cabinet Office minister Francis Maude (pictured above) has been working frantically to put into action a wide-ranging reform plan conceived and developed over the long years of Conservative opposition. Departmental business plans; quango reform; a revised civil service redundancy scheme; the Big Society; stronger departmental boards; transparency; supplier contract renegotiations; channel shift – on a host of fronts, Maude has been driving an agenda that is fast altering the way that government operates.
Of all the Cabinet Office’s interventions, though, the policy which has most affected the work of civil servants across government so far is the imposition of a set of ‘control regimes’ which dramatically constrict departmental spending in various fields – property, training and consultancy, for example. Cabinet Office approval systems now make life complicated for budget holders across Whitehall, and many have been eagerly awaiting the day when these centrally controlled regimes are lifted in favour of reformed departmental management systems and processes.
However, Maude is clear that, when these reformed systems arrive, they will not mark a retreat of central control over corporate departmental spending. “In any large organisation that’s pretty dispersed, there are some things that you need to control from the centre,” he says. “In all these areas of civil service management, these are things where it makes sense to have central controls, and we’ll continue to do so.”
Until recently, he argues, departments’ freedom of manoeuvre has been damaging the efficiency of government as a whole. “You would not in any organisation let random bits of the organisation go off and set up their own IT infrastructure; it’s like letting people build different-gauge railways around the country,” says Maude. “It’s insane – and yet that’s what we’ve had.”
Estate of the nation
On property, for example, Maude argues that we shouldn’t allow “one bit of government to make a disposition which may be in their narrow interest, but not in the broader [public] interest”. The Cabinet Office currently requires departments to win its approval whenever they wish to renew a property lease – a policy which, says Maude, has resulted in departments exercising their option to break leases in three quarters of cases – but even if this stricture is relaxed, the system which replaces it is set to perpetuate the Cabinet Office’s interventionist approach.
Maude intends to introduce “central controls which enable us to drive co-location, downsizing, and using property much more efficiently than we do”, he explains: he is developing “property vehicles where we pull together government property across the piece, and are able to configure it in a way which makes sense for the whole”. These vehicles will, he adds, “deliver much more central control of property”.
To date, progress on organisational and process reform has been variable – procurement and property are making good headway, for example, while the changes to civil service training appear to have paused. One thing is clear, though: the era of government departments acting as autonomous corporate entities – an era on the wane ever since Labour began pushing greater cross-departmental collaboration – is now officially over. Departments may in future enjoy greater independence in setting policy, but when – and if – the control regimes are relaxed, the reformed systems that replace them will institutionalise the Cabinet Office’s much-extended powers over corporate functions.
Non-executive action
In creating centralised systems governing these areas of spending, Maude will have to address complications concerning permanent secretaries’ accountability to Parliament for their departments’ budgets – for when control over government activities is pooled or centralised, the lines between departments’ resources (and thus perm secs’ responsibilities) may also become blurred. Meanwhile, permanent secretaries are already nervous about another area of reform which may, some fear, reduce their control over budgets for which they remain formally accountable.
One of Maude’s reforms has involved strengthening the role of departmental boards and bringing in a swathe of new non-executive directors – many of them from private business (for profiles of them, see p15-20). There are concerns that, if these boards get too closely involved in individual spending decisions, permanent secretaries’ control over the budgets for which they are accountable may be weakened. But Maude insists that permanent secretaries’ executive powers will not be weakened, and that “ministers and the accounting officer remain accountable in just the same way as they are at the moment”.
Rather than making management decisions, Maude says, non-execs will simply examine and test those made by ministers and officials: they’ll provide “challenge and support and advice and some independent judgment; and in some ways continuity as well, as we don’t always have a high level of continuity, either among civil servants or among ministers”.
“The leadership has to come from ministers,” Maude continues, “but the non-executives will have the ability to push back; for example, when they think a particular configuration of the policy is going to lead to an implementation nightmare – as was the case with tax credits, where implementing the policy a bit differently could have led to all sorts of horrendous failures being avoided.”
Easy come, quango
Indeed, in future permanent secretaries may even have greater control over some elements of their departments’ budgets, as many non-departmental public bodies are being abolished and their policymaking functions brought back into departments. A recent report by the public administration select committee, criticising the Cabinet Office’s quango reforms (see box) argued that, rather than NDPBs being absorbed into Whitehall departments, they should be turned into executive agencies – thus improving their political accountability through departmental ministers, while retaining NDPBs’ strong links with external stakeholders. But Maude argues that PASC has misread the situation: “That’s exactly what we’re doing with a large number of them”, he says.
Anyway, he argues, in this case the Cabinet Office is leaving much of the decision-making to individual departments. “The PASC report assumes that this is all being run from the Cabinet Office,” he says. “It isn’t; we’re coordinating it. Some functions – in policymaking, for example – will sensibly be [brought] directly within the mainstream of a department. Others, which are more to do with delivery, may be more suitable for an executive agency. But that’s very much a choice for departments.”
What’s more, Maude adds, even when functions are brought into departments, the Cabinet Office’s transparency agenda will ensure that links with the frontline and external stakeholders are preserved. “We’re trying to make government much more open: to make sure there aren’t barricades [around Whitehall]; to open the windows and let the sunlight in,” he says. “So I don’t think there’s a danger of [functions] disappearing into the dark.”
In fact, some government functions will be heading the other way: right out of government, and into the hands of other public bodies and private or voluntary sector organisations. “A number of these things don’t need to be carried out by the state,” Maude argues. “They may well be carried out by mutuals or other civil society organisations – albeit supported by government.”
How pluralism adds up
This idea links into another of Francis Maude’s fields of frantic activity: the push to create “greater pluralism” in service delivery. “We want to open up the provision of public services,” he says. “Obviously, there are huge swathes of public services that are not amenable to anything but a state provider, but nonetheless in quite a few areas there are alternatives. Healthcare is one area where it doesn’t need to be a monopoly state provider; education is another.”
The solutions will vary in different fields and localities, Maude explains. “It’s horses for courses, with a different approach in different places,” he says. Many such horses, he hopes, will emerge in the form of mutuals: public sector teams or groups which peel away from government as employee-owned, independent organisations. Encouraging parts of the public sector to hive off in this way will, Maude believes, tap into a “pent-up frustration among people who can see how things could be done better but aren’t able to make it happen”, appealing to “latent entrepreneurs: public servants, deeply steeped in the public service ethos, who would love the opportunity to lead a team, to do things better, to put in place the ideas they have”.
More details of this policy will emerge in a white paper expected within the next few weeks, but Maude has already announced a ‘right to provide’ – meaning that public service commissioners will be obliged to accept well-founded plans for the establishment of mutuals. The task of evaluating and judging such plans, he emphasises, will rest with departments rather than the Cabinet Office; the centre will restrict itself to “keeping an eye on them and being a point of reference so that if concerns arise, they can be referred to us. We’ll also be setting up an outside group of experts which can be another point of contact.”
Nonetheless, Maude does set out some of the factors which, he believes, will help determine whether bids to become mutuals will come to fruition. Asked how new mutuals will be able to compete with existing businesses for service delivery contracts, he argues that mutuals would be well advised to “bring in an outside partner who could perhaps bring in additional management bandwidth or expertise or technology, or perhaps just development capital”. The minister pronounces himself happy to see such joint venture partners taking a stake in mutual organisations, although he argues that the government should also retain a stake to ensure that assets are not lost to the public sector without recompense. “I’m very interested in models where the government itself retains an interest in the entity,” he says.(See newsfor more)
Better jobs – but fewer of them
The mutuals agenda will, Maude argues, help to make public service jobs more fulfilling “by reducing the top-down targets and command and control, and giving people more freedom, more power at the front line to fulfil their public service vocation – which is to look after people, to provide public services, and to do so in a way that responds not to the top-down diktats from some remote desk in Whitehall, but to the genuine perceived needs of citizens”.
However, Maude accepts that there will in future be fewer public service jobs. Job losses are not to be celebrated, he says, and nor are they the fault of public workers: “There’s a public [finances] deficit that needs to be dealt with. That deficit was not the fault of public sector workers; it was emphatically, unequivocally the fault of the previous government.”
What’s more, Maude argues that all of the Cabinet Office’s work to improve government efficiency – plus “the pay freeze, which helps to protect jobs by lowering the unit cost per job, and the changes that there will need to be to pensions – all of these are concerned with making it easier to protect jobs and frontline services. That is our overwhelming concern.” Nonetheless, and despite his claim that “we are concerned to avoid redundancies at all, if possible”, Maude has been working hard to put in place a revised set of packages for voluntary and compulsory redundancy.
Little sign of union
After months of legal action, negotiations and legislation, in December the government introduced its reformed Civil Service Compensation Scheme. The new system has won the backing of four civil service unions – the FDA, Prospect, Unite and the GMB – but the POA and PCS have rejected the scheme, with their leaders winning overwhelming majorities in favour of their stance in membership polls completed earlier this month.
Indeed, the PCS was not involved in the most recent round of talks over the reformed scheme: it is, says Maude, a “tragedy” that its leaders “weren’t prepared to engage in the very constructive negotiations we had with the other unions”. Everyone – even the PCS – agrees that the old scheme needed reforming, says Maude, and in the revised packages “we did our best to protect the interests of PCS members. There are other unions involved – Unite and the GMB – which have large numbers of lower-paid civil servants among their number, and we very carefully constructed the new scheme to give additional protection to lower-paid civil servants.”
The problem for Maude now is that the PCS seems determined to lodge a case at the High Court under the Human Rights Act, arguing that in legislating to remove the requirement for consensus on alterations to redundancy terms, the government has infringed its members’ human rights. One obvious risk here is that departments enact major redundancy programmes only to find, months or years down the line, that a court ruling insists they should greatly increase the payments made to staff who’ve long since left the workforce.
Another danger is that civil servants may be reluctant to accept voluntary redundancy packages, on the basis that they’ll only benefit from a favourable court judgement if their redundancy is compulsory. “They might do,” concedes Maude, on this latter point. “And that would be a very malign effect of the PCS action – particularly because if you have more than 12 years’ service, the compulsory terms are less advantageous than the voluntary terms. So it would be a pity if people took that view; but that will be their choice.”
Anyway, Maude says, he doesn’t believe that the courts would find against the revised scheme: “We’re fairly confident that our case is robust; that we’ve looked at all the implications, we’ve provided for them in the [Superannuation] Bill – now the Act – and we’re confident that it is a good piece of legislation in human rights terms. It is robust.”
The Cabinet Office minister, charging frenetically through a radical and wide-ranging set of reforms to the operation of government, is clearly in no mood to call a halt to his government’s cost-cutting programmes – no matter what the PCS does. “Everyone accepts that it cannot be right that a single trade union should have the ability to veto the reform of a compensation scheme which everyone – even the PCS – believes needs reform,” says Maude. “There comes a time when you just have to crack on and do these things.”