'Doing politics', handling the tough conversations, and how Alastair Campbell helped him out....lunch with Gus O'Donnell

Who?

Gus – now Lord – O’Donnell joined the civil service in 1979 as an economist at the Treasury, after a short stint as an academic. In 1985 he joined the British Embassy in Washington, returning to the UK four years later to become press secretary for then-chancellor Nigel Lawson, and then for prime minister John Major the following year.

In the late 1990s, O’Donnell took senior posts at the International Monetary Fund and the World Bank, before returning to the Treasury. His roles there included head of the Government Economic Service and managing director of macroeconomic policy and international finance.

He was named permanent secretary to the Treasury in 2002, before becoming cabinet secretary and head of the home civil service in 2005. During his six-year spell as the UK’s most senior civil servant, he supported the creation of the first peace-time coalition government since the 1930s under David Cameron and Nick Clegg.

Where

Searcy’s Bar and Brasserie at Surveyors House, Westminster. Elegantly done British classics in refined surroundings, a short stroll from Whitehall and the Houses of Parliament.

We ate

Tomato tatin with sheep’s cheese and crisp sage; smoked salmon mousse with cucumber, fennel and dill salad; 28-day matured Lake District sirloin steak; charred celeriac with braised lentils, celeriac cream and crispy kale.

We discussed...

The moment when he realised the civil service was for him

It was when I started to get some traction on policy. I suddenly realised that with all of this economics, you could actually do something. You could influence real policies. Whereas in academia, the pinnacle was writing a paper for Oxford Economic Papers, which I think was probably read by about eight people… one of whom was my mum, who probably didn’t understand a word of it. Then suddenly you’re in this world where, actually, it’s real, there are budgets happening. [Then-chancellor] Nigel Lawson wanted to change corporation tax to lower the rate and reduce the allowances. And we did the analysis, and it was just like, “Wow, this is real”.

His proudest moment before he became cabinet secretary

I was really pleased with the review we did which brought together Revenue and Customs 20-odd years ago. [Then-PM William] Gladstone looked at it in 1862 and rejected the idea at first, though by 1889 he had changed his mind and said this should happen… and then in 2004, it did. Not the fastest bit of reform in the world – but we got there. There were lots of things on the economic side I was pleased to be part of, but this was something where it combined the economics and the institutional change agenda.

But probably the highlight of my career was when I was No.10 press secretary and John Major announced, on the steps of Downing Street, the first ceasefire in Northern Ireland. That was just amazing for me. I’d had a conversation with Major and he’d said that Conservative Central Office told him not to waste his time on Northern Ireland: “there’s no votes there”. He profoundly disagreed and did amazing work, which Tony Blair then built on. And for me as press secretary at the time – the shot of him, and you’ve got the Christmas tree as well… it was just a great moment.

His time as press secretary to the PM

The lobby were all quite kind to me when I became John Major’s press secretary, because I was a total rookie. One act of kindness I remember was on Black Wednesday. John Major said to me: “Everything’s falling apart”. [Then-chancellor] Norman Lamont was going back to the Treasury to tell the press that we were leaving the European Exchange Rate Mechanism. I went back to the courtyard with him but what I didn’t see, because of where I was standing, was that there was a big drain right behind where Norman was about to give his speech. But there was this journalist who did spot it and he said to me: “That’s not a great shot, is it?” So we covered it up. That journalist was Alistair Campbell. He’s just a really decent guy, and that started a respect that I’ve felt for him ever since.

How his experience as press secretary shaped his approach as cab sec

I found it incredibly valuable. My economics background helped me with sorting out what’s good policy, what’s bad policy, but then it’s about presentation. I am always struck by what [former European Commission president] Jean-Claude Juncker said: “We all know what to do, but we don’t know how to get re-elected once we’ve done it.” So I used to say to the Government Economic Service: you need to be professional and persuasive. It’s not enough to have the evidence which says objectively this is the right thing to do; you’ve got to persuade people to do it. I look back on my career as a litany of failure in that regard because with things like tax reform, there are so many obvious changes that I never persuaded chancellors or the parties to do.

“I’m the biggest fan in the world of civil service impartiality. But that doesn’t mean you don’t do politics. Quite the reverse. The fact is, we are a permanent civil service, therefore you’ve done politics all your life”

 

Preparing for tough conversations with politicians

Number one was having really good people around you to rehearse with. So for every select committee appearance, I had Sue Gray cross-question me. If you could survive that, the select committee was a doddle because she knew all the really difficult questions. I also had a succession of private secretaries – Paul Kissack, Ciaran Martin, Rachel Hopcroft, Siobhan Benita – and there was not an ounce of deference amongst the lot of them. Outrageous, really! But they would all say to me: “that’s stupid” and point out the fallacies in my argument, why it wasn’t persuasive. Then when you get to the conversation: stick with it, make sure you’re clear.

There’s a great temptation to fudge. But if it is option A or option B, make it absolutely clear that there’s not an option “A-plus”. You’ve got to explain the costs and benefits as you see them, and present the consequences, so it’s a grown-up conversation. You hope they will come away thinking hard about it. You might not change their minds, but you might at least make them realise it’s not the slam dunk they thought it was.

‘Doing politics’

I’m the biggest fan in the world of the impartiality of the civil service. But that doesn’t mean you don’t do politics. In fact, quite the reverse. The fact is, we are a permanent civil service, therefore you’ve done politics all your life. Not party politics, but you see the political angles and it’s your job to point them out. If someone’s about to fall down a political manhole, you say: “This might not go down well with this particular group and you should get special advisers involved if they aren’t already.”

His proudest moment 

I felt incredibly proud of the civil service when we were in Westminster Abbey for [late cabinet secretary] Jeremy Heywood’s funeral. We had all of those prime ministers across the spectrum: Conservative, Labour and Lib Dems, all extolling the virtues of a civil servant and just demonstrating that the civil service can deliver for all parties. And – something I’ve always said – the measure of success is that when you leave a place, it gets better. Jeremy, who I’d worked with for so long, taking over as cabinet secretary, and his success, was an example of that. 

Teamwork 

I would say that what success I had was down to teamwork. There were two teams that were really important. One was the private office team, and beyond the private office, key people in the Cabinet Office, and that team included Jonathan Powell and Alistair Campbell. Then there was the team of perm secs: I was really lucky in having around that table a lot of perm secs more experienced than me, who were really good and just great colleagues. And there were some like David Normington who’d gone in for the job [of cabinet secretary] and not got it. And they just thought: “Well, fine, you know. We’re going to work together and we’re going to make it a success.” 

 

 

What we should be learning from Covid

One of the greatest public policy failings is we are going to have had the Covid pandemic and not learn anything from it. When I gave evidence to the UK Covid-19 Inquiry, I said this process is great for victims’ voices, but come the next Covid-style crisis, as cabinet secretary I would want to be able to say: “What do we know about what works? Do lockdowns work? Do masks work? What’s the best way to distribute vaccines?” We have this brilliant situation where all the countries in the world faced the same virus, and all did different things at different times. So we can analyse all of that and come up with the answer to the questionof what works and what doesn’t. There’s no reason why we shouldn’t do this, but no one’s doing it.

Public inquiries

Inquiries are trying to do too many things. More and more, they become a sort of therapy – which is fine, but you need to do the analytical side as well. You don’t need a judge, you want an analyst. 
I think we need a whole new system – I wouldn’t even call them inquiries, but lessons-learned groups. They’re not apportioning blame, not talking about victims. They’re just saying: “What, from a public policy point of view, can we learn from this?” And actually, quite often, the answer will be: “It’s not about us. We can’t learn from a sample of one. In order to find this out we need an international study.”

Chairing a good meeting

The geography of the room is really important. We used to have perm sec meetings in a very grand room in the Cabinet Office – the one with the throne – and it was absurd. Everyone had “their seat” and I hated that. So I moved it along Whitehall to a more modern building, and I told them to sit where they like. As chair, you need a really good brief with times on it that sets out the context of what you need to achieve. It might be saying: “This is really contentious and there are a few different schools of thought; you need to sort out where we go because we don’t have more time.”

Sometimes when you sum up, you can say: “I hear we’re in different places, we don’t need to decide yet, so what would help us picking the next steps?” But sometimes you need to say: “We’ve had plenty of time, we’re not going to learn any more, someone has to decide, and I know you won’t all agree but you’ll make it work.” Then you need someone keeping you to the brief. You want a private secretary there who catches your eye and lets you know to get on with it. And you need to keep people in order. People need to be heard but being concise is massively important. There is nothing more frustrating than being in a badly-chaired meeting where someone’s just sounding off all the time and hogging the space, and the chair is not directing it and it’s going over time. 

Diversity and pay

I worry about the impact of “the bank of mum and dad” on diversity. I’ve seen some proposals to try and improve diversity in the civil service by easing degree requirements, to get people from a wider range of backgrounds. That’s great if we want a more diverse entry. But if they come in, train through the Fast Stream, do well, and then notice: “I haven’t got any money. I could earn more if I leave the civil service… that will help me get on the property ladder, have a family.” Now, the ones who don’t have to worry about that are the ones who’ve got the bank of mum and dad. So you’re not going to radically change the make-up of the civil service unless you address the pay issue. 

What he worries most about in terms of the future of the civil service 

Attracting and retaining the best talent. I worry a bit about culture as well. We’ve been through a period where we’ve had a lot of ministers publicly blaming civil servants, and we have then crept into a world of civil servants wanting to blame ministers with briefings to the press. We should turn the other cheek – but it is only turn the other cheek in public. In private, the cabinet secretary, the permanent secretaries, have got to get a grip and fight the corner for civil servants. They need to tell ministers when something is unacceptable.

What makes a good perm sec

A team player, number one. A great leader, which is really underestimated, because you are leading the department. And – this is true for all civil servants, but particularly true of perm secs – you need the ability to explain complicated things, simply. To grasp complicated evidence quickly. A lot of the easy questions get answered elsewhere. The ones that end up on your desk are horribly complicated, horribly political, and you’ve got to cut through all of that. You need to be able to say: “The essence of this issue is, do you want to do A or B? A does this; B does that.” And to put that in a way which makes it easier for the minister to be a good minister. 

What makes a good minister

Someone who can manage those tricky decisions, and who actually knows what they want to achieve. By that I mean not what they want to do, but what outcomes they want to achieve. So in five years, what would success mean for them? Would it be better educational outcomes? Would it be longer, healthier lives? It could be many things but please don’t say: “It would be 10 more hospitals. Or 10,000 more police.” That’s a minister that’s really not quite got it. Tell us the outcome, and let us help you with it.

What makes a good prime minister

Someone who can prioritise, because there is so much, at any point in time, that is coming your way. You can see now, with the current prime minister, there are geopolitical things that are really, really important. There will be a crisis, like the riots crisis [last summer]. The prime minister realised: “This is my big first test. I need to prioritise that.” But then within that prioritisation, they should not lose sight of [the fact that] in the long run, people assess you on whether they feel their lives have got better during your time. What are you doing about that?

His hardest day at work 

Well, Black Wednesday was really hard: it was clearly a big failure of policy. It’s also really tough when you’ve got a changeover moment and you feel personally for prime ministers because it’s so abrupt. 
Then there was the day when IRA bombs landed in the No.10 gardens – you’re worried for all those people who have been affected by this, who have never been near something that really could have killed them. You want to be clear about that psychological element. But also, as press secretary, I was thinking: “We’ve got to show the world the IRA didn’t win.”

So that was a really tough day for me, and actually my wife had gone away, and so our young daughter was with her minder, the wonderful Barbara. I promised my wife I would get home early to pick up our daughter but as soon as the bomb landed I’m thinking: “This isn’t gonna happen.” 

I didn’t have Barbara’s phone number so my PA, at the time Tina Stowell – actually that’s another thing I’m really proud of: Tina, who was my PA, ended up being leader in the House of Lords – went to my house to get the number. While she’s there, the phone rings and she thinks it’s me so she picks up it up. But it’s a friend of mine who was just phoning my wife to ask if we were OK, but she’s now thinking there’s a strange woman in the house – what’s going on?!

Staying calm in a crisis

Psychologically, I don’t worry. To me, it is a bit of a waste of time. My approach is: “Okay, there’s a problem. Let’s get on and solve it.” What would frustrate me is if you couldn’t get on and solve it and had to, for some reason, do nothing. But if it’s completely out of your control, then just get on with preparing for different outcomes.

“I really regret not having won the argument on changing the civil service remuneration to be more pay, less pension”

His early appraisals

When I joined the civil service, I don’t think people had thought through how to manage people’s careers –although there was a sort of career management because when you did an appraisal, it would say your performance in the job, and then how high they expected you to go in the organisation. My first one said that I would make it to grade five… So there was a certain amount of management, but mostly my career was haphazard.

Take becoming press secretary: Nigel Lawson just wanted someone who he could talk about economics with, helping him write about economics in speeches. I didn’t know anything about press. Initially he said: “You’ll be private secretary”. But the hours can be very long [O’Donnell had a young daughter at the time] so John Gieve, who was a press secretary, kind of volunteered to be private secretary, God bless him. And I became press secretary. Is that career management? I’m not really sure it is.

His regrets

I really regret not having won the argument on changing the civil service remuneration to be more pay, less pension. And, as I say, lots of stuff on tax reform. Also, education. When I look back on the Tony Blair-era reforms, I wish I’d asked: “What are you really trying to achieve here?” We have become so obsessed with exam results, and everybody knows that [in international comparators] we went up a bit in English and maths, but wellbeing for kids is right at the bottom.

We’ve now got a children’s wellbeing bill before the Commons, and there’s no mention of measuring wellbeing. Everyone’s having an argument about academies and I’m like: see the big picture, guys, what are we trying to educate people for? We actually want them to be resilient, we want to build their characters. And it turns out if we do those things, they do better in exams, so there’s no trade-off here.

Whether he has ever wished he was back in government

Yes, I got very exasperated through Covid. Take the issue of closing schools: all the debate was about how this might affect transmission, might reduce deaths in teachers. Nobody was talking about the impact on the kids and the impact on the parents. But we’re seeing it now, the impact of it. I was screaming at the television. I was just down in Oxford with [professor of medicine] John Bell. We were talking about the emphasis there was on the cases. When it was cases going to hospital, we didn’t really know the prevalence until the ONS started doing the surveys. This is garbage data, the use of a single “r” number when we knew it was very different in different parts of the country. I think Covid had me screaming at the television almost as much as watching Manchester United.

Civil service reform

This is an area where you [as senior civil servants] really have to lead. Tony Blair, for example, wanted to modernise but didn’t really have any ideas, other than delivery units which are good, but not enough. So he was open to ideas and that’s the great thing. Lots of really good civil servants came up with the idea of capability reviews; the top 200; Civil Service Live; the Civil Service Awards. This was something I realised when I got into the cabinet secretary job: there are a whole host of things which you can do to drive change and also lift the civil service and restore its pride and passion.

What he is proudest of in terms of civil service reform

Getting people to talk about leadership and to understand that they were leaders at various levels in the organisation, and trying to make it a much more diverse group. I was proud the day we ended up with 50% women perm secs. At the start of the coalition, getting David Cameron and Nick Clegg to talk to perm secs about what they wanted to achieve. This is how it should be. And then the National Security Council – a great idea of the Conservatives – but being able to get that in place really quickly. To my mind that’s a really good innovation, with that principle of the key politicians and the key officials leaving the room together, as opposed to the traditional cabinet committee where all the ministers meet with a brief.

His failures

My life is a story of multiple failures that actually mostly turned out right. Number one, A-levels. I blame football and girls, basically, but I screwed up my A-levels and didn’t get into the university of my first choice. Fortunately, I got accepted by Warwick, which has a brilliant economics department.

Failure number two was after Warwick: I was at Oxford as a postgrad and there was only one success outcome as far as the academics were concerned: being an academic. Everything else was career failure. So I got to be an academic, started doing research, published some papers, and my professor said: “You’re not going to make it, you’re not going to be the world’s greatest economist. Go and do the grubby applied stuff [in the civil service].” That was what I wanted to do, modelling and applied work that mattered to policy, but it wasn’t what counted as academic success. So a failed academic goes into the civil service.

Next failure: I applied to work on developing countries because I had specialised in that. Failed – they put me in the Treasury. And then my big break in the Treasury – where I had been pigeonholed as a modeller, a techie, ex-academic – was when a job came up as first secretary in Washington [at the British embassy]. Four people apply; they put me fourth. And Tim Lancaster, who was my boss at the time, said, “No, I think it would be really good for Gus’s development.” So I got to work in Washington, see a different department, see a different country, learn a lot about different policy ideas. 

How he’d like to change politicians

There are very few jobs in life that you should go into without having any training. So let’s think about what would be really good training for a minister. To me, it’s decision-making under uncertainty. That would be my number one wish. Number two, I’d say to ministers: nearly everything you do gets delivered through the civil service, so you need them on side. It sounds bleeding obvious, but it’s like [Gerald] Ratner getting up and calling his products crap. [Ratner’s eponymous chain of jewellery shops lost £500m of value in the weeks after he denigrated the company’s products in a speech.]

Yes, tell the cabinet secretary to improve things: you might need better people, you might need new skills. But when we see things like the tepid bath [speech], briefings about [Trumpian anti-bureaucracy drive] Project Chainsaw… there is someone in No.10 who thinks this is clever, but they don’t get the impact it has on the civil service.