House of Commons - Public Administration

Select Committee on Public Administration Second Report

2 The machinery of future thinking

7. Governments have always been concerned about the future. It is the extent to which this concern has resulted in systematic, open and effective long-term thinking which has changed. In 1959 Harold Macmillan, the then Prime Minister, established a highly secret assessment of performance of the UK's economy and its place in the world. Macmillan describes in his diary the beginning of the review:

All day conference at Chequers on 'Future British Policy'. The idea was to draw up a paper—for the use of the next Government. The first part would try to assess 'The setting'—what is likely to happen in the world during the next 10 years. The second part would deal with 'UK's resources'—the gross national product; the calls for expenditure on Pensions, Education, Defence etc. wh [sic] are more or less inescapable. The third part would be about 'The Objectives'—what Foreign, Commonwealth and Colonial and Economic policies we ought to follow. Today's meeting was to agree the skeleton—the general outline of the work—and to cast the parts. It is hoped to do the job in 2 or 4 months…[5]

In 2006 the Prime Minister established a strategic policy review. Unlike Mr Macmillan's review which took place behind closed doors, Mr Blair's review has been openly advertised and background papers have been made publicly available.

8. Sustained future thinking within the context of modern government is not easy. The 1970 Reorganisation of Central Government White Paper set out the difficulties created by the expansion of the functions of the state after the Second World War:

It has become clear that the structure of interdepartmental committees… needs to be reinforced by a clear and comprehensive definition of government strategy which can be systematically developed to take account of changing circumstances and can provide a framework within which a Government's polices as a whole may be more effectively formulated. For lack of such a clear definition of strategic purpose and under the pressures of the day to day problems immediately before them, governments are always at some risk of losing sight of the need to consider the totality of their current policies in relation to their longer-term objectives; and they may pay too little attention to the difficult, but critical, task of evaluating as objectively as possible the alternative policy options and priorities open to them.[6]

9. In response, the Heath administration established the Central Policy Review Staff (CPRS) in 1971 to give strategic advice to the Cabinet. The CPRS included both externally appointed staff and civil servants. Its work included strategy reviews, studies on particular topics, assessments of the effectiveness of particular departmental activities in relation to their intended objectives (and the evidence base for those objectives), and the preparation of collective briefs for Cabinet and its committees.[7]

10. The 1970s arrangement was not wholly satisfactory. The economic crisis that began in 1973 and continued for the remainder of the decade meant that the CPRS became enmeshed in short-term crisis management. David Howell, a Conservative minister during the 1970s, explained that by 1979 "[The CPRS] had become a sort of trouble shooting body… any role it was originally supposed to have, as a systematic, regular bringing together of reports of programme analysis throughout Whitehall to present an overall strategic picture to the Prime Minister and the Cabinet had long disappeared".[8] The CPRS was finally disbanded by Mrs Thatcher in 1983.

11. The next major development in future thinking was in 1994 with the Foresight Programme. This followed the 1993 White Paper, Realising our Potential—A Strategy for Science, Engineering and Technology.[9] The Foresight Programme began as the co-ordinator for a series of sector-facing panels which brought together experts from industry, government and academia to explore opportunities in different sectors of the economy and issue reports on these areas. Its initial focus was on informing the makers of government science policy, and reaching out to the science community and science users. Since then its function has evolved, as we describe later in this report.[10]

12. Successive governments also have used inquiries, reviews and Royal Commissions to examine issues with a futures focus. For example, the Royal Commission on Environmental Pollution was established as an independent standing body in 1970 to provide advice on environmental issues. Royal Commissions can also be used for individual studies, such as the 1949 Royal Commission on Population. Although there have been some recent Royal Commissions, most notably that on Reform of the House of Lords, which reported in 1999, Royal Commissions have now almost disappeared, a trend which began under previous administrations.

The Labour Administration: Modernising Government

13. In 1999 the current administration set out its approach to policy making and public services in the Modernising Government White Paper and the Professional Policy Making for the Twenty-first Century Report.[11] These papers concluded that, although long-term thinking was taking place within government, the difficulties identified by the 1970 White Paper remained. Professional Policy Making declared that "Ministers often want to see measures that produce results in the short rather than the medium or long-term because of the pressures of the electoral cycle"[12] and, "although there is a lot of activity across departments looking ahead, it has not, as yet, been joined up effectively nor does it feed systematically into mainstream policy making".[13]

14. In order to overcome these endemic problems new organisations were established (often within the Cabinet Office and Number 10) and new processes such as the Spending Review were introduced. The Foresight Programme and the use of external Commissions have continued. The main components of future thinking used by the current administration are set out below.

THE PRIME MINISTER'S STRATEGY UNIT

15. The organisations involved with future thinking at the centre of government have evolved over the last decade.[14] The Performance and Innovation Unit (PIU) was established in the second half of 1998 to work primarily on "time limited projects, with teams given the time and space to develop forward looking policies rather than reacting to short-term pressures".[15] In 2001 a small Prime Minister's Forward Strategy Unit (PMFSU) was also established to provide "a complementary capacity for doing more private work, generally working bilaterally with departments rather than on cross-cutting issues, and reporting directly to the Prime Minister and Secretaries of States".[16] In 2002 these two units were merged with parts of the Centre for Management and Policy Studies (CMPS) to create the Prime Minister's Strategy Unit (PMSU) which remains the main body associated with future thinking at the centre.

16. The PMSU has three main roles:

to carry out strategy reviews and provide policy advice in accordance with the Prime Minister's policy priorities;
to support government departments in developing effective strategies and policies - including helping them to build their strategic capability; and,
to identify and effectively disseminate thinking on emerging issues and challenges for the UK Government e.g. through occasional strategic audits.[17]

Stephen Aldridge, the Director of the PMSU, explained its function as follows:

…there is a certain support that any Prime Minister of the day may need, in terms of analytical rigour. The Strategy Unit is perhaps in a fortunate position that it does not have many day-to-day responsibilities and therefore can step back a bit from the events of the day, the immediate crises, and offer a more considered view to the Prime Minister and Number 10 than would otherwise be possible.[18]

17. The decision to establish the PMSU was influenced by the work of the CPRS in the 1970s.[19] Like the CPRS, the PMSU was designed to be close enough to the issues, politics and personalities in government to understand the contexts and challenges, but distant enough from everyday matters and from those closely associated with existing policy to provide new thinking. It can be seen as a kind of internal consultancy or think-tank. It challenges the assumptions made by departments and employs specialist skills to analyse evidence and trends and think strategically about the direction of policy.

18. The staff of the PMSU includes civil servants and people drawn from the private and voluntary sectors, as well as from the wider public sector. This mix of staff aims to bring together a variety of skills and experience, and a fresh perspective.[20] There are currently around 55 people working in the PMSU (although this has decreased from the 70-90 it once had). It is far larger than the CPRS, which had no more than 20 staff at any one time.[21]

19. The work of the PMSU has been widely praised. Lord Birt explained that it is "recognisably the kind of institution you would find in a major global corporation with a very similar set of skills available, and, indeed, now, I think, a rich national asset".[22] Jill Rutter, Director of Strategy and Sustainable Development at Defra, gave an example of how the PMSU's work had contributed to decision-making in her department:

It was before my time, but the Net Benefits report looking at the future of the fishing industry, where PMSU, working with Defra, spent a year throwing quite a lot of people at quite an intractable problem and came up with interesting and different solutions which Defra on its own would not have generated, was a very useful process.[23]

FURTHER SOURCES OF STRATEGIC ADVICE TO THE PRIME MINISTER

20. The Prime Minister has been concerned to set strategic priorities for his Government. After the 2006 General Election he sent letters to his cabinet colleagues explaining the "future challenges" that they faced. He has given a series of lectures over the last year entitled 'Our Nation's Future'. In autumn 2006 he established 'Pathways to the Future', a strategic policy review programme. The aim of the review is to "assess the long-term strategic priorities of the UK alongside the Government's existing policy framework".[24] The project involves Policy Review Working Groups, chaired by the Prime Minister and attended by members of the Cabinet, that will examine long-term, cross-cutting policy challenges. The PMSU supports these groups and has published a background paper for each strand of the Review.[25]

21. The Prime Minister has also appointed individuals at the centre of government to give him strategic advice. For example, Lord Birt, previously Director General of the BBC, acted for a period as his unpaid strategic adviser. He produced reports for the Prime Minister on issues as diverse as transport and drugs, and had regular contact with the Prime Minister.[26] Lord Birt was assisted in his work by senior civil servants, including those within the PMSU. Until recently the Prime Minister was also advised by Matthew Taylor as Director of Strategy in Number 10.

22. Effective futures work has to be intimately connected to government strategy and policy. As Lord Birt told us, "policy is a subset of strategy".[27] They must inform and influence each other. The current Prime Minister's Policy Directorate was created when the Prime Minister's Private Office and the Policy Unit were merged following the 2001 general election. The Number 10 Policy Unit had first been established in 1974 when it was run by Bernard (now Lord) Donoughue. The Policy Unit was maintained throughout the 1980s and 1990s when its heads included Ferdinand Mount and Sarah (now Baroness) Hogg. The new Policy Directorate is headed by David Bennett, a special adviser, and consists of "nine or ten" members of staff.[28]

REVIEWS AND COMMISSIONS

23. Long-term thinking and strategic work is not always best conducted by government insiders. Dr William Plowden, a former member of the CPRS, explained that:

…thinking should be done at several points on the line that links rules at one end and dreamers at the other. Well-resourced and responsible think-tanks can play a major part. Insiders, although under pressure not to be too radical themselves, can commission or at least report the thoughts of independent outsiders, who can be much bolder. Planning, which involves decisions about the use of resources, has to be done by insiders, taking account of political realities.[29]

24. Governments can engage with outsiders by establishing reviews or commissions at arms length to 'think the unthinkable'. As Lord Turner explained, "an external commission can be a mechanism for addressing issues which are either very politically difficult to deal with within the to and fro of antagonistic political debate".[30] As we describe in Chapter 5, this Government has used a wide range of types of independent review and commission. As we have noted, it is no longer usual to establish Royal Commissions to do such work. Dr Geoff Mulgan, former director of the PMSU and now Director of the Young Foundation, explained that:

The idea that simply putting a bunch of the great and the good together around a table will get you to the right and legitimate answer no longer works today for quite a few reasons. One is that it is not clear whether they would use the right methods for analysing a problem. Second, it is not clear that the public will see their views as legitimate just because they are great and good and that is why we need much more expansive and inclusive processes than in the classic royal commission.[31]

FORESIGHT AND HORIZON SCANNING

25. The Foresight Centre, led by the Government's Chief Scientific Adviser and located in the DTI, "brings together key people, knowledge and ideas to look beyond normal planning horizons to identify potential opportunities from new science and technologies and actions to help realise those opportunities".[32] After a review in 2000 the Foresight Programme moved away from a system of standing panels to a structure of rolling programmes of specific, tightly focussed, projects. Although heavily science-based, the Programme considers science in the widest sense and includes social scientists amongst its pool of experts.

26. The Foresight Programme itself contains a number of elements:

Let us assume you are standing on the bridge of a ship. You scan the horizon (Horizon Scanning) and see an iceberg and your supply ship. You work out the likely speeds and direction of the iceberg and supply ship (trend analysis) and put the information into the ship's computer (modelling) and then plot a course (roadmapping) so that you meet with the supply ship and not the iceberg. While you are doing this you dream of eating some nice chocolate that you hope is on the supply ship (visioning).

You realise that the speeds and directions of the iceberg and the supply ship might change, so you work out the range of options to make sure you have the greatest chance of meeting the supply ship (scenarios). Even with all of this planning, you know there is a chance of the unexpected and hitting the iceberg so you get the crew to do an evacuation drill (gaming). While they are doing it, you work back from the most likely future position of the supply ship to work out the steps you need to get there (backcasting).[33]

27. There is also a centre of excellence in Horizon Scanning based alongside Foresight in the Office of Science and Innovation which identifies potential threats and opportunities involving science and technology which could affect Government policy. A recent report by the Science and Technology Committee commended the work of the Chief Scientific Adviser and Office of Science and Innovation in "strengthening horizon scanning in relation to science and technology across Government".[34] Those we met in Scandinavia told us that the Foresight Centre was considered a world leader in futures work.

FROM FUTURE THINKING TO POLICY DEVELOPMENT: TARGETS AND DEPARTMENTAL STRATEGIES

28. Along with this long-term work, the Government produces shorter-term strategies and targets. These are intended to move policy towards preferred and prioritised outcomes. In 1998 the Government introduced a system of targets in the form of Public Service Agreements (PSAs) as an integral part of the Government's spending plans. In July 2005 the Government announced that it would conduct a second 'Comprehensive Spending Review' to "identify what further investments and reforms are needed to equip the UK for the global challenges of the decade ahead".[35]

29. The Government has also tried to increase the strategic capacity of individual departments so that current decision-making takes account of longer-term issues. In 2004 each major Whitehall department produced a five-year strategic plan that set out the department's vision, its priorities and how these would be reached. Strategic capabilities are being assessed by the Departmental Capability Reviews, while the National School of Government provides training on strategic thinking.

Conclusion

30. Governments have to find ways to overcome the political and practical difficulties associated with thinking about the future. Successive administrations have increased the capacity of government to undertake strategic thinking, which is now carried out more systematically than ever before. In particular, we commend the work of the Foresight Programme which is recognised as a world leader in its field.

5 Macmillan diaries (unpublished), Western Manuscripts Department, Bodleian Library, University of Oxford, entry for 7 June 1959, as quoted in Peter Hennessy, Having it so good (London, 2006), p 577. Back

6 The Reorganisation of Central Government, Cm 4506, 1970. Back

7 Tessa Blackstone and William Plowden, Inside the Think Tank: Advising the Cabinet 1971-1983 (London, 1988), Appendix 2. Back

8 Now the Rt Hon Lord Howell of Guilford;Peter Hennessy, Cabinet (Oxford, 1986) , p 112. Back

9 Realising our Potential: A strategy for science, engineering and technology, Cm 2250, 1993. Back

10 See paragraph 25 below. Back

11 Cabinet Office, Modernising Government, Cm 4310, March 1999. Cabinet Office, Professional Policy Making for the Twenty-first Century, September 1999. Back

12 Cabinet Office, Professional Policy Making for the Twenty First Century, para 4.2. Back

13 Ibid., para 4.5. Back

14 For more details on the evolution of the centre of government since 1997 see House of Commons Library, The Centre of Government: Number 10, the Cabinet Office and HM Treasury, Research Paper 05/92, 21 December 2005. Back