By Matt.Ross

06 Oct 2010

At Defra, Helen Ghosh ditched Whitehall’s traditional departmental structure in favour of a fluid, project-based system. Now, she tells Matt Ross, we’re facing an even greater revolution in relations between the centre and the front line

Previous efficiency drives have had an impact on Whitehall, Helen Ghosh (pictured above) is arguing. Then she pauses, and looks me in the eye. “But I suppose I’d say there’s nothing like a genuine financial clampdown to concentrate people’s minds wonderfully,” she adds. “Having your cash reduced is a very good way of making you think about everything that you do.”

As permanent secretary at the Department for Environment, Food and Rural Affairs, Ghosh has already done much of that concentrated thinking: last month, her department became one of the first to agree budgetary plans with the Treasury ahead of 20 October’s spending review announcement. A painful period lies ahead for Defra staff, she admits: the workforce is set to shrink.

“Assuming we have to reduce our administration spend by about 33 per cent, which is the guideline figure, we’ll aim predominantly to lose people voluntarily,” she comments. She adds that she’s keen to get through this period of uncertainty and discomfort quickly: “As soon as we know how much money we’ve got this year and it’s clear what the civil service compensation rules are, we’ll be aiming to have some redundancy schemes and move as fast as possible to the new world.”

Interestingly, Ghosh believes that the department’s unique staff-management structure helped smooth the discussions with the Treasury, and “stood us in extremely good stead in debates around the spending review and efficiencies”. Initially conceived in 2006 as a way of both erasing the divisions that lingered between different units – Defra was created in 2001 from parts of three different departments – and “giving us much greater flexibility in terms of moving money and people about”, the ‘Renew Defra’ initiative largely replaced permanent, thematic departmental units with a project-oriented system that builds interdisciplinary teams to tackle specific, time-limited tasks.

The right team for the task

Many of the challenges facing Defra, Ghosh explains, “need a real mix of skills from across the department”: a programme around land use, for example, may demand expertise in planning, farming, conservation and water management; in science, economics, policymaking and community relations.

“The fact that we create project teams with policy and specialist input from across the department means that the policy answer is much more likely to be correct,” she argues, highlighting the Marine and Coastal Access Bill: “That product has been very high-quality, I think partly because it was [produced by] a project team that involved very different skills, rather than a policy wonk who might think occasionally about talking to a lawyer or an economist.”

The system also benefits staff, Ghosh believes, offering variety and fostering career development. What’s more, people who divide their time between various projects end up “applying their skills as an economist, say, to everything from marine planning to the green bank to bovine TB. They find that extremely enriching.”

To provide consistent performance management, each individual has a ‘development manager’ as well as their ‘activity manager’ team leader; meanwhile, the department has built up its professional groups to ensure that specialists scattered between project teams benefit from dedicated training and support.

From a management perspective, the system minimises waste – because teams are founded and disbanded to match Defra’s changing workload – and increases the department’s responsiveness, says Ghosh: “When you have a sudden demand, you know where everybody is, you know what their skills are, and you know when staff will become available. We have a much clearer idea of what everybody is doing than we’ve ever had before.” She admits that the model “is still regarded as quite radical in Whitehall”: although a couple of other departments have small project pools and the Treasury has expressed interest, Defra remains the only wholehearted adopter. Nonetheless, she adds, “a number of people have commented that with reduced resources it’s the best way to operate, because we need to be able to move resources around rapidly.”

Asked for advice for any other departments considering following Defra’s lead, Ghosh picks out three lessons: don’t try to introduce the system fully-formed, but allow it to evolve in the light of experience; keep performance-management, staff-allocation and project-approval systems simple to minimise overheads; and ensure that the non-pool staff working in back office and frontline delivery functions don’t feel like “second-class citizens”.

Taking a step back

So Defra’s staff management model may be one way in which departments can improve their effectiveness while restraining costs. Such efficiency savings, though, can only make a tiny dent in the savings required by the government. “The mantra we’ve used here consistently in thinking about the spending review is: let’s think about what only government can do, and we will only do that,” says Ghosh. “Because that’s all we’ll be able to afford to do.”

In part, this means encouraging behaviour change among the public in ways that reduce the need for expensive government interventions. Ghosh mentions the new Cabinet Office unit charged with investigating ‘behavioural economics’: “We’ve been doing this for some time, encouraging people to recycle or turn the lights off or use less water, and we have a special unit that’s a combination of economists and sociologists and policy researchers,” she says; the aim is to “achieve an outcome without regulating or spending money”.

More controversially, the government will have to take a step back from delivery work, and think about how it can realise its objectives by encouraging communities and interest groups to step in instead. “A wonderful example is how we dealt with the animal disease bluetongue,” says Ghosh. “Traditionally, we’d have said: ‘We’ll be in charge of this, we’ll pay for it all, we’ll get everybody vaccinated, it’ll all be very top-down’. But we took a very different approach.”

DIY government

Defra worked out “the things that only government could do”, says Ghosh – in this case, bulk-buying vaccines to sidestep the cashflow problems that could have reduced take-up among farmers – and encouraged farming industry bodies to establish animal movement-control systems, vaccination programmes and information campaigns. Rather than enforcing universal vaccination, Defra relied on peer pressure among farmers eager to ensure the disease’s eradication – “and it was extremely successful”, says Ghosh. “It was fascinating hearing farmers berating people who’d [undermined the system by] importing animals from areas affected by bluetongue. It was a way of letting people police themselves.”

This kind of approach is set to become far more common, Ghosh believes: local community groups may be encouraged to help manage nature reserves; coastal communities will be given a bigger say in deciding where to fight erosion – and where to give up. “The resources issue, combined with the fact that this government wants to do things differently, and sees the role of government quite differently, will encourage innovation,” she says. In future, “Big brother government won’t tell you what to do. Communities will make the decisions – and take some of the risks, too.”

If this approach is to work, says Ghosh, communities will have to be “empowered to know all the facts in order to make a decision”. A decade ago, she was involved in launching the ‘New Deal for Communities’ schemes – community-scale regeneration projects that tried to put local people in the driving seat – and she noticed that communities often changed their minds about spending decisions after getting to grips with the issues. “It was fascinating to see local communities reaching their own conclusions and saying: ‘Oh, that wasn’t what we’d have thought in the beginning’,” she comments. “So how do you enable local communities to choose the right things more often than not? And do you worry if they don’t?”

The risks in retreat

Ghosh doesn’t have a ready answer to these queries: “It’s a fascinating time to be involved,” she says, evading my question. And the retreat of government raises other issues which will also need to be addressed, she believes: when departments are handing powers down to councils and local people, or encouraging interest groups and industry bodies to take on work traditionally managed by government, “the thing we as leaders of the civil service will have to work very hard at is: how do you know what everyone else is doing?”

There’s a role here, Ghosh argues, for a greater “capacity to keep departments informed” about relevant work under way in other parts of Whitehall. “I want someone saying: ‘Did you know that the Ministry of Justice is doing that, or could you piggy-back on what the communities department is doing, or had you thought about doing it in this way?’” she suggests. “That’s something that I do think we need to work on, and once we’ve all got clear plans through the structural reform and business planning process, I think we need to make sure we’re joining all that up and making sure we know what everyone else is doing.”

The risk that departments may duplicate work or fail to join up potentially complementary projects, Ghosh suggests, may be heightened by the imminent death of the regional government offices and development agencies. “Government offices did have a useful role to play in making sure that they could see how [departments] joined up locally,” she comments. “And we’re looking at how we maintain our intelligence about what’s happening at a local level without the government offices.”

The department will also have to find appropriate accountable bodies to take over the regional development agencies’ role in distributing European money. “Whatever the arrangement is, it’s got to be acceptable to Europe,” says Ghosh, adding that using the emerging local enterprise partnerships is complex because they’re “bottom-up, so you can’t give them instructions” in the same way.

Difficult times ahead

As Defra’s cuts loom – their outlines decided, but as yet still veiled – Helen Ghosh knows that one of the big challenges facing her department will be maintaining morale as job numbers fall. She and her team will set about reducing the scale and scope of Defra’s interventions – and this, she says, will be “the real test of our management system. As we try to reduce the demand, we’ll have more people than we need for the priorities we have, and that will be a very interesting test of how we manage the workforce.” The aim is “to get a match reasonably quickly between the staff and skills that we have, and the things that only government can do and will carry on doing in the future”.

Openness and pace are the best tools here, she believes: “People want to know what you know, even though you can’t give them definite news. So we’ve been completely straight: we’ll look for ways of finding efficiencies, but there will be an impact on staff.” The current uncertainty is painful, she acknowledges: “Most staff would just like us to start getting on with it, and we can’t really yet.” When the voluntary redundancy packages are on the table, she says, “people will have some sense that they have power over their situation. Communication, communication, communication and being honest is the best way.”

There is, though, another challenge just as big: to change the mindset, the culture and the default approach of Defra’s civil servants. To meet the coalition’s objectives, officials will have to learn to take a step back, letting communities make mistakes as they take more control over – and responsibility for – their environment. “One of the things that we’ll find difficult is allowing communities to decide what they want to happen,” says Ghosh. “It’s letting go, saying: ‘You decide locally what’s best,’ rather than worrying about whether it’s exactly the same as what people get somewhere else. That sense that we’re here to protect equity – that isn’t part of this vision.”

The risks are clear: civil servants as well as politicians will have to accept that in some areas local services will fail, and be prepared to defend the retreat from attempts at universal, generic provision. “This isn’t an issue about skills but about culture – and political culture,” says Ghosh. “It’s part of a political narrative as much as something for us as civil servants.”

It will certainly be hard for civil servants, trained for decades to think that – as Ghosh puts it – “what we’re here to do is to protect the greatest happiness of the greatest number”, to change their attitudes. But this government has been quite clear about its intentions: its role, it argues, is to give local people the tools to make decisions about their own happiness. And as it puts structures in place that hand powers down to the local level, the civil service will simply have to let the responsibility move across as well.

The new government’s ‘place-based budgeting’ pilot, under way in Cumbria – a trailblazer in the previous government’s Total Place pilot – is experimenting with the idea of pooling most of the public cash spent in that area, then giving local people much more control over how it’s spent. And this model, Helen Ghosh suggests, could resolve many of the worries about joining-up government programmes; about how central government achieves its objectives locally; about how to plan at a regional level. Given pooled budgets and local control, she says, “we don’t have to sit here saying: ‘How do we join things up locally?’ You turn the model upside-down and say: ‘How do we help communities to join things up locally?’”

Defra, one of the earliest departments to agree a budget plan, also seems to be a little bit ahead of the game in understanding how to squeeze its traditional quart into its new pint pot: by throwing out Whitehall’s quart jug, and letting local people order their own pints. “You’ve got to get away from thinking about centralised command and control,” says Ghosh. “We’re in a transition to having turned the world upside-down.”

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