Interview: Jonathan Stephens

The Department for Culture, Media and Sport, in its birth and its steady evolution, reveals much about the changing role of government since John Major’s administration. It illustrates the state’s expansion into previously self-regulating areas of public life; the growth of its self-appointed responsibilities as manager, sponsor and regulator; its harnessing of economic and social activity for the public good (in its case, the use of arts and culture to drive urban regeneration); and, latterly, its retreat – sparked by both financial necessity and political philosophy – from day-to-day management of its sector towards a lighter and more selective approach to interventions. Meanwhile, the coalition government has brought a narrowing of focus, with DCMS’s many and varied responsibilities nowadays seen through the lens of the country’s dire need for economic growth.

“Increasingly, we see ourselves as moving from being a department that administered or curated different sectors, that kept them going, to being a department that’s an agent of change,” says Jonathan Stephens, the department’s permanent secretary. These days, DCMS officials are “interested in what we can do that makes a difference; in making that intervention; and then in leaving something behind that is sustainable for the sector to get on with.”

“The Olympics is a perfect model of that – and a very, very big model of that,” he continues. “It’s a one-off intervention. It’s done because successive governments believe that it can make a real difference: change East London, change lives. And come October the hundreds of people involved will go off and do something else. It will leave behind a changed landscape in East London, with great new business and tourism opportunities. And that’s the model of how we see ourselves intervening in the future.”

This retreat from everyday management to one-off interventions is happening quickly – certainly far faster than the government’s previous expansion into the arts, culture, media and sport. Britain’s first arts minister was appointed in 1964, but there was no dedicated department for another three decades: it was exactly 20 years ago, after the 1992 election, that new PM John Major founded the Department for National Heritage. The DNH absorbed the old Office for Arts and Libraries and took responsibilities from five Whitehall departments, bringing together broadcasting, sport, film, tourism, heritage, listed buildings, national parks and the brand new national lottery.

At the time, some Conservatives raised eyebrows at Major’s decision: “Broadcasting and the arts – and sport, too – are best left to run themselves with the minimum of state interference,” wrote Robert Harris in the Sunday Times. “That, I thought, was Tory philosophy.” Yet over the following years, the department – which took its current name after Tony Blair’s ‘97 election – grew to encompass the creative industries, the internet, telecommunications and broadband, gambling, honours and ceremonials, entertainment licensing, architecture and, of course, the Olympics. “I’ve always thought of us as something like a Tardis,” comments Stephens. “We look incredibly small from the outside, but once you get inside you understand what a huge reach we have.”

Where fibre-optics meet fabrics
That reach, Stephens believes, won’t diminish as the DCMS changes its approach – but the department’s focus is clearly changing. Asked whether the end of the culture-led ‘urban renaissance’ leaves the DCMS on the fringes of work to support economic development, Stephens argues that in fact the DCMS is “an engine for change at the heart of economic growth.” Its roll-out of broadband – and of superfast broadband in ten key cities – represent a “big capital project that will make a huge difference for businesses and individuals, opening up new opportunities for enterprise.”

What’s more, he says, that communications infrastructure will provide a huge boost for the creative industries, “in which we [in the UK] have a traditional strength and a comparative advantage, and in which our exports are growing very fast. We’re the perfect department to bring these two bits together: the hardware, the infrastructure, with the software – the creative content.” The output of the creative industries, Stephens explains, relies on “the underpinning of the wider arts and creative sector, because there’s enormous interplay between the two. They flourish together, and it’s when you attract visitors and creative people from around the world that you get a sort of creative hub – a hub that mirrors the financial hub that London has always seen itself as offering.”

Stephens, then, argues that the arts underpin the UK’s crucial creative industries. But given the retreat from “curating” the arts – with dramatic cuts in grants and the abolition of arts quangos – isn’t the department at risk of weakening those creative wellsprings? “There can’t be any disguising the fact that there’s less money to spend”, he replies; but the DCMS is “strengthening the sector to diversify its sources of funding, and in particular creating a framework that encourages a strong sense of philanthropy” – in part by using heritage and arts funding to match-fund private donations. What’s more, the department will keep on “looking at the barriers, the things we can do to support [the arts’] growth”. As examples, he cites help with raising finance and defending intellectual property rights.

Changing roles, changing organisations
Of course, as the department’s role and focus changes, the organisation must change too – and here, Stephens had a head-start. Having worked on public services reform and spending at the Cabinet Office and Treasury between 2000 and 2006, he arrived at the DCMS armed with a set of ideas around efficiency; ideas that are now being enacted across government by the Cabinet Office’s Efficiency and Reform Group.

“A lot of the things that we were talking about then are just as true today, but all the more so,” he comments. “Even when I joined the Treasury in 2002, when we were talking about expanding the health budget, we were also talking about how you get more efficiency from that spending. I was in the Treasury when Peter Gershon did his first efficiency review, and all the themes that were coming out then about how you get value for money from procurement, how you make sure you deliver back office services in more efficient ways, are all the more true today.” If the mind was willing, though, in those days the flesh was weak. “It was quite difficult to get our message across in an environment when spending was still seen as rising,” Stephens recalls.

That perception has now, of course, gone into dramatic reverse. Indeed, culture secretary Jeremy Hunt imposed an eye-watering 50 per cent cut on DCMS administrative spending; at one point it looked like the 500-strong department would halve in size. In fact, the DCMS is likely to end up with 340 staff in 2014, says Stephens: “It’s about making savings in our accommodation costs, our IT costs – wherever possible, before we make savings on people.” After the Olympics, the department will move out of its beautiful HQ on Trafalgar Square; Stephens is, he says, “looking very actively” for a new tenant, enabling him to move in with a bigger department and share its facilities.

The department has, Stephens believes, been able to dramatically cut costs without significantly weakening its capabilities – in part, because it moved some years ago to a project-based structure rather than keeping its staff in permanent teams. “I remember when I first came to the department,” he recalls, “I said to people working there: ‘What do you think is the biggest problem you’ve got here?’ The answer came back: ‘It’s moving resources around. When something new comes up, it’s the devil’s own job to prise people out of a standing team. [Managers argue they] have all got this huge agenda and can’t possibly release anyone’.”

In 2008, Stephens put 100 of his staff into a pool but retained slimmed-down standing teams, improving his ability to move people to where they were needed while protecting the expertise embedded in his specialist, permanent groups. “That meant people got used to working flexibly: working on more than one project at a time; moving from one project to another rather than being part of a team for a number of years,” he explains. The department also learned how to “manage knowledge as people move from one project to another; how to make sure that you learn lessons at the end of the project, and have a good handover.”

Recently, DCMS moved to a fully project-based structure, enabling Stephens’ top team to regularly assess the department’s priorities and redistribute its staff to suit. “We have become much more flexible and adaptable, and I think that’s the model for a lot of what the civil service has to do for the future,” he comments. Other departments certainly seem interested: the environment and business departments have adopted the model, and the Ministry of Defence recently approached DCMS to learn about the system. “Rather remarkably, we even had the Treasury board come to us,” says Stephens. “Now the Treasury’s not known for learning lessons from other government departments, but they came to us and said: ‘We’re really interested in applying this flexible model. How did you do it?’”

Moving like a duck
While Stephens appreciates the flexibility that comes with moving staff between teams, however, he sees the value of keeping senior officials in post for long enough to see projects through from start to finish. “I always remember my first hearing in front of [the Public Accounts Committee],” he recalls, “when they said to me: ‘Will you still be here at the time of the Olympics to tell us whether you’ve lived up to all your promises?’ And I’m really pleased that I am, and looking forward to reporting to them after the Olympics.”

PAC chair Margaret Hodge has, of course, recently ruffled feathers in Whitehall by insisting that civil servants should remain accountable for their work even after they’ve moved on to new jobs – famously summoning Home Office permanent secretary Dame Helen Ghosh to discuss her work in her previous role at the environment department. Asked whether it’s fair for committees to call back departed officials, Stephens replies that it depends on how much time has elapsed. “If you’re called back five years afterwards, I think that’s very difficult and risks being a huge distraction,” he says. “If the project is complete and three months later there’s a PAC hearing, I don’t think that’s unreasonable myself. Others might take a different view.”

On other issues, though, Stephens challenges Hodge’s approach. In PAC’s December report, Preparations for the London 2012 Olympic and Paralympic Games, the committee complained that on two matters Stephens “declined to engage with us on the grounds that these were ministerial policy decisions”, adding that even where policies have changed, the accounting officer “remains accountable to Parliament for the value for money of public expenditure”. Stephens agrees immediately that accounting officers remain responsible for value for money; he explained to the committee why the decisions represented a good use of public funds, he says. But “then I was asked why I put the money into that rather than something else, and at that point I said that was a ministerial decision. It’s ministers who decide what the priorities are and what we should invest in.”

On the Olympics themselves he’s feistier still, defending DCMS’s management of its budget and refuting PAC’s figures on the state of the contingency fund. Asked about the committee’s allegation that late planning for security requirements left DCMS paying over the odds for its additional requirements, he argues that they “couldn’t produce good estimates until we knew the detailed sports schedule, the security requirements and the threat at the time. We’re confident that even if the estimates had been different two, three years back, it wouldn’t have made a material difference to the cost.”

Getting things right
PAC’s criticisms may have particularly riled Stephens because, overall, the Olympics is a rare example of a highly successful big public sector construction project; even the PAC report acknowledges that the “building programme has been exemplary” before turning to the committee’s budgetary concerns.

Asked what foundations enabled the project to remain on time and on budget, Stephens names three factors: “First, it’s about having a really clear, common purpose, so that everyone knows that the Olympics is more important than any individual part of it or job within it,” he says. “Second is really good and capable people. We’ve got a top team that has stayed right through the project – and that’s been absolutely critical. And the third key area is strong relationships within that top team. It’s not that people don’t have arguments – if you’ve got top people with strong views, there are plenty of robust discussions; that’s actually one of the strengths. But we can have those discussions and everyone knows that everyone cares most of all about success for the project as a whole.”

While question marks still hang over the eventual use for some sports venues, the Olympics look set to leave a powerful legacy in East London. “London has raised the bar on how to deliver a lasting legacy,” International Olympic Committee president Jacques Rogge said last month. That legacy will not, however, be either quick or easily measurable. “One has to think about this in terms of decades,” says Stephens. “It will be 10, 20 years before one even sees the development of the Olympic Park fully realised, and it’s over that period of time that we’ve talked about the money that went in from the lottery being returned. But this was never about financial return in that narrow sense. It’s about economic growth, jobs in East London; it’s about generating opportunities for inward investment, for exports, in ways that nobody envisaged back in 2006.”

Of course, given DCMS’s new approach, it will have moved on to new challenges long before the Olympics legacy reaches maturity. Indeed, if the department has succeeded in – as Stephens puts it – “making that intervention; and then leaving something behind that is sustainable for the sector to get on with”, then those legacy benefits should roll in without the need for constant DCMS oversight. The same is true of the department’s other big projects, such as the broadband roll-out and the digital switchover. So as the civil service shrinks and becomes more hands-off, will there even be a continued need for the DCMS? Should the department complete its lifecycle, dissolving to leave our cultural sectors to look after themselves?

Absolutely not, says Stephens, “because we’ve got this critical role at the heart of economic growth, of this new and important emerging agenda around technology, and we’ll have a proven record of really effective delivery of big change projects.” Like the Olympics, he notes, digital switchover is “quietly and effectively and competently coming to a conclusion on time and well under budget; that’s the sort of thing that this department does superbly well.” In fact, the department’s capital budget has doubled in a year, as the government invests in broadband.

When the Department for National Heritage was founded 20 years ago, it was quickly dubbed the ‘Ministry for Fun’; and fair enough, says Stephens, “we deal with the subjects that really interest and excite people.” These days, though, its work is “a lot more serious than that. This summer, the Games are critical in terms of business opportunities. The eyes of the world’s investors will be on London. It’s a critical opportunity for tourism. The communications and internet sectors are critical areas of growth.”

The department’s approach, and its objectives, have changed dramatically since it was founded by John Major’s new Conservative government; but 20 years on, Stephens believes that DCMS has proved to a new Tory-led administration that the department is an important catalyst for economic growth. “Far from our responsibilities diminishing, they’re widening,” he says. “Our work is exciting, but it’s also deadly serious.”