Sunday 1 July 2012

Whitehall's power without responsibility

On 12 June 2012, the Institute for Government hosted a seminar on leadership which consisted of a conversation between Sir-Gus-now-Lord O'Donnell (GOD) and his oppo in Australia, Terry Moran. They were due to discuss "the role of leadership in reform, the challenges of making change happen in public service and leading through crises".

Sadly it is no surprise that the NAO has found substantial problems with the HMRC’s accounts. This year has seen a litany of tax errors and scandals come to light with mistakes made at the most senior level from the Permanent Secretary for Tax downwards.

The sheer scale of waste and mismanagement at HMRC never ceases to shock me. Without even mentioning the tax gap, in 2011-12 the Department wrote off a staggering £5.2 billion of tax owed, overpaid nearly £2.5 billion in tax credits due to fraud and error and underpaid around £290 million.

In some areas the Department is moving in the right direction and has made progress to implement improvement plans. But the Department is still plagued by IT problems; limiting, for example, its ability to link together the debts owed by tax payers across different tax streams.

With its long history of large scale IT failures, the Department needs to get a grip before it introduces its new real time PAYE information systems and begins the high-risk move from tax credits to the Universal Credit.

That was Margaret Hodge, chairman of the Public Accounts Committee, commenting on the National Audit Office report on HMRC's 2011-12 accounts.

("Challenging", of course, means impossible.)
The event was reported next day by Sue Cameron in the Telegraph, Whitehall’s knights joust over public service reform:
"Private sector people who come into Whitehall get a big shiny star," remarked Gus O’Donnell, Britain’s former top civil servant this week, adding: "Ministers think they’re wonderful."

He said it with a rueful smile. Lord O’Donnell reckons that private sector executives are not always as good as they are cracked up to be by some ministers. "I tried to bring in more people from outside and on the whole they did slightly worse than other civil servants," he told a seminar on leadership at the Institute for Government (IfG) in London. "Often they took very big pay cuts to come in. You’d see some of them and you’d think… what was all that about?"
GOD was in charge of Whitehall from 2005 to 2011. How well did He do? Take a look at Margaret Hodge's verdict alongside, "substantial problems ... litany of tax errors and scandals ... mistakes made at the most senior level ... sheer scale of waste and mismanagement ... wrote off a staggering ... overpaid ... underpaid ... plagued by IT problems ... long history of large scale IT failures ...".

She's talking about HMRC, just one of GOD's satrapies. Just one of His satrapies where perhaps He failed to show leadership in reform, where the challenges of making change happen seem to have been too much even for Him and the public are left to pay for the crises.

Smile ruefully. And next time someone alludes to His ability to walk on water, just ask them, what was all that about?

According to Ms Cameron, it's all about the plans to reform the civil service and particularly, the plans to outsource more policy-making to the private sector. Clearly GOD disapproves.

The reform plan is said to be the work of Cabinet Office minister Francis Maude and Sir Bob Kerslake, head of the home civil service. Sir Jeremy Heywood, the feline Cabinet Secretary, is quoted as saying of Sir Bob that he is "doing his best at a new level".

Who knows how the relationship between the knights will develop over the next few years? For the moment, "doing his best at a new level" looks more like scratch-your-eyes-out than jousting.

No doubt about the relationship between GOD and Bernard Jenkin. Having looked forward to an enjoyable assault on the capabilities of private sector executives, GOD's heart must have sunk when he saw Jenkin in the IfG audience:
At the IfG, Lord O’Donnell was asked by Bernard Jenkin, Tory chairman of the Commons public administration select committee, about the billions wasted on public sector projects, with nobody resigning or taking the blame and ministers and civil servants sheltering behind each other.
In Sue Cameron's account, by way of a response GOD started by raving about scope creep:
Lord O’Donnell said there was a “straightforward” way to cope with this. The reason major projects went off track was because ministers wanted changes.
Complete nonsense. Lazy thinking. There's nothing wrong with scope creep, it's the sign of a healthy and useful system in its prime, it just needs managing. GOD must know that. His normally smoothly functioning circuits must have been shorted by the languid Mr Jenkin's question.

That's where the jousting was taking place – between GOD and Jenkin, and GOD was unhorsed.

"Straightforward"? In the Whitehall temple to deviousness it's hard to imagine a greater insult for a permanent secretary, let alone a Cabinet Secretary.

The first thing any senior civil servant will tell you is that the minister wants what the permanent secretary tells him he wants (the masculine includes the feminine). And if the minister insists on wanting something else, then that will be sabotaged. Completely. While leaving no incriminating traces.

It's in the Sue Cameron article as well but the extent to which GOD was wrong-footed by Jenkin's question is clearer in's article about the same encounter, "Only accountable if you're responsible":
The former Cabinet Secretary told an Institute for Government event on leadership and reform that he is not opposed to the idea of senior civil servants being held to account by select committees ... He said: "I would like to have the situation where we have public servants appearing in front of select committees for things that they are really responsible for, but to be really responsible you have got to have the power ..."
The only way this argument of GOD's works is if He believes that senior civil servants are not currently responsible. That their job is not a responsible job. That senior civil servants should not currently be called to account by Parliament because they are doing only a menial factotum's job.

He can't believe that. It's not true. And it's the opposite of what He would normally be expected to argue, viz. that the country is lucky to enjoy such a capable Executive branch of government, dominated by Whitehall. And that, in turn, means that the senior civil service must be accountable.

A bad day's work for Him, that IfG seminar was another nail in the coffin of GOD's chances of being the next Governor of the Bank of England.

That's His problem.

The public's problem, clearly and repeatedly identified by Margaret Hodge and Patrick Jenkin, is that our senior civil service wastes billions of pounds of our money. Whitehall's misfeasance in public office has already survived 30 years of outsourcing to the private sector and of recruiting private sector people and methodologies. More private sector involvement isn't going to solve the problem.

Neither is moving to cloud computing or using so-called "agile" software engineering methods or making public services digital by default.

That's all flannel. Whitehall has demonstrated for decades that it is quite agile enough to waste public money digitally, by default, in a cloud or anywhere else. The infantile fascination with technology offers no salvation, only automated misfeasance.

The solution, also clearly and repeatedly identified by Margaret Hodge and Patrick Jenkin, lies in accountability. More openness, earlier in the life of Government initiatives. Whitehall must acknowledge the supremacy of Parliament. They must be open with Parliament.

GOD must know that and like an old-style union baron he obtusely refuses to accept it. But He's gone now. He's retired, even if He doesn't realise it.

It's up to Sir Jeremy and Sir Bob. They're the leaders now. We don't want them jousting. Or hissing at each other. We want them to make Whitehall obey the Constitution. That will be good for Whitehall as well as the public. Sir Jeremy and Sir Bob must make Whitehall accountable. That is their duty.

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