Any diplomat based in London will be aware that, amid the whirl of the global financial crisis, the Coalition is attempting a whole range of sweeping reforms which are intended to fundamentally affect what Whitehall departments do and how they operate.  This may seem a second order priority considering the present financial crisis, but reshaping the relationship between the capitalist economy and the role of the state is crucial to putting all our economies onto a more sustainable basis.  We have grown used to living standards based on too much borrowing and not enough discipline and competiveness, with debt to fill the gap between them.  Those days are clearly over, so the Cameron project should be of interest to every nation which aspires to a free market democracy.

Last year, each government department in the UK produced an internal business plan, as part of the government’s plans for reform of the civil service.  These plans were published online as part of a drive to open up the civil service to the public.  The Prime Minister described this as a ‘complete revolution in how government operates,’ representing ‘a power shift’ from government and ‘one of the biggest blows for people power’.  Instead of targets, these plans contained timelines and milestones for change.

The Public Administration Select Committee (PASC), which I chair, has been carrying out an inquiry into the issue of good governance and civil service reform.  We recently produced an ‘end of term report’ on further structural reform in each of the government departments.

From the responses which we received from government departments, we are concerned that the centre of government, most notably the Treasury and the Cabinet Office, is not providing the strategic leadership or the governance framework necessary to help departments manage their programmes of change.  This is worrying because stewardship from the centre is essential for change to be implemented swiftly and effectively across government.  It is also needed in order to coordinate the sharing of best practice.  Relying on outstanding leadership from within each department is not enough.  We found that the quality of leadership and management in Whitehall was the critical requirement for success in reforming the civil service.

To take one example, the FCO recently launched ‘Diplomatic Excellence’, a reform programme for the next four years which  brings together policy, diplomatic skills, organisation and management to ensure that the corporate changes made in the FCO explicitly support its three foreign policy priorities – security, prosperity and consular services.  This programme replaces a previous one, although the FCO argues that it has learnt a key lesson from its earlier programmes: the need to make explicit links between the support functions and the diplomatic front line.  Overall, the information provided led us to believe that the stated goals of the FCO are likely to be realised, if attention is especially given to realistically meeting the leadership challenges being faced in driving through change.

This is particularly important as the civil service currently faces the twin challenges of enabling the government’s plans for major public service reform and working with significantly reduced administrative budgets.  The Comprehensive Spending Review commits the government to reducing departmental administration costs by an average of a third.  These challenges make the need for strong central leadership even more urgent.  The need to ‘do more with less’ will also mean that even greater importance should be attached to the skills base of the civil service.

However, the civil service will need not just to do more with less, but also to do less in certain areas.  This is the real implication of the Government’s Big Society agenda and the open public services White Paper.

The White Paper places great emphasis on choice for individuals in the type of public services they wish to have. We cannot say that we are in favour of choice and then insist that a particular service be run by a monopolistic local authority or central body. For real choice, we need to promote competition.  This is essential if the Big Society project is to be successful.  Departments will have to move more and more from a providing role to an enabling role, letting go of the control of public services.  This is potentially a huge culture change for government and how it goes about the business of government.  Our inquiry suggests that not all parts of the Whitehall machine and the Civil Service have yet really started to understand the implications of the change which is required.  However, there are some encouraging signs.

The FCO, for example, argues that the principles of the Big Society are less directly relevant to the FCO than they are to many other government departments, as the majority of its work is conducted overseas. Despite this, the FCO has sought to reflect the principles in its working methods.  A key part of its ‘Consular Strategy’ is to improve the quality of service by using customer feedback, reflecting the Big Society agenda of giving people the power to change things.

Progress is being made.  Yet the government also needs to be aware of the limitations of the civil service as it puts forward its reform agenda.  As the FCO example illustrates, civil service reform is not a new idea.  Previous governments have been disappointed in their efforts to reform Whitehall and public services.  It will take a huge effort if history is not to repeat itself.  In his memoir, A Journey, Tony Blair famously said that he should have moved further and faster on reform.  Yet he also argued that the intellectual task is as important as the resolve to reform.  This is where strategic leadership at the centre of government is needed.