BIS permanent secretary Martin Donnelly would like to protect an insipid image while his department handles some political hot potatoes and sheds staff. But Joshua Chambers finds that his job is anything but bland.
“I do hope I didn’t say anything too interesting,” Martin Donnelly (pictured above) tells me as our interview concludes. Like most permanent secretaries, he eschews the limelight and actively “enjoys being obscure”. That can’t have been easy at a department that has garnered many newspaper headlines in the last nine months – both for unguarded comments by its secretary of state, and for strong reactions to its policy agenda.
Donnelly is jolly, well-mannered and purposeful, bringing to mind a Major-esque vision of a village verger cycling to church with a list of odd jobs in hand. And if that is to be the metaphor, then business secretary Vince Cable must surely be the troublesome village priest whose controversial sermons have caused tumult in the parish.
The most recent hullabaloo occurred just before Christmas, when Cable was recorded by undercover reporters boasting that he had “declared war” on Rupert Murdoch’s media empire. As the secretary of state charged with regulating Murdoch’s attempts to take over BSkyB, Cable’s comments were deemed by the prime minister to be insensitive and inappropriate, and the department was stripped of its powers over telecommunications and broadcasting policy.
The Department for Business, Innovation and Skills (BIS) consequently had to transfer 70 civil servants into the Department of Culture, Media, and Sport (DCMS), which has taken over the policy brief. Donnelly explains that the resulting financial and human resources issues will have been tackled by the end of the financial year. The aim is that “from the outside, people won’t be able to see the join, and that cooperation between the two departments – which was anyway very close – will still continue,” he says. It helps that Ed Vaizey, the minister directly responsible for the policy, already had a joint portfolio split between BIS and DCMS.
Telecommunications policy is only one of a number of areas in which BIS has lost influence recently. Under Lord Mandelson, the former first secretary of state, the department became a sprawling octopus – but many of its tentacles have been pruned back, both in the ‘bonfire of the quangos’ following the £6.2bn spending cuts announced in May; and then in October’s spending review, which saw the department’s capital budget cut by 44 per cent and its administrative budget by 40 per cent.
The incredible shrinking department
This looks disastrous – but “the figures don’t tell the whole story”, Donnelly explains. The strain on the capital budget is not as great as it appears, he says, because changes to university tuition fees mean that the funding burden is shifting from the department to those attending university.
Nonetheless, he adds: “We do have significantly less resource, and we have got huge pressure on the administration budget. That’s the challenge we are wrestling with now, and I have made it very clear from day one that… we will come out of the other side more flexible, more focused, and smaller.”
Donnelly’s vision of BIS is of an outward-looking department that actively seeks to collaborate and shares expertise with government departments and other organisations (“stakeholders”) in order to pursue economic growth. With the Department of Health, he says, he is looking at how to develop the UK’s biotechnology sector; while BIS is working with the Foreign Office and inward investment agency UKTI to encourage international companies to invest in the UK.
“I could go on, across government,” he says; BIS is seeking to engage with almost every Whitehall department to ensure that private sector growth can be boosted by government policy. “This is a tremendous chance for us in BIS to really ensure that what we are doing is at the centre of everything inside government,” he says. Unencumbered by memories of the department as a larger body – he notes that he “had the advantage of starting last October” – Donnelly is clearly optimistic about his department’s future role.
As in most departments, though, there will be pain in the short term. He reveals that, less than two weeks ago, he announced to staff that the department will be making redundant “up to 400 staff over the year ahead”, adding that: “We want to be clear with everyone about their position by Easter, so we are running this as rapidly as we can.” He wants the department to have totally completed its restructuring from top to bottom by “this time next year”.
Higher education reforms
This time last year, the Liberal Democrats signed a pledge not to increase tuition fees. Once in government, however, the party abandoned this promise – and the resulting charges of duplicity and unfairness set off a chain of protests across the country.
Donnelly’s top floor office gives a good view of part of Millbank, the riverside embankment where rioting students last autumn invaded the Conservative Party’s HQ. Donnelly admits that “there are lessons to be learned” on how the policy was communicated – and, indeed, how the department now continues to communicate the policy.
BIS was hindered at the time by the policy-formulation process, he claims: it couldn’t explain the details of the new system until the bill had been approved by Parliament, because the proposals could have changed markedly during the debates.
Now the legislation has been passed, Donnelly says that it’s a “key priority for us” to explain that “the graduate contributions system is not like an American loans system”. The department believes that explaining this contentious policy will be a very important role for BIS, and Donnelly is planning its communications strategy accordingly, he says.
His press office later confirms that the new strategy is to explain the policy directly to those affected by it, rather than allow the changes to be disseminated purely by the media and student unions.BIS will be joined in this task by Liberal Democrat deputy leader Simon Hughes, who has become a government advocate for higher education and will discuss the changes with prospective students. “The more help we get, the happier I am,” says Donnelly; he wants to ensure that young people aren’t deterred from applying to university because of the changes.
Family and folk music
Donnelly has a good understanding of the strong feelings the policy provoked amongst students – not just because he had a plum view of the protests, but because he has three daughters currently studying at university. Were they chanting outside his office? “No,” he responds cheerfully. “They were all working.”
When relaxing in his Wimbledon home, Donnelly reveals, he likes to play folk guitar: “1960s stuff, a bit of ‘Sloop John B’ style.” A caveat quickly follows – “only for my own benefit”, he says – but his wry smile suggests that he could be persuaded to perform if enough peer pressure is applied: BIS civil servants take note. Given that the chorus to ‘Sloop John B’ is “Well I feel so broke up, I want to go home,” it’s probably best he sings something else, however. ‘The Times They Are a Changin’’ might be a more appropriate ditty.
Yet Donnelly is hardly one for the limelight – he looks quite uncomfortable while posing for pictures. Even if his secretary of state – and, indeed, his department – cannot keep out of the headlines, BIS’s permanent secretary will do his best to remain in the background as the challenging task of reform begins.