The need for a strategic body at the centre

31. There is undoubtedly a need for some form of strategic capability at the centre of government. Those at the centre can look across government, free from the constraints and influence of departmental agendas, but with access to the knowledge within departments. As William Plowden told us:

…there are two reasons why line departments should not be allowed to monopolise long-term thinking and planning. First, even in the short-term, and certainly in the longer-term, decisions about sectoral policies are almost bound to raise "whole of government" issues, of concern to other ministries. (This is also so in cases where it is not obvious who should take the lead, e.g. global warming.)

Secondly, in thinking about the future the executive agencies responsible for policy in any specific sector will inevitably be influenced by the current assumptions and priorities implicit in existing policies; it is hard for them to accept that their assumptions and priorities may be mistaken and that long-term strategy may need to take a completely different direction.[36]

We consider here the key functions of any central unit concerned with strategy and future thinking.

Concentrating on the future

32. Strategic thinking and policy making are closely linked: policies move strategies from visions into actions. However, future thinking and strategic analysis require the ability to challenge existing policies, to look outside short-term time scales, and build up portfolios of policies as a result. This cannot be done if the central unit tasked with looking at the long-term is constantly diverted into short-term crisis management or pressing policy concerns. The CPRS arguably failed to keep hold of its long-term agenda, leading its historians and former members Tessa Blackstone and William Plowden to write that, "If our view is accepted that the 'strategy' function is important and should be performed, a future reconstructed CPRS ought to ensure that this function is formally written into its job specification".[37]

33. The Prime Minister's Strategy Unit has published some valuable work on the future, looking at trends, key indicators and international comparisons. It has conducted two 'Strategic Audits' (in 2003 and 2005) that aimed "to provide a balanced and objective assessment to help establish a factual context for policy-making and wider discussion".[38] In November 2006 it also published a paper, Strategic Priorities for the UK, which assisted the Cabinet in its discussion of the Prime Minister's Policy Review. Other future and strategy work includes a report on the UK's digital strategy, and another on progress in education over the last ten years and the future challenges faced. A full list of PMSU publications is appended to this report.

34. However, the Strategy Unit has also become involved in policy work. The first of its three functions includes a commitment to "provide policy advice in accordance with the Prime Minister's policy priorities" (see paragraph 16 above).[39] Policy and strategy are closely related and it is inevitable that there will be some cross-over between tasks. PMSU publications such as the Strengthening Powers to Tackle Anti-social Behaviour consultation paper and the Social Exclusion Action Plan reflect this.[40]

35. Government needs detailed policy advice. Policy should be set within the context of long-term strategy. Unlike the CPRS, the PMSU has not been diverted into short-term crisis management or provision of advice on a daily basis. When asked about the difference between the work of the PMSU and the Policy Directorate in Number 10, Stephen Aldridge told us that the Policy Directorate "deal with the more day-to-day advice, but, of course, there has been a meshing of our work programme with their concerns and priorities".[41] Nonetheless, the PMSU is the only body at the centre of government with the remit of future thinking. This should be its primary task.

36. It is inevitable that the PMSU will become involved in some policy issues as there is a close relationship between strategy, policy and delivery. But it is crucial that the PMSU is not diverted to current policy making and crisis management at the expense of its key strategic role. Strategy is its distinctive contribution to government.

Joined-up thinking and cross-government approaches

37. Any policy decision can have long-term implications, many of which will inevitably fall outside the immediate policy area or department. Building a new runway may alleviate an immediate air transport issue, but it will have long-term impacts on the environment, tourism and business. The ageing population has consequences not only for pensions policy, but for health-care provision. It is vital that thinking about the future and long-term policy is not constrained by departmental boundaries.

38. Cross-government thinking is, however, inherently difficult. Sir Michael Bichard, former permanent secretary at the Department for Education, told us that the problems identified by the 1970 White Paper still existed whilst he worked in Whitehall in the 1990s: "…there is very little joined-up thinking, partly because all the pressures are against it, you build up your empire and you defend your empire and you are regarded as a good secretary of state or a good permanent secretary as your empire gets bigger so you try to take over other empires".[42]

39. The PIU report Wiring it up suggested a variety of ways to overcome this traditional difficulty.[43] Approaches used by this Government have included:

• establishing units at the Centre on specific cross-cutting areas such as the Social Exclusion Unit;
• establishing central units that range widely across departmental boundaries, such as the PMSU and the PIU before it;
• establishing units within Departments to concentrate on co-ordination, such as the newly established Office of Climate Change in Defra;
• giving individual ministers responsibility for cross-government issues, such as 'women and equality'; and,
• including joint targets in the spending review process, for example the Department of Transport's 2004 Spending Review Target:

To reduce greenhouse gas emissions to 12.5% below 1990 levels in line with our Kyoto commitment and move towards a 20% reduction in carbon dioxide emissions below 1990 levels by 2010, through measures including energy efficiency and renewables. Joint with the Department for Environment, Food and Rural Affairs and the Department of Trade and Industry.[44]

40. The PMSU is in a prime position to look at issues across government although, like the FSU before it, some of its work is conducted bilaterally with individual departments. In its recent report on the strategic priorities for the UK, it identified a number of cross-cutting challenges such as the pressure on health and social care that will result from demographic change.[45] The initial meetings of the Working Groups established as part of the Prime Minister's 'Pathways to the Future' review resulted in the commissioning of cross-cutting reports to inform them. The reports will consider questions such as "How can action by the state facilitate culture change; for example tackling dysfunctional (but not illegal) behaviour and low aspirations?"[46]

41. 'Joined-up' future thinking could be further improved. One of the requirements of "good strategy" is, as William Plowden told us, that it is "a strategy to which individual policy decisions will be subjected, they will be evaluated in the light of the long-term strategy. Until that strategy is changed, they need to be consistent with it, so it gives a consistent set of guidelines which should influence policy decisions as long as that strategy is in force".[47] We are not clear whether there is any fully effective process in place to ensure such integration between policies and strategies, and across strategies. Jill Rutter explained that, "One of the short-comings of the process around five-year strategies was the lack of integration. …because it was done department by department, you were either a first wave or a second wave, there were a lot of missed opportunities where you felt those strategies could have linked better".[48] Strategy work is now conducted at the centre, in department, and by reviews and commissions. There is a danger of incoherence. Care has to be taken that work undertaken for one part of government does not cut across work being done for another. The PMSU should ensure that individual policy proposals are consistent with the broader direction of government and any strategies already agreed. Opportunities for joint approaches across departments should not be missed.

The relationship between the centre and the departments

42. A central strategy unit may need to challenge departmental policy, but it also has to be able to work productively with departments. Its proposals need to take account of the context in which the department operates. If they do not, they will not be able to influence the department's thinking. Although Jill Rutter said that "it was wrong to characterise it as there being great tension between departmental strategy units and the PMSU", Lord Birt considered that, just as in private companies there can be tensions between the corporate centre and the operating departments, in government there would inevitably be tension between the centre and departments.[49] Sir Michael Bichard suggested that there was "work to do to achieve greater ownership across government within departments for strategic thinking and a better relationship between the centre and departments".[50]

43. The Foresight Programme provides an example of how a central unit might handle any tensions of this kind. Each Foresight project has a departmental minister at the head of its stakeholder board. For example, the Public Health Minister at the Department of Health is the sponsor minister for the 'Tackling Obesities: Future Choices' project. The Minister does not direct the project, but is informed of its progress and takes some ownership of its results. The PIU's projects also had a sponsor minister, "to act as a sounding board and give political steers".[51]

44. One of the major differences between the CPRS and the PMSU is that the former worked for the Cabinet as a body, and the latter is nominally the 'Prime Minister's'. Jill Rutter explained that "…obviously the PMSU is directed by the Prime Minister, so their work programme is governed very much from the centre of Number 10".[52] William Plowden expressed a concern that:

As long as you have got a prime ministerial and cabinet system, I do think it is essential to try, and it is very difficult indeed to do it in practice, to get the Cabinet to work as a collective body which is informed by the strategic thinking of a Strategy Unit. There should be not just a Prime Minister's Strategy Unit, as there was a Prime Minister's Unit in Bernard Donoughue's day, you want a Prime Minister's Unit and a Unit which works for the Cabinet, that is to say, in public, it needs to be within government.[53]

45. The Prime Minister should have a source of strategic advice within government. The difficulty is that having two strategic units at the centre could lead to duplication and incoherence. The better solution would be to widen the 'ownership' of the PMSU's work. This would help ensure its work reflected not only the priorities of the Prime Minister, but of the whole of government. The Prime Minister should be able to call on the Strategy Unit for such advice as he feels necessary. However, there would be benefit in making sure major studies were owned collectively. If, like Foresight projects, a minister supported each of the PMSU's major projects, then departments would have more commitment to any recommendations produced. As Sir David King, Chief Scientific Adviser to the Prime Minister, told us in relation to the Foresight Programme:

The stakeholder board provides purchase into Government so this does not just float into space, but the government minister who takes on the responsibility to chair it, and sometimes the minister's success, is then responsible to carry it through…[54]

46. Departmental ministers should be involved in the work of the PMSU, as they are in the work of the Foresight Programme. This would increase the relevance and effectiveness of such strategic work, and ensure that departments engage with its results.

37   Tessa Blackstone and William Plowden, Inside the Think Tank: Advising the Cabinet 1971-1983 (London, 1988), p 215. Back

38   www.strategy.gov.uk Back

39   www.strategy.gov.uk Back

40   Strengthening powers to tackle anti-social behaviour-consultation paper, November 2006; Social Exclusion Action Plan, September 2006.  Back

41   Q 95 Back

42   Q 57 Back

43   Cabinet Office, Wiring it up: Whitehall's management of cross-cutting policies and services, January 2000. Back

44   Department of Transport, Spending Review 2004, Target 7. Back

45   The Cabinet Office, Strategic Priorities for the UK: The Policy Review, 23 November 2006. Back

46   Ibid., p 26. Back

47   Q 181 Back

48   Q 444 Back

49   Q 247; Q 427.  Back

50   Q 6 [Bichard] Back

51   Public Administration Select Committee, The New Centre, Thursday 11 July 2002, HC 262-iii, 2001-02, Ev 48. Back

52   Q 431 Back

53   Q 174 [Plowden] Back

54   Q 457 Back