With the BBC currently repeating Yes, Minister, it is tempting to speculate what Sir Humphrey’s reaction to the idea of a board to run the department would have been. The curl of his lip at such an import from the base world of business would have been something to behold, I suspect.
You probably have to be very much a Whitehall-watcher to know that government departments now have boards, like companies, charities, and other organisations. They are chaired by secretaries of state, and include other ministers, top officials, and independent non-executives, usually with a business background. Their origins go back to the 1990s. The two crucial elements, however, that Secretaries of State chair and that most non-executives are from business, were put in place by the coalition government after 2010.
When I say, “like companies”, that is actually rather a stretch. Unlike boards in other sectors, departmental boards have no legal personality or defined powers and duties. They operate according to a guidance code issued by the Cabinet Office. Powers and accountability rest firmly with secretaries of state, and, on the management of spending, with permanent secretaries as accounting officers. That is far too embedded in the law and constitutional conventions to be unpicked.
Does the lack of formal status mean departmental boards are a flawed concept? The Commission for Smart Government, of which I am a member, along with current and former government non-executives, decided we should take a look. Our answer is that they have undoubtedly been doing useful work, but could do so much more. A few well-judged changes would allow them to take on a powerful and much more useful role in improving the planning and execution of the government’s policy intentions. We have set our views out in detail in a new report.
As they stand, to varying extents, boards, and the independent non-executives on them, are making a positive difference. Independently chaired audit committees work well, and outside formal processes, non-executives contribute their experience and insight, in particular helping to address the tendency of Whitehall discussions to be ‘non-operational’, as one non-executive put it. However, the effectiveness of boards is limited by their exclusion from the formative stages of strategy and policy development, and the tendency of some ministers not to take them seriously, or have the skills necessary to make best use of them. As a result, both non-executives and ministers can feel frustrated.
Our report makes five suggestions, all intended to strengthen ministers’ ability to direct their departments by complementing their political insight with the varied professional insight of board members, not least the non-executives with corporate experience.
First, scrap the current guidance which excludes boards from discussing policy. While ministers are clearly the source and origin of policy, they can and do discuss it extensively with officials. So why keep policy, or more specifically, the best ways of translating policy intent into practical action, off board agendas, where non-executives could contribute their extensive experience of forming effective strategy and turning it into action?
Second, the government has rightly decided that departmental planning needs a fundamental shake-up, with new Outcome Delivery Plans. A recent Commission paper has suggested the management of departmental project portfolios needs to be strengthened. Boards should be given formal authority for assuring the soundness of both.
Third, making the right appointments at the top of the organisation, and managing performance, is critical to business success anywhere. Non-executives already play some role on these fronts in departments, but we suggest that needs to be strengthened and formalised, with properly constituted renumeration committees overseeing the most important roles in departments and arm’s length bodies.
Fourth, while the main elements of what boards do need to be the same across government, their precise ways of working should be tailored to individual departments. Departments vary significantly in size, budgets, and in the accountability and governance of operational functions. Above all, secretaries of state have their own bundle of experiences and preferences. Each board’s ways of working should be discussed between the secretary of state, permanent secretary and lead non-executive, and properly documented.
Finally, the key elements of board effectiveness need to be defined in a one-to-two-page document and assessed as part of the Treasury’s and Cabinet Office’s assessment of departments’ systems and effectiveness.
Unlike so many attempted reforms in government, boards have survived and won acceptance for their usefulness, up to a point. Let’s charge them up further, as a key supporting piece of infrastructure for modern, smart, government.
Lord Michael Bichard is a crossbench peer in the House of Lords and until 2021 was chair of the National Audit Office. He was formerly permanent secretary at the Department for Education and the first director of the Institute for Government.