From archive to action
Senior Researcher
In 2007, then-Prime Minister Tony Blair remarked that one of his “big regrets” was not using his first term to more quickly reform public services. Last week, a release from the National Archive revealed frustrations shared by his Chief of Staff, Jonathan Powell, and the former Cabinet Secretary, Jeremy Heywood, about the way No.10 was set up — impacting on its ability to deliver.
A new Government might think that the mechanics of No.10 are a second-order problem or that, in trying to change them, they’ll be accused of navel gazing. This couldn’t be further from the truth. As these letters from the archive reveal, having a capable centre, with the capacity to closely track performance targets while also crafting long-term strategy, is key to achieving ambitious goals.
Here are three things that stood out:
1) No.10/Cabinet Office leadership on spending strategy
As the late Cabinet Secretary, Jeremy Heywood, writes “in the ideal world the relevant part of the Treasury (i.e. its Spending Directorate) should certainly be part of No.10/Cabinet Office. But assuming that is off the agenda we need to build up our own capacity and work more effectively alongside the Treasury”.
Taking a strategic approach to spending relies on No.10 and the Treasury working hand-in-glove. Yet the imbalance in economic clout between the two means HMT holds many of the cards in budget negotiations (it’s one reason why, for better or worse, a joint unit of spads was established between No.10/HMT in 2021).
One way of countering this would be to beef up No.10’s ability to conduct economic analysis and grant it access to more granular data on public spending so that it can take part in discussions with HMT on more equal terms.
A more radical suggestion is to break up the Treasury: having it retain its role in setting an overall spending envelope and deciding tax policy while making No.10, Cabinet Office or perhaps a new department (such as the “Office of Budget and Management” recommended in the Maude Review) responsible for strategy and stimulating economic growth.
2) Chasing progress from the centre
As Heywood rightly observed: "Performance management, particularly when we are focusing on whether things are actually happening on the ground not simply on whether departments are sticking to their budgets, is surely the core function of the CEO and centre. We cannot entirely sub-contract this function to the Finance Department".
A No.10 that delegates its role in checking whether things get done also risks losing its grip — and the power of the Prime Minister’s office — to catalyse change. The PMDU under Michael Barber, for example, benefited from Blair’s personal involvement in quarterly ‘stocktake’ meetings — sending a clear signal to Secretaries of State and Permanent Secretaries on what the PM cared most about and the outcomes they’d be held accountable for.
3) Opening Permanent Secretary roles to outsiders
Finally, a letter released last week revealed advice from Jonathan Powell that when Robin Mountfield, then Permanent Secretary to the Cabinet Office, retired, he should be replaced through an open competition with the aim of attracting “a really good businessman”. Just over a decade later, of course, this became a reality when John Manzoni left the executive team of BP to take up a job at the Major Projects Authority and later as a Permanent Secretary and Chief Executive of the Civil Service.
The Civil Service, particularly its senior most ranks, suffers from a well-documented narrowness of experience and breath of perspectives. Earlier this month, the interim report of the COVID-19 inquiry found that advice offered in the pandemic was undermined by “groupthink” and a “lack of significant external oversight and challenge”.
The culture of any organisation is largely shaped by its leadership. Opening up and encouraging external applications to Permanent Secretary roles would be a ‘route-one’ way of introducing greater cognitive diversity, and potentially more robust policy advice, into government. Though, as others have cautioned, the “labyrinth”-like structures of the Civil Service mean that the ability of outsiders to implement change relies on them having the right support to effectively navigate the government machine, and find out which ‘levers’ will compel action.