Five years into his job as the UK's top official, Sir Jeremy Heywood faces his greatest challenge yet – ensuring the civil service he leads is ready for the mammoth task of leaving the European Union. Jess Bowie and Matt Foster sit down with the cabinet secretary to talk Brexit, Theresa May, public sector pay – and the future of Whitehall's reform agenda
In his decades at the centre of power, standing by the side of successive prime ministers, Sir Jeremy Heywood has faced terror attacks, financial crises and ministerial scandals. Few people in British politics have witnessed so much at such close quarters. But even he knew that a good night’s sleep would be vital on the night of 23 June 2016. If the country chose to “Vote Leave” in the referendum on Britain’s membership of the European Union, the UK civil service, led by Heywood, would instantly have to begin implementing the biggest policy U-turn in living memory. As busy days in the office go, June 24 would be up there.
His three teenage children also knew how crucial a role their dad would play, which is why they kindly roused him in the small hours as the outcome was becoming clear. “I obviously couldn’t get back to sleep,” the cabinet secretary recalls.
Soon after, he was at his desk, “just to make sure I was available for conversations with the prime minister and the senior team here”. Things then moved very quickly. “My job, of course, was to make sure the civil service knew immediately what its responsibility was, which was to help the government carry out the wishes of the British people – which were very clear. So we put out a message to the entire civil service that day, and we immediately got on with thinking about how we would structure the work programme for the period ahead. That started that morning,” he says, adding with a smile: “Tiredly.”
Whitehall will not slim down workload in wake of Brexit vote, says Sir Jeremy Heywood
Jeremy Heywood: civil service did "significant" Brexit "thinking" in final weeks of campaign
Jeremy Heywood hits back at critics of civil service's Brexit work
Theresa May and the new Number 10
Sitting with CSW at the vast boardroom table in his 70 Whitehall office, just over a year on from our last interview, Heywood has a new set of departments to oversee, a gargantuan new priority at the top of his in-tray and, of course, a new boss.
How does the Theresa May administration differ from the Cameron government – and how has Heywood helped her to shape Number 10?
“I think Number 10 is working very well at the moment, actually. The prime minister has a very distinct way of working. She likes to spend quite a lot of time in collective discussion with her ministerial colleagues – so we have four very significant cabinet committees that basically oversee the various strands of policy work that are going on: the national security committee, one on trade, one on industrial strategy, and one on social reform. She spends quite a bit of time chairing those, we spend a lot of time preparing papers for those, and we have genuinely good discussions which really shape thinking and policy. So that’s probably the most distinctive difference.”
There is, Heywood says, “good cooperation between the special advisers and civil servants”, something he describes as “the hallmark of a successful Number 10”. May herself has “a very big work appetite”, preferring “detailed papers that present all the options" and, he adds, "the civil service welcomes that evidence-based approach”.
Recruiting for Brexit
As we speak, the latest salvo in the war of words over Whitehall’s ability to deliver Brexit has just been launched. The secretary of state for exiting the European Union, David Davis, has that morning been on the airwaves dismissing claims that the civil service needs more staff to take Britain out of the European Union and forge a new deal with the rest of the world, and insisting that those who say it does are merely officials keen to increase their departmental budgets.
But his comments contradict statements from a wide range of Whitehall-watchers including civil service unions, think tanks, and former top officials – including Heywood’s predecessor Gus O’Donnell. When asked last year whether he thought the civil service was ready – both in size and in skills – for the challenge of Brexit, Lord O’Donnell said: “There’s a simple, short answer to that, and it’s no.”
More than six months after the vote, what is Heywood’s view of the capacity of the system, as it currently stands, to deliver Brexit?
“Well, I think at the moment we’re not delivering Brexit as much as working through what the negotiating strategy should be, putting in place the work strands necessary to cope with all eventualities, including the legal work, administrative work, policy work and obviously trade negotiation work as well. So I think we’re pretty well in hand in terms of recruiting the extra roles and people to fill those roles that are necessary.
“The last time I checked we needed about another 100 senior civil servants across the whole of Whitehall, and I’d say we’re 80-90% of the way there in recruiting those people. Overall, the civil service at our estimate at the moment requires 1,500 to 2,000 extra roles. And again, we are probably two-thirds of the way through that.”
Asked if these figures relate to the extra staff needed just for the negotiation stage or for afterwards, when a vast range of bureaucratic functions currently carried out by the EU are repatriated to the UK, Heywood replies:
“Well, that’s all the work we need to do at this point: help shape the negotiation priorities, doing the analytical work to underpin that. But also all of those areas like controlling our own borders, for example, which we don’t need to negotiate, we just get on with. So there are options around that and it requires considerable work.
“Wherever you look there are domestic implications of Brexit, some of which are known already, some of which we can only sort of estimate, and some of which we’ll have to have contingency plans for. So it’s all Brexit-related in one way or the other, sometimes directly or sometimes indirectly. But every single department has got its own plan and we’re basically putting that into action”.
Setting up the new departments
Incoming prime ministers often like to make their mark on Whitehall by ordering machinery of government changes. Theresa May was no different, wasting no time in merging the business and energy departments and, more significantly, establishing two new ministries: the Department for Exiting the European Union (DExEU) and the Department for International Trade (DIT).
A number of commentators have, however, questioned the logic of channeling precious civil service time and energy into creating a new set-up, particularly as the DIT cannot begin signing any trade deals until Britain has formally left the EU. Six months on, how confident is Heywood that these changes were the right decision – and how has he tried to ensure that there hasn’t been a significant diversion of effort into the reorganisations?
“Well, first of all let me say that I discussed with the prime minister and her senior team these changes before she actually became prime minister. So these weren’t just sort of made up on the hoof – they were properly discussed and thought about."
"These were start-ups. And the question was: do we bring them all into the Cabinet Office’s role?" – Sir Jeremy Heywood on DExEU and the DIT
“And I think they have worked very well,” he adds, before discussing how the new departments differ from “normal” machinery of government changes – if there is such a thing. Unlike other government reorganisations, which involve shunting policy areas and functions from one department to another, there was no existing department responsible for negotiating Britain’s trade deals, Heywood points out. Similarly, Britain had never left the European Union before.
“There wasn’t a team of 400 people sitting somewhere else in Whitehall doing that job. So these were start-ups. And the question was: do we bring them all into the Cabinet Office’s role? Do we add to them to another department’s role? Do we create one new department that has two massive new roles – one to exit the European Union and the second to negotiate a whole series of trade deals? Or do we set up two, bespoke organisations for two very bespoke challenges. And we decided to do the second of those things.
“I think, frankly, looking back on it it was exactly the right decision. If we asked David Davis and [DExEU perm sec] Olly Robbins now, on top of everything else they’re doing, to also be the people thinking about how we negotiate five, 10, 15 new trade deals, it would simply be beyond the capacity of the senior team. There’s just too much work to do for it to be comfortably within the compass of one department. It makes perfect sense to have two senior secretaries of state, two different permanent secretaries, and two separate departments doing those two very, very big new challenges. And I don’t think anybody in Whitehall seriously questions this now.”
Getting plans in place
Despite Heywood’s confidence that the civil service now has the right structures in place as Britain readies itself for its EU exit, doubts remain in some quarters about the overall direction of travel. Indeed, a recent report from the Institute for Government suggests that civil servants still do not feel like they have the information – or indeed the money and the staff – they need to deliver Brexit. Having interviewed a number of officials for the research, the think tank’s Dr Hannah White said: "This is not about revealing whether we are heading towards a hard, soft or grey Brexit. This is about being ready for the negotiations, and getting ready for life after Brexit. We know the civil service has the skill to do this, now it needs clear direction from Number 10."
Given how fraught the politics of leaving the EU have become, Heywood cannot, as an impartial official, be expected to give a view on the “best kind of Brexit” for Britain. But perhaps he can shed light on how officials can start to grapple with some of the practical implementation issues that will arise from the UK’s departure. When, for example, can we expect Home Office permanent secretary Mark Sedwill to get civil servants trained up to run whatever new borders system emerges from the EU deal? And how will Defra go about replacing the Common Agricultural Policy which has overseen payments to farmers for decades?
"We can’t just wait until the outcome is known for certain before we start planning and undertaking action on a contingency basis" – Sir Jeremy Heywood on Brexit planning
“Well, these are good questions,” he replies. “I think the civil service is very realistic. Certainly whenever I’ve taken permanent secretaries away for meetings or off-site discussions of these questions, of course we recognise there are lots of uncertainties – it’s a very challenging and uncertain negotiation that lies ahead of us, as the prime minister acknowledges.
“But equally we know that we can’t just wait until the outcome is known for certain before we start planning and undertaking action on a contingency basis. So that is the task we’re engaged in. It’s obviously our professional judgement working with ministers, and the prime minister above all, as to which are the highest-priority areas for us to be working on. And there are many, many issues to work through. Most of them are being done in line departments, in a way that is coordinated by DExEU (see below), but some of the big ticket items like what sort of immigration system we’re going to put in place, clearly those are subjects that come up to the cabinet committees for discussion and ultimately decision, and that work is underway.”
Of course some parts of government will be more affected by Brexit than others. But in general, what can the 380,000 officials who work for Heywood expect in their day jobs over the next few years?
“For many civil servants up and down the country – serving the public in job centres, in prisons – Brexit in the short term probably won’t make a huge amount of difference to them. They’ll carry on doing their very important work in the way that they have always done and you know, thank goodness they do it. So part of the civil service’s job is to stay in formation, make sure we don’t get distracted, and concentrate on the jobs that we have to do.
“Other parts of the civil service will of course be very, very involved in planning both the negotiation but also what happens after the negotiation is complete. So it will vary very much from one part of the civil service to another. People will be affected in different ways. But all of us are working flat out and very hard – I mean, there’s no doubt about it. The civil service is under huge pressure and I’m absolutely delighted and proud of the way in which we’re coping with that pressure.”
Attacks on the civil service
Part of the pressure the civil service finds itself under in the wake of the Brexit referendum is undoubtedly political. Senior officials are used to taking a pounding in the press, having their pay unfavourably compared to the prime minister’s or being dismissed as “bungling mandarins” when a major project goes off track.
But the civil service has found itself under attack on a number of fronts since the vote. The run-up to the referendum saw officials – who are bound to serve the government of the day – accused of fixing the fight in favour of the Remain camp. Then there were accusations that Whitehall – instructed by David Cameron not to have contact with the official Leave campaign – had failed to plan for a Brexit outcome. And, just weeks before CSW’s interview with Heywood, an intense media storm erupted over the resignation of Sir Ivan Rogers as Britain’s permanent representative to the EU.
Rogers’ letter to staff urged officials to continue to challenge “muddled thinking” and “speak truth to power” – a message that prompted a series of outraged denunciations from senior politicians including Iain Duncan Smith, and former UKIP leader Nigel Farage, who called for a “complete clearout of the Foreign Office”.
The tone of such attacks on Whitehall seems particularly virulent – aimed not just at the competence of the civil service, but at the very idea of an impartial bureaucracy. So what is Heywood, as head of the civil service, doing to try and change the debate around the reputation of the organisation, and to counter some of that negative noise?
“Well, first of all, I don’t really accept the premise of your question,” he replies.
“I don’t think the criticism of the civil service is particularly virulent. There are, occasionally, in some newspapers, some people criticising the civil service. That’s their right. The civil service, of course, has to be under scrutiny. And we are accountable. We totally accept that, and it goes with the job, as you say.
“But I definitely feel that the government, from the prime minister downwards, fully supports the civil service and the role of an impartial civil service. That’s not in question at all. I think relations between government ministers and the civil service are extremely good and close, as they have to be as we work together on this immense challenge. And we certainly don’t feel unsupported at all by senior politicians right now.”
"I don’t think the criticism of the civil service is particularly virulent" – Sir Jeremy Heywood
While he clearly rejects the idea that the civil service has faced an unprecedented level of criticism in the wake of the vote, Heywood is keen to stress that he very much sees it as part of his job, as the organisation’s head, “to continue at all points to defend the reputation of the civil service”.
But he argues that this is done not just through public declarations of support, but by showing that civil servants are simply getting on with the job and delivering Brexit.
“There was, last year, in the run-up to the referendum, some commentary around a lack of impartiality,” he says. “I totally reject that. At the time the civil service was working for the government of the day which had a particular perspective on the referendum and it was our duty, as civil servants, to support that elected government until the period of purdah came into place, when I think even the critics of the civil service would accept that the civil service literally played no role whatsoever in those last 28 days, as parliament had set out should be the case.
“And we comply with the law, we comply with conventions, which are that we work with the government of the day. And that was that. And I don’t think there was any question of the civil service not being impartial.
“So I defend the civil service – I have a regular Twitter feed which some people read, for their sins. I make speeches. I defend the civil service at all points. I’m very proud of the civil service’s reputation for impartiality and also for competence.
“I think we’ve shown once again over the last few months, which has been a very, very intense period, just how effective we are in supporting an incoming administration because, let’s face it, we’ve got a new prime minister, a new set of ministers, a completely new agenda. We have turned on a sixpence and are now focused very much on that and serving the country in that way."
Workload and prioritisation
Away from the politics, high and low, of Brexit, there is also the thorny issue of resources. Despite some speculation that the EU vote might prompt a rethink of the austerity-driven departmental spending settlements agreed across Whitehall since 2010, last year’s Autumn Statement did little to shift the overall fiscal picture. While new resources were given to key Brexit-facing departments – with £412m of extra money allocated across DExEU, the Foreign Office and the DIT – the rest continue to press ahead with tough spending plans signed off in 2015, long before the Brexit vote. Are these other departments, in the words of Dave Penman, general secretary of the FDA union for senior officials, expected to “just suck it up” and absorb the extra workload imposed by the result?
“Well, the key point is we have got to make sure that the civil service and departments are resourced to do the job that they’re asked to do,” Heywood says. “And that is happening. Individual departments can make their case for more resources to the Treasury – that’s a perfectly honest dialogue, that’s the way things work.
“The Treasury of course, and I as head of the civil service, expect that there will be some reprioritisation. This is not just a case of extra resources. Because, as a whole, we’ve got to meet the fiscal ceilings that we’ve got.
“And the civil service certainly can’t be exempt from the overall requirement to control public spending. So we will live within our means, we will try and reprioritise and where a case can be made for extra resources, as in the case when you’ve got a new department like DExEU or DIT, of course the Treasury will find a way of making that happen out of the normal reserve.”
"This is not just a case of extra resources. Because, as a whole, we’ve got to meet the fiscal ceilings that we’ve got" – Sir Jeremy Heywood
It is not the first time that a senior official has talked of the need for the civil service to reprioritise following the referendum result and change of administration. The organisation’s chief executive, John Manzoni, told officials late last year that the civil service had already been doing “30% too much to do it all well”, while Tony Meggs, who heads up the watchdog overseeing major government projects, told CSW the key theme of 2017 would be “ruthless prioritisation”.
But, as the IfG and the National Audit Office have pointed out, the government already has a lot on its plate alongside the legwork of Brexit, delivering not just the packed agenda of the 2015 Conservative manifesto, but also Theresa May’s new personal priorities – industrial strategy, schools reform and social mobility, to name just three. So is Heywood confident that his permanent secretary colleagues are able to have realistic conversations with ministers about what can and cannot be done, given the tight resources and limited legislative time they now face?
“Yes I am. I mean, we have that conversation all the time, both with the prime minister and the minister for the Cabinet Office – who takes a close interest in all of this – but also individual permanent secretaries with their secretaries of state.
“Obviously, when you have a new government with a new set of priorities the logical question is: well, do the old priorities still stand? And how many of these new priorities become even more important than the pre-existing workload?
“So we’ve had those explicit conversations. And I think the honest truth is that very few of the original set of priorities can be dropped. The prime minister feels very strongly that she and other ministers were elected on a Conservative Party manifesto that must still stand. So, of course, she’s added some further priorities and we’ve got the Brexit programme as well. But, you know, one way or another, we are going to deliver that package. That’s the civil service’s job.”
Civil service pay
The last time CSW caught up with the cabinet secretary, at the end of 2015, we asked him whether civil servants could expect to see “a light at the end of the tunnel” on pay. Since 2010, officials have seen their salaries first frozen and then capped, with maximum annual rises of just 1%. Back in 2015, the cabinet secretary praised the results achieved by officials during a time of austerity – but he told us that civil servants understood the balance to be struck between increasing pay and protecting jobs.
Fast forward to 2017 – with inflation now at 1.6% and the latest Civil Service People Survey finding that less than a third of officials are satisfied with their pay and reward packages – what is Heywood’s message to the troops on pay?
"There’s no doubt whatsoever that the overall framework is going to be tough until we get our fiscal deficit under control" – Sir Jeremy Heywood on civil service pay
“Well, my message is the same as it was last time we met, which is: it is tough, there’s no doubt about it. We have tried to build in some more flexibility within the 1% pay policy, and some departments have managed to find ways of paying more than 1% in return for productivity improvement or service improvements and so on. So there is more flexibility if the workforce and management can agree on ways of changing work practices in a way that makes the Treasury comfortable. But there’s no doubt whatsoever that the overall framework is going to be tough until we get our fiscal deficit under control.”
Heywood again rejects the phrase “light at the end of the tunnel” (“It doesn’t feel to me like a dark place, like a tunnel. It feels to me like a place where people are realistic”), pointing out that overall staff engagement levels, as measured by the People Survey, are up year-on-year.
“I think people’s job satisfaction, and their sense of duty, their desire to be involved in supporting the country as we go through this very challenging period, is at sky-high levels,” he says. “We have remarkable percentages of people who really love their jobs, really love their colleagues, and who like coming to work. Most organisations would die for these sorts of numbers.”
While the cabinet secretary acknowledges that staff would “like to get paid more”, he is clear that, until the public finances are “back on an even keel, that policy isn’t going to change”.
“It’s a case of finding the flexibilities within it, where that can be justified by productivity and efficiency improvements and where management can come to an agreement – and then just buckling down and getting the job done, which I know is a pretty tough message. But that is realism. And I think in the end people prefer realistic leaders and authentic leaders to people who pretend things are easier than they actually are.”
"There's a job to be done"
Heywood has now been cabinet secretary for five years, a source of continuity and support to ministers at the top of Whitehall during an exceptionally turbulent era in British politics. In the last two years alone he has seen the end of coalition government, the bedding in of a Conservative majority administration, the upheaval of a ferocious referendum campaign, and the arrival of a new prime minister. And now his to-do list includes helping to untangle a decades-long relationship with the EU. That’s more drama than most people see in a lifetime. So is Heywood still enjoying the job – and is he here to stay?
“I’m definitely here to stay. Yes, of course I enjoy this job. More importantly, I think, there’s a job to be done. And the civil service is doing this job, and I’m leading that. I think I have the full support of all my colleagues, and obviously the prime minister too. Absolutely.”
Moments of quiet are, he admits, few and far between. Asked how he decompresses, Heywood admits that he does not have “much time to unwind”. A rare treat is seeing Manchester United play at Old Trafford (he is an avid fan) and going to the opera (his wife is on the board of the Royal Opera House).
He also has a weakness for boxsets. The family are currently working their way through HBO’s The Young Pope, Heywood reveals. And the cabinet secretary says he would be watching The Crown – if only he could figure out how to get it running on his TV. “I need one of my techie kids to work out how to do it for me,” he laughs. “It’s been a hard year in terms of hours of work. But you know, your kids keep you young...”
Heywood on… DExEU vs the old centre of government
The Cabinet Office still has a very important coordination role. Obviously the Department for Exiting the European Union is the lead department and the lead on the negotiation, but it will need to galvanise lots of other departments and it needs the help of the Cabinet Office and certainly the cabinet secretary in doing that. The Treasury plays its traditional role – it is the lead department on a number of key, Brexit-related issues, and is involved in anything to do with money or the economy as you would expect. And I think it’s working very well. I obviously work very closely with [DExEU perm sec] Olly Robbins and [Brexit secretary] David Davis, and we all work very closely with the prime minister and Number 10. And those relationships really are vital if this is going to be pulled off successfully as we believe it will be.
[Asked if if the centre is dictating Brexit priorities to line departments]
Absolutely not. There is a constant dialogue between DExEU and the Cabinet Office on the one hand, and departments on the other, in which we are requesting information, seeking the opinions of departments on a whole raft of policy questions, negotiation issues, analytical questions, data – but also [asking], what are their plans? Because obviously we’ve got to make sure that the plans each department is making are coherent with each other – and that we’ve correctly prioritised the legislative requirements, for example, and the financial requirements. So individual departments have to have their own plan – but then that has to be iterated back to the centre to make sure that the sum total of the plans are properly coordinated, and add up to what we need as a country.
Heywood on… whether the centralising era of civil service reform is over
Absolutely not, no. John Manzoni, the chief executive, leads a very, very full and vigorous programme of functional leadership. And I think what you’re seeing here is a sort of maturing, a sort of phase two of the reform programme. To start, the system had to be sort of given a jolt. And that had to come from the centre. That’s what was done. But I think anybody who knows anything about transforming large organisations knows that, in the end, you need to have ownership of each of the individual line businesses, in this case departments, if you’re going to make that reform self-sustaining.
That’s the phase we’re in now, under John’s overall leadership. That’s still from the centre, and still strongly supported by ministers. What you’re seeing is a sort of bedding in throughout departments of that functional approach. But the outcomes are just as important as they’ve ever been. We are absolutely determined as a civil service leadership and with the full support of our ministers to drive the civil service so it becomes the most digital civil service in the world, it becomes a major commercial entity in its own right, and we’ve already discussed the importance of diversity of talent. So these are the three key priorities that add up to turning the civil service into a brilliant civil service by 2020.”
Heywood on...Whether meritocracy in the civil service is a ‘fantasy’ for many BME staff (see story)
I think it’s a fair criticism that we haven’t got anywhere near enough senior BME staff at the top of the civil service. The question is what we do about it. So what we are doing about it is not doing tokenistic things, and we’re not setting targets that can’t be met. We are applying ourselves, step-by-step, to building a strong pipeline of very talented BME civil servants, from Fast Stream and apprenticeship onwards, so that we can build a sustainable cadre of very talented officials who can win those jobs, on merit, over the next year, five years, 10 years. It’s not going to be an easy, quick win.
Over the last period we had something like 6% of senior civil service posts being filled by BME staff. So, we’re beginning to get the flow into the senior civil service at a higher level than the current stock. And that’s of course the sort of starting point for this. So our real focus is on trying to get our most talented, Band A, civil servants from a BME background into a place where they can compete for the jobs in the senior civil service. And you know, all permanent secretaries get involved in mentoring schemes, I personally mentor some people in that category. And I think we making steady progress, but it will take a long time.