Tim Knox is editor of the Effective Governance Forum and former Director of the Centre for Policy Studies.
In just the last couple of weeks, the political world suddenly seems to be turning rightward. The Prime Minister has suddenly found the appetite to increase defence spending, to analyse the depth of the malfunctioning of the Civil Service, to announce cuts in the international aid budget, to address welfare in both its fiscal and its moral roots, to attacking quangos, to claim fiscal rectitude, and even to argue for Heathrow expansion.
Meanwhile Kemi Badenoch has announced her desire to go further on defence spending and to end the race to Net Zero by 2050. Just as importantly perhaps, she also signalled yesterday that she, unlike Labour when it came into office last summer, will be ready with a fully-funded plan for the Government:
“… just like the 1970s and 2000s, our Party cannot shortcut our way back into office with easy answers or rushed announcements. We must develop credible plans that are based on shared conservative values. Personal responsibility, citizenship, sound money, family, freedom, and so much more. Plans that show we are thinking about tomorrow. Plans that are ambitious, tackling problems with the detail they deserve but rooted in realism, not wishful thinking.”
So far, so good. But, and it is a big But, we must not underestimate the extent of the challenges facing both our current and any future government: as the head of the National Audit Office said recently that: “We’ve managed to pull off the trick of a vast increase in the cost of the system, but no sign of improved outcomes”.
He is not alone. The Governor of the Bank of England said last month that falling public sector productivity is holding back the whole economy. The Public Accounts Committee warned that HS2, with costs likely to end up at £80 billion, is the “model case of how not to manage a national infrastructure project”.
All this against the backdrop of failing public services: overcrowded hospitals and prisons, crumbling schools, and police failing to police, all leading to record levels of public disillusion with over three quarters of us now feeling that serious reform of public services is necessary.
And we all surely know that yet more money, yet higher taxes can not be the answer; we have surely reached the limits of what is possible there. So what can be done?
Two interconnected things are essential: the first is for shadow ministers to have a serious plan for what they will do in government from day one. To make sure that they know both where they want to get there and to have strong plans on how they will get there. Think Michael Gove in 2010 when he had the ideas, the people, and the support from No 10 to drive through true reform at the Department for Education.
The Effective Governance Forum is now developing a blueprint for how an opposition party should prepare for government – so more on this shortly. But there is also a crucial element of public sector reform which lies in a single phrase whose implications are rarely properly considered: falling public sector productivity.
So yes, some seemingly huge sums of money have been bandied around recently: Labour is going to try to cut international aid by £6 billion or so. Its welfare cuts might be another £5bn. The Chancellor’s inherited black hole was £22bn. Kemi wants £20bn for defence.
But these numbers are in fact tiny if you look at them in the context of public sector productivity. For if public sector productivity could match the performance of that of the private sector it would release at least £100bn a year, every year, to spend on whatever the government of the day chose.
They could drop all the cuts, have more defence spending, and still have huge amounts left over to spend on tax cuts, extra spending on whatever they wanted, even – whisper it – starting to pay off some of the grotesquely high national debt. So the big question which needs to be asked is: how on earth can you get public sector productivity to match that of the private sector?
And the answer is simple, if difficult to achieve. It is question of ensuring that professional management is the norm in both Whitehall and the public services.
What does this mean in practice? Here are a few practical steps. Government should do what any charity, football club, or business must do if it is in crisis: bring in new top management who are not imbued with a failing culture and then decide its core business and decentralise the rest. Ministers should appoint the best professional managers they can find – let us call them the Chief Executive of a department – and give them the authority and power to make sure that their department meets whatever objectives are set by the relevant Minister.
This would require a vast change: to be able to achieve results, these Chief Executives should control staff’s time in post, pay and conditions, and be free to recruit their own team to drive through deep-seated reform. They should be appointed on long-term contracts to reverse the ridiculous current rate of churn of ministers and civil servants which in itself creates instability, short-termism, and loss of institutional knowledge.
To be effective, departments should become independent units with complete control over their staff, methods of working, and pay terms and conditions. This will ensure that every level – including, crucially, that of the chief executive – can be held accountable. Each department would soon develop stability of vision, ethos, and leadership.
Revolutionary perhaps. But would Tesco hire a CEO who had little management experience, no knowledge of retailing and who changed jobs every two years? Why is exactly that approach tolerated throughout the public sector?
So yes, Badenoch must have great policies ready to go – but make sure also that she has a plan to mend the broken Whitehall machine.
Sign up to the EGF newsletter here.
Tim Knox is editor of the Effective Governance Forum and former Director of the Centre for Policy Studies.
In just the last couple of weeks, the political world suddenly seems to be turning rightward. The Prime Minister has suddenly found the appetite to increase defence spending, to analyse the depth of the malfunctioning of the Civil Service, to announce cuts in the international aid budget, to address welfare in both its fiscal and its moral roots, to attacking quangos, to claim fiscal rectitude, and even to argue for Heathrow expansion.
Meanwhile Kemi Badenoch has announced her desire to go further on defence spending and to end the race to Net Zero by 2050. Just as importantly perhaps, she also signalled yesterday that she, unlike Labour when it came into office last summer, will be ready with a fully-funded plan for the Government:
“… just like the 1970s and 2000s, our Party cannot shortcut our way back into office with easy answers or rushed announcements. We must develop credible plans that are based on shared conservative values. Personal responsibility, citizenship, sound money, family, freedom, and so much more. Plans that show we are thinking about tomorrow. Plans that are ambitious, tackling problems with the detail they deserve but rooted in realism, not wishful thinking.”
So far, so good. But, and it is a big But, we must not underestimate the extent of the challenges facing both our current and any future government: as the head of the National Audit Office said recently that: “We’ve managed to pull off the trick of a vast increase in the cost of the system, but no sign of improved outcomes”.
He is not alone. The Governor of the Bank of England said last month that falling public sector productivity is holding back the whole economy. The Public Accounts Committee warned that HS2, with costs likely to end up at £80 billion, is the “model case of how not to manage a national infrastructure project”.
All this against the backdrop of failing public services: overcrowded hospitals and prisons, crumbling schools, and police failing to police, all leading to record levels of public disillusion with over three quarters of us now feeling that serious reform of public services is necessary.
And we all surely know that yet more money, yet higher taxes can not be the answer; we have surely reached the limits of what is possible there. So what can be done?
Two interconnected things are essential: the first is for shadow ministers to have a serious plan for what they will do in government from day one. To make sure that they know both where they want to get there and to have strong plans on how they will get there. Think Michael Gove in 2010 when he had the ideas, the people, and the support from No 10 to drive through true reform at the Department for Education.
The Effective Governance Forum is now developing a blueprint for how an opposition party should prepare for government – so more on this shortly. But there is also a crucial element of public sector reform which lies in a single phrase whose implications are rarely properly considered: falling public sector productivity.
So yes, some seemingly huge sums of money have been bandied around recently: Labour is going to try to cut international aid by £6 billion or so. Its welfare cuts might be another £5bn. The Chancellor’s inherited black hole was £22bn. Kemi wants £20bn for defence.
But these numbers are in fact tiny if you look at them in the context of public sector productivity. For if public sector productivity could match the performance of that of the private sector it would release at least £100bn a year, every year, to spend on whatever the government of the day chose.
They could drop all the cuts, have more defence spending, and still have huge amounts left over to spend on tax cuts, extra spending on whatever they wanted, even – whisper it – starting to pay off some of the grotesquely high national debt. So the big question which needs to be asked is: how on earth can you get public sector productivity to match that of the private sector?
And the answer is simple, if difficult to achieve. It is question of ensuring that professional management is the norm in both Whitehall and the public services.
What does this mean in practice? Here are a few practical steps. Government should do what any charity, football club, or business must do if it is in crisis: bring in new top management who are not imbued with a failing culture and then decide its core business and decentralise the rest. Ministers should appoint the best professional managers they can find – let us call them the Chief Executive of a department – and give them the authority and power to make sure that their department meets whatever objectives are set by the relevant Minister.
This would require a vast change: to be able to achieve results, these Chief Executives should control staff’s time in post, pay and conditions, and be free to recruit their own team to drive through deep-seated reform. They should be appointed on long-term contracts to reverse the ridiculous current rate of churn of ministers and civil servants which in itself creates instability, short-termism, and loss of institutional knowledge.
To be effective, departments should become independent units with complete control over their staff, methods of working, and pay terms and conditions. This will ensure that every level – including, crucially, that of the chief executive – can be held accountable. Each department would soon develop stability of vision, ethos, and leadership.
Revolutionary perhaps. But would Tesco hire a CEO who had little management experience, no knowledge of retailing and who changed jobs every two years? Why is exactly that approach tolerated throughout the public sector?
So yes, Badenoch must have great policies ready to go – but make sure also that she has a plan to mend the broken Whitehall machine.
Sign up to the EGF newsletter here.