Listen to our podcast on the shape of the government following the election

Listen to the May podcast in our monthly series, 'in conversation with' Nick C Jones, Director of PwC's Public Sector Research Centre.

For this recording, Nick C Jones is joined by Julian McCrae, Deputy Director of the Institute for Government.  They discuss what the shape of the government will mean for continued transformation of Whitehall - and the priorities for public service reform agenda more broadly.

 

Transcript

NJ
Hello, I am Nick Jones and I am Director of PwC’s Public Sector Research Centre.  I am joined today by Julian McCrae from the Institute for Government and we will be discussing the election results in the UK and what impact that will have on the business of government.  
Julian, given the Institute’s mission for promoting more effective government, what is your message for Whitehall in its preparations for the new government?   
JM
Well, I think the key thing now is to get on top of what is this government’s driving agenda, what does it really want to achieve?  I mean, you look historically; a lot of people are talking about 1992 - and the political term is what this looks like.  Actually in governmental terms, looking back to 2001 where you saw Tony Blair coming back in, reshaping some of the tools he was using to run government, and things like the Prime Minister’s delivery unit, that we remember so well, set up immediately after the election.  Look back to 1983, last time we had a returning Conservative government, and in that State, you had privatisation, complete reshaping of the state, changed how we ran our public sector, crucial lessons were drawn from the first term’s experience.  Things not just about the politics of privatisation but about the regulation of new markets and how did you drive the efficiency that made those changes so irreversible.  I think Whitehall will really be looking now to distil what this government is trying to achieve and what does Whitehall need to do to support the government in that?   
NJ
So, you have reminded me very much of the big changes, as you mention, the privatisations, of course, the theme at the moment around transformation of government.  I guess the question there, about how the Conservative administration with its small working majority,  how will that help or indeed hinder in terms of continuing the transformation process across Whitehall as a whole?   
JM
Well, I think there is a lot to build on in terms of changing how Whitehall works.  You think about initiatives like the Government Digital Service which has brought a whole new set of skills into Whitehall.  Think about the finance profession in Whitehall, real drive being led out at the Treasury to try and move it from a more transactional to a more strategic role that we kind of need to support any kind of transformation - and actually something that we’re very familiar with in the private sector.  The functional leadership of these sets of organisations, how does your commercial, your finance, your legal, how does it all support the day-to-day business that you are trying to undertake.  These are new ideas emerging inside Whitehall, a lot of initiatives but few of them have yet reached their potential and I think it will be essential to watch and see if this new government really takes seriously how it builds on what has happened over the last five years and in that, you know, it is going to be really crucial, do we have the Prime Minister, do we have the Chancellor, seeing reforming how Whitehall works as being essential to delivering the promises they have made, essentially, to the British people.   
NJ
And the people who will actually drive that day-to-day as well, besides the people at the very top of government.   
JM
Yes, well I think we are going to really be looking to see, well, where is the political drive, how is that focused. Francis Maude has done the job on that for the last five years. I think we will also be looking for the Civil Service leadership itself and what is its vision, what is its plan for taking things forward?  John Manzoni, the new Chief Executive working with Jeremy Hayward as the Head of the Civil Service, how is that going to work out in practice as we go forward, how are they going to set out a vision to the five hundred thousand civil servants in the country who really need to change how they are working, what they are doing if we are going to take this agenda forward?   
NJ
Now, a lot was made during the election campaign and indeed in the manifesto the Conservatives put out about the lack of detail on what will actually be done, obviously numbers around the departmental cuts and the welfare savings, but not actually the detail and opinion in it.  So, deficit reduction is going to be one thing to be grappled with early alongside the big issues like decentralisation and devolution and the longer term challenges surrounding the demographic, demographic pressures on health care spending, pensions and so on.  Clearly we have got a Spending Review process to come up, what do you think the priorities will be in that process?   
JM
Well, I think the government is going to want to get on with it.  They will want to build on a momentum they have got now and I think one of the things while they will have to concentrate on getting the numbers right, getting their numbers to add up, that is no mean feat. But also thinking about this as a planning exercise.  We know, we are talking to people back in 2010.  There were a lot of people leading the public services who were, you know, they knew it was going to be a challenge what was coming up, but they were confident, they had plans, they had ways they thought they could deliver this.  2015 talking to people, it is a very different scenario; there are a lot of pressures already built up in the system.  Everyone really accepts that, you know, we are going to make the next round of reductions.  It has got to be about transforming things, it is got to be about changing things, a much more difficult task than just cutting back, some of those efficiency savings, the low hanging fruit classically that we have seen from the past.  So, how the government builds a process that builds in those plans, make sure they are robust and they can be delivered but also does not spend ages on a planning cycle.  We haven’t got much time, savings have to be delivered and transformations take a look of time so we cannot spend too long on just thinking about it.   
NJ
And, of course, having an eye to the long term because there are clearly things you can do in the short term which may have a negative impact on the long term so you are looking for things in the short term which also have a positive long term outcome as well.   
JM
Yes I think that is exactly right, and it will be interesting to see how and what time scale is put on this Spending Review.  You know it could be done relatively quickly, sort of three years, concentrate on the cuts.  But actually the time horizons for transformation a full five years and even beyond for some services are going to be vitally important and I think we have a real opportunity now to actually build, the one thing that was always going to be tricky is if we had a government coming in where everyone thought ‘there was going to be another election very soon’.  How do you keep your eye on the long term? I think, you know, we are pretty clear this election result has now given us a government probably for the next four or five years at least.  So I think they will have the time and the space to factor in some of those longer term concerns and that will be very good, I suspect, for everybody if we can think across those kinds of time scales.   
NJ
And yet although you have to have that perspective on the long term, there is the very critical next few months, the hundred days if you will and what ministers have to get right.  In your view what are those key things?   
JM
Well, I think one thing that I am sure ministers will decide for themselves and are very keen to do is just setting a very clear direction.  Setting that momentum into the reforms they really want to see across the public sector.  But beyond that, the really vital thing is that we do not spend our time in a Whitehall policy wonk discussion.  We have got to make sure implementation and the implementability of these changes is built in right from the start, and that means working in slightly different ways to we have done before.  It means making sure we have people who really know what they are talking about, who run these services, in the room as we are drawing up the plans.  Now it is not some loose sort of talking shop I am thinking about here, it is really with that political direction set, that confidence, of what this government wants to achieve. Can we bring in across the piece people who can say, ‘well look, this will work, that will not work.’  Actually if you want to change this, it means really, really, nitty-gritty things that we are going have to get right and get that built in from the start.   
NJ
And alongside that, making sure the best use is made of digital, data and all of the new tools you were mentioning earlier on.  The importance of reinventing and delivering new tools to do the job, that they are used as well.   
JM
Yes I know, exactly, exactly, and this is where I think it all comes full circle.  You know, as we are getting clearer about what needs to change and how it needs to change, then linking that up with what are the skills, what are the people we really need in Whitehall to do that?  I think, in 2010, there was a bit of let’s run with the Spending Review, let’s  make our big prioritisation decisions, oh, and then we have got to reduce the size of Whitehall, I think that is pretty inevitable, I cannot imagine the Treasury will do anything other than say ‘further reductions in the workforce’.  But those two things about reducing workforce and the priorities were, kind of, run separately.  This time round, really, really, important, as we are pulling together the priorities for government, we are also thinking about, well what is our strategy for the people in Whitehall?  How do we want to change it?  How do we want to build new capabilities?  How when we need to pay do we bring in people with skills that we do not have, and how do we make the savings overall from our total workforce?  Those are big challenges.   
NJ
So it seems they are around engagement, around implementation and the capability to actually deliver the change that is needed.   
JM
Yes, indeed, indeed.
NJ
Julian, thank you so much for your insight.
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