After 31 years as a public sector chief, Michael Bichard is stepping down as head of the Institute for Government. He tells Matt Ross that, even in a squeeze, the coalition must succeed where Blair failed – and reform public services.
Michael Bichard is musing about the difficulties of reforming public services. “If there’s lots of money around, people tend to feel that there’s not much incentive to redesign your service because you can just throw money at it – and although you don’t get transformation of the service, you get some improvement. That’s what we’ve seen since ’97,” he says.
“But if there’s no money around, the instinct is still not to redesign your service: it’s to protect and defend what you have – and we’ll hear a lot of talk about ‘defending public services’ over the next year or two.” So while services may get faster and better when the public purse is full, and slower and poorer in lean times, “the way the service is designed stays the same whether you’ve got a lot of money or no money”.
As public spending declines, though, the design flaws do become increasingly obvious. “If you’ve got a poorly-designed service, it’s like having a bucket with a leak,” Lord Bichard continues. “The more water you pour in, the less obvious it is that there’s a leak – but if we reduce the input, it’ll start to look pretty horrible.”
The danger, he believes, is that the tap is running dry; unless we plug that leak, service users will pay a very painful price for the public sector’s failure to reform itself. “The big question is: are we just going to ‘salami-slice’? Are we going to carry on with services that have been inadequate even with all that additional money?” he asks. “Or are we going to redesign and reconfigure services?”
Reform, he knows, is no easy task; Tony Blair struggled with the issue before, Bichard believes, heading off down a blind alley. “There was a four-year period when [Blair] could have really reformed the civil service and public services, in ’97 to 2001, and I think he missed the opportunity,” he says. “If you’re going to do it you need a lot of public confidence and trust, which is exactly what he had then. But I don’t think he understood the public services well enough at the time.” After one term, Bichard says, Blair “came to the conclusion that reforming public services wouldn’t win him any votes and was quite a painful thing to do.”
The wrong targets
Blair then resorted to targets regimes which, in Bichard’s view, improved service quality but mitigated against reform: “If you have a large number of narrow targets that tell people not just what to do but also how to do it, what’s the incentive to be innovative?” The focus on targets was important in improving the quality of information available to government, but Bichard – who confesses that he helped develop the approach during his stint as the education department’s permanent secretary – now accepts that “we went overboard and continued all of that longer than was appropriate, and it became more and more detailed.”
As Blair’s premiership wore on, Bichard argues, he got distracted by structural reform in the public sector. “I think Tony Blair showed once again last week [while publicising his book] that he never really understood structure,” says Bichard. “He was saying that he’s realised that structural change is what achieves things: well, it depends where you start from, Tony. If you redesign the service and realise that, in doing so, you need to redesign the structure, then that’s defensible. But if you change the structure in the belief that doing so will automatically change your service and improve its effectiveness, then it’s not.”
Tinkering with structures is, Bichard adds, “tempting, because it looks as if you’ve changed things – but actually you rarely have.” Instead, the response to failure should be to “look at the business model, redesign the service, and then look at the structure and decide whether it’s fit for purpose.”
The influential institute
Bichard’s scepticism about the value of structural reform reflects both his own experience inside government, and the findings of the think-tank that he’s led since its creation two years ago: the Institute for Government. Funded by Lord Sainsbury and enjoying an enviable reputation for non-partisan and authoritative research, the IfG has been extremely influential; it played an important role, for example, in dissuading the new government from embarking on its own programme of restructuring Whitehall’s departments. Why has the think-tank managed to get so much traction? “Partly by luck and partly by judgement, we chose the right issues over a couple of years,” replies Bichard: the IfG’s work on transitions, coalitions and fiscal retrenchments came to fruition just as those issues hit the mainstream media.
Just as important, Bichard continues, is the IfG’s determination to build understanding of its reports. “We follow up our findings to ensure that something happens, with discussions, seminars, workshops, plus presentations to Whitehall departments, management teams and the three parties at a senior level,” he says. Most crucial to the institute’s reputation, though, is its determinedly cross-party approach. “We don’t break confidences; we work with all three parties,” says Bichard. “It was always one of my hopes and ambitions that we could get through the election with everyone still trusting us; we must be trusted by all three parties.”
Given this, is he concerned that replacing a former permanent secretary with a Labour politician – the new IfG chief is Lord Adonis, the last transport secretary – risks distancing the institute from coalition politicians? “Of all the ministers of recent years, Andrew [Adonis] has a reputation for being pretty independent,” Bichard replies. “He understands the importance of that issue, and all the signals I get from the Conservatives are that Andrew has their confidence.” And after all, the IfG’s work with the opposition is important too: “One of the lessons of history is that effective government depends on effective opposition,” he adds. “I think it’s perfectly right that we should help the opposition in exactly the same way as, hopefully, we’ll continue to help the government to be effective.”
The place to be
Of all the IfG’s work, perhaps the closest to Michael Bichard’s heart is its support for the concept that became Total Place: the project, which helped local authorities to identify all the public spending within their areas, rapidly swelled from its initial handful of formal pilots to include scores of eager councils. The over-arching aim was to foster better collaboration and coordination between all the arms of local and central government operating in an area, in order to realise efficiencies and service improvements. Bichard believes that local authorities saw the huge potential value of – and the fast-growing need for – the approach.
“One of the reasons why Total Place took off – to end up with 102 self-starting projects is unheard of – was that people understood that there was this tsunami coming, and they needed to plan how they were going to deal with it,” he recalls. “They knew they could do that better together than individually.”
By tackling the fragmentation of public service management structures, budgets and delivery mechanisms, Bichard believes, politicians and officials could greatly improve both quality and efficiency. “Our inability to collaborate, our obsession with territories and sovereignty, is costing us a great deal of money,” he says. And this problem exists at both local and central level – as examples, he cites the lack of “any convincing purchasing strategy across the public sector”, even for the £100bn spent annually on “common services like energy and paper”; and the duplication so common in the public sector’s work with difficult families. “There are families who are getting ‘support’ – if that’s the right word – from six, seven, eight different agencies, in a pretty uncoordinated way,” he complains.
As a solution, Bichard champions both devolution – so essential if local service providers are to have the flexibility and autonomy to collaborate with other actors – and the joining-up of government at a central level, with Whitehall forcing frontline staff to collaborate by creating pooled budgets and imposing shared objectives. “The government needs to show through the comprehensive spending review [CSR] some really powerful examples of how they are delivering a more joined-up government,” he says. “One of the problems is that if you ignore that [central] part of what is in some ways a rather dysfunctional governance system, and you go entirely for the devolution route, you’re in danger of ending up with even narrower silos. So it’s got to be devolution connected, and it’s got to be connected at the top and the bottom – because if you don’t connect it at the top, it’s very difficult to connect it at the bottom.”
In the past, notes Bichard, governments attempted to foster this kind of local collaboration through “attempts to align budgets”; and panels such as Local Strategic Partnerships did indeed bring people together – but then, Bichard complains, “everyone sits around the table and says what they’re spending, and nothing much happens. It’s when you get to the position of pooling budgets in a place that things could change.” In essence, he believes, people won’t make the kind of compromises that are required unless they’re forced to. “The CSR needs to be opening the door on this, even if it doesn’t create a grand solution,” Bichard argues. “I don’t expect the whole of the local government budget to be pooled overnight, but it’s got to be a significant shift in that direction.”
Winning in Whitehall
If frontline staff are free to focus on the needs of service users rather than their Whitehall paymasters, Bichard believes, service design will improve. “If your focus is on the service for the client, then some of these bureaucratic silos start to look even more stupid,” he comments. But that doesn’t leave Whitehall sitting on its hands; instead, he argues that the civil service urgently needs to improve its capabilities and skills in order to support an era of reforming services.
“There are certain areas where I think the skill set in government is a worry,” he says. “There aren’t many people in government who understand how to design services. There aren’t many people, even now, who understand how to commission services: if you’re trying to sell to government, the processes are bureaucratic, expensive and risk-averse, and they don’t give people space to use their initiative. And there aren’t many people who understand the issues around behavioural economics and influence – though there is a group in the Cabinet Office looking at this, at last.”
These weaknesses present a real obstacle to progress, Bichard argues: in the years to come, “I think it’s difficult to envisage a successful government that doesn’t have those three skills at its heart – and yet they’re almost completely lacking at the moment.” Information technology is “another area where we haven’t covered ourselves in glory”, he adds; “I don’t see how we can deliver better services at less cost without better application of IT.”
The civil service will also have to engage much more effectively with the voluntary and community sector, Bichard says, and greatly improve its performance management. “Contrary to what some people think about me, I don’t believe in brutalism,” he says, “but I do believe in honest and difficult conversations.” Managers must find the courage and honesty to “sit across the table from people and say: ‘I’m sorry, but you’re not delivering.’ It’s not fair on people to leave them for years thinking they’re doing fine, when it’s not the case.”
A riskier business
Essential to many of these agendas is changing the civil service’s attitude to risk, Bichard argues: in a highly risk-averse culture, the potential rewards of innovation are constantly trumped by the danger of embarrassing a minister or attracting hostile media attention. Politicians and officials need to go beyond exhorting staff to be more innovative, he says, and put in place systems that reward intelligent risk-taking: “Could we change incentive systems so that people are encouraged to innovate? Do we promote the innovators? Have we had departmental reviews which give priority to innovative capacity?” he asks. “We haven’t in the past, but I hope we will in the future.”
As for the threat of being hauled up before the public accounts committee (PAC) to explain a failed policy, he says: “I’ve been there, done that. I haven’t got the record for the highest number of PAC hearings, but I’m up there in the first division; and I don’t talk about it lightly.” Yet ministers and officials, he argues, must grasp that nettle: “For so long, I’ve heard senior civil servants say: ‘Well, that’s all very well, but there’s the PAC, the National Audit Office, ministers…’ And it’s not easy, I know, but sometimes [those threats] can be used as an excuse; I think you have to go beyond that.”
A big ask
All this reform is, of course, a pretty tall order – and Bichard says he won’t be driving it through himself. “This is the first time in 31 years that I’ve not been a chief executive, and I don’t really want to do that any more,” he says. “I’m going to do some work here, I’ll spend some time in the Lords, and I might do something else – which is not code for saying I’m about to make some great announcement! Actually, what I’d like to do is something closer to clients, to service delivery.”
So Bichard insists that he won’t be leading the charge on public service reform; he does, however, believe that a change is gonna come – and soon. “I don’t say that some of us go around glorying in the problems that we’re currently facing, but most innovation comes as a result of pressure, of necessity,” he says. With civil servants beginning to face up to the swingeing cuts around the corner, he believes, we have a huge opportunity. “Centrally, people don’t normally believe that [cuts] are going to affect them – but I think they do now,” he says. “The next thing is how they react. Will they react by closing ranks and protecting themselves, or by looking for new ways of doing things? And if it’s the latter, they’ll get into issues like collaboration and partnerships, because working with other people can save them money as well as delivering a better service”.
Of course, many public sector staff may choose the protective option of closing ranks; reform is not guaranteed. But the CSR will ask some very big questions of public servants – and if it asks the right questions, it might well get an answer that truly enables government to deliver more, for less. “I don’t think we have much choice now,” concludes Bichard. “If we carry on trying to do things in roughly the same way with less money, we’ll really hit a brick wall.”