CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 303-iiHouse of COMMONSMINUTES OF EVIDENCETAKEN BEFOREPUBLIC ADMINISTRATION COMMITTEE
OUTSIDE APPOINTMENTS TO THE SENIOR CIVIL SERVICE
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This is a corrected transcript of evidence taken in public and
reported to the House. The transcript has been placed on the internet on the
authority of the Committee, and copies have been made available by the
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The transcript is an approved formal record of these proceedings. It will be printed in due course. |
Oral Evidence
Taken before the Public Administration Committee
on Tuesday 12 May 2009
Members present
Dr Tony Wright, in the Chair
Paul Flynn
David Heyes
Kelvin
Mr Gordon Prentice
Paul Rowen
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Witnesses: David Bell, Permanent Secretary, Department for Children, Schools and Families, Sir David Normington KCB, Permanent Secretary, Home Office and Gill Rider, Head of the Civil Service Capability Group, Cabinet Office, gave evidence.
Q58 Chairman: Let us make a start. As you know, the Committee is starting an inquiry into outside appointments to the Senior Civil Service and we want to take evidence from people who have done some thinking on this and you are the people. We are delighted to welcome David Bell, Permanent Secretary at the Department for Children, Schools and Families, Sir David Normington, Permanent Secretary at the Home Office and Gill Rider, Head of the Civil Service Capability Group in the Cabinet Office. I do not know whether any of you want to say anything just by way of introduction. You can assume that we have read some of the documentation you have been involved in but if you want to say something.
Sir David Normington: I do not want to say a lot because I think we will probably have an exchange about most of the issues. I think I am here because I did a report into workforce and reward in the Senior Civil Service. I think David Bell is here because he did a piece of work for the Cabinet Secretary on external appointments and Gill sits in overall charge of us in the Capability Group in the Cabinet Office. Between the three of us we have done quite a lot of thinking about this subject and have actually put some things on the record. I think that most of the issues will come up as we have the discussion.
Q59 Chairman: Let us start rather generally and get into some of the particular areas if we can. I think it was the last Cabinet Secretary who said that we had a permanent Civil Service but not permanent civil servants and that was the mantra of the time. I think it was this Cabinet Secretary, or it may have been the last one, who said to the Civil Service "If you want to get on, get out". Are these two mantras still the ones we are living by?
Sir David Normington: It is certainly true that no civil servant now should assume they have a job for life. If they are not performing we should assume that there will be a point at which their employment comes to an end. Similarly, when we are developing our staff we do encourage them much more to have a much broader set of experiences, secondments and attachments outside. Equally, we encourage people to come in on secondment and attachment as well as recruiting people from a much more diverse pool. Since they are both my distinguished colleagues and I worked for them both, I think probably both those mantras are still very much the underpinning and principles for the way we operate. Basically, we are always trying to get the best leadership team we can. We have to draw that from wherever we can. My report is about the balance which we should strike in our recruitment in trying to get the best possible leadership team. It is both about who you recruit and how you recruit them and then what you do with people and how you support their development when they are inside.
Q60 Chairman: If I may put it like this, the problem with senior civil servants is that in public they always have to agree with each other whatever they do in private. So you very loyally say you agree with all this, but in fact you have been writing this report which says something quite different. It says we have been wrong to think that we have to go outside for all these people. In fact you have turned the mantra on its head. You have said now that you have to grow your own. Both these things cannot be true, can they?
Sir David Normington: I am trying to have it both ways. I think there is a very central theme in my report which is that we need to do better at growing our own. If you do not grow your own you get into a situation we are in now which is that we have to go into the marketplace to compete for the kind of skills which a Civil Service of 500,000 people ought to be able to do better in training for itself. That is just one of the central themes. We need to do better at developing some of the professional and leadership skills which a big employer ought to be able to develop. I do not think that invalidates the need sometimes to recruit from outside. If you read my report, I am really saying that there will always be times when you should go out and recruit outside appointments and there are all kinds of reasons you might want to do that. Actually it is often going to be better to do that a little earlier in a career, in mid career and develop people. In other words, we have a model where we recruit people often at the entry grades, at the beginning of their careers and then much later and we do much less of it in between. I think the system needs to be more porous so you are less dependent on recruiting people very late in their career and in their Civil Service career. As David Bell's work points out, there is quite a lot of evidence that that is a risk. I have two external appointments on either side of me.
Q61 Chairman: I am going to get there in a minute. May I invite David and Gill to contribute to this initial question?
Ms Rider: I would agree with David. I know you think we always agree in public but we will see whether we can carry that out for the rest of the afternoon. This is a subject where there is no magic answer. This is a subject where it is about getting the balance right the whole time and, certainly in the Senior Civil Service, if you look at the numbers, we recruit a balance of people externally where, every time we look at a job, we say "Do we have the people who can do that? Can we find out whether there are people of equal merit or better in the market?". If we do not have the skills then obviously we go to the market and we actually have a very well-tuned machine through the senior leadership committee and the way that we work with the Civil Service Commissioners which allows us to look at each opportunity, each role, as a role and decide whether we have the skills and experience that we need, the balance of some new blood from outside. Always you are looking to do that and the important thing, when any department looks at its leadership team or any profession looks at its profession, is that it has the right skills and experience.
Q62 Chairman: Sir David Normington's report says you have not been doing it very well.
Ms Rider: We have not?
Q63 Chairman: Yes.
Ms Rider: It says, quite rightly, that over the years a series of gaps has appeared and if you look back to other Cabinet Secretaries, the existing and the previous one, the introduction of professional skills for Government clearly showed that if you look at the areas of IT, HR, finance, to name but a few of the professions, we needed some more professional skills than we had. A lot of the recruitment that we have been doing from the external world has been, like me, to fill in gaps in those areas. Like me, everyone who comes into one of those roles has a duty to ensure they are doing the best they can to build the capability which is going to grow up from below you. One thing I would add to what David said is that it is hugely important for every organisation that the people who are in it can look up and can aspire to opportunities above. If the balance tilts and you have too many at the top coming in from the external world, then that aspiration is not as high as it should be. It is really important to get the balance right of people in the organisation from inside and outside.
Q64 Chairman: I am still testing the model that I think was being presented a few years ago of this constant traffic of people who are meeting in the middle as all these people were going out and all these people were coming in. My sense from what is being said by you and by Sir David in the work you have done is that that is not how things should be now.
Mr Bell: It is a mixed picture and it has been a mixed picture of success. We have been quite open about that and I am sure we will get to some of the reasons later as to why that has been so. It is important to have a fairly non-ideological view of this. I do not believe that the Civil Service should be composed entirely, particularly at the senior levels, of outsiders. Nor do I think it is good for the Civil Service to be entirely dependent upon the traditional insiders. We are probably now just trying to recalibrate a bit from this. We were very reliant, for reasons which Gill and David have explained, on external recruits in some professional services areas. That has given us some success stories but it has not been a complete success in every case. Therefore I think it is good, for the reasons that Sir David Normington identified, to ensure that we have a better flow of talent being developed early and being brought through the system.
Sir David Normington: My report recognises that the reason we have had to recruit much more heavily from outside in the last few years, under the previous Cabinet Secretary and the present one, is because we have not invested heavily enough in our own development. We have done a lot in some areas but in the Civil Service we have been very late investing in professional skills and qualifications. We have big finance departments, for instance, but it is only in the last five, six, seven years that we have put much greater emphasis on the development of that professional skill; we have been very late doing that. It is not surprising therefore, if we do not have enough senior qualified finance directors, because we have not groomed them. My report is only saying that balance has to shift.
Q65 Chairman: For as long as I can remember we have been saying these things.
Sir David Normington: I know but this time we are trying to do something about it.
Q66 Chairman: Can you tell us, David Bell and Gill, just at a personal level, you are both people who have come in from outside although from different outsides. Much of the discussion is whether these are successful - not you particularly - or not successful. I wonder whether in your two cases you can tell us how it was. What has it been like coming in and if it is successful, why is it successful and what are the lessons for policy?
Mr Bell: I find it hard to imagine what it would have been like coming from the outside straight into a permanent secretary's post. I had the advantage of doing an intermediate step when I went to Ofsted because Ofsted is a government department. It is different in lots of ways but actually similar in many. It gave me some experience of what it would be like to be working on the national level. When I came into the department I found it remarkably smooth to make the transition. There were things I had to learn and am still learning and I reflected some of that in the papers you have seen but I found it pretty straightforward and I also found the traditional Civil Service was very welcoming. I think it was partly because I said from the beginning that there were aspects of my career experience which probably in the main the Civil Service does not have but actually there are many aspects of what the Civil Service has that I do not have. Therefore I was very clear from the beginning that we could fuse the best of what I was bringing with the best of what the traditional Civil Service stood for. The other thing that people were watching for very quickly was whether I was going to turn over and bring in a whole set of outsiders to the Senior Civil Service and, as it turned out, that is what happened. I have brought one or two others in from outside and quite a lot of the appointments have been from the mainstream Civil Service. People did watch for those kinds of signals early but I think most people now would take David's position and say "Let's find the best person". Sometimes that can be an outsider and very often it is an insider.
Ms Rider: I think I came to see you very early on in my career.
Q67 Chairman: You did.
Ms Rider: I still believe it has been a privilege to be here actually. I have learned a lot, I think I have given a lot. Like David, I found that the culture you come into was very welcoming. It is a risk, both for the individual who moves in and for the organisation to bring somebody in from such a totally different culture and there is no doubt that the culture I came in from was different from the one I came to. It has been helped enormously by the support of colleagues, by people who have been prepared to mentor me and to whom I can go to ask the dumb questions and say "Is it really like this?" and they will give me straight answers about how it is and how it does work. I was very clear when I arrived that I needed to have a period in which I was learning, so I went out on visits with people, I job shadowed people, I went to Bristol with Leigh Lewis to a Jobcentre and I remember dragging my poor husband in on a Saturday morning to a Jobcentre so he could try it out as a punter and see how it worked. I did a lot of things to help with learning and I found it remarkably easy. There are still times when the way that decisions get made are different and you just have to remind yourself of the process you are now in. It has been remarkably easy as a transition and, looking back at my old world, I do not think it is any different from any individual stepping into an organisation at a senior level in terms of the levels of learning risk that you have to take.
Q68 Chairman: Some of the evidence which seems to be emerging is - tell me if I am wrong - that we do rather better if we bring people in who have some experience of public administration - that is public administration - and the context in which you have to operate. David, you did come from that background. Does the evidence seem to support what I am saying which is that there is an easier transition there and people know something about that context in which they are going to be asked to operate?
Mr Bell: I think I said in the notes which I sent to the Cabinet Secretary that it was to do with the understanding of the political environment and the rhythms of political life. I would be a little bit narrower rather than just say it is the public life. Some folks who come from elsewhere in the public service have not actually found it easy or straightforward if they have not had a lot of political exposure and experience and I was fortunate in previous jobs to have had that too. I would just be cautious about generalising. We have had some really successful imports from the private sector; we have had some really successful imports from the wider public sector and frankly we have had some which have not been quite so successful and that is why the second letter which I sent to the Cabinet Secretary was really designed to try to identify how we can help people whatever their background to adjust to this world.
Sir David Normington: I am clear, for instance, that some of the people we have taken in to improve our commercial work, our procurement, our project management, whom we have taken from the private sector, have been a major influence on the improvement, such as it is, that we have made in the way we purchase, in the way we let contracts and so on. I have a commercial director from the private sector and we have some very, very big contracts and I need someone on my side of the argument to look those big private sector companies in the eye and to deal with them on equal terms. You will find those skills in the public sector but sometimes the private sector commercial director will be able to give you that skill where no-one else can. It is horses for courses.
Q69 David Heyes: As you would expect, we have been looking at the Normington report in preparation for this Committee. The strong feeling that comes to me from it is that absolutely central to your recommendations, your proposals, is the need for a workforce strategy. It underpins everything. Can you just say a little bit about why you came to that conclusion and what the purpose and intent of that would be and how that would help to develop the SCS?
Sir David Normington: Yes. We took the view that a lot of the decisions about whom we should recruit and where we should recruit and when and what we should pay them had been taken a bit ad hoc. For instance, there is no doubt - and Gill has been a leading player in this - that we all decided that our HR functions were not good enough and not professional enough and we decided we needed to go out into the public and private sector and recruit some really good people to top up our skills. We took that decision because we found we were in that situation. It is much better if we try to take a slightly longer term view and said our longer term aim is to have a much more professional HR capacity. To do that you need to have both internal development programmes and to make a judgment about what your balance is going to be long term between internal development and recruitment at different stages. That is just one example of why you need a longer term view - it will not be precise, it will always have to be updated - about what kind of future skills you are going to need, what kind of leadership capabilities you are going to need and from that you then derive a view about where you are recruiting, who you are recruiting and what you are going to pay for it. All those decisions feel as though they have been taken without that long-term view. That is why I was very keen on the workforce strategy; that is a strong view of all of us actually.
Q70 David Heyes: That is persuasive and logical and yet you stop short in the report of actually formulating that workforce strategy or making strong recommendations for what it should contain. Why was that if it is so important?
Sir David Normington: Chapter 2 of the report has some very big clues about what should be in that workforce strategy. It does say that we should be less dependent on external recruitment at our senior levels and that we should adjust that balance. It does say we should grow more of our senior professionals. It does say we should be much less dependent long term on contingent labour, on contractors which are costing us an awful lot of money. It says some things about how, when we are actually setting out on recruitment, we value the skills that we are going into the market to purchase. It is true that it does not actually write that workforce strategy because basically a steering group cannot do that. However, it does give some very big clues about where we ought to head and it also talks about some of the ways in which the Civil Service is changing. It talks about how commissioning and contracting skills are needs which we have now but we will need in the future. It talks about some of the leadership challenges that civil servants have. There are quite a lot of things in there which ought to make it possible to write the strategy.
Q71 David Heyes: The Senior Salaries Review Body, the SSRB, have looked at your report and they did not agree, did they, that the steering group should not write the workforce strategy. They are actually fairly critical of the fact that you did not do that as a foundation for the further recommendations that you made. What is your response to that?
Sir David Normington: It was never my remit to write the strategy. That is the Cabinet Office's job. I have given some very clear signals and it is over to Gill who is doing it. I am staying in touch.
Q72 David Heyes: I want to hear what Gill is going to say about it, but why are the SSRB so off the mark then? They are quite critical of the fact that you did not do this.
Sir David Normington: They think we have been very slow.
Q73 David Heyes: That as well.
Sir David Normington: They think that we should have been doing this two or three years ago and that we have been slow to respond to their year-on-year recommendations about this. That is the underlying thing. They probably have a point actually.
Ms Rider: If you just take a step back to where we were two and a half/three years ago, departments did have workforce strategies; it was a classic of the future is here today but just unevenly distributed. It was not pulled together into a coherent picture and what we did with David's review was start that process of producing a coherent picture. At the same time that we were concluding we needed that, we did pull together what we have called the people and HR framework which is well known as the pentagon, which has been an agreement between HR directors and the permanent secretaries as a whole on what those things are as a priority that we should tackle in terms of workforce, that we needed to tackle collaboratively and we have made progress on that. Where we have got to lately, since the Normington review, is to put together a small - and it is small - central team in the Cabinet Office who can help coordinate the activities which are going on in departments and within professions. At the same time, each profession is also looking at what it needs to do for its future workforce strategy. Take my own profession. What we have been doing is a whole series of things. Firstly, we have been creating a career structure for people in the HR profession that did not previously exist, then overlaying that with what experience we would expect people to have at different levels, working with CIPD[1], which is the profession, to work out how to give qualifications to people who study at those levels. We have put in some of our own training courses to help people to develop and now we are starting to do talent management, to say what sort of experience people need and how they can get it, not just within the department they are in but moving them across departments. I say that just to illustrate that it is quite multi-dimensional in what we need to do and quite complex.
Q74 David Heyes: Just to come back on another point which I picked up from the SSRB, their criticisms of this is that all that work is going on but the Normington report recommends a reward model without that work having been undertaken, certainly long before it has been completed. It is not my view but the SSRB say that is a flaw, it is wrong. What is your response to that? How can you do a reward model when you do not have a workforce strategy?
Sir David Normington: To some extent that is true. We felt it would be much better - and we say it in the report - to have the workforce strategy and to put into that a subset of it, a strategy both for the recruitment and reward of the senior civil servants. In fact it cannot just be a strategy for the Senior Civil Service because by definition senior civil servants grow from junior civil servants. It would have been better that way round but we would have been even more criticised if I had not even produced the reward model. The main job was to produce a reward model and I think that a lot of detail needs to be worked up there. The framework we provide in the report, not a detailed strategy but the framework, is sufficient for us then to develop the reward model and that is what we decided to do. That is what I thought the job was and obviously I have the day job as well, which is running the Home Office, which is quite a full-time job. I did as much as I could to move this along but it really is now down to the Cabinet Office.
Q75 David Heyes: You have been accused of being too slow here; you obviously do not approve of that. What are we doing to catch up on the timetable? What target dates have you set yourselves? When might we see the workforce strategy, some more development? What timetable are you working to? Give us some dates?
Ms Rider: Each profession is doing its own strategy and each department has elements of its own strategy. What the central team is attempting to do is to see where we can find coherent approaches and answers to the questions. We are basically looking now with two departments and two professions with an aim to bring that into a structure by the spring.
Q76 David Heyes: The spring of next year? This seems like spring to me now.
Ms Rider: It does; you are right. I will just have to think about that for a moment. I mean summer.
Q77 David Heyes: It was originally intended to be spring, was it not?
Sir David Normington: That is what my report said. It said final strategy by the autumn, did it not?
Ms Rider: Yes. That is what we are aiming to do. It is pretty multi-dimensional. It is trying to find the way you can be coherent through that and bring the elements together. The first checkpoint is the summer; I apologise.
Chairman: Thank you very much. At least we have the seasons established.
Q78 Mr Prentice: Our colleague Liam Byrne, who was in front of us last week, apparently said - according to my briefing notes here - that he looks forward to a time when internal appointments in the Civil Service are the "exception rather than the rule". Do you agree with Liam Byrne?
Sir David Normington: Obviously my report does not agree with him, no.
Q79 Mr Prentice: Do you think ministers should have a view on these matters?
Sir David Normington: Yes, of course; of course they are entitled to. In the end they sign off the overall approach.
Q80 Mr Prentice: If ministers said "We'll bring in 75% of senior civil servants from the private sector", you would just go along with that. It is another one of these ministerial decisions. If it affects the ethos of the Civil Service and all that kind of stuff, well, ministers have decided and you just have to go along with it.
Sir David Normington: No, of course not. We, the Cabinet Secretary particularly and the rest of the leadership in the Senior Civil Service, have a responsibility for the Civil Service and we will argue with Liam Byrne which I am used to doing from his previous job. In the end though, the model which we have is a model which will have to be signed off by the Government.
Q81 Mr Prentice: I am interested in this institutional memory thing which has been flagged up by Prospect and to what extent bringing in people from the outside in these numbers damages the Civil Service's corporate memory or institutional memory. Is that an issue? I keep asking that, but is it?
Sir David Normington: Yes, I think it is in some cases. One of the problems in my own department at board level has been that almost everyone at senior level, including myself, was recruited from outside the Home Office. That was necessary at that point in its development because it was in quite a poor state quite frankly. However, you suffer from that in that you have nobody on your senior team who actually has the corporate memory and you have to be looking around all the time for that. Clearly that is an extreme which, if possible, you should avoid.
Q82 Mr Prentice: When did the realisation dawn that if people were being brought into the Senior Civil Service in these numbers there was a real possibility that the institutional memory would be adversely affected and it was something you had to think about?
Sir David Normington: I do not think there was a moment when it dawned. What has been happening is that the numbers of people recruited from outside as a proportion of the Senior Civil Service has grown to about 23% but then stabilised at that number. I think that rather suggests that there is a feeling that probably we should not go on increasing that number. In fact my report suggests that, if anything, it should go in the opposite direction. This is always a balance; in my view you should have a balance at every point of decision when you are putting together a team. Sometimes you should go outside and sometimes you should not. I have just had to restore this balance for the first time for many a long year in the Home Office and we recruited someone who has a Home Office corporate memory to be my crime and police director general and that is a very important moment in terms of just trying to restore the balance.
Q83 Mr Prentice: I am not going to labour the point. My figures say 29%. Is that what you said?
Sir David Normington: I said 23%.
Q84 Mr Prentice: I defer to you. You are the Permanent Secretary at the Home Office.
Ms Rider: If I may just explain. It is 23%. The 29% is the percentage of the new joiners to the SCS who came from outside. You are absolutely right that the population is 23% and 29% is new joiners last year.
Q85 Mr Prentice: I was reading the paper submitted by the Civil Service Commissioners and they tell us that the Cabinet Office is now beginning to track the performance of appointees to the Senior Civil Service. I know we touched on that but I found it surprising, given that the Senior Civil Service has been opened up for a number of years now, that a paper submitted to us just a few months ago by the Civil Service Commissioners tells us that the Cabinet Office - that is you - are just beginning to track the performance. Why was that not just part and parcel of what they did before?
Ms Rider: Essentially the performance of the individuals once they arrive is the responsibility of the department in which they work; the performance of individuals is always the responsibility of line management. So that is how it has been. One of the things we realised when David asked his questions and we had our small group to respond, was that actually we did not have a collective database about that. That is why we have started to look at it now. We also have another mechanism which David has been chairing for us on behalf of Gus which is very important here which is the senior leadership committee. It meets on a monthly basis and what that has been doing is working through with each permanent secretary of each department, their leadership and the succession plan effectively for each department, looking at who is in place now, who the individuals are who will, over a course of time, with relevant experience and interventions, be ready to take those jobs. That is starting to give us a lot more insight as well into the balance and the mix and the experience of our top leadership teams.
Q86 Mr Prentice: A lot of the stuff that I read suggests that quite a number of these external recruits were unsuccessful however you define the word "unsuccessful". Again, I am surprised, given that so many of them were unsuccessful, that there were no exit interviews, no papers were going up to the Cabinet Secretary saying "We really need to rethink this policy because these people whom we are paying a premium to bring into the Civil Service are not hitting the ground running".
Ms Rider: I am not sure what you have been reading that suggests that people have been unsuccessful. Some have, certainly.
Q87 Mr Prentice: Let me tell you. I have here a submission from Ernst & Young and they have interviewed permanent secretaries, senior people in the Civil Service and they have given us the benefit of their system. They say "... it will typically take about 18 months to make a demonstrable difference" these are the external people to whom we pay a premium "... and possibly three years to embed this and leave a sustainable legacy". There are other figures about turnover.
Ms Rider: I think they are quoting from
the Corporate Leadership Council, which is a
Mr Bell: My musings to the Cabinet Secretary, which the Chairman very grandly described as a report, began to tease this out, partly because of our own experience in the department and partly based on my own personal experience. Why was it that some people seemed to be more successful than others? That led to a very helpful discussion about the characteristics of those who were more or less successful. We probably recognised at departmental level who has or has not succeeded but we probably had not really raised it up across the whole of the Senior Civil Service.
Q88 Mr Prentice: Who are the people who are unsuccessful? I sound like the school swot here and believe me I am not. We heard something from the PCSU[2] who say - and they do have some members in the Senior Civil Service - "... evidence suggests that turnover is highest amongst women and ethnic minorities". I am just interested in the turnover as between the people brought in from the private sector and internal promotees.
Sir David Normington: The annual turnover is about 11.5% for external appointments and about 7.5% for internal as it is running at the moment.
Q89 Mr Prentice: That is a big difference, is it not?
Sir David Normington: Yes. There is one thing to say about this which is that of course some of the external recruits are recruited to do a specific job on a time limited basis. They come in with specific skills to do a project. It is quite a big gap but you might expect them to turnover more quickly than those who are long-term recruits to the Civil Service; not everybody comes in for a career.
Q90 Mr Prentice: What percentage are on fixed-term contracts? I would assume that you would have taken fixed-term contract people out if you were trying to compare turnover between external recruits into the Senior Civil Service and the internal promoted people.
Sir David Normington: I think you will find they are in those figures.
Ms Rider: Yes.
Q91 Mr Prentice: David Bell said that the successful people, the people who prove to be successful in the Senior Civil Service, have a kind of feeling for politics or something. I cannot remember the exact words but that was the gist of it. In the letter you did to Sir Gus O'Donnell you say the best translation of people from outside into the Civil Service was done by those who understood the rhythms of government and politicians. What exactly did you mean by "the rhythms of government and politicians"?
Mr Bell: It partly goes back to what Gill said about decision-making; it is not going to be quite as clear cut as it is in other walks of life. You understand political discussion, debate, you understand the motivations that underpin the way politicians have to think, what factors they have to consider when coming to decisions which are not always just related to the facts in front of them. They are also thinking about the impact in the wider world, those that elect them and so on. If this is completely alien to you, it can seem a bit of a madhouse when you arrive. People who have had some experience at local government level or perhaps elsewhere just have a bit of a touch of what it is like to work in a political environment.
Q92 Mr Prentice: When you came in from Ofsted, you hopped into the Senior Civil Service from Ofsted, were you paid a premium as someone from outside? It sounds a terribly impertinent question. You can ask about MPs' salaries and so on.
Mr Bell: The answer is no. In fact the Cabinet Secretary made it very clear to me that I would have to fit within the arrangements which applied to the other permanent secretaries and I took that as an entirely fair settlement.
Q93 Mr Prentice: How much disaffection is there amongst the internal people when they see people brought in from the private sector and paid a premium? There is a premium and if I were a civil servant and I was working as hard as I could, doing a good job and then someone was just floated in above me at £20,000 more than me I would feel a bit cheesed off.
Mr Bell: Yes, that has been a problem and it is not just the private sector but also, because of the way in which public sector salaries have changed over time, sometimes bringing people in from other parts of the public sector, local government, NHS and so on, where they are paid a premium against civil servants. I think that was exactly why David was given that very pressing task of trying to work out a reward strategy, so if you were going to pay more, at least you had a rationale for doing it. What annoyed traditional civil servants most was the kind of randomness about decisions that were being made or what appeared to them to be a randomness about decisions that were made. What David has laid out is at least a structure where, if you are going to pay over the odds, you are very clear what you are paying for. I think that will go a long way towards dealing with what was some dissatisfaction.
Sir David Normington: And making quite sure that the starting point, when you are recruiting someone to do a job, is the same starting point for that job for everyone. It may be that you pay a personal premium to someone whom you want to recruit, but in terms of the nature of that job and the weight of that job you should start from the point that you are going to pay the same amount to the person you recruit through a competition, whether it is someone recruited from inside or recruited from outside, with the aim over time, but of course it is an unrealistic aim to achieve completely, of narrowing some of these differentials. It might be easier at the moment of course but in a year or two's time it might become more difficult again. If you are going to recruit from outside the Civil Service at a big premium, you have to be completely clear why you are doing it and you need to make sure that you are paying a market premium for something that is of value to you. I am not sure we always have done that.
Q94 Mr Prentice: May I ask a final question, prompted by what you have just told me? We used to read about masters of the universe; single individuals who can get huge sums of money because they, as single individuals, make a huge difference to the organisation. I am not too sure about that to be perfectly honest. My own personal view is that masters of the universe - we can do without them. In your report you talk about awarding team bonuses. How does the team bonus fit in when you have people who have been brought in at a premium at the top of a department?
Sir David Normington: Remember the report says that there should be a separate element for performance and it should be a bonus which is variable year on year according to performance. The report then says we should be more flexible in allowing management of departments to decide whether those bonuses should simply be paid to individuals or whether they should be paid wholly or in part for team performance. I have a feeling that always simply rewarding individual performance encourages a bit of what you have just described and sometimes what you most want is a very good performing team. If that is what you really want, then that is what you should incentivise. It slightly depends. I am with you in thinking that there are no masters of the universe. Sometimes a key appointment can make a big difference but you should never put all your eggs in one basket or one person.
Q95 Chairman: Not only do we have this pay gap in appointments between external and internal but we know from the figures which either you or someone has produced that that pay gap continues thereafter. It does not get rectified. We also know from the work that you and others have done that often the person who comes in from outside actually performs worse than internal people. So you have this situation, which must be extremely galling, of having people come in, they are paid a premium to come in, that premium continues over time and yet they are performing worse than similar internal people. In terms of staff relations and all the rest of it that is obviously unacceptable.
Sir David Normington: If that does happen, it is not very satisfactory.
Q96 Chairman: But you tell us it does happen.
Sir David Normington: The way you should deal with it is by getting rid of the person who is not performing well. In the end you should tackle the performance really and if you are paying a premium to someone you should expect them to perform.
Q97 Chairman: You tell us - and you are not the first person to tell us this - how awful performance management is.
Sir David Normington: That is the perception. Our own staff tell us that. We are trying very hard to improve it. I certainly think that if you are paying over the odds for someone and, after a decent period for them to grow into the job, they are not performing, you have to tackle that otherwise it sends the really negative signal to everyone else. This is not all one way. There is some poor performance amongst people who have spent 30 years in the Civil Service.
Q98 Chairman: We are not paying them a premium though.
Sir David Normington: No, that is true.
Q99 Mr Prentice: How many of these premium league people have been invited just to go? That is a euphemism for sacking, is it not? They would be better off doing something else, deploying their talents in another way or whatever.
Sir David Normington: I do not know the figures. It does happen, but I am afraid I do not have figures.
Q100 Mr Prentice: It does happen?
Sir David Normington: Yes, it does.
Q101 Chairman: What surprises me, reading a lot of this stuff again, is how little research we have to underpin some of these things we want to do. We just do not know enough about what we are getting from these people we are recruiting. The work has not been done. It is a funny kind of organisation which has embarked upon this strategy yet in a sense does not quite know what it is doing.
Sir David Normington: It is quite true that we do not have a lot of empirical research into this subject. We are trying to supplement it, to fill in the gaps, by in a sense talking to a lot of people who are inside the system or are commentators on it to try to draw that evidence together. Essentially though it is more anecdotal than it is a body of research to underpin those findings. Remember that there are still relatively small numbers of people recruited externally into the Civil Service and it is over quite a long period and therefore actually it takes you quite a time to build up an accurate picture. Most of us could, if we sat down for a few hours, put our experiences into that pot and that is what we are trying to do in this report. It is underpinned by that sort of evidence but it is not hard evidence of the sort you would wish to have.
Q102 Chairman: You would wish to have it Gill, would you not?
Ms Rider: Absolutely and we are starting to collect it and to track it but it is relatively small numbers and in order to make any conclusions you really have to have trend data over three to five years at the very least. We are starting to look at it and try to pull analyses out of the database that we do have provided to us. As time goes on we will get better about it. We have started to do a number of things which will really help. For example, at the director general level we have created an assessment tool which allows us to get to some better comparisons of like for like. Obviously we have an incredible range of types of jobs people do and this tool looks at people's leadership and performance and we are starting to work with departments to build up evidence together. That will help us as we build up that database to look at the strengths we have and also the areas for improvement.
Q103 Chairman: Knowing in general what kind of people from what kind of previous backgrounds tend to do better in which kind of jobs in the Civil Service, that sort of basic workforce planning information. It is all right having this anecdotal evidence and these suggestions which are thrown out but it is basic data, is it not?
Mr Bell: It is but some of us now have quite a bit of experience of this. If I think of my distinguished predecessor at the then Department for Education and Skills who is sitting to my left, David had begun a really quite significant programme of bringing in people from outside. When I first went to the department, sitting round our senior management table, we had an ex university vice chancellor, ex FE college principals, teachers and the like. For a time we have understood more about the kinds of skills which are required. It is back to my answer to Mr Prentice. I know that I have my own theology about this. I know what I am looking for if I am targeting recruitment to outside. I really want to test very hard whether people are going to understand the rhythms of politics and government because actually you have to learn that fast. We should not be under any illusions. When people come in from outside, they do not have a lot of time to get this right. If you cannot handle that first moment or two with the minister and you just do not get it, it is quite hard to retrieve it. It is really important, based on the evidence and experience we have, that we do get the right people coming in.
Q104 Chairman: On the 23% figure that you had the exchange with Gordon about just now, are we at a point where we can reliably say that we know these percentage figures overall, given horses for courses and all that, we know broadly, in terms of the organisation that the Senior Civil Service is, what percentage ought to be in? Some people have said for example that they thought probably 80:20 is the right kind of balance because then you retain enough internal memory and home-grown skills but you fertilise yourself outside too. Are we at the point where it is possible to say that is broadly the approach that we are going to take?
Mr Bell: I suppose if you think about it that feels about right but I have not done that kind of scientific analysis. When you are filling a vacancy you are looking at your team and you are thinking "Who have we got on the inside? Should we just try to look for possibly someone from outside?" recognising in the end that I would far rather have five really good insiders than four really good insiders and one token outsider who did not happen to be very good. If it does shape the kind of decision-making and whether it is 80:20, I do not know. I feel fairly relaxed about this. I do not set out thinking it is going to be 80:20 across the Senior Civil Service, how do we balance up injection of new talent and fresh blood with the organisational memory, the continuity that you have described.
Sir David Normington: I do think it also depends where the organisation you are talking about is in its stage of development. Sometimes, if it is very poorly performing and that leadership team has pretty much failed you then need to do something much more dramatic. If it is in more of a steady state and performing well then you can take decisions one by one. Sometimes it may be higher than 80:20.
Q105 Chairman: It may be poorly performing - you gave the example - because it has denuded itself of its institutional memory.
Sir David Normington: It may be and of course it may not produce that answer. I am simply saying there are times in which you change a lot of your people and there are times when you do not. Sometimes you need new skills and new energy and if you cannot find those from inside then you go out and get them.
Ms Rider: I would just be very wary of setting targets. I just think 80:20 flexes, like 80:20 rules always should, does it not? You just have to look at each situation in turn and if you start setting walls, you start doing things which are not necessarily the right things for that organisation. It is always about the balance. Any organisation needs to balance, maintain the culture, maintain the history, have the right experience, have the right skills. Frankly, how you build the chemistry of the team is important as well. What I am very clear about is that at the heart of it really successful teams are diverse teams. They are teams which do have a variety of experience and background and whether that is from lots of different places in the Civil Service or from an external mix, you just have to get to that right balance and you have to make a judgment each time about that and just keep an eye on the picture.
Q106 Paul Flynn: Does this not create a monster in that by hiring people and giving them transfer fees because of their abilities you are dragging up the actual pay of the Civil Service generally to a situation we have now. We were in Wales yesterday and the First Minister in Wales has at least six civil servants earning more than he does and I think Gordon Brown has 195 civil servants earning more than he does. Do you think this is reasonable and desirable? Would you like to tell us whether any of you earn more than the Prime Minister?
Ms Rider: The data shows that, if you look at those public sector figures, civil servants are mainly quite low down the list. It is really important when you make these comparisons to look at the total package as well, not just the salary. I have also been to Wales recently and one of the stories which struck me as being a really significant issue for us was the difficulty they were finding in recruiting a finance director for the NHS because the health authorities were paying very much more. It was an extraordinary example. In all these cases we are operating in markets and pay moves in markets in different ways at different times. When you peg your base salary you have to take account of those markets. I think I am also right that in the public sector as a whole and the private sector over the last ten years the salaries have increased at 53-54% whereas the Civil Service has only increased at 44%. The differential between the markets in which we play and the Civil Service has increased quite significantly.
Sir David Normington: We do worry about this and I am very uneasy about it. I am not sure about what the comparison with the Prime Minister would be because that is a different argument that somebody else should have. I am always very anxious when I have to pay a big premium. It results in many of us having people working for us who are paid more than we are and that is why I say in my report that we need to be absolutely clear that it is going to be worth it and, if there is no alternative, that you are recruiting someone who is going to be of great value to you. If you can be fairly sure of that then I think you should pay what you need to pay. However, I am always uneasy about it because of course it pushes the whole salary level up and it creates all kinds of disparities in the senior team which are unhelpful.
Mr Bell: I have nothing really to add. We see that in some sectors in particular. It is important for us, for example in our department and in other departments, to try to attract the best talent from local government but it is actually quite tricky looking for people from local government to come in at director general or even director level to be able to pay what people are being paid now at the level I would like to bring them in. It is a tricky one. I agonise over this but I end up taking a fairly pragmatic view about it. I say that if there are some skills that we really need and unfortunately people are in a different market to the Civil Service, we may just need to pay them.
Q107 Paul Flynn: I note none of you answered the most interesting part of my question. I should say that there is a big group, 195, not just civil servants but public servants but we will have to remain in ignorance of whether you are part of them.
Sir David Normington: I think we are paid less but we are not quite sure what the Prime Minister is paid.
Q108 Paul Flynn: In your report you said that you had not intended to increase the size of the Senior Civil Service pay. Clearly some of the recommendations would lead to increased pay for individuals in the Senior Civil Service. You say that there might be compensating savings elsewhere. How would you do that? Would you reduce the pay of other civil servants?
Sir David Normington: There are several ways in which there might be savings over the long term. One is that we will pay less perhaps to people we recruit from outside because we may not recruit so many, we may not have to go into the market so aggressively. I certainly think there are some savings to be made from reducing our dependence on what I call contingent labour where we often have to pay a daily rate in order to get skills we do not have. There is a big saving to be made there. The long-term aim of investing in skills and then increasing the supply of skills from within the Civil Service will also act as a dampening effect on paying higher salaries. There are some compensating things but we are also saying that in some cases we should be prepared to pay civil servants who have scarce skills and who compete for a job at the rate that we have advertised. One of the problems is that we sometimes advertise a job at a salary and then, if a civil servant gets it, we pay them quite a lot less than we have advertised. If you want something that causes upsets and a feeling of unfairness, there it is. In some cases we will pay civil servants more out of this and we will have to do that modelling in detail and frankly, if it is forcing the pay bill up, we will not be able to afford it and these proposals will not be able to be implemented. I am clear about that. There will have to be some detailed economic modelling of the proposal.
Q109 Paul Flynn: Would one of the possible savings be revising the pension arrangements?
Sir David Normington: I think so.
Q110 Paul Flynn: In what way?
Sir David Normington: Now I really am going beyond my remit. I say some things in the report about pensions. I think myself that there is a long-term need to look at reform of the Civil Service pensions. I do not think I had better go further than that because it is not my responsibility.
Ms Rider: It is important that we have actually significantly reformed Civil Service pensions and in 2007 we brought new arrangements in which have changed the deal for new joiners to the Civil Service. We have made a very major change in terms of pensions.
Sir David Normington: These are quite long term.
Q111 Paul Flynn: You talked about the difficulty of recruiting and it becoming difficult to recruit at senior levels, not just from the private sector but the wider public sector as well. The Civil Service can offer private sector recruits a kind of public sector package. I wonder what this includes. It does not include the gold-plated pension any more from 2007. What has the Civil Service to offer the wider public service if you cannot match it on pay. It would not be expenses would it?
Mr Bell: We should not beat ourselves up too much. These are clearly interesting jobs that we do. I look around and people say "Do you not think you should be paid this or that?". Actually I think I am incredibly well paid for the job that I do and I do a great job. For the record, I do a great job in the sense that it is a great job to do rather than that I do a great job. We should be quite prepared to say that there may be a case here that you will not get paid as much if you go and work at the top end of local government or the top end of the NHS but my goodness, these are really interesting jobs. We sometimes underplay the value and the benefits which accrue from doing these fantastically interesting jobs. I think we can do that. We have to accept in the wider public sector that we have seen quite a discrepancy in some areas and I mentioned local government. For departments like ours, which are outward facing into education and the children's services system, that is quite an issue. It would be bad for a department like ours not to have any folk coming in from outside who had experience of that system adding to the Senior Civil Service. If it gets to the point where people out there are paid significantly more than we can offer, then we just will not attract them despite my "This is a great job, come and do it".
Q112 Paul Flynn: I recall when we were in America that somebody worked for the national printer and he explained that he had a very low wage but he was so proud that he was doing the job because he was serving his country. The ethos we found was an unexpected one, particularly when the wage was extremely low, but the status was high. Does this still exist?
Mr Bell: Yes.
Ms Rider: Yes.
Sir David Normington: Yes, of course it does. It is strong and it does attract people in and many of our external recruits do put that into the balance when they are judging whether they should take a job even if it is not a very competitive salary. We see this quite a lot actually.
Q113 Paul Flynn: Gill Rider, could you tell us what you have achieved in tangibles since 2006 in filling the gaps in the skills that you knew were there at the time?
Ms Rider: The things that we have been tackling, if I start from the wider workforce side of things, is that we do now have a shared agenda between permanent secretaries and HR directors about what the issues are that we should be prioritising and tackling together. We have built a very strong HR community. A lot of new individuals from both the broader public and private sector have joined us and we have created a community which works together in a very collaborative way across departments. That is really important for the people agenda because it saves us re-inventing the wheel on many things. On the broader workforce I am also responsible for the capability reviews which are the Cabinet Secretary's management tool, if you like, for working with departments on where they are in terms of building capabilities for the future. The other side of things would be the leadership agenda where I would just draw out two things: The Top 200 as a community - One of the things Gus recognised he needed was a Top 200 that would work together collaboratively to deal with so many of the issues of the day which are cross-departmental. We have done a lot to build a very strong community there to deal with things like the PSAs. Another intervention would be the SCS base camp which is a programme actually hosted by permanent secretaries to help new entrants into the SCS understand what it is that they need to do in terms of their leadership responsibility as a senior civil servant.
Q114 Paul Flynn: One of the permanent complaints one of the Civil Service unions told us about is that for at least 30 years there has been a shortage of project management skills. Is this a fair criticism and why has something not been done about it?
Sir David Normington: I am the only one who can go back 30 years. It has certainly been said for all that time. Do we make progress? Yes, I certainly think we do actually. People have short memories about how absolutely hopeless it was and how far we have come. I went on my first project management course in 1992 and most departments have put a great deal of effort into building project management and programme management capacity into their departments. In the meantime, some of the project programmes in the Government have got bigger, more risky and more complex. One of my department's jobs is to deliver a secure Olympics. That is a very, very big project and even if I had trained extensively for that I might not have quite the level of project management, programme management skills, inside to do that, so I might always need to add to that. What I was going to say and I think it relates to the project management point is that there have been two big developments in recent times. One is a whole new set of senior leadership development programmes. The other is much stronger professional leadership on HR, on finance, on communications, including policy development and operational development and those heads of professions, some of whom are permanent secretaries, actually leading work to develop the professionalism of each of those strands. Apart from creating a leadership capability we are also developing the professionalism as well. A sub set of that is leadership on programme and project management with centres of excellence on project management in each department which feed into a central point in the Treasury. These are big developments in terms of developing our capacity. I think it is making quite a big change.
Q115 Paul Flynn: With this wonderful, well-oiled machine, which is staffed by the best skills in the private sector and public sector, why is it then necessary to call in consultants from outside?
Sir David Normington: It is not that well oiled yet.
Q116 Paul Flynn: Why is it necessary to call an increasing number of consultants in recent years?
Sir David Normington: Because the scale and size of programmes and projects has grown and we simply do not have all the skills inside that are needed. It is as simple as that. Some of the developments I have described have been over quite a long term but some have not. In the meantime some of the challenges have just grown. Most organisations have to supplement their internal capacity by buying in skills from outside. We have sometimes had to do it more than we should. Longer term we have to try to get that balance right too.
Q117 Paul Flynn: Do you think we have been spending too much on consultants in recent years?
Sir David Normington: I do. We have had to because we have not had the capacity inside and if you want to produce the results, then we have not had the capability to do it ourselves, we have had to buy it in. I am saying therefore that in the future I should like to get to a better balance.
Q118 Paul Flynn: Can you give me an example of poor value when consultants have been called in and possibly good value as well?
Mr Bell: I am quite happy to share my pain on this because the National Audit Office picked it up. We had the use of a consultant on the Building Schools for the Future programme. We ended up paying a lot of money. We should have intervened earlier and said that actually we were going to require that skill in-house so why were we paying the daily rate to the consultant? Out of that we have been much more forensic in saying where we need skills we will have them in the main body of the staff and pay the rate for the job as a civil servant and where we do not require these people for a long period we will bring them in occasionally. There are examples you could spot across government where we have just been a bit lax in the use of consultants. It is important and on some projects you are not going to need to employ people on a permanent basis so you might just be better to get the right kind of expertise and, if you buy in at a daily rate for a contracted period, you will pay more usually than you would pay for a permanent member of staff.
Q119 Paul Rowen: In his statement to us in March Jonathan Baume said that external recruitment was a distraction from developing internal talent particularly in specialist areas. You have mentioned Building Schools for the Future where you perhaps should have developed that talent earlier. What are you collectively doing to make sure that in the specialist areas, whether in finance, whether in IT or whatever, you are developing the talent from within the Civil Service rather than always having to bring someone in from outside?
Mr Bell: On the Cabinet Secretary's behalf I chair something called the corporate functions board which brings together all the heads of profession in the key professional area, finance, HR, procurement, communications, legal and the like. Part of our job has been to ensure from each head of profession that they have that people development strategy, that they are developing pay strategies, that they are developing workforce strategies and so on. I think that is a significant difference to where we were previously. Heads of profession now realise that they are not just there to provide the best technical advice as say the chief economist or somebody in Gill's position providing HR advice. Their responsibility as Head of Profession is to ensure that they are building the professional capability through the whole of the Civil Service. It will take time but I already see quite encouraging signs of how we are doing. For example, if you take the Fast Stream programme which is for the graduates, we now have graduate specialist programmes like finance, which we had not had previously. You build the talent from the beginning, you bring people in, you say you want to be a finance specialist but you are going to do that in the Civil Service. We are much better at organising the professions via their responsibilities. We now assume that the heads of profession, as part of their performance management, will see that as their job. It is not just the best technical advice but what they are doing to build the workforce.
Q120 Paul Rowen: In terms of getting through to the Top 600, have you any examples of where some of those people with those special skills have actually made it through to the top?
Mr Bell: It is quite early yet to think of people. If you look at the permanent secretaries' group, in the main that is still made up largely of people who have the traditional generalist experience of civil servants or in some cases outsiders. We are pretty confident that some of the people we have brought in recently at director general level, or probably even at lower levels looking into the medium term, will be permanent secretaries in the future. It is a really good question; it is a really good test whether professional expertise can broaden so that people can have that wider range of skills which you probably do need at the permanent secretary level.
Sir David Normington: I was a professional HR director. It is a bit of a cheat but there are one or two examples like that. The reason we have had to recruit many of those professionals late in their careers at senior levels in the Civil Service is precisely because some years back we did not invest heavily enough in that. Hopefully what David has described will put that right. It will take time.
Q121 Paul Rowen: May I ask a question picking up what you said earlier on about when it is appropriate to bring people in at senior level from outside. I think it was two Home Secretaries ago who described your department as not fit for purpose. I do not know whether that was just when you moved.
Sir David Normington: Fortunately it was fairly shortly after I had moved there otherwise I probably would not still be there.
Q122 Paul Rowen: Given your previous reputation at the DfES, how many external appointments at that level have you made since you moved?
Sir David Normington: How many external appointments have I made at the Home Office?
Q123 Paul Rowen: Yes, at director level or above.
Sir David Normington: I probably have that in my papers. Quite a lot but I am afraid I do not have the precise figures. Quite a high proportion because in 2006, as part of the response to both John Reid's comments but also a capability review which confirmed his view, we did change a lot of the leadership both at director general and director level. The majority of the people we recruited into the senior posts at that point were from outside the Home Office, although quite a number came from other parts of the Civil Service. I think it was probably about 70:30, that is 30% recruited from outside at that point.
Q124 Paul Rowen: So less than the average of the overall figure.
Sir David Normington: Slightly ahead of the average at that point in terms of 70% civil servants and 30% from outside, which is just ahead of the overall figure. I could let you have those afterwards.
Q125 Paul Rowen: Yes, that would be interesting. Given what you said in your letter about people from outside staying, what experience have you both had within your departments of those externally appointed people actually staying the course? Has there been a rapid turnover?
Mr Bell: I have a terrific example which used to be in my department but has now gone off to another department. I appointed a director general for finance and corporate services in the department who had previously, interestingly, been a director of finance in a local authority. He came in, did a terrific job for us, was appointed the head of the government financial management profession, which was a really interesting indication that here was somebody relatively recently brought in who had that professional standing and acclamation, and for doing such a good job he is now off to be the finance director at the Ministry of Defence.
Sir David Normington: Most of the people I have recruited are still with us, in fact almost all of them are. Of course it is about three years since they were recruited so we are coming up to some quite interesting conversations. The answer to your question will be proved in about a year's time probably.
Q126 Kelvin Hopkins: I have to confess that my old school prejudices lean the way of Sir David. I think they are good, the idea of a professional Civil Service recruited straight from university and trained in becoming servants of the state. On the other hand, each of you, coming from different backgrounds, is a perfect example and one could argue from the particular to the general and say David has done a splendid job and that is the route we should go. When you are recruiting from outside, do you have to look at their values, their character, whether they are going to be the sort of people who would be loyal to the state, to the public realm, who would not just see it as a business opportunity before they move onto something with ICI or whatever? Is that important?
Ms Rider: Yes.
Sir David Normington: It is absolutely central. I would not want to be characterised as thinking you should not have a mix of people. My report simply says that I think we may have gone slightly too far in that direction in recruiting people at the very senior levels but also saying you should have a balance. I think the Civil Service is immeasurably better than the one I joined for having that mixture. We should recruit people at middle levels so that they have a career in the Civil Service, one where they also bring expertise from outside but then have time to develop. This is one way of dealing with this issue of building values as well so that before they get into the very senior levels they have had a chance at middle management levels to develop not just their skills but their understanding of the culture and values of the Civil Service and of the public service. However, just to say again, you are absolutely right that one of the key tests, particularly when you are recruiting at senior levels is whether this person will make the transition. Do they share the basic values of impartiality and integrity and so on which you must have in the Senior Civil Service? Often they would not be putting themselves forward actually if they did not think they could make that transition. If they are very, very highly critical of the Civil Service and do not understand it, they will not be joining us. We do test this quite hard.
Ms Rider: It is a hugely important part of the recruitment process. I can look at my own experience and almost the first paragraph of the brief pointed me to the Civil Service values and Civil Service code. Certainly I felt that was the most important thing; I studied and learned and understood what it meant before I came along to the panel interview. I do think it is really important. The values absolutely go to the heart of what the Civil Service is. The Civil Service Commissioners are very strong on making sure their recruitment processes build them in and that we really make sure we are measuring how people respond. Certainly I can remember at my panel, on which a certain Sir David Normington sat, feeling that I was being questioned very strongly about the values.
Mr Bell: It is not just an issue for the outsiders. I know in our induction programmes we do it, in our middle management programmes we see every new recruit inside or outside for the Senior Civil Service on a one-to-one basis and I begin by saying "Just to remind you, particularly as you have moved into the Senior Civil Service, these are the particular requirements that I have of you, but these are based upon the Civil Service values which apply to every one of us in this organisation". I do not think we can rest easy on this one. It is really important to continue to remind all our staff of the values which underpin the Civil Service.
Q127 Chairman: The evidence shows there is a problem. Ernst & Young, in their memo to us say their reading of the Senior Civil Service staff survey "... suggests that external recruits have less affinity with their department or the Civil Service than those who have worked a long time in the organization". We do have some empirical data here to stress that there may be.
Mr Bell: I just wonder whether that is a statement in one sense of the obvious, that they have not been in the organisation for so long therefore they do not have the same affinity. I do not think that in any sense absolves us of our responsibility to remind them of the kind of organisation that they joined and what underpins our ways of working through our values. My sense of the very many outsiders, the ones I have dealt with in the Civil Service, is that people do not need a lot of reminding. They like to be reminded, but perhaps it is the case that those who have applied, whilst not actually understanding what it is going to be like to be in the Civil Service, have some orientation towards the public service and in particular the Civil Service.
Q128 Kelvin Hopkins: It strikes me that all three of you wear your Civil Service badge on your arm with pride, which is as it should be but it may not be the case with everyone. Some time a few years ago, and even today, there were some of our leaders who looked to a world where they could break up the traditional Civil Service and drive in the entrepreneurial spirit from outside and make it a different kind of culture. I must say I am deeply opposed to that and I just wondered what your views might be. Is it true that some of our leaders were trying to do that? It seems to have faded a bit now although Liam Byrne still seems to say things of that kind when he makes his speeches. I do not agree with him I may say. Is that kind of era over? It struck me as a kind of Maoist cultural revolution, bringing the peasants in from the fields to show the intellectuals how to be true to the faith and all that. That is the feeling one had a few years ago.
Sir David Normington: There have undoubtedly been periods when there has been a feeling that the Civil Service leadership and the culture of the Civil Service were too slow and too cosy. Those who wanted to bring in people to change the mix have been trying to inject, in my view sometimes rightly, into the Civil Service some of the other things you need apart from the public service ethos and the core values. This Cabinet Secretary, as you know, has overlaid the core values - I have written them down in case I forget them and I must not - with pride, passion, pace and professionalism. Sometimes those were not on show enough, particularly pace and professionalism, in the Civil Service. Some of the frustrations that some politicians of both parties have had with the Civil Service have been because it has sometimes felt not very responsive, too slow and not professional enough. The solution to that has been to inject some people who bring some private sector ethos to it. I understand why they feel like that because I feel sometimes it is too slow and not professional enough, but I think we have to change that from within if we can so that we do get protection of the core values but a real sense of pace, pride and professionalism.
Mr Bell: In the first letter I wrote to the Cabinet Secretary I did write that I observed when it came to the crunch that politicians really seemed to like and want close to them those who had some of the traditional skills of operating the machinery of government, providing wise counsel and advice, fixing things and making them happen, negotiating across Whitehall and so on. I think you can believe very strongly that that is what ministers want and like to have at the same time sometimes as external expertise, sometimes drive that the traditional Civil Service does not have. The trick for us is to combine the very best of those close-quarter skills with the proper openness to outside ideas and views.
Ms Rider: You can be reassured that those of us who have come in completely from outside, certainly I in my role, are absolutely relentless about reinforcing the Civil Service values because that defines what we are and what we do. We do have some extraordinary advantages, if you look at the data Ernst & Young has given us about civil servants, the commitment of civil servants, 98% committed to making it successful. These figures compare with international civil servants where you look at that sort of pride and commitment and their scores are down around the high 50s and we are up in the high 90s. So I think there is something very important about how values are driven through our Senior Civil Service that we need to continue and keep going.
Q129 Chairman: We had Geoff Mulligan in front of us a little while ago, the former head of the Strategy Unit, and he sort of echoed what Kelvin has been saying, not his exact words, that the period in which we thought that all the answers to our problems were to be found in the private sector is over. What is interesting is that in a way this chimes very much with this emerging thinking coming out of your own work. You are saying this in a context and a climate that would have made it very hard to say it just a few years ago.
Ms Rider: I think I did say it actually when I came to see you two and a half years ago. I did say that was one of the things I found myself saying most often when I arrived, that it is not private sector good, public sector bad. There are very many good examples in the public sector.
Sir David Normington: There are many private sector examples of companies which do exactly what the Civil Service does which is grow their own. Clare Chapman, who came into the Health Service from Tesco was surprised even now at the extent to which we took the risk, as she sees it, of recruiting at the very senior levels from outside the organisation. Although that happens of course in other organisations she had worked in, they would think very, very carefully about it. It is a slightly different reason. It is basically that, if you have a very strong ethos and it is successful, you need to be very careful who you bring in to that. However, when I did my report I did not really know, did I? My report was done during 2008. I did not realise quite the context in which it was being written even then. I still would not want to be characterised as saying that we should close off the recruitment from the private and public sector where that makes sense. After all, the private sector comes in many shapes and sizes. There are some great companies and there are some great people in those companies. The Civil Service can have its share of those and it will be better for it.
Q130 Mr Prentice: I do not want to go over old ground and we have flagged up Ernst & Young quite a number of times. So for the last time, let me quote Ernst & Young. A lack of confidence within the Civil Service has led it at times to be in awe of external recruits with impressive looking CVs and job titles, to be insufficiently critical and challenging and referencing in its assessment of fit and wider capabilities. That is a lot of management-consultancy-speak, is it not, but we understand the core of it? Is that a valid criticism now or is Ernst & Young describing a situation which applied before you came before us two years ago. Is this happening now?
Ms Rider: Their report is very current so we have to take the observation as being current. This is very judgmental, is it not, but I do believe we are every day improving our recruitment processes so that they are working closely with the Civil Service Commissioners? We are taking good references, we are doing proper assessments of individuals and we are extending the process beyond what essentially used to be the paper and then the panel interview. I do believe that we are constantly looking to improve the process.
Q131 Mr Prentice: Okay, so this is an unfair criticism. I do not want to put you on the rack over this. They could have got it wrong. They are just management consultants for God's sake.
Mr Bell: I would just say that we are not in awe of anyone who comes in. I respect people's skills from outside but actually I think I know a fair bit, as my colleagues across the Senior Civil Service know, about the business that we are in. I think I can speak for most of the senior colleagues in my department; I do not ever see them in awe of anybody else coming in.
Q132 Mr Prentice: When you got your present job in from Ofsted, were you given a buddy? Were you mentored? David, here is your buddy.
Mr Bell: Yes.
Q133 Mr Prentice: What did your buddy say to you? What did you confide in your buddy? Within these four walls.
Mr Bell: That is confidential. I was provided with another permanent secretary and of course I had my predecessor just down the road which was extremely helpful and he provided wise counsel and advice. I cannot actually remember what my buddy said to me. More importantly, the point of having a buddy is that they are somebody you can just phone up and say "Look, I just don't get this. How does this work?". Actually there was lots of advice in the department. One of the disadvantages I have had and still have is that I did not have the experience that many civil servants have of taking a bill through Parliament with ministers. I had never done that because I had never been in the Civil Service. So I had lots of buddies inside who would tell me how to do these things.
Q134 Mr Prentice: I have said this in this Committee before years ago. I am a great believer in demystifying things, demystifying jobs, demystifying the work that permanent secretaries do, unpacking it. I think there is an army of people out there who, given the encouragement, could do a lot of those "top" jobs. When I hear people talking about going outside for good people, I ask myself what the attributes are that these good people bring into an organisation. What are you doing to people within the Civil Service already to say "Listen, with a little bit of encouragement, with a buddy, with a mentor, maybe you can be a permanent secretary". Are you actively doing that work, scouring the department for talent, good people?
Mr Bell: Absolutely, we are really aggressively doing that. To be fair, we are doing that aggressively across the Civil Service because it is really important to us. We have the next generation of people in middle management coming into the Senior Civil Service, going on to be directors and beyond. I take it really seriously as one of my responsibilities as an organisational manager, if I can put it that way. I need to find talent. As for demystifying the job of permanent secretary, I am not sure that will take very long because there is not a whole lot of mystery to it but sometimes people from outside have a perception of what the permanent secretary does and actually it is a serious point to try to give some of our more junior colleagues some sense of what we do so that they can think "Actually I might not fancy that job" or "I think I could do it". I absolutely agree with you.
Sir David Normington: We had a whole process in the Department for Education and Skills when I was there of matching senior staff up with senior people in the education world. I still have a sort of buddy head teacher in fact and I spent several days in his school over a period and he also spent time with me understanding what senior levels of the Civil Service did. We replicated that across a number of sectors. The head teachers who did that said that they had no idea how many similarities there were in leadership roles across sectors. I do believe in your demystifying point; a lot of the leadership jobs are the same. It is the elements which are not which put people off. We get this from people who are considering the Civil Service. A lot of people would not dream of applying at permanent secretary level because it is a very exposed position for someone to come into with no experience and understanding. That is why I have always favoured coming in a little bit below that and growing. We have a number of examples who have come in at one level down and are now progressing to that level. That just gives them a bit of time and a bit of protection.
Q135 Kelvin Hopkins: A simple question. If one pursued what Gordon suggested, bringing people in, might this not be a deterrent to recruiting the very best minds from good universities as an administrative class would have done and hopefully still does. It is perhaps not called the admin class any more. They had the prospect of being leaders of the country and that was one of the great attractions of joining. People like me were not clever enough; I did not get a first and so on, but these were very, very able people and if you have lots of recruitment from outside they might say they are not going to make it.
Sir David Normington: Again it is the balance we have been talking about. We have no problem attracting some of the best graduates. At this moment we are attracting a lot of the best graduates but even when times were not as they are, we did not have a problem attracting the best graduates. When you are recruiting I do not think the best graduates think about it like that. I do not think that they always think, as I did, that I was going to spend 36 years in the Civil Service. I do not think that is how people think now. They think they are coming to an interesting job and they hope it will offer them lots of opportunities but I am not sure they have mapped out their career ahead and perhaps that is the right way of approaching it these days.
Q136 David Heyes: That was the final point I wanted to make. The dramatic change, the unanticipated changes in the job market in the last 12 to 18 months are changes which have taken place subsequent to the thinking that went into your report and I just wonder to what extent your report might have been undermined a bit by those sort of changes, whether there is a need to revisit some of your recommendations. For example, David Bell gives a very convincing argument about the tendency for people who have an orientation towards public service to put themselves forward. I wonder now whether we have some former bank high fliers who will want to put themselves forward because they are looking for calmer pastures, they are looking for a safer environment. Has the market distorted significantly as a result of what has been happening in the economy?
Sir David Normington: No, I do not think we have seen that actually.
Ms Rider: No. What we have seen is the applications to the fast stream, which is for the brightest graduates, go up by 30% year on year; an extraordinary rise.
Q137 Chairman: Since last year?
Ms Rider: Yes, since last year. I think people at all levels are seeing us hopefully in the right light, not in terms of safe pastures, but in terms of the really interesting work that David talked about which we offer. We have not seen a significant change in the applications for the senior roles and certainly we have not seen a number of bankers queuing up to join us.
Chairman: Thank you very much for that. I think we had better let you get back to your day jobs as you described them. We have had a really interesting session and we have enjoyed reading all your thoughts written down. We have enjoyed talking to you about them today. I hope we can make some sense out of all this. Thank you very much indeed.
[1] Chartered
[2] Public and Commercial Services