'Civil service threw keys of the castle across to private sector', says Stephen Kelly

The civil service must foster “a more vibrant, competitive marketplace” of government contractors and rebuild its skills in contract management, the government’s outgoing chief operating officer Stephen Kelly has told CSW.

By Matt Ross

13 Nov 2014

Speaking in an interview set to be published in this Friday’s issue of Civil Service World magazine, Kelly argued that for 20 years government “threw the keys of the castle across to the private sector”: the civil service steadily lost expertise, while passing ever more business to a handful of fast-growing businesses.

“We probably didn’t spend enough time ensuring there was competition in the marketplace,” he said. “But in any business competition drives innovation and value, so we’ve tried to make sure we’re on a corrective course. We love companies to make profit out of government business, because we want them to invest in government – but we don’t want them making supernormal profits”.

“We're quite conscious that there is in some areas a thin marketplace, and we're absolutely going out to encourage a much more vibrant, comp marketplace,” he added.

Historically, Kelly argued, civil servants have built complex procurement systems, but “we haven’t done a great job of market development, and we’ve not done a great job all the time on contract management – and that’s where all the value is”. The Crown Commercial Service is, he said, working with the CBI Strategy Group to improve both the use of open book contracts, and civil servants’ ability to understand what they’re looking at: “Do we have the competence and order capability to examine an open book contract? Probably not,” he commented.

Enormous progress has been made in improving the civil service’s efficiency and skills over the last four years, said Kelly, but “the large-scale transformation we’ve got will probably take a decade.” One key goal, he argued, must be to “align the incentive structures to ensure the outcomes”: people’s public service ethos helps in focusing their attention on delivery, but “bonuses and performance rankings and management of lower performers” must also be built more closely around organisational objectives. “We’ve started a performance structure where we’re shifting from a culture of patronage to one of performance,” he says, but “it doesn’t happen with the wave of a magic wand.”

Much of what has been achieved, Kelly says repeatedly, is down to Cabinet Office minister Francis Maude: “Shame on us in the civil service: it took a minister to come in and grab the bull by the horns and say: ‘We can do much better. We can change. We can become one civil service’.” It was Maude, he pointed out, who “put together the five key reform programmes and said: ‘The civil service can be a much stronger, much more digital, more commercially-aware executive for the government of the day’.”

For the full interview see the November issue of CSW

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