THE
EXTENT AND
MANNER OF
CHANGE IN
THE CIVIL
SERVICE
The Extent of
Change
129. The Committee wishes
to draw attention to the very extensive nature of the changes
to the United Kingdom's Civil Service which have been described
in Parts 2, 3 and 4 of this Report. There have been changes in
the boundaries of the Civil Service, in its structure within those
boundaries and in the way in which the Civil Service is managed.
130. Public sector involvement
has decreased over the last thirty years.
Most, but not all, of the public sector
industries have been sold to the private sector on the Stock Exchange.
Increasingly, functions such as the
design, construction, financing and management of individual prisons
or highways, or the design and manufacture of defence equipment,
or the provision of nuclear energy, have been let to the private
sector under long term contracts.
Some central Government functions,
such as the Recruitment and Assessment Services and Her Majesty's
Stationery Office, have also been sold to the private sector by
private treaty, the Civil Servants working there being transferred
with the business. Other businesses such as the National Engineering
Laboratory, Chessington Computer Centre, the Building Research
Establishment, the Transport Research Laboratory, the Teachers
Pension Agency and AEA Technology are now also run by the private
sector.
131. Government Departments
are now required by the Office for Public Service regularly to
review whether work carried out within the department could more
appropriately be done elsewhere. In the 1994 White Paper The
Civil Service-Continuity and Change the Government said that
the aim of the 1991 Citizen's Charter had been to introduce choice
and competition, and that the key questions to be applied to activities
performed by the Civil Service were:
Does the job need to be done at all?
If the activity must be carried out,
does the Government have to be responsible for it?
Where the Government needs to remain
responsible for an activity, does the Government have to carry
out the task itself?
Where the job must be carried out
within Government is the organisation properly structured and
focused on the job to be done?
132. The Council of
Civil Service Unions quoted in their evidence (Special Report,
p 243) a statement made by the then Financial Secretary to the
Treasury, Mr Stephen Dorrell, in 1992 (Times, 23.11.92):
"we are no longer simply looking for obvious candidates for
privatisation. The conventional question was 'what can we sell?'
That question must now be turned on its head. Now we should ask
ourselves-what must we keep? What is the inescapable core of
Government?".
133. Functions which
remain within the public domain are now carried out either by
core Government departments, or by executive agencies working
within such departments, or by a wide range of diverse organisations
created by or working for the public service. Mr Christopher Clifford
of Nuffield College told us (Q 349) "I would say if you look
at the history of the Civil Service as far back as Northcote-Trevelyan
I cannot think of anything as radical or as far reaching as the
Next Step reforms and the later reforms, the interest in market
testing and privatisation. Essentially it is leading to the fragmentation,
and some might say the breakdown, of what we once knew as the
Civil Service." Professor Vernon Bogdanor of Brasenose College,
Oxford (Special Report, p 36) wrote that "the public service
reforms of the past few years-privatisation, the introduction
of executive agencies, market testing, contracting out and the
introduction of a more decentralised system of Civil Service pay-are
undoubtedly the most important since Gladstone, by Order in Council,
laid the foundations of the modern Civil Service in 1870."
Professor Peter Hennessy of Queen Mary and Westfield College,
London described the Next Step Agencies (Q 1888) as the most dramatic
change in the Civil Service since the late 19th century.
134. In their written
evidence to the Committee (Special Report, p 14) Sir Christopher
Foster and Mr Francis Plowden summarised the main structural changes
in the public sector as: "privatisation, the contracting
out of many public services and inputs into public services, the
creation of internal markets and the devolution of many departmental
activities to executive agencies which co-exist with many types
of quango and often with ill-defined difference of purpose from
them". They considered that in general these changes are
beneficial, but Foster and Plowden conclude their evidence (p
25) with the observation that the changes constitute a fundamental
revolution in public administration and that "whether the
outcome is defensible for a modern democratic state depends on
identifying and overcoming the problems of adapting the traditional
notions of public service, of public ethos and of such constitutional
conventions as those of Ministerial responsibility, public accountability
and natural justice to these new structures".
135. Sir Robin Butler,
Secretary of the Cabinet and Head of the Home Civil Service, did
not agree. He said (Q 2135) "I do not think it amounts to
a constitutional change, but I suppose it is a characteristic
of the British constitution that it evolves all the time. You
could perhaps describe the presence of more political appointees
in the system as a way in which our system of Government and perhaps
even our constitution is changing".
136. The Council of
Civil Service Unions said in written evidence (Special Report,
pp 238 to 239) that "one of the most essential characteristics
of the British Civil Service since the Northcote-Trevelyan reforms
has been its unified hierarchical structure. The Government's
objective of transferring Civil Service work to the private sector
through initiatives such as Competing for Quality, privatisation,
and the Private Finance Initiative has unnecessarily fragmented
a Civil Service which is the envy of the world. We would also
contend that the Government has pursued these initiatives as ends
in themselves, not necessarily in the pursuit of better quality
of service or value for money."
137. Dame Ann Bowtell,
Permanent Secretary of the Department of Social Security, said
(Q 414) that by far the most important change made in the Department
of Social Security in the last 25 to 30 years was the creation
of the executive agencies, which had really transformed the way
in which the Department operated. "Unlike some Departments
with agencies where the agencies are peripheral to the Department's
business, in the DSS the agencies are absolutely central to it;
98 per cent of our staff are in the five large agencies we have
created and there is a very small headquarters staff. So the creation
of the agencies has really shifted the emphasis in the DSS, so
we now have a much clearer emphasis on operations, a much clearer
dividing line between operations and policy, and a much greater
focus on service to the customer brought about by that re-focusing
of the operational effort in agencies".
138. The other very
significant change Dame Ann mentioned was the introduction of
information technology in the Civil Service (Q 414). "In
operational areas computers have absolutely transformed the kind
of business that it is, and what most of our operational staff
are doing now is working with computers to deliver the service,
and that has transformed both how we deliver it and what it is
we are able to deliver, because we are able to deliver things
for the benefit of customers we could not have attempted without
computers".
139. Mr Michael Scholar
described in evidence the extensive structural changes which had
from time to time been made in the Department of Trade and Industry.
When asked (Q 1558) if such frequent change had a very disruptive
effect on the administration of the Department, he replied, "It
is something we cope with. I cannot pretend that it is something
we seek" and suggested (Q 1560) that a period of stability
would be welcome. Asked if he saw scope for further privatisation
(Q 1602) he said, "We have had an extensive look at these
matters in recent years. Michael Heseltine, before I came to the
Department, was very keen to privatise wherever possible. My predecessor
and my colleagues went through the Department's activities pretty
rigorously at that time to look for areas to privatise. I should
be surprised if they overlooked any areas."
140. Mr Andrew Turnbull,
Permanent Secretary of the Department of the Environment, was
asked (Q 2240) whether a period of consolidation would be good
for morale. He said, "A period of consolidation after the
reviews, yes. I think that this is a period we have to go through.
We are not asking for a quiet life, that is certainly not what
you would get in any other walk of life. We recognise that change
is continuous, but there are ways and ways of going about this
process".
141. The Civil Service
has also undergone enormous human resource changes over the last
30 years. Ms Jenny Thurston of the Council of Civil Service Unions
(CCSU) pointed out (QQ 1751 and 1752) that 30 years ago only about
a quarter of Civil Servants were female, but that now just over
70 per cent were women. Thirty years ago half of all Civil Servants
were employed in London compared with 20 per cent now.
The Manner of
Change
142. Dr Rosamund M Thomas
of the Centre for Business Studies and Public Sector Ethics (Special
Report, p 272) wrote that there was a real danger that the extent
of the change being carried out in respect of the Civil Service
and the machinery of Government was proceeding without adequate
public awareness, union consultation, or parliamentary findings
and at speed. In the past such changes would have been the subject
of a Royal Commission or an independent enquiry or legislation.
143. Sir Robin Butler
challenged the view that there had been little awareness of the
changes taking place in the Civil Service. He said (QQ 2106 to
2109) that the Treasury and Civil Service Committee of the House
of Commons had taken a close interest and had received evidence
from him and from Ministers among others: "there has been
a very good degree of close scrutiny which became very expert
scrutiny on the part of that Committee. We have always attached
great importance to carrying the Committee with us". He said
that the Treasury and Civil Service Committee set up a Sub-Committee
on the Civil Service in 1988 when the Next Steps initiative was
announced, to examine the proposals and to monitor their implementation,
adding "the fact that the House of Commons Committee was
accepted on a bi-partisan basis made it, of course, very much
easier for us, as Civil Servants, to take a high profile in leading
the Civil Service towards it, because we had some assurance that
this was not a matter of political controversy and was supported
by both parties". Asked (Q 2109) why there was little public
awareness of the changes, Sir Robin replied "there could
have been, but the fault was that people do not find these management
questions very interesting rather than a reluctance on our part.
You know, I have tried-and you may say I should have been more
successful-to shout this from the rooftops. I would like to get
very much more publicity for what is done in the Civil Service".
144. Mr Robin Mountfield,
Permanent Secretary of the Office of Public Service, said (Q 1983)
"a great deal of the so-called Next Steps movement, of course,
stemmed from the report in the late 1980s which was pretty heavily
discussed at the time. I think that it is absolutely fair to say
that the establishment of individual agencies has not been debated,
not typically anyway, but the general shift into agency form has
been endlessly debated in the select committees of both Houses,
in the academic world and so on, and I think that the pros and
cons of that are pretty well understood".
145. The lack of awareness
was, however, confirmed by Dr David Clark, Chancellor of the Duchy
of Lancaster, who agreed that the changes which took place over
the last 30 years took place without a great deal of public discussion
(Q 1842). He confessed that even he had not realised the extent
of the changes until he found himself running the Office of Public
Service, at which point he was "really quite surprised at
the extent of the changes".
146. Dr Martin Smith
of Sheffield University (Q 399) said that while there had been
radical change "and Ministers and senior officials admit
there is a change, what they also say is that the constitution
has not changed and does not need to change". Sir Christopher
Foster said (Q 128) that the trouble was that executive agencies
were established on a model taken from private management without
much consideration of the likely constitutional consequences:
"most previous reforms in the Civil Service had been preceded
by very considerable thought and a Royal Commission, and that
was not the case with the recent reforms; they were preceded by
inquiries often by those already committed to the answers and
there was not sufficient time or public debate before the reforms
were implemented and that is why now, after the reforms have been
implemented, we are discovering that there are serious problems
involved with them".
Further Changes?
147. One result of the
way in which the changes have been introduced is concern about
the likely next developments in the process. The National Association
of Citizens Advice Bureaux, for example, thought the introduction
of executive agencies in the Department of Social Security was
a prelude to privatisation. Mr Peter Adeane said (Q 745), "We
have had an announcement from the Minister of a number of areas
which are going to be put out to privatisation: the Child Benefit
operation, the Benefits Agency Medical Services, providing payments
of benefit and also the management of local offices will be transferred
to the private sector through a long-term partnership. There is
also a new idea which will be coming into operation later on this
year of a provider/purchaser concept which will mean that it will
be a contract between the Benefits Agency and some other organisation,
which might be the Agency or might not, to provide particular
services, assessing benefit and the like. I think we do have a
concern that the ethos might change there because you will then
have these organisations which might be private organisations
or might be in-house but they will be under tight constraints
to deliver a service. We wonder whose concerns will be pre-eminent.
Will they be the concerns of the purchaser? To what extent will
the concerns of the claimants be recognised?".
148. Sir Robin Butler
was asked whether, against the background of functions being transferred
to agencies and quangos and various other privatised bodies, there
would remain a core of the public service resembling the existing
Civil Service. He said (Q 2075) "The Civil Service,
of course, has been greatly reduced in size. It is now down to
475,000. That is down 125,000 during my period as Head of the
Civil Service in ten years. But it is still a very formidable
size. It is 475,000 people. Although I expect it will go down
further, it will remain a substantial body, so I do not think
there is any great danger that there will not be a substantial
Civil Service remaining".
149. Mr Robin Mountfield
said (Q 2028) "I think we are very near to the end of the
establishment of agencies of the kind we have had so far. We have
got, I think it is 76 per cent, 77 per cent, of the Civil Service
in agency form. There are a small number of agencies which the
Northern Ireland Office and the Ministry of Defence particularly
want to establish. I think that will probably take it up to about
80 per cent maximum". As to future developments, Mr Mountfield
thought (Q 2029) the emphasis would increasingly be on improving
the links between agencies and making them more sophisticated,
using new technologies to co-ordinate the delivery of services
from more than one agency to the individual citizen.
150. Mr Turnbull described
the creation of agencies as more or less finished (Q 2171).
He said "this is basically a mature initiative and there
are no other plans to create new agencies".
151. Dr Clark said to
the Committee (Q 1843), "I think we are going to face many
changes in public service over the next ten years". When
asked as to what those changes might be, it became clear that
the Government's concerns about the Civil Service relate mainly
to the provision of services to the public. Dr Clark spoke about
the Government's plans to further the use of information technology,
to centralise the provision of services and to pursue the ideals
of the citizen's charter to improve the quality of the service
provided (QQ 1852-1854). The Committee notes the Government's
intention to publish a White Paper on the Civil Service early
in 1998.
The Committee's
Conclusions
152. The changes
in the Civil Service over the last thirty years, and particularly
in the latter half of that period, have had the cumulative effect
of substantially altering both the nature and the extent of the
public sector. The Committee agrees with those witnesses who described
the changes as radical and as a fundamental revolution in public
administration. In later sections of this Report, we consider
the effects of these changes on particular aspects of public administration
and on the public service ethos. We address here our concerns
about the approach which has been adopted towards changing the
public service as a whole.
153. The question
of what is the proper sphere of Government is one of fundamental
importance which should be a matter of wide public debate. We
accept the evidence given to us that in the last three decades
there was little open or public debate about the extent of the
structural changes being made to the Civil Service. The desirability
of cross-party consensus in this area was stressed by Lord Callaghan
of Cardiff during the debate in the House of Lords on the privatisation
of Recruitment and Assessment Services (HL Deb, 8.3.96 col. 546).
The result is that, while justifications might be provided for
each individual change, no overall strategy or set of guiding
principles was worked out in advance. The absence of debate has
led to some measure of confusion and doubt, and the Committee
is not satisfied that the constitutional implications of the changes
were fully thought through before the changes were introduced.
154. The Civil
Service in the United Kingdom has been described as the envy of
the world. We draw attention elsewhere in this Report to its special
characteristics: lack of political bias, integrity, impartiality,
objectivity, loyalty and freedom from corruption. There has in
the last thirty years been a substantial reduction in the extent
of operations which are carried out under the auspices of the
Civil Service and in accordance with its ethos. Some of those
operations are now carried out in whole or in part by companies
in the private sector whose primary responsibility is to their
shareholders. It may well be that they can provide a better service
at lower cost, but the question whether a service should be provided
by the traditional Civil Service only, or by public bodies to
which powers are delegated or assigned, or by the private sector
is not simply a matter of management and efficiency, it is a matter
of public policy.
155. Dr Clark's
proposals for the future seemed to be directed to greater efficiency.
They were not, it seemed, related to the clarification of accountability,
the preservation of the Civil Service ethos, or the protection
of the unity of the Civil Service following the introduction of
agencies or the devolution of arrangements for pay and conditions
of service. It remains to be seen whether these issues are dealt
with the forthcoming White Paper.
156. The issue
of who should or should not be allowed to provide services in
the public interest (and otherwise carry out the functions of
Government) has become a matter of political debate. This is partly
because the Government, when transferring functions from the public
to the private sector, did not make clear which functions of Government
they were seeking to relinquish and which to secure; nor did they
offer any consistent rationale for the many ways in which Government
responsibilities were being devolved and dispersed. Justifications
for changes in the Civil Service were often couched in the language
of efficiency, effectiveness, service and value for money. The
concerns expressed about them tended to focus on responsibility
and accountability. We therefore recommend that any significant
change in the way in which public services are delivered should
be subject to open debate, and that Governments should seek Parliament's
views on prospective changes, even those changes which can be
implemented using the Royal Prerogative, and without legislation,
with a view to obtaining cross-party support.
