By Matt.Ross

07 Sep 2011

Sir Bob Kerslake has a record of taking tough jobs just as they get still tougher, and that’s certainly true of his arrival at the DCLG. He tells Matt Ross about localism, budget cuts, policy reform – and the threats to morale

Bob Kerslake left London for a job as chief executive of Sheffield City Council in 1997, when the city was still firmly in the grip of its long, post-industrial decline. He became the first head of the Homes and Communities Agency – charged with overseeing affordable homes and urban regeneration – in late 2008, just as the credit crunch was tearing chunks out of the housing market and construction industry. And he replaced Peter Housden as permanent secretary of the Department for Communities and Local Government in November 2010, whilst the department was trying to get its collective mind around a budgetary settlement that, Kerslake warned, might reduce head count by 40 per cent. This is clearly a man who likes a challenge.
At DCLG, the challenges facing Sir Bob are not just to dramatically cut costs – the department’s resource funding will halve by 2014-15, and capital spending will fall by 70 per cent – but also to push through wholesale policy and organisational reform. And then there’s the pressure of events: Kerslake is half an hour late for our interview, thanks to an over-running conference call on the riots. “It’s not a quiet August,” he says, with his trademark wry smile.
Handed a punishing financial settlement and the ambitious – if amorphous – localism agenda, Kerslake has restructured the department, cutting its directorates from six to three. Three key factors have shaped this work, he says. First, there’s the department’s altered purposes: these are now “very much about localism – transferring power – and localities: creating the conditions within which neighbourhoods, towns, cities, can succeed”. The new structure reflects this split, with a localism directorate overseeing councils and the ‘Big Society’, while a neighbourhoods directorate runs housing, planning and regeneration.
Second, Kerslake continues, there’s the new ministers’ policy aims: the department is being reorganised “to make sure we’re delivering on those key priorities”. And third, there’s the need to be as open as possible with staff about the changes, “so people can see that if we’ve said we’ll do something on day X, we do it – then you don’t see a lot of energy wasted because people don’t trust the process”. While the job losses won’t have run their course until late next year, says Kerslake, “Most people will know where they stand by this October. We’ve broken the back of the task within about a year.” It’s been important to make these decisions quickly, he adds: “Dragging it out over four years would have been unbearable.”

Localism: onwards and upwards

So DCLG is now organised to fit the coalition’s localism agenda. Asked how he’ll foster the culture change required within the department to adapt to this new approach, though, Kerslake challenges the question’s implication that “everything that went before was bad, and everything going forward is going to be different and good. There were empowering and enabling approaches before, and they’ll continue. So this isn’t about suggesting that the culture of the department was wholly wrong.” Latterly, he suggests, the Labour government recanted its over-controlling, didactic approach, and began fostering local autonomy – an approach much amplified by the coalition.
Having said that, it’s clear that many of the techniques DCLG is using to realise its goals have changed. These days, says Kerslake, “We don’t automatically look to regulation or legislation or putting a ton of money in. We look to see whether, if we remove some regulation or top-down controls, that creates the conditions within which these things can happen.”
With his long experience in local authority work, Kerslake is acutely aware of the need to work with councils rather than trying to control them. “And I guess this is partly why I got the job,” he comments. “I come from a background of knowing that if you trust people, you’re likely to get a result.” The critical thing “is to get to shared ambitions – then you’re pushing at an open door”, he argues. “It isn’t a case of us having to pay [councils] money, or regulate to force them to do things. Often, it’s about helping them deliver, rather than assuming that all the push has to come from us. And that makes it a much more enjoyable process, because you feel less like a policeman.”
Of course, this approach does require the government to accept local variations. “An inevitable corollary of localism is that it allows people to do things in different ways, and if you’re not being prescriptive it will also result in different outcomes,” says Kerslake. “So central government has to be clear about where it’s comfortable with difference, and where it’s not.” However, he adds, the idea that targets and budgetary ring-fencing gave the last government tight control over what happened at a local level was always a myth: “Anybody who’s sat on the other side of the table knows that there’s a fair amount of ‘gaming’ goes on,” he points out. “With systems where you say: ‘Do this and I’ll pay you some money,’ you’re at risk of people telling you what you want to hear. I think we shouldn’t assume that those models were quite as effective as people assumed them to be.”

The levers were always bendy

Similar problems, Kerslake argues, afflicted the tight data-reporting regimes imposed by the last government on delivery bodies, with the aim of producing nationally comparable data on service quality. “As someone who’s produced this data and tried to use it, I know that you can have the ostensible veneer of comparable data and then when you test it there are hugely differing assumptions and variations behind it,” he says. “So a top-down model allows you to tick the box, but is the data good, usable, robust? To get to that point, you need to get buy-in from the sector.”
Labour did eventually realise that its data-reporting regimes were producing “conflicting, competing and redundant” information, says Kerslake, and “a lot of that got pared back by the last government.” This government wants to go much further in reducing the reporting burden on councils, and Sir Bob says that it’s ended or made voluntary 40 data requirements. “There is more to do, though, and a lot of work is being done with the Local Government Association [LGA] on this,” he adds. “We hope to publish a significantly reduced version of the single data list this year.”
However, the coalition’s transparency agenda rests on the publication of much more data, enabling service users to hold providers to account; and Kerslake acknowledges that, to date, the data published by local authorities under the transparency banner hasn’t represented much more than “a powerful signal of intent”. So how can DCLG reduce compulsory reporting while increasing voluntary publication?
“The key to broadening the data available is the partnership with the LGA, because if we’re going to develop a more powerful model for comparative data it has to be done collaboratively with the sector, with their engagement and involvement,” he replies. Central government does have a responsibility to ensure that councils publish comparable, accurate data on their operations and services, says Kerslake, “but it has to be a shared goal. Part of our job is to persuade the sector that it’s important for them, and then to work with them to deliver it. We don’t say: ‘It’s our duty to force you guys to do it.’ It’s our duty to create an environment in which both parties recognise that it’s the right thing to do.”

Following the money

If DCLG succeeds in this task, service users will be better able to hold providers to account. But that won’t satisfy public accounts committee chair Margaret Hodge, who fears that local autonomy is weakening her committee’s ability to hold top Whitehall officials to account for public expenditure. Kerslake, who’s spent the last six months wrestling with this question, argues that in future accounting officers will have to be held accountable for overseeing the operation of “a system which promotes value for money, probity, and identifies any need for intervention” (see news section).
We can no longer “have a model – if it ever existed – where the accounting officer has day-to-day control all the way down the system to someone on the frontline buying some goods”, he says. “The conversation has to be around whether you have an effective system for delivering these things and whether that system is being applied in practice.”

A push in the right direction

Despite all this talk of collaboration, localism and replacing day-to-day control with systemic overviews, however, the DCLG – under its pugnacious secretary of state Eric Pickles – is not averse to giving councils a firm shove down the desired road. The department’s proposed planning reforms, for example, suggest that there should be an assumption in favour of granting planning approval when applications fit within councils’ local development strategies. Crucially, many councils do not yet have approved strategies – and in these circumstances, DCLG’s consultation suggests, the presumption in favour of approval would win out whenever applications conform to the proposed stripped- down national guidance on sustainable development.
“This does provide an incentive for [councils] to get those plans in place,” Kerslake concedes, “but you’ve got to look at how long it’s taken them to get this far. Okay, there were rightly some criticisms that the system was over-engineered, and we think we’ve addressed some of that. But there is a case for creating some incentive for local authorities to get on with their local plans and to make them the foundation stones of their decision-making.”
Meanwhile, DCLG is also rejigging the system for inspecting major infrastructure planning applications – a crucial area for many government departments. The Infrastructure Planning Commission, established in the dying days of the Labour government to speed up the approval process, is now being merged with the Planning Inspectorate. But Kerslake is quick to calm fears that infrastructure schemes may be delayed: “While you’re seeing changes around the institutions, the core processes are continuing – hopefully with greater simplicity to them – and we’ve spent a lot of time working with the IPC to make sure they keep the pace going to the current timetable,” he says, adding that “we’re acutely aware of the importance of processing infrastructure applications, because of their links to the growth agenda.”

Crossing the rubicon

After 10 months in the job, Bob Kerslake has clearly learned his way around Whitehall; but he’s still fresh enough to the civil service to pick out contrasts with the world of local government. His first observation is that in policy and senior management roles, the civil service “has a huge concentration of very able people. That’s not to say that there aren’t able and bright people in other organisations, but the kind of intellectual firepower you have here is materially bigger. There’s no question about it.”
“The second thing that strikes you is that [the civil service has] quite a structured, almost regimented way of seeing the world,” he continues. “Grades matter a lot, and there are quite structured ways of managing and doing things which would be much more fluid in other organisations.” Paradoxically, though, in terms of career development, civil servants “are much more flexible and fluid about what they do. They expect to move around, and they’re able to adapt to new roles.”
Kerslake has also noticed that in Whitehall, “People look very much upwards to ministers. In other organisations, in non-departmental public bodies and others, the emphasis is more outwards. One thing that I’m trying to encourage is that, while obviously you’ve got to keep that focus on what ministers want, you’ll be better at doing that if you’re connected outwards to other departments and local authorities and localities.”
In fact, Sir Bob clearly believes that some councils now outclass central government in their ability to work across departmental and organisational boundaries. Whitehall may have “massively developed systems for clearing things across departments”, he says, but “there isn’t an instinctive collaborative and corporate approach to dealing with problems. Typically, an issue will be developed in one place to quite a level of sophistication, then a minister will say: ‘Yes, I think that’s the way forward’, and off it goes around the loop for everyone to chip in – rather than trying to collectively see what the problem is.”
This fragmentation of identity and control, he suggests, lies behind the slow progress on agendas such as shared services, which require corporate leadership. “I think we’re in a period of transition in the civil service towards that new model, and I’d say that the most advanced organisations out there – in local government and others – went on that journey a while back,” he says. “In the best authorities, they’ve managed to break down the barriers not just within the authority, but with the police and health and so on.”
Kerslake also thinks that central government could benefit from the “immediacy, the connection with the public” that he experienced in local government. “You can get very detached,” he comments. “There’s no substitute for meeting the public.”

Credit where credit’s due

Then, however, Kerslake re-emphasises his respect for the civil service: “Central government [officials] should be open to learning, but they shouldn’t lose sight of their enormous strengths. There’s a wealth of talent in the civil service; people who can do things that nobody else can do. The skill and pace with which they can formulate options and policy is extraordinary. So they should be open to learning, but they should go into that with a sense of confidence.” Unfortunately, he warns, that confidence is currently being undermined – both by job losses and weakening terms & conditions, and by the messages coming out of senior leaders.
“The civil service has worked on a form of psychological contract,” he argues: talented people have chosen Whitehall careers, foregoing better-paid jobs in the private sector, out of a sense of vocation, public service and shared purpose. “Therefore, there was some sort of mutual obligation. There’s no question that some elements of that contract are now being questioned and tested,” says Kerslake, citing the end of the ‘job for life’ as well as declining pay, pensions and career opportunities. “To some extent that’s inevitable and right, but it does open up the boundaries – and if we’re into open boundaries, then people can move both ways,” he comments. “A lot of people in the civil service might have thought they’re not that marketable in the wider jobs market, but I think they are; they just haven’t realised it.”
Asked whether civil servants’ views of their employers are shaped most by their changing terms & conditions or by the language used about them, Kerslake replies: “It clearly is both, but I think people underestimate the tone and language and feedback side.” Communications from leaders “are particularly important in the civil service, where people place great store on the messages they hear from ministers”, he explains. “There’s a huge amount of weight put on those messages and their tone; much more, I think, than the leadership realises – whether that’s ministers or permanent secretaries.”
While the current job market is weak, Kerslake continues, it will strengthen in future years. “Therefore we’ve got to constantly think: ‘Why do people choose the civil service? How can we make it a rewarding career? How do we attract them?’ We could forget that – we could lose sight of it, and ministers could lose sight of it – and then we’d turn around after a little while and say: ‘Hang on a minute, where are all these people going?’” Nobody, he warns, should think that civil servants are locked into their jobs and that “we can do whatever suits because they’ll stay there”.
On this topic, Kerslake’s habitually laid-back demeanour gives way to real passion. “We mustn’t lose sight of the fact that this is a labour market, and it will become more open, not less so,” he argues. “And we must get to a point where civil servants feel valued and respected, and have strong self-esteem.” He’s a diplomatic guy, but his message is clear. Perhaps he’s had his fill of taking tough jobs just as things get tougher: Bob Kerslake may like a challenge, but even this phlegmatic troubleshooter doesn’t want to find that he’s arrived on Whitehall just as his most talented staff make a beeline for the exit. ?

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