Agents of change
Senior Researcher
Principal-agent problems refer to potential conflicts that arise when one person — an “agent” — is required to act on behalf on another — the “principal” — in a context of uncertainty or where an agent has competing interests. Say, for example, when a bank invests money on behalf of a depositor or an estate agent is selling a client’s house.
The civil service is constitutionally required to serve the government of the day. As the Armstrong memorandum sets out, it has no “constitutional personality or responsibility separate from [this]”. And, for their part, civil servants are often described by ministers and officials as “fundamentally passionate” about public service reform, having a “can-do attitude” and working “diligently” on government priorities — including some they disagree with on a personal level.
But, crucially, their behaviour is also influenced by other, equally powerful incentives — including career progression and a bias towards the status quo — with most civil servants working several stages removed from ministerial oversight.
The political-official relationship is, in other words, a classic principal-agent problem.
Progression to other roles depends on demonstrating abstract competencies, known in Whitehall as “behaviours”; being able to fit a particular civil service mould; and playing the small ‘p’ politics required to work the system.
Similar issues affect other large bureaucracies and predictably mean that civil servants are incentivised to defend their department, and consider what’s best for their future career, as much as put ministers’ priorities first. One former minister told Reform, for example, that the “primary loyalty” of Principal Private Secretaries (PPSs) — the most senior official in a Secretary of State’s private office — is “always to the system”. Others report a deep frustration with their inability to drive change.
Enter: political appointments.
In a democratic system, with government expected to fulfil complex, wide-ranging mandates, we shouldn’t shy away from ministers selecting more of the staff they have around them, including SpAds, policy advisers and other outside experts — acknowledging that part of their value is loyalty and a single-minded commitment to a minister’s goals. This isn’t in tension with an impartial civil service; it’s about government achieving its maximum impact.
This principal-agent problem won’t go away, and nor should we fundamentally change the relationship between the permanent civil service and ministers. But we must therefore provide a stronger and much better defined system of political support to ministers, so they can successfully execute their role.