Non-executive directors in Whitehall: how useful have they really been?

The role of non-executive directors in Whitehall departments has developed over recent decades. A new Constitution Unit project, led by former senior civil servants, aims to investigate the role of these outside experts and the impact they have had. David Owen introduces the project and invites contributions from those who have been involved with the work of non-executives.

What role is there for outside expertise in the running of a government department? For some time now in the UK, one way in which such input has been made has been through non-executive board members or non-executive directors. The Constitution Unit is undertaking a project to look at who non-executives are, what they do and the impact that they have had. The work is being led by former senior civil servants Alan Cogbill, Hilary Jackson and Howard Webber. We have felt encouraged following discussions with Cabinet Office, who have expressed interest in seeing the results.

Non-executives: the evolving government approach

Governments have drawn on external contributors for a long time, but the term ‘non-executive’ is thought to have been first used in the early 1990s. In 2005, the Treasury set out guidance on non-executives in its Corporate Governance Code.  The code commented that much what it said of non-executives, as well as of the operation of departmental boards, was new, ‘reflecting an agenda which has developed rapidly’. It recommended that each central government department board should have at least two non-executives, preferably more, with the aim of providing support and challenge.

Following the 2010 election, the use of non-executives developed with the appointment of a lead non-executive for government, former BP chief executive Lord Browne.

This drive formed part of Cabinet Office minister Francis Maude’s wider civil service reform plan for the civil service. He saw non-executives as having a key role in delivering savings, providing the kind of input for which consultants had previously been paid millions of pounds.

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How can referendums in the UK be improved? Lessons learned from the EU referendum

Today, the House of Commons Public Administration and Constitutional Affairs Committee (PACAC) published a report on Lessons Learned from the EU Referendum. The report touches on a variety of areas in relation to the conduct of referendums, including the role of referendums, the role of the civil service during referendum campaigns and cyber security. PACAC’s chair, Bernard Jenkin, outlines his committee’s findings, which they hope that the government will take heed of so that the country is ready for any future referendums.

Today, the Public Administration and Constitutional Affairs Committee (PACAC) has published its latest report on Lessons Learned from the EU Referendum. With Holyrood demanding a new Scottish independence referendum, it is clear that referendums have become a permanent part of the UK’s democratic system, with major implications for our system, which is based on representative democracy. PACAC’s report highlights the importance of clarity in relation to the role and purpose of referendums, and ensuring that referendums are conducted fairly and effectively.

PACAC argues that referendums are appropriate for resolving questions of key constitutional importance that cannot be resolved through the usual medium of party politics. PACAC also argues, however, that referendums are less satisfactory in the case of what might be called a ‘bluff call’ referendum when, as last June, the referendum is used by the government to try to close down an unwelcome debate. As well as a clear question, the outcome in either case must also be clear. That means there should be more clarity and planning by the government holding the referendum, so there is less of a crisis of uncertainty if they don’t get the answer they want, as in the EU referendum.

PACAC considered four other areas in relation to the conduct of referendums: the fairness of the so-called ‘purdah’ period; the administration of the referendum; the role of the civil service during a referendum campaign; and cyber security.

On purdah, the government claimed at the time that the purdah provisions would impair the functioning of government. However, these provisions were of critical importance to the fair conduct of the referendum. The purdah provisions should be strengthened and clarified for future referendums and PACAC supports the Law Commission’s proposals to consolidate the law regulating the conduct of referendums. Additionally, PACAC asserts that the purdah restrictions should be updated to reflect the digital age, and extended to cover the full ten weeks of the referendum period, as recommended by the Electoral Commission.

With regard to the administration of the referendum, the evidence gathered during PACAC’s inquiry suggests that, while not without some faults, the EU referendum was on the whole run well.  PACAC commends the Electoral Commission for the successful delivery of the referendum, which was of enormous scale and complexity.

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Definitely not business as usual: Predictions and preparations for May 2015

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On 12 March 2015 Lord Gus O’Donnell and David Cowling spoke at a Unit seminar entitled ‘Forecasting the 2015 Election result, and preparing for a hung Parliament’. Ruxandra Serban reports on the event.

With just 6 weeks left until polling day, the outcome of the May 2015 general election remains highly unpredictable. With few signs that either of the two main parties will secure an overall majority in the House of Commons, current predictions are predominantly based on the assumption of another hung parliament. On 12 March 2015 the Constitution Unit and the UCL School of Public Policy hosted a seminar with David Cowling (BBC Political Editor) and Gus O’Donnell (Cabinet Secretary between 2005 and 2011) to discuss whether any reliable predictions can be made about the election, given the current shifting political landscape, and whether the 2010 election is a useful guide in the preparation for another hung parliament.

David Cowling framed the discussion around the unique features that the 2010 election brought to the usually predictable two-party race for Westminster: the first televised leaders’ debates, changes to parliamentary boundaries, and the surge of the third party (Liberal Democrats) in the opinion polls. Cowling dubbed 2010 ‘the losers’ election’, as the Conservatives failed to win an outright majority for the fourth election in a row, Labour scored their second worst vote share in 80 years, and even the Lib Dems lost seats.

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The Prime Minister must ensure that he gets a chief executive at the centre

peter.riddell-99Peter Riddell argues the idea of appointing a full-time chief executive to lead the Civil Service is correct – provided the responsibilities and authority match the role. There are worrying signs in this month’s announcement that they will not, and we may have the second muddled reorganisation in three years.

There was an inevitability about yesterday’s announcement of Sir Bob Kerslake’s imminent departure as Head of the Civil Service, while remaining as Permanent Secretary at Department for Communities and Local Government until the end of next February. With an activist Civil Service Minister in Francis Maude, the space became too crowded for Sir Bob as the tensions over the pace and scale of reform increased. The political line was about a renewed drive on civil service reform; absolutely right, but it would be wrong to ignore the huge scale of changes since 2010 and the impetus for reform among most senior civil servants themselves.

The real problems in the civil service leadership are structural. It was right in January 2012 to split the functions of Cabinet Secretary and Civil Service Head since no one could perform both roles. However, it was a mistake for Sir Bob to double-hat as Head of the Civil Service and a departmental Permanent Secretary. That created impossible pressures on him, and, in this position, he never had the powers or authority to lead the changes expected of him.

However, yesterday’s announcement confuses as much as it clarifies. Sir Jeremy Heywood will take the title of Head of the Civil Service while maintaining his current responsibilities as Cabinet Secretary. That makes it clear who is in charge and who reports to the Prime Minister, and this we welcome. The problem is that the new chief executive, who will report to the Cabinet Secretary, is not really going to be a CEO of the Civil Service, but, rather, someone who is in charge of civil service transformation, efficiency and reform plus taking over responsibility for running the Cabinet Office. The inclusion of the latter muddles the tasks of running the headquarters operation with oversight of the whole civil service.

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Civil Service reform: is tinkering worth it?

19th June 2013

Posted on behalf of Peter Waller

The Constitution Unit this week held a seminar on the IPPR’s new report on Civil Service reform. Guy Lodge from the IPPR outlined the report and former Permanent Secretary Sir Leigh Lewis made various observations, all pertinent. Numerous good points were made in the question and answer session that followed.  Everyone agreed – sincerely and indeed correctly – that the report was not only excellent but also very important.

But I wonder. Not about the excellence but about the importance. Whitehall watchers, myself included, find fascinating the detail of how Permanent Secretaries are appointed and how many people should serve in a Minister’s private office.  But it is hard to argue that those issues matter a row of beans in considering how to avoid episodes like the West Coast mainline saga or whether or not it is sensible to reduce the number of specialist heart units in hospitals.  And it is those issues which are far more likely to matter to the ordinary citizen than whether the Prime Minister or the head of the civil service should appoint the next Sir Humphrey.

There is certainly no doubt that there are big issues about the civil service which are worth serious study.  What is the right balance between Ministers deciding policy and public officials who are tasked to deliver that policy?  Should the civil service have direct links to Parliamentarians in the way that local Government officials have direct contacts to Councillors, regardless of their political party?  Should we have much more wholesale turnover of the civil service with a change of Government, following the US model.  And should we perhaps more openly recognise that not all Ministers are actually competent to run large Departments when they have no prior relevant experience.

The IPPR could have been asked to look at those issues but they weren’t. Indeed, even within the broad frame of what they were asked to look at, it was all a bit selective. For example the IPPR were asked to look at how Permanent Secretaries were appointed but not being asked to look at how they were dismissed  – even though it is an open Whitehall secret that quite a few recent Permanent Secretary departures were not entirely voluntary.

So we are back into the old game of tinkering with the system. Who knows how much emphasis the Government will now put on this but no doubt we will have some a long debate followed by some modest reforms, probably with Francis Maude forecasting Nirvana and some former Permanent Secretaries forecasting Armageddon.

There are times, of course, when tinkering is the only way of making progress.  The differences of view on how the House of Lords should be reformed, for example, should not be allowed to prevent sensible interim reforms such as the Lord Steel proposals.  But it would be nice to  see a slightly more ambitious attempt to look at the issues with a little more seriousness. We are not perhaps fiddling while Rome burns as London isn’t burning in quite the same way. But surely we could do better.

A split over the Permanent Secretary?

Posted on behalf of Peter Waller

The press has reported today that No 10 has rejected the potential appointment of David Kennedy, currently CEO of the Climate Change committee as Permanent Secretary at DECC. Yet again this is seen as a sign of a coalition split and of meddling by No 10 in civil service appointments.

There is no reason to doubt the underlying accuracy of the story, though we can rest assured that nothing will be disclosed on the record. But does that mean either the coalition is yet again in crisis or that No 10 is throwing its weight around? Possibly but probably not.

From the outside, a strong case could be made for two types of appointment to DECC at present.

First there is the case for someone with business credibility in the energy industry given the need, as Ed Davey said in Parliament yesterday, for £110 billion private sector investment in our energy infrastructure by 2020.   This is a huge challenge – and the Department will need to be strongly business facing in the next few years.  Moreover, Ministers always start by trying to attract suitable individuals with a business background, though are seldom successful.

Second, usually as fallback, there is a case for a Whitehall insider, someone who knows how to manage a Whitehall Department at a time of significant downsizing and structural reform. And who will know how to keep the show on the road.

But David Kennedy did not really tick either box. Kennedy is hugely respected for his knowledge of climate change and if the Department had been recruiting a head of policy development, then he would have been an outstanding candidate. But his background is neither a business one, nor a Whitehall insider. And the role of Permanent Secretary is no longer, if it ever was, about being the principal policy adviser to Ministers. It is primarily a managerial role, making sure the Department delivers what Ministers want.

All this is, of course, speculation on my part. But I do recall one appointment in my civil service career where my Department was on the verge of appointing a totally “outside the box” candidate to a senior role – but we were saved from doing so by  a wise soul in No 10 telling us to think again.  Six months later we were all grateful to No 10 for their response. This case is not remotely like that one and Kennedy might well have been successful in the role. But a No 10  veto can always be exercised wisely as well as wilfully.

Francis Maude’s Ambitious Civil Service Review

In the mid-term ministers’ fancy lightly turns to thoughts of civil service reform. The current government is no different. In recent months, various figures in the Coalition have expressed growing frustration about the performance of the civil service. And so it comes as no surprise that Francis Maude, Minister for the Cabinet Office, announced at the beginning of August that he would commission a review of government structures in other countries and multilateral organisations. This review would include examining various governments’ operation and accountability, identifying best practices and making recommendations for how these could be adopted in the UK. It’s a competitive bid, all for the princely sum of £50,000.

You can read the Cabinet Office’s proposal here. It’s certainly ambitious. The Constitution Unit was mentioned as one of the possible contenders for the bid, which was very flattering, but unrealistic, for reasons we set out below. And it has recently emerged that a number of other think tanks have also politely declined to submit a bid.

It’s worth thinking about the practical aspects of the proposed review. The terms of reference are very, very broad. The successful external consultant is expected to look in detail at six different countries’ bureaucratic systems at a minimum; and to look not just at the relationships between ministers and the bureaucracy, and how policy advice is provided, but successes and failures, public and parliamentary accountability mechanisms … the list goes on. Some of these six countries—New Zealand, Australia, Singapore, France, the United States, Sweden—actually have very different systems with very different experiences. The review also insists on examining the European Union (why?).

The vast scope of the proposed review means that the external organisation would need a substantial number of staff already in place, or else a very, very quick recruitment process. That would exclude a good number of organisations (like the Unit, for instance). And the comparative nature of the review also means this large project team would probably need to be already familiar with the countries in question. So not just a large team, but a large expert team. Experts or consultants cost money. That sum of £50000 begins to look less and less realistic.

Moreover, the final report is meant to be ready within two months. That is a very short time indeed. As a point of comparison, the IfG—one of the biggest, most well-staffed think tanks in the UK—is taking one year to examine many of the issues raised by the Cabinet Office proposal.

The final kicker is that the external consultant is expected to meet regularly with the Minister so that he can discuss progress and ‘provide direction’ for the project. This, coupled with the implied requirement of familiarity with comparative public administration across six countries, the short time within which they are expected to deliver, and the low sum of money being offered, raises real issues of neutrality and impartiality. The terms of reference suggest that Maude already knows what he wants, but that he needs an ‘external’ consultant to somehow legitimate it.

A final point. Francis Maude is asking for too much, too quickly. If these are the kinds of goals he thinks are realistic, is it any surprise that he and his colleagues are disappointed by the performance of the civil service?

EDIT 28 September 2012: since this blog post, Maude has announced that the Institute for Public Policy Research has won the £50,000 contract.