Leadership of change: new arrangements for the roles of the Head

160 Pages·2012·1.17 MB·English

House of Commons
Public Administration Select
Committee
Leadership of change:
new arrangements for
the roles of the Head
of the Civil Service and
the Cabinet Secretary
Nineteenth Report of
Session 2010-12
Report and Appendix, together with formal
minutes and oral and written evidence

Ordered by the House of Commons
to be printed 17 January 2012

HC 1582
Published on 20 January 2012
by authority of the House of Commons
London: The Stationery Office Limited
£17.50
The Public Administration Select Committee (PASC)
The Public Administration Select Committee is appointed by the House of
Commons to examine the reports of the Parliamentary Commissioner for
Administration and the Health Service Commissioner for England, which are laid
before this House, and matters in connection therewith, and to consider matters
relating to the quality and standards of administration provided by civil service
departments, and other matters relating to the civil service.
Current membership
Mr Bernard Jenkin MP (Conservative, Harwich and North Essex) (Chair)
Alun Cairns MP (Conservative, Vale of Glamorgan)
Michael Dugher MP (Labour, Barnsley East)
Charlie Elphicke MP (Conservative, Dover)
Paul Flynn MP (Labour, Newport West)
Robert Halfon MP (Conservative, Harlow)
David Heyes MP (Labour, Ashton under Lyne)
Kelvin Hopkins MP (Labour, Luton North)
Greg Mulholland MP (Liberal Democrat, Leeds North West)
Priti Patel MP (Conservative, Witham)
Lindsay Roy MP (Labour, Glenrothes)

The following member was also a member of the Committee during the inquiry:
Nick de Bois MP (Conservative, Enfield North)
Powers
The powers of the Committee are set out in House of Commons Standing
Orders, principally in SO No 146. These are available on the Internet via
www.parliament.uk
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The Reports and evidence of the Committee are published by The Stationery
Office by Order of the House. All publications of the Committee (including press
notices) are on the Internet at http://www.parliament.uk/pasc.
Committee staff
The current staff of the Committee are Martyn Atkins (Clerk), Charlotte Pochin
(Second Clerk), Alexandra Meakin (Committee Specialist), Paul Simpkin (Senior
Committee Assistant) and Su Panchanathan (Committee Assistant).
Contacts
All correspondence should be addressed to the Clerk of the Public
Administration Select Committee, Committee Office, First Floor, 7 Millbank,
House of Commons, London SW1P 3JA. The telephone number for general
enquiries is 020 7219 5730; the Committee’s email address is
[email protected].
Leadership of change: new arrangements for the roles of the
Head of the Civil Service and the Cabinet Secretary 1
Contents
Report
Page
Summary 3 
1  Introduction 5 
2  The combined role of Cabinet Secretary and Head of the Civil Service 7 
The role of Parliament in changes to Civil Service structures 9 
3  Implications for the Head of the Civil Service and for the Civil Service 10 
The proposed arrangements 12 
Access to the Prime Minister 15 
4  Time commitment of the Head of the Civil Service 18 
A full-time Head of the Civil Service? 22 
5  Leadership at the top of the Civil Service 26 
Lines of accountability for Permanent Secretaries 26 
Effect on Civil Service reform 30 
Staffing and offices for the new Head of the Civil Service. 33 
The role of Permanent Secretary of the Cabinet Office 34 
6  Conclusion 36 
Conclusions and recommendations 38 

Appendix 1: Letter from Sir Bob Kerslake to Mr Bernard Jenkin MP, Chair of PASC 43
Formal Minutes 45 
Witnesses 46 
List of printed written evidence 46 
List of Reports from the Committee during the current Parliament 47

Leadership of change: new arrangements for the roles of the
Head of the Civil Service and the Cabinet Secretary 3
Summary
The Civil Service faces a period of radical change as it strives to meet the Government’s
objectives to devolve power out to communities and citizens, and to reduce costs. We have
identified leadership as one of the key principles for achieving this transformation within
Whitehall, and the retirement of Sir Gus (now Lord) O'Donnell as Cabinet Secretary and
Head of the Civil Service has made timely a consideration of how the Civil Service should
be managed.

Whilst this report is mainly concerned with the Civil Service, we recognise that changes in
the governance of the Civil Service can have implications for the much wider role of the
Cabinet Secretary, who is concerned with the totality of government. This we shall monitor
and return to, if necessary, in due course.

We have sought to consider what form the leadership at the top of the Civil Service should
take to implement a change programme across Whitehall, to break down departmental
silos and overcome bureaucratic inertia. Our work on Civil Service reform has shown that
the size of this task should not be underestimated.

The Government proposed dividing Sir Gus O'Donnell’s role into three separate posts:
Head of the Civil Service, Cabinet Secretary and Permanent Secretary of the Cabinet
Office. Sir Bob Kerslake, Sir Jeremy Heywood and Ian Watmore have been appointed to
these posts respectively. Sir Bob will have direct responsibility for Civil Service reform, with
Mr Watmore reporting to him.

We are concerned that this could lead to weaker leadership and disperse power at a
critical time of change in government. The Civil Service needs to have clear and effective
leadership and a strong reforming head to make the necessary changes. We are
disturbed that all four surviving former Cabinet Secretaries have expressed deep
reservations. We therefore believe it would be right for the Government to monitor
these changes and review their effectiveness in due course.

Sir Bob Kerslake has been given the responsibility of leading the Government’s reform
programme in Whitehall. To achieve this, the Head of the Civil Service must have the
seniority and access to the Prime Minister to fulfil the essential role of speaking truth unto
power. As one of the checks and balances on executive power, the Civil Service, through its
head figure, must have parity of status with the Cabinet Secretary. We have recommended
that the Head of the Civil Service regularly meet the Prime Minister and Deputy Prime
Minister, and should as a matter of course attend Cabinet, and be placed at the Cabinet
table on an equal footing with the Cabinet Secretary.

We hope that Sir Bob Kerslake’s appointment will be a success and that the new structure
will be made to work effectively. However the risk of unequal status with the Cabinet
Secretary, and limited access to the Prime Minister remain a concern. While the evidence
4 Leadership of change: new arrangements for the roles of the
Head of the Civil Service and the Cabinet Secretary
from Sir Bob Kerslake was persuasive on these points, we will monitor closely how this
post works in practice, and we recommend a full review of the new structure by July 2012.

We are also not convinced that the role of Head of the Civil Service can be combined with
that of a permanent secretary in a major government department. The demands on Sir Bob
Kerslake by the Head of the Civil Service role are extensive. In practice there is a strong
case for a full-time Head of the Civil Service. We found that the Head of the Civil Service
role has grown substantially since the posts of Cabinet Secretary and Head of the Civil
Service were combined in the early 1980s. While the post has always been held as a part-
time role, in conjunction with another senior Civil Service post, the transformational
change required and the challenges facing the Civil Service are of such magnitude that it is
necessary to consider whether what has served in the past is suitable for the future.

We have recommended that the July 2012 review we propose should also assess whether a
full-time Head of the Civil Service is required, and whether it would be appropriate to
combine the roles of Permanent Secretary of the Cabinet Office and Head of the Civil
Service in one post. This would place responsibility for Civil Service reform solely with one
individual in the stronger centre of government which we consider is needed to drive Civil
Service reform.
Leadership of change: new arrangements for the roles of the
Head of the Civil Service and the Cabinet Secretary 5
1 Introduction
1. The Civil Service is one of the United Kingdom’s great institutions. It is not merely the
administrative function of government: it is one of the vital checks and balances in the
UK’s largely unwritten constitution. Its impartiality and objectivity are supposed to be its
hallmark. Senior civil servants are responsible for advising Ministers on appropriate
procedures and legal and ethical practices. They must be independent enough to speak
truth to power. No two roles are more important in this respect than those of the Cabinet
Secretary and the Head of the Civil Service, roles which have in recent years been vested in
one person.
2. The retirement of the Head of the Civil Service and Cabinet Secretary, Sir Gus (now
Lord) O’Donnell, was announced on 11 October 2011.1 On the same date, significant
changes to the staffing at the top of the Civil Service were announced. Whilst this paper
deals mainly with those changes we recognise that they could impact on the wider role of
the Cabinet Secretary, who is concerned with the totality of government. This we shall
monitor and review in due course.
3. Sir Gus retired on 31 December and has been succeeded as Cabinet Secretary, but not as
Head of the Civil Service, by Sir Jeremy Heywood, formerly Permanent Secretary at 10
Downing Street.2 Sir Bob Kerslake has been appointed Head of the Civil Service, a post he
will hold in conjunction with his current post, that of Permanent Secretary at the
Department for Communities and Local Government. Sir Gus was also Permanent
Secretary of the Cabinet Office. This role is now filled by Ian Watmore, formerly Chief
Operating Officer of the Efficiency and Reform Group in the Cabinet Office. The post of
Permanent Secretary of 10 Downing Street has effectively been taken over by the Cabinet
Secretary.
4. These changes raise fundamental question about the leadership of the Civil Service. In
our report, Change in Government: the Agenda for Leadership,3 we identified ‘Leadership’
as the first of six key principles of good governance and change management. The success
of the government’s public service reform agenda depends upon the successful
implementation of change in government. We therefore attach the highest importance to
the structure of leadership at the top of the Civil Service.
5. This inquiry sought to examine the reasons given for splitting Sir Gus O’Donnell’s role,
the impact on the Civil Service, and the key tasks and responsibilities of the Head of the
Civil Service.

1 “Cabinet Secretary Sir Gus O’Donnell h a s today announced his retirement”, Number 10 Downing Street website, 11
October 2011, www.number10.gov.uk
2 The appointment of Sir Jeremy as KCB was announced in the 2012 New Year’s Honours List.
3 Public Administration Select Committee, Thirteenth Report of Session 2010-12, Change in Government: the agenda
for leadership, HC 714
6 Leadership of change: new arrangements for the roles of the
Head of the Civil Service and the Cabinet Secretary

6. In particular during the inquiry PASC considered the governance and leadership of the
Civil Service in terms of:
a) the promotion of better cross-departmental working;
b) the implementation of a change programme involving the top management of all
departments, including the centre of Government, and identifying the barriers to
change;
c) the establishment of a stronger centre for the operation of Government able to lead, to
coordinate and to support delivery departments throughout the reform process and
beyond; and
d) the preservation of the status and independence of the leadership of the senior Civil
Service; and the ability to speak truth unto power.
7. This inquiry was an opportunity for PASC to press the key findings of our Change in
Government report, which recommended that “the scale of the challenges faced by the Civil
Service call for the establishment of such a corporate centre, headed by someone with the
authority to insist on delivery across the Civil Service”.4 The conclusions of that report have
been broadly welcomed by the Government.5
8. We published the issues and questions paper for our inquiry on 19 October 2011,
following the announcement by the Government of the proposed changes. The
appointment of Sir Bob Kerslake was announced on 11 November. On 23 November Sir
Gus O’Donnell provided us with an organisation chart which set out the reporting lines
under the new system. They had not hitherto been released.
9. Over the course of this inquiry we received ten memoranda. We also held six evidence
sessions, where we heard from the Minister for the Cabinet Office, Rt Hon Francis Maude
MP, the new Head of the Civil Service, Sir Bob Kerslake, the then Head of the Civil Service
and Cabinet Secretary Sir Gus O’Donnell, and five former Heads of the Civil Service: Sir
Douglas Wass, Rt Hon the Lord Armstrong of Ilminster, Rt Hon the Lord Butler of
Brockwell, Lord Wilson of Dinton, and Lord Turnbull. We also took evidence from
academics, journalists and commentators on Civil Service issues. We would like to thank
all those who contributed to the inquiry and our specialist adviser on this inquiry,
Professor Andrew Kakabadse, Professor of International Management Development at
Cranfield University School of Management.6

4 Public Administration Select Committee, Thirteenth Report of Session 2010-12, Change in Government: the agenda
for leadership, HC 714, para 110
5 Public Administration Select Committee, Eighteenth Report of Session 2010-12, Change in Government: the agenda
for leadership: Further Report, with the Government Responses to the Committee’s Eleventh, Thirteenth and
Fifteenth Reports of Session 2010-12, HC 1746
6 Professor Andrew Kakabadse was appointed as Specialist Adviser to the Committee for this inquiry on 18 October
2011.
Leadership of change: new arrangements for the roles of the
Head of the Civil Service and the Cabinet Secretary 7
2 The combined role of Cabinet Secretary
and Head of the Civil Service
10. The first Head of the Home Civil Service, Sir Warren Fisher, who held the post between
1919 and 1939, set a precedent for his successors by taking the role on a part-time basis,
alongside another senior Civil Service position, in his case, Permanent Secretary to the
Treasury. This arrangement was made in response to the 1918 Haldane Report, which had
urged greater control over the Civil Service by the Treasury.7 The combination of the two
roles of Head of the Home Civil Service and Permanent Secretary to the Treasury was a
common arrangement until the 1968 Fulton Report, save for the period from 1956 to 1962,
when the then Cabinet Secretary, Sir Norman Brook, concurrently held the post of joint
Permanent Secretary to the Treasury and Head of the Home Civil Service, the first Cabinet
Secretary to be appointed Head of the Home Civil Service.
11. In 1968, in response to recommendations of the Fulton Report, a Civil Service
Department (CSD) was established, the Permanent Secretary of which also served as Head
of the Home Civil Service. The CSD was relatively short-lived: on its abolition in 1981, the
serving Cabinet Secretary, Sir Robert Armstrong (now Lord Armstrong of Ilminster) was
asked to take on the role of Head of the Home Civil Service, jointly with Sir Douglas Wass,
who held the joint role in combination with his role of Permanent Secretary to the
Treasury. On Sir Douglas’ retirement, Sir Robert became the sole Head of the Home Civil
Service, keeping his role as Cabinet Secretary. Lord Butler told us that the then Prime
Minister, Margaret Thatcher, was unwilling to continue what she had described as a "Pinky
and Perky arrangement” of joint Heads of the Home Civil Service.8
12. Sir Robert’s successors, Sir Robin Butler (now Lord Butler of Brockwell), Sir Richard
Wilson (now Lord Wilson of Dinton), Sir Andrew Turnbull (now Lord Turnbull) and Sir
Gus O’Donnell (now Lord O’Donnell) have all occupied the joint role of Head of the
Home Civil Service and Cabinet Secretary.9
13. Four former Cabinet Secretaries were blunt in their hostility to the new arrangement.
They told us that splitting the roles of Head of the Civil Service and Cabinet Secretary had
not worked in the past. Lord Turnbull said that
The history is quite an unhappy one. Those who took the job, I would say the late Ian
Bancroft in particular, felt they were typecast as the shop steward of the mandarinate.
In other words they were representing this class of people rather than working with
Ministers to get this class of people to change, develop and improve. In my last
conversation with him, the late Douglas Allen said, ‘Well, I have had this fine career,
and it all rather ended with a whimper because I took this separate job and I wish I
hadn’t; I wish I had just gone.’10

7 Peter Hennessy, Whitehall (London: 2001), p 69
8 Q 13 [Lord Butler of Brockwell]
9 Following the entry into force of the Constitutional Reform and Governance Act 2010, the Head of the Home Civil
Service is now simply entitled Head of the Civil Service; the Permanent Under-Secretary of State at the Foreign and
Commonwealth Office remains Head of the Diplomatic Service.
10 Q 91 [Lord Turnbull]
8 Leadership of change: new arrangements for the roles of the
Head of the Civil Service and the Cabinet Secretary

His predecessor in the role, Lord Wilson, stated that
The history of this job in the 1960s, 1970s and early 1980s does teach you that
separating off the Head of the Civil Service, particularly if you locate it outside, is
going to be extremely hard to work.11
The decision now to have a separate Cabinet Secretary and Head of the Civil Service was,
Lord Wilson suggested: a “brave step into the past”.12 Lord Turnbull described it as “a step
backwards”.13
14. Lord Armstrong told us that combining the roles of Head of the Civil Service and
Cabinet Secretary in 1983 had been thought “to be a permanent change in the light of the
experience of previous decades”, but noted that personalities were critical to the success of
this model.14 Other witnesses confirmed the view that the new structure at the top of the
Civil Service might not be permanent, and some indicated that the continuation of the
structure would be dependent on political circumstances and the personalities involved. Sir
Gus O'Donnell presented this positively: the new structure was dependent on successful
collaboration between the Head of the Civil Service and Cabinet Secretary: it would “only
work if they [Sir Bob Kerslake and Sir Jeremy Heywood] work together really well”.15 He
added that the new structure was “right for this Parliament and through this Parliament”,
but that he could “imagine a circumstance where it would be right to have one person
doing both [the job of Cabinet Secretary and Head of the Civil Service]”.16 Lord Hennessy
of Nympsfield, Attlee Professor of Contemporary British History at Queen Mary,
University of London, appeared scathing when he said that the new structure was “not
going to hold”,17 and Professor Colin Talbot declared that he “would put money on it”
being reversed.18
15. The Prime Minister, in evidence to the Liaison Committee on 8 November 2011, did
not attempt to dispute this, and acknowledged that his successors might revert to one
individual holding two roles. However, he defended his decision to divide the roles as part
of a more substantial reorganisation of the heart of Government which, he argued,
completed a reform undertaken by the previous administration:
I think Gus O’Donnell has been a fantastic Cabinet Secretary . . . and Gordon
Brown’s initiative of putting a permanent secretary into No 10, which he did with
Jeremy Heywood, was actually a good move, but I think the way to modernise and
make that permanent is . . . to split the Cabinet Secretary’s role in two—to have that
permanent secretary effectively uniting No. 10 and the Cabinet Office and then to

11 Q 92
12 Q 85
13 Q 91 [Lord Turnbull]
14 Q 13
15 Q 317
16 Q 271
17 Q 182
18 Q 224 [Professor Talbot]