By Matt.Ross

21 Mar 2011

A key adviser to three chancellors and three prime ministers, Number 10 permanent secretary Jeremy Heywood has spent twenty years at the epicentre of political power. In his first ever interview, he speaks to Matt Ross.

Like all waiting rooms, the one at Number 10 Downing Street has an unloved, transitory feel. A small, slightly tatty room crowded with overstuffed leather armchairs, it holds a mishmash of objects put there by people who didn’t quite know what else to do with them: a row of children’s paintings; an oriental vase; an ostentatious carriage clock with the world’s loudest tick. Oddly, the hearth has been replaced with a sturdy, wall-mounted safe. Still more strangely, when I test its cast iron handle it opens to reveal two more sturdy gilt carriage clocks, their hands frozen. As Liam Byrne notoriously said, there is clearly no money left.

The scene is typical Whitehall: fading grandeur, human touches, and hidden pecularities whose origins are long forgotten and now completely inexplicable. But when I’m ushered through to meet the man who runs Number 10, permanent secretary Jeremy Heywood, I find myself in a bright office space whose walls are hung with abstract art.

The official who sits right at the intersection of central political power and the civil service – the very sharpest meeting point between Westminster and Whitehall – certainly has the archetypal mandarin’s suave, diplomatic demeanour. But he is also a rather modern figure; not yet 50, he’s made himself invaluable to successive governments with his understanding of how to get things done in a globalising world where the media is growing ever more hyperactive, public opinion more sceptical and money more footloose. On his mantelpiece, rather than another gilt carriage clock, is a bust of Gandhi. “Not a role model, but an inspiration,” says Heywood when I point it out, flashing a rare grin.

Heywood is an interesting mix of contemporary methods and age-old mores; of reforms and traditions. And in some ways, this reflects one of the civil service’s great strengths: its ability to bend with the political wind. Asked how he’s managed to thrive through political transitions, he doesn’t let modesty slip: “I don’t think I’m any different from any other civil servants,” he replies. “Most civil servants with a long career end up having to work with different political masters; and indeed, that’s what a lot of us like about the civil service.”

Adapt and survive
Even in that context, though, Heywood’s adaptive skills are impressive. He’s worked closely with Tory chancellors Norman Lamont and Ken Clarke; with both Tony Blair and Gordon Brown – first acting as a key Blair link to Brown’s Treasury, then as Brown’s own Number 10 chief – and now, of course with David Cameron and Nick Clegg. Pressed on his ability to cross political boundaries, he replies: “The ministers and PMs I’ve worked with value independent advice, impartial advice, fearless advice. If you’re seen as someone who gives that kind of advice and can be trusted, you end up as a close adviser. And when a new PM comes in, if they’re unfamiliar with parts of the job – or all of the job – and the team in place does a good job in the first few weeks and months, they’re in a good position to win the trust of that person.”

Winning that trust, of course, involves embracing the new policy agenda – and Heywood has already proved himself here. Last month, The Economistreported that the government has been “surprised by Mr Heywood’s enthusiasm. He is always prodding departments to be bolder in publishing government data and pushing power down to the lowest tier possible.” As he tells CSW: “In the end you have to adjust to whatever the PM wants to do. Flexibility and nimbleness on your feet are key requisites for any civil servant these days.”

There’s another key requisite of a successful inner-circle civil servant: discretion. This is Heywood’s first interview – a fellow permanent secretary tells me that “Jeremy believes his job will be easier if he stays out of the limelight” – and when I ask about his days mediating between Blair and Brown, he stonewalls. “I don’t want to comment on how other administrations worked,” he says. “I don’t think that’s my job.”

Managing issues, not people
Fair enough. So what exactly is his job; and how does it differ from that of cabinet secretary Sir Gus O’Donnell? Both of them spend time advising the PM and sitting in on his meetings, Heywood replies, but “Gus has a responsibility for the whole civil service and is a line manager of all the permanent secretaries – including me. He has some policy responsibilities, obviously, as the PM’s political adviser overall, but he spends a lot of time on civil service management issues that don’t relate to my responsibilities at all.”

Heywood’s management responsibilities are “pretty small”, he adds. “My job is to be focused on making sure the PM is happy hour by hour, day by day, week by week – overseeing the way in which advice comes to the prime minister; helping him achieve his objectives across Whitehall.”

In the decade or so since Tony Blair put Heywood in charge of his policy directorate, the official has had an unrivalled view not just of the PM’s own office, but of its relationships with the other departments – and the wider world. What’s more, Heywood has had that overview during a unique period of international economic and financial turmoil; and while few political discussions now dwell on the period when the world’s economy teetered on the brink of disaster, Heywood is happy to praise Gordon Brown for his achievements at the 2009 G20 meeting.

“I think he played a very, very important role,” he says. “It’s widely acknowledged that the G20 summit was a really, really important moment in the global economy. Prior to that, there had been genuine uncertainty over whether the international community could summon the kind of vision and energy and creativity to put a halt to the collapse in confidence, collapse in global trade and so on.”

The fact that the G20 did provide a “route map out of the crisis”, Heywood believes, “was due in no small part to Gordon Brown – who, leading a good team of ministers and officials in the UK, put together a very ambitious set of announcements and agreements for that summit and, I think, showed unusual drive and tenacity and ambition in basically forcing other leaders to face up to the gravity of the situation and the size of the opportunity.” The former PM, he adds, “deserves a lot of credit for his leadership role in that moment”.

All change
Heywood well understands just how close the world’s economy came to the brink: when the credit crunch hit he had just rejoined the civil service after spending three years with investment bank Morgan Stanley. “I had no idea when I came back into government in mid-2007 just how valuable that experience would be – or just how lucky I was to be leaving the City at precisely the right time,” he recalls. The skills and contacts he built up at Morgan Stanley proved immensely useful back in the civil service, he adds: “I’ve always been a believer in encouraging civil servants to spend time outside the civil service and get a different experience.”

Working outside the civil service does hone those crucial adaptive skills – and, given the drives for localism, transparency, outsourcing and efficiency, the civil service has got a lot of adapting to do. These agendas are exerting a complex array of centrifugal and centripetal forces on government: the coalition is “replacing bureaucratic accountability with democratic accountability where possible, pushing power down to the citizen and local communities,” says Heywood. “But in a different neck of the woods [paymaster general] Francis Maude and [chief operating officer] Ian Watmore in the Cabinet Office are busily and explicitly – and with everyone’s agreement – tightening control over certain elements of spending in order to improve value for money. So we have on the one hand a loosening, but a tightening somewhere else.”

Meanwhile, No10 is strengthening its oversight of departmental policy with the establishment of a new policy unit. This will give the PM and DPM “a better feel for what’s going on, and more dedicated resources to work with departments on areas which the prime minister and deputy prime minister attach great importance to,” Heywood explains (CSW, p1, 23 Feb).
So powers and responsibilities are being redistributed between the centre and the departments – but this is nothing new, says Heywood. Back in the Major years, he worked for then-Treasury permanent secretary Lord Burns to make central spending controls “more strategic” and reduce the emphasis on “counting beans”. Then under Blair, a government that “held itself accountable for ensuring its targets were met, cared passionately about what was happening on the ground, because it thought it would be blamed if those targets weren’t achieved”; a delivery unit was created to ensure “that decisions taken at the centre about spending priorities were being delivered”.

Each government has its own priorities and ambitions, Heywood explains; the task for civil servants is not to find the ‘right’ balance between the centre and the departments, but to devise systems and structures that will realise the government’s aims. “That’s part of the excitement and enjoyment of being a permanent secretary,” he notes. “The job is never the same from one month to the next.”

Fostering behaviour change
To meet the coalition’s aims, the civil service will need a new set of skills. “Clearly, if you’re not setting targets and your job is just to establish a system and a set of incentives within which local actors then operate, that requires a different sort of mentality or skill set or approach than if you’re setting targets from the centre and trying to make sure they’re driven down to the local level,” says Heywood.

While those skills are being developed, he says, civil service behaviours can be altered simply by changing the environment in which people work. Under the transparency agenda people’s salaries, expenses and meetings are being published, he notes, and “that definitely means that they’re giving more attention to how they spend their time; whether they’re meeting different groups too much or too little”.

“You can call that a change in culture if you like,” he adds. “But I call it responding to a different framework.” And the creation of a coalition has also changed the framework, altering the way the government operates. “A key element of the government’s philosophy is to make sure that announcements go through a due process; that papers are written and circulated in good time; that cabinet committees meet and consider things,” says Heywood. “One of the reasons the coalition is operating so well is that people don’t feel they’re being bounced or blindsided; announcements have to go through that process of being cleared by all the departments with an interest, and both sides of the coalition.”

The addition of a new centre of power in the form of the deputy prime minister’s office, he concedes, has made his job more complicated – but “the central point of working in Number 10 has always been that you’ve got to get the agreement of different groups, different departments. There’s always a process of winning support or arbitrating disputes; this just moves us along the spectrum of complexity.”

Heywood paints a picture of a government that’s careful to forge internal consensus before moving ahead: “Insofar as we’ve had to row back on some of the decisions on forestry, that’s not a failure of process,” he says. “It’s just that the government probably misjudged the public mood in some respects.” But the government launched its consultation after introducing the legislation: isn’t that an unusual policymaking process? “Well, all legislation is in a sense subject to consultation until it becomes an act of Parliament. You continue consulting and receiving opinions until the legislation has gone through,” he replies.

For the first time in our interview, Heywood seems to be skating rather uncomfortably on thin ice. “The point I’m making is that the government’s proposals, when they were first put forward, had been through a process of consultation,” he adds. “They weren’t rushed out.”

Cuts and jobs
Consultation will be just as important for senior civil servants as they seek to make big efficiency savings, Heywood argues: “You’ve got to engage your staff; you’ve got to get the best thinking from lower down the organisation; you’ve got to win hearts and minds and make sure your middle managers are up for the change – otherwise it will quickly fizzle out.”

Permanent secretaries, he believes, are ready to reform: to consider “whole activities that can be cut out”; to see “how we can take advantage of the government’s interest in localism and so on to really reconceptualise how the departments work”; to “think radically and from first principles”. The scale of the budget cuts “requires a genuine attempt to look at new ways of doing things rather than carrying on in the old way and just doing fractionally less of everything”, he argues. The trick, then, is to develop a good plan for efficiency reforms, then engage staff in making changes; and there is, Heywood says, “every chance of engaging middle management in this endeavour”.

It is clear that the next couple of years will be hard work for almost all civil servants; but, like all times of change, they will also be years of opportunity for those with the right position and attitude. One obvious opportunity for Jeremy Heywood is the chance to take the reins from Gus O’Donnell, who has signalled that he may retire in the next couple of years; the FT and the Economist have both speculated about Heywood’s interest in the job.

Asked whether he’d be interested in the job of cabinet secretary, that of head of the home civil service or, indeed, both, Heywood pauses, then says very carefully: “First of all, there isn’t a vacancy. Secondly, it’s not a job that I have ever aspired to. Thirdly, I’m extremely happy in my current job; which is an important job for the prime minister, working closely with Gus – who I greatly admire. And if and when there is a vacancy, then I’ll consider it at the time.”

Both O’Donnell and Heywood channel messages out from the centre of political power; but while O’Donnell also manages a very large, diverse and disparate organisation, Heywood can concentrate on policy advice and discreet conversations with key individuals. And this, in the end, may be what makes him happiest. Sir Gus “spends a lot of his time on management, and less time on pure policy advice than I do”, Heywood comments.

Ensconced in Number 10, safely out of the limelight, Heywood is free to push the prime minister’s agenda out into departments; to broker the deals and make the connections that keep government moving forward; to concentrate on giving that forthright advice that, he says, has kept him close to the centre of power for so many years. “The new government is very keen to receive clear, objective advice,” he says. “The prime minister doesn’t like woolly advice, fence-sitting; he likes to get from civil servants, no matter how senior or junior, clear, robust advice – and he doesn’t mind advice that he doesn’t like, as it were. He likes to be challenged.”

It is, in the end, an enviable position to be in; Heywood must have truly fascinating insights both into how government works, and into the minds of three chancellors and three prime ministers. But as he says, it’s not his job to spill those beans; or, rather, it’s very much his job to keep them safely canned. For the foreseeable future, Jeremy Heywood’s uncensored thoughts will remain as veiled in mystery as the reason why the Number 10 waiting room contains a safe guarding a pair of defunct, gilt-painted carriage clocks.

CV Highlights
1983    Graduates from Oxford with a BA in History and Economics; joins Health & Safety Executive, then Treasury

1986    Made private secretary to Norman Lamont, Treasury financial secretary; awarded an MSc in Economics from the LSE

1988    Seconded to World Bank and IMF

1991    Made principal private secretary to chancellors Norman Lamont, then Ken Clarke

1997    Joins Number 10 as private secretary to PM Tony Blair

2004    Leaves government for a job with Morgan Stanley as senior managing director

2007    Rejoins the civil service as PM Gordon Brown’s head of domestic policy and strategy, Cabinet Office

2008    Appointed permanent secretary, Number 10, under PM Gordon Brown

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