A harder core

Tell some civil servants that the centre of government isn’t strong enough, and they’re likely to look bemused; annoyed, even. Political scientists have long pointed out that the UK possesses one of the developed world’s most centralised systems of government, even following devolution to Scotland, Wales and Northern Ireland.

Nevertheless, the centrepiece of Shaping Up, a heavily-publicised new report from the Institute for Government (IfG), is the recommendation that the beating heart of Whitehall – the Cabinet Office, Treasury and 10 Downing Street – strengthen their ability to develop and implement a “whole-of-government strategy”. The report also calls for departments to be guided by minister-chaired strategy boards, and puts forward a raft of proposals to address that perennial Whitehall bugbear: lack of coordination.

The IfG’s finding that Whitehall’s centre is weak in strategic terms should hardly come as a surprise: the think-tank said as much last summer in its interim report, State of the Service. Simon Parker, both reports’ lead author, explains the importance of a more strategic approach to setting priorities for the whole of government.

“It’s fundamental,” Parker says. “It’s important to have a set of limited targets – certainly no more than 20, and ideally fewer – which are genuinely the government’s priorities; the things that will change the world over the next five years.”

But what about the existing public service agreements (PSAs), the Treasury-based delivery unit that monitors them, and the Cabinet Office-based strategy unit? The report says PSAs are “frequently missed with few penalties for failure”, and while the strategy unit has provided useful analyses for the prime minister, it has “failed to fulfil a genuine strategic leadership role”.

Parker insists that Whitehall doesn’t need to start again from scratch, and says that many of these Blair-era innovations were positive steps – but they failed to overcome the “big problems” with leadership at the centre. His solution is the creation of a new strategy directorate, its decisions discussed and agreed with every cabinet member to secure support across government.

Dame Sue Street, former permanent secretary at the Department for Culture, Media and Sport, is full of praise for the report, but worries that this new hub could lack feedback from departments and, indeed, the front line of service delivery.

“The strategies could be really airy-fairy and impractical,” she says. Street suggests one way of overcoming this could be greater involvement by the existing permanent secretary steering group, which could provide the link between the setting of overall strategy and the hard realities of departments’ roles and capabilities.

Christopher Hood, professor of government at All Souls College, Oxford, and a specialist in Whitehall reform, expresses concern that the previous incarnations of strategy hubs have tended to be largely staffed by ambitious wonks with little experience of implementation.

But Hood does agree that one feature of British government is a relative lack of clarity at the centre over policy coordination, describing the sprawling functions performed by both the Cabinet Office and the Treasury as “unusual” in international terms.

Addressing these complaints, the IfG report envisages a stronger centre of government, but also a smaller one, with the increased focus on cross-Whitehall agenda-setting counter-balanced by the removal of the more extraneous functions of both departments.

So the Treasury would be less closely involved in policy development with other departments and stick to financial allocations, while the Cabinet Office would lose responsibilities such as charity policy.

That’s a proposal with which Jonathan Baume, general secretary of senior managers’ union the FDA, has sympathy. “A lot of people – including very senior officials – have felt for a while that the Cabinet Office lacks shape,” Baume says.

“It’s almost as though if there isn’t a real home for something, then people say: ‘Oh, we’ll dump it in the Cabinet Office’. The Office of the Third Sector could just as easily be in Communities and Local Government; that would be more sensible.”

However, while many departments would be relieved to imagine less Treasury tinkering, Sue Street says there are benefits to the money men having a voice in policy development. “I think it’s healthy for the Treasury to have a pretty good grip on what the delivery challenges of different policies are.”

Financial considerations are, in fact, at the heart of the report’s intentions. Simon Parker says Whitehall reform is vital for more than dry, academic reasons: the need to make deep spending cuts across departments will necessitate a more coordinated centre.

Baume agrees: “The next government is not going to get anywhere – and nobody seems to have come to terms with the cuts that might be looming – unless they pick up proposals like this.”

The stronger, coordinating core is in a sense the cornerstone of the IfG report, and the rest of their recommendations grow out from that. They include greater collaboration through pooled budgets; secretaries of state with policy briefs based on priorities, not departmental structures; and departmental strategy boards chaired by ministers. Most commentators agree that the ambitious programme of reforms would require that elusive asset, political buy-in.

Parker nods to Michael Heseltine’s chief executive-style management of his departments; an example of strategic leadership that IfG boss Sir Michael Bichard also likes to use. Heseltine’s practice was to take his new permanent secretary to lunch at a Mayfair hotel and present them with a short list of his priorities.

That might work for one department, but guaranteeing the whole Cabinet are committed to a strategic direction presents a challenge of a different order. “Joining up will only happen if Cabinet ministers are not trying to score points off one another or be marked out for favour,” says Sue Street. This may be a tricky objective to achieve.

The government’s own Smarter Government, published in December, and the raft of plans from the Conservatives, align with many of Shaping Up’s concerns. Indeed, shadow Cabinet Office minister Francis Maude stresses the overlap to CSW.

“It is great to see that so many of the IfG’s conclusions align entirely with Conservative policy, particularly their proposals to strengthen departmental boards and governance and introduce departmental business plans,” Maude says. “We will look at their remaining proposals with interest.”

Notwithstanding some unease over sensationalist early newspaper reporting, many senior Whitehall figures are keen to commend the Institute. The actual reforms may have to wait until after the election, but the debate has certainly begun.