THE CITY GRUMP

24 hours before Cabinet Secretary Sir Mark Sedwill was fired, Michael Gove gave the annual Ditchley lecture. Much of the first 70% covered the standard political mantra of “the London bubble means the Elite is no longer trusted” so we must base more decision makers in Middlesborough, Merthyr Tydfil and so on. But  the final 30% was a no holds barred analysis of what is wrong with our Civil Service and what to do about it. It is excellent and just could mark the point when decades of Whitehall ineptitude, aided and abetted by naïve Ministers, begins to end. Certainly, Sedwill’s sacking gave substance to Gove’s speech. Here are the highlights:

Paragraph 90 sets the scene, uncompromisingly:

“For many decades now we have neglected to ensure that senior members of the civil service have all the basic skills required to serve government, and our citizens, well.”

As an example he points out how few senior civil servants have numerical , let alone commercial skills. But reform also requires Minsters to get with it:

“We need to reform not just recruitment, but training. We need to ensure more policy makers and decision makers feel comfortable discussing the Monte Carlo method or Bayesian statistics, more of those in Government are equipped to read a balance sheet and discuss what constitutes an appropriate return on investment, more are conversant with the commercial practices of those from whom we procure services and can negotiate the right contracts and enforce them appropriately.  I should of course that it’s important that those of us who are politicians have the knowledge, skills, and if not humility, to be able to ask the right questions and understand the answers. Reforming how Government works requires ministers who can reform themselves”.

Then he goes for the jugular sanctity of Civil Service briefing papers, declaring they are now flabby, verbose and jargon rich. Clarity of purpose has gone out the Whitehall window:

“And the need for appropriate skills, training and knowledge within Whitehall goes much further than the areas I have mentioned. Submissions, the papers which are prepared to guide ministerial decisions, and which were once the glory of our Civil Service, have become in far too many cases formulaic, over-long, jargon-heavy and back-covering.The ability to make a tight, evidence-rich, fact-based, argument which doesn’t waste words or evade hard choices is critical to effective Government. As is deep, domain-specific, knowledge.”

Warming to his task Gove skewers the absurd Whitehall tradition of constantly moving their staff from one unrelated posting to another and he doesn’t spare ministerial shuffling either:

“The current structure of the Civil Service career ladder means that promotion comes from switching roles, and departments, with determined regularity. Just at the point that an official at DIT who is a deputy director masters the intricacies of tariff schedules and their impact on important UK sectors and the opportunities that arise from liberalisation with Ruritania, he or she, if they want to progress in their career, aspires to become a director, in another department such as in DFE overhauling child protection.  Commentators, rightly, criticise the rapid turnover of ministers and the seemingly random reshuffle of Parliamentary  Under-Secretaries for Paperclips after just a year to become Ministers of State for Paper Files. But far less noticed and just as, if not more, damaging, is the whirligig of Civil Service transfers and promotions.  We must be able to promote those with proven expertise in their current role to perform the same, or similar, functions with greater status and higher rewards without them thinking they have to move away from the areas they know and love to rise in their profession. We would not ask an Orthopaedics Registrar to become a psychiatrist in order to make consultant. So why should we require an expert in agriculture negotiations with the EU to supervise the Universal Credit IT system in order to see their career progress? That is why we need to ensure that we have a proper, and properly-resourced campus for training those in Government. One which is not preoccupied with the latest coaching theology or sub-business school jargon but equips the many hugely talented people within the Civil Service to become as knowledgeable in their public areas as consultant surgeons, chancery barristers and biochemistry professors are in theirs. And, more than that, we need to ensure that basic writing, meeting chairing and time management skills are de rigueur for all policy civil servants.”

The other great shibboleth  he addresses and acknowledges this will be the most difficult to change is an abiding mistrust of anything new and how and why the system is constantly rigged to favour the established incumbents. Accordingly:

“There are so many barriers to doing things differently in Government, and so many incentives to play safe that it is difficult to know where to start. It is a cliché to say of Government that no-one ever lost their job for recommending the contract go to IBM. Decide that you will procure services from a new organisation and, if things go wrong, you will face the wrath of the National Audit Office, the criticism of self-righteous chairs of parliamentary select committees, the hindsight-rich rancour of 56 newspaper columnists and as well as the disappointed froideur of your Permanent Secretary and Secretary of State. Elect to have the service performed by an established supplier, choose to assess their performance by deferring to the big management consultants, set up a board to manage the process with officials from lots of different departments and you can be insulated from failure. The delivery companies you contracted are too big to fail, too embedded in so much else that Government does, too sanctified by the faith other departments have placed in them. The consultants are an invaluable prophylactic – if these super bright people from the private sector with MBA degrees and huge earnings outside said it was ok, well it must have been. And the  cross-Whitehall board is the biggest insurance policy of all. You can’t hold me accountable – it was a ‘shared’ decision.  All of these factors work against innovation – and accountability. Innovation comes when people take reasonable risks – and responsibility. We need to move to a system where those who propose the innovative, the different, the challenging, are given room to progress and, if necessary, fail. But we must then ensure that we learn quickly, adjust and respond”.

Finally on this subject, in what is absolutely my favourite paragraph he delivers the coup de gras to that most antediluvian of all government departments, the Treasury:

“Sadly but far too often, innovation in Government is treated as though it were a mischief rather than a model. The default mechanism of the NAO, PAC, other select committees and various commentators is that any departure from the status quo must be assumed to be more downside than upside. Had they been able to interrogate George Washington, Thomas Jefferson and Alexander Hamilton in 1783 they would have concluded that American independence was an expensive, untried and unjustifiable innovation. In Treasury terms they would have said it would have been novel and contentious and therefore had to be stopped”.

In concluding, Michael Gove and undoubtedly his silent partner in this, Dominic Cummings, argues that even if some of his suggestions are wrong we need more radicalism not less. He declares the current Civil Service is not fit for purpose. He is right. Let’s hope the holy (unholy to their many Establishment enemies) triumvirate of Boris, Gove and Cummings now follow through. The ejection of  Sedwill is a promising start.

The Squires welcome The City Grump to this magazine. Grump has spent some 40 years in the City of London. He started as a stockbroker’s analyst but after some years he decided he was too grumpy to continue with the sell side of things so he moved to the buy side and became a fund manager for the next 20 years, selling his own business in the 1990s. Post the millennium, he found himself in turn chairing a stockbroker, a financial PR company, and an Exchange. He still keeps his hand in, chairing a brace of VCTs and investing personally in startups. The City Grump’s publications are available here.