Interview: Andrew Haldenby

The state of the public finances, says Andrew Haldenby (pictured above), means that “we as a country need to do fewer low-productivity activities, and more highly-productive work.” And the think-tank chief points an accusing finger: “The public sector as a whole has been a low-productivity part of the British economy, and that now puts it into a process of transition. It’s been protected in the past by a huge amount of extra spending. But that spending has bankrupted the country; something has to give.”

Haldenby doesn’t mince his words, calling for large-scale reform of the civil service and public services plus “a transfer of resources from the public to the private sector”. And if readers are tempted to dismiss his comments as attention-seeking by a think-tank at the margins of debate, think again. Haldenby is a former head of the Conservatives’ research department, and the man with whom he founded Reform in 2001 is now a Tory MP. His stance may sound radical, but Reform is very close to today’s Conservative Party.

Nonetheless, while Tory politicians take pains to praise the civil service, Haldenby adopts a very different line. “The evidence of poor management in the civil service is very strong,” he says. “Management means achieving something within a budget, and it seems to me that that is more the exception than the rule.” Under Labour, he believes, attempts at public service reform have been “at the margins”, while “policymaking has been weak, particularly over the last decade; in some areas, it’s been a complete disaster.”

This poor performance, says Haldenby, is rooted in a lack of accountability; officials should be held directly accountable for their work rather than hiding behind the concept of ministerial responsibility. “If people aren’t personally accountable, they become a bit defensive; they don’t try and do anything differently; they become rather stuck in their ways – and we’d see all that as characteristic of civil service culture,” he says. But if people were more exposed, wouldn’t they become still more risk-averse? No, he replies; if officials are publicly tasked with achieving a stretching objective, they’ll have to be innovative to achieve it. “You say that the current system gives them cover to take risks,” he argues, “but I think what they have is cover not to take decisions.”

Ideally, Haldenby would like to see accountability split between ministers and officials, with politicians taking responsibility for strategy, resource allocation and communications, and civil servants accountable for delivery. Meanwhile, he would dispense with large-scale, contract-based service outsourcing by giving citizens control over their own individual budgets. And the civil service’s pensions and working practices would be attacked to cut costs and improve flexibility.

“It’s about the end of a ‘job for life’ culture,” he pronounces. “The civil service shouldn’t think of itself as a cadre of people which exists regardless of the task in front of it, but an ever-changing group that changes according to the nature of the task.” Civil servants enjoy vastly better job security, pensions, and terms and conditions than private sector employees, says Haldenby, “but none of this is statutory; it can all be negotiated away. This means making the civil service indistinguishable from the private sector in terms of employment, and enabling civil service managers to take people on and let people go as they see fit, as a private sector manager would.”

Many of these changes would benefit good civil servants, Haldenby believes. “If you have a smaller number of more productive people with more responsibility, you’d expect a lot of salaries to go up,” he says. For the senior civil service, though, there would be a quid pro quo: direct appointment by elected politicians.

“Politicians can and do influence the appointment of senior civil servants, but it’s very untransparent; the worst of all worlds,” Haldenby says; appointment by ministers would improve the civil service’s accountability and boost its dynamism. On this issue, Haldenby believes that the Tory party is inching towards his position. “Conservative policy is now that departmental boards will have the power to tell the cabinet secretary if they’re not happy with a permanent secretary,” he says. “That’s quite a major step on the way.”

The time is right for reform, Haldenby argues. “There has never been stronger political support” for change, he says; “Labour people like Liam Byrne and David Blunkett and Caroline Flint have come to the conclusion that you need to have a better-managed and more accountable civil service, and [shadow Cabinet Office minister] Francis Maude has moved and agrees. Then there’s the deficit, which means that government has to be run in a different way. Those are the conditions that would enable a reforming government to sit down with the senior civil service and say: ‘There’s no alternative to these changes’.”

Nonetheless, Haldenby accepts that neither party “shows any great sign of wanting to bring up these themes in the election campaign”. Indeed, “Both say they want to get the deficit down, but neither is keen to talk about what that would mean. There’s no doubt that the level of political debate is a very long way behind the honest one that needs to be had if they’re going to achieve their goals on the deficit.”

That honest debate, he continues, would include a recognition that frontline staff numbers will have to fall, and “a discussion about what government should and shouldn’t do – because I think it will do less.”

On these tricky subjects, politicians are maintaining an uncomfortable silence. “The good case scenario is that all this is politically difficult, and whoever wins the election will come up with a plan to do this afterwards,” says Haldenby. “The bad case scenario is that it’s too politically difficult, and they won’t come up with a plan afterwards; and there is no credible plan to tackle the deficit”. In this case, he suggests, the new government will eventually be forced to act by an “external event” such as a downgrading of its credit rating.

The prospect of major reforms shouldn’t scare effective officials, the Reform chief says: “This is not a process of slash and burn; it’s a process of improvement and increasing efficiency.” Civil servants who resent “the lack of good management, the incredible frustrations of having to deal with every changing political whim” will welcome a world “where civil servants have more autonomy, more responsibility”, he argues. “After all, people say that happiness comes from having control over what you’re doing.”

Dramatic reforms might be uncomfortable, says Haldenby, but “the end result would be a better public sector which is achieving more, at a sustainable cost, and with more motivated people working in it.” And the alternative? “A world in which arbitrary, savage cuts are applied. If simple cuts are applied in, say, the health service, I’d expect waiting lists to rise; I’d expect big voluntary redundancy programmes, and you might lose the better people. We’d get these perverse consequences.

“Whatever happens going forward, head counts are going to go down; government’s going to do less,” concludes Haldenby. “But there’s a good way and a bad way of doing that.”

The front line of debate
Key recommendations of Reform’s December 2009 report, The front line

Ministers should be able to appoint and fire senior civil servants in their departments
Recruitment should be the direct responsibility of line managers, not managed centrally
The public sector should move to fixed-term contracts
Terms and conditions should be set locally, and all unfunded public sector pensions and barriers to outsourcing above the basic TUPE framework should be abolished
Senior civil servants should appear before the media and parliamentarians to increase their accountability
Independent teams should be invited to conduct reviews of departmental operations
Public sector workers should be cut by 15 per cent, returning their numbers to 1999 levels