Interview: Lord Burns

In 1979, Terry Burns (pictured above) was an up-and-coming economist known for making economic forecasts for The Times and appearing on the highbrow television show Weekend. “Out of the blue”, he remembers, he received a phone call offering him the job of chief economic adviser to HM Treasury.

In fact it can’t have been entirely out of the blue, as he’d been serving on the Treasury’s academic panel for three years; perhaps it was the seniority of the position which was unexpected. At 34, Burns found himself at second permanent secretary level in the Treasury, “about 15 years younger than anybody else in the civil service at that level.”
There was much speculation at the time, he says, about how he would cope with the Whitehall mandarins. But things worked out fine: “I went on a four-year contract,” he says smiling, “and I ended up staying for 18 years”.

Terry Burns – now Lord Burns of Pitshanger – is far from the archetypal stony-faced Treasury accountant: he was described by John Major as “genial and without pomposity or malice. Nothing was ever boring to him and he never seemed downcast.” Since leaving the civil service he has continued working for a range of public bodies, but – tellingly – has sought to ensure his work remains independent of Treasury funding. In his role as chairman of Channel 4, he told a broadcasting conference: “When I left the Treasury I vowed to never put myself in a position of dependency ... When short of money they look around everywhere for targets.”

Yet he clearly enjoyed his years as a Treasury mandarin, seven of which he spent as permanent secretary under Norman Lamont, Ken Clarke and then Gordon Brown. “I liked the people; I liked the way they worked. It was a very collaborative culture,” he says. “People in the Treasury – I'm sure it's still the case – were very busy, so there wasn't a lot of fighting over turf; people were grateful for anybody who was actually helping to get the job done.”

During his 18 years in the civil service, the world changed dramatically. Economically speaking, the nature of challenges shifted – from “the worries as to whether inflation ever would be under control and would unemployment ever fall” in 1980, to a much more buoyant economy in 1998 when “there was much more emphasis on things to do with our role in relation to Europe”.

“In the latter years, I like to think that we changed the management and the ethos of the Treasury quite a lot,” adds Burns, explaining that he worked on creating a flatter management system, and promoted the importance of having specialists in senior roles. “When I joined, there was this old expression about specialists being on tap and not being on top,” he notes. “By the end, many of the senior positions in the Treasury were filled by people who had been economists, accountants or statisticians.” Burns himself was the first trained economist to be appointed permanent secretary.

Burns’ reforms culminated in the 1994 Fundamental Expenditure Review (led by Jeremy Heywood, now permanent secretary at Number 10), which recommended stepping back from interfering in departments’ spending decisions, and cutting a large number of Treasury senior management posts. Under the plans, a streamlined Treasury would set broad spending totals for departments rather than picking over fine details. The arrival of Gordon Brown in 1997 reversed this hands-off trend, but Burns still believes that the centre of government should set strategy rather than micromanage other departments’ business.

During his time at the centre of government, Burns oversaw both spending increases and decreases from the centre and he recognises that implementing the spending review is “overwhelmingly the biggest challenge” facing the government today, requiring a “mixture of political courage and nous” plus patience. With both cuts and spending increases, he says, “you make less progress than you expected [initially]. The machine actually does take a long time to crank up. There is an issue of not panicking about that. You’ve got to remain determined and keep it going.”

If impatience sets in at ministerial level, he says, it is the civil servant’s role to judge whether progress is slow simply because of inertia or because the plan is flawed and needs to be re-considered. “A lot of decisions are taken quite quickly in spending reviews, in the context of hard bargaining – and when you actually then come to implement it you find that there are a lot of rough edges,” he says.

“The most effective politicians are those who can stick to their journey but are able to recognise when they have to make some alteration to course,” he adds. Geoffrey Howe, the first chancellor Burns worked with, had this quality: “He had this determination all the time to be on the journey, but he would also keep questioning. Are we doing this right? Is there another way of doing this?”

The minister/civil servant relationship is one of the things Burns seems to remember most fondly from his time in the civil service, describing it as “rewarding, exciting, stimulating and worthwhile”. However, it doesn’t always work like that. One minister with whom his relationship was not so rewarding was Gordon Brown; Burns left soon after Brown’s arrival as Chancellor. “It was more difficult,” says Burns, “I wouldn't say so much to do with Gordon Brown as an individual, but the sort of circumstances and the way in which work was carried out under the new government from ‘97 onwards was much more difficult.” He refers to the Labour government’s style of deciding policy “to a much greater degree in private”, rather than through the process-driven policy formation he was used to, with civil servants present at meaningful debates around the chancellor’s table.

Burns puts great store in proper process and governance – an approach that characterises not only his long tenure in the civil service, but also his work since: he’s sat on a number of commissions and company boards. To these, he’s brought both the civil service’s analytical skills, and its flair for studiously diplomatic language: the first enquiry he chaired, into foxhunting, included the understated conclusion that hunting “seriously compromises the welfare of the fox”. These characteristics led to his recruitment for a number of delicate enquiries, including reviews into the future of the BBC and governance in the Football Association.

Burns describes his post-civil service career as “the most extraordinary, varied time”, during which he has done “the most fascinating things”. Asked to advise other senior civil servants leaving the service on how to build a rewarding career, he replies: “The first thing I would say is that the skills that you develop within the civil service are actually much more transferable than you would imagine when you are working there.” He mentions, for example, good crisis management skills; but his real focus is on the ability to solve problems through a careful mix of process and analysis.

“It's not just a question of being very clever and thinking: ‘Well what's the best way of doing things?’,” he says. “You’ve got to have the right process that you go through whereby you involve other people and get stakeholder buy-in and help to deploy, learning from other people's views and bringing them together.”

That skill is one which many civil servants possess and, he says, “in the end much of life is about working your way through complex problems and finding the right process and the right analysis to go with it”. Civil servants should, he says, be confident about their ability to move into other spheres of work; they will then find, as Burns has, that a talent for analysis and a passion for process will take you further outside government than you might expect.

CV highlights
1965    Joins London Business School (LBS), becoming lecturer in 1970
1976    Made director of the LBS Centre for Economic Forecasting, and becomes a member of HM Treasury’s (HMT) academic panel
1980    Joins HMT as chief economic adviser
1991    Becomes permanent secretary
1996    Joins Queens Park Rangers Football Club as a non-executive director. Leaves this board in 2001 but other non-exec posts, including roles at Legal & General Group and Pearson, follow
1998    Leaves HMT
2000    Chairs the National Lottery Commission and the Inquiry into Hunting with Dogs in England and Wales
2001    Appointed chair of Glas Cymru (Welsh Water)
2002    Becomes chair of Santander UK (formerly Abbey National)
2006    Joins Marks & Spencer as chairman
2009    Appointed chairman designate of Channel 4, taking on the role formally in 2010