FDA Evidence to the House of Commons PublicAdministration Committee

Public Service Reform

1. The FDA welcomes the opportunity to give evidenceto the Public Administration Committee Enquiry into Public Service Reform andhas considered the Issues Paper. We donot at this stage wish to comment on the paper in its entirety, particularlygiven its breadth but there are a number of points we wish to make in advanceof the oral evidence that I will be giving on 29 November.

Reforming public services

2. The FDA was involved in the dialogue initiated bythe then ministers, David Clark and subsequently Jack Cunningham, during thepreparations for the Modernising Government white paper published in March1999. We broadly welcomed the whitepaper and remain committed to an agenda of public service reform, recognisingthe entitlement of UK citizens to high quality and efficient public services.

3. The FDA also had significant involvement in thepreparation of the Civil Service Reform Programme, agreed by PermanentSecretaries at Sunningdale in autumn 1999 and published in December thatyear. The FDA again broadly welcomedthe programme of reform and remains committed to its delivery.

4. The FDA believes that public service reform must beunderpinned by a partnership between elected politicians, management and staffthat involves staff at all stages during any process of reform and recognisesthat staff have legitimate interests in the overall delivery of reform. The FDA, together with the other unions inthe Civil Service, signed a partnership agreement with the Government and theHead of the Civil Service in spring 2000.This we believe has enhanced dialogue and involvement at the centre ofthe Executive (which we would define as No.10, the Cabinet Office and Treasury),although we remain concerned at its piecemeal application across Governmentdepartments; that said, the unions and Cabinet Office have initiated a jointworking group to examine the implementation of the partnership agreement andhow this can be enhanced in future.

5. We believe that the Civil Service Reform Programmedoes offer a coherent basis for enhancing the work of the Civil Service and inaddition has the potential to offer significant improvements to the quality ofworking life, and the employment terms, of civil servants at all levels. We remain concerned that reform is runningmore slowly than we would wish in a number of departments, although a report ofprogress is currently being prepared, we understand, by the Cabinet Office.

6. We are also concerned at the apparent lack of cohesion betweenthe Cabinet Office, Treasury and No. 10.Although the key link between individual departments and the centre isthrough the Public Service Agreements and Service Delivery Agreements signedbetween departments and the Treasury, there are also a number of units withinNo. 10, in particular the Delivery Unit headed by Michael Barber, which alsomonitor departmental performance. Inaddition the Office of Public Service Reform, part of the Cabinet Office andheaded by Wendy Thompson, is also considering wider issues, mainly outside theCivil Service but which nevertheless impact on the delivery by departments ofagreed programmes. There is evidencefrom departments that they find this overlay at the centre both confusing andat times an impediment. It is also notclear how these different units interact, and in particular the FDA is notclear about the role that the Office of Public Service Reform will play. It would be helpful to have a clearstatement of where the boundaries are and how the different departments andunits relate to each other.

7. Part of this apparent confusion arises from the process bywhich different units were brought together, often at short notice, immediatelyfollowing the General Election. We donot believe that it would have in any way undermined the democratic process andpolitical debate during a General Election had the Government planned thecreation of units, and the reorganisation within No. 10 and the Cabinet Office,well in advance of the General Election.

8. A similar haste is apparent in reorganisingdepartments; an example is the merger of MAFF with a substantial part of theold DETR to create DEFRA. Althoughcivil servants were involved prior to 7 June in plans to merge MAFF with partof DETR, the scale of the change announced immediately after the GeneralElection went considerably beyond that mooted in the weeks before. In a less high profile context, therelationship between LCD and the Home Office was also not clarified, and thenat very short notice, until the week immediately following the GeneralElection. The FDA recognises thepolitical sensitivities attached to reorganising Government departments, but webelieve that the tendency of both Labour and Conservative governments topropose reorganisations at short notice and without inadequate preparationundermines at least for a period the ability of those departments to delivereffectively.

9. We believe that there is merit in a comprehensivereview of the role of the centre vis--vis individual departments. Recognising that it would be helpful to leta period of time elapse for the new central structures to clarify their rolesand interaction, it would be appropriate to launch such a review next autumn.

10. TheFDA also supports more effective regional government, drawing together the workof the Government Offices of the Regions and other regional bodies. Enhanced regional government has thepotential to play an important role, but we recognise that this would not befeasible without a coherent review of the relationship between central andlocal government, and the link between the NHS and regional government wouldrequire consideration in depth.

11. TheFDA represents more than 1000 Chief Executives, Executive Directors andequivalents within the NHS, and is well placed to comment on the concerns andpressures felt by those responsible for delivering change within the NationalHealth Service.

12. Thepace of change in the NHS over the past decade has been considerable. As senior managers, our members know thatthey must continue to demonstrate the highest degrees of flexibility,adaptability and creativity to deliver the improved Health Service demanded bypoliticians and citizens. As seniormanagers they also have a fundamental commitment to ensuring that the NHSprovides the best healthcare possible and we have no doubt that they willcontinue to provide the health service with the dynamic leadership it needs.

13. However,senior NHS managers are increasingly concerned and affected by the blameculture in which many of them have to work.The FDA is alarmed by the number of cases where our NHS members areforced out of their jobs on pretexts that defy the most basic tests of fairness. All too often this removal is on the whim ofa board of non-executive directors and has more to do with decisions thatmanagers faces no longer fit than the quality of those managersperformance. The effect of thisunreasonable and unfair employment context goes beyond the individual dismissaland creates a climate of fear among his or her colleagues with all the negativeeffects on morale and trust that such insecurity generates, as well asdiverting much needed resources - both human and financial from the deliveryof health services.

14. SeniorNHS managers have fewer safeguards against unfairness at work than almost anyother comparable group of public sector professionals. No one benefits from this situation. Our members face a working environment whereno matter how well they do they can be dismissed, and patients end up relyingon a health care system where those responsible for the quality of that healthcare lack many of the employment rights and expectations they take forgranted. The FDA believes that systemsand structures need to be put in place that ensure that NHS managersperformance is assessed and responded to fairly and proportionately. Insecurity and unreasonableness will neverlead to optimal use of any senior professionals capabilities.

15. TheFDA believes that reform of public services cannot however be successful unlessthe political framework overseeing the delivery of services is also subject toreform. Two important areas ofpolitical reform are required.

16. Firstly,whilst the Government can take credit for the Freedom of Information Act, it isdisappointing that implementation has been deferred until 2005. Reform within the Civil Service and NHS islikely to be more successful if it takes place within a framework of greatertransparency and openness. The decisionto defer implementation was taken by ministers and sends an unfortunate signalthroughout the public services.

17. Secondly,the FDA is disappointed that the Government has, despite an election commitmentin 1997, moved extremely slowly in seeking to reform the House of Commons andappears highly reluctant to ensure effective scrutiny and accountability ofministers and departments. There isclearly a balance to be struck with regard to Parliamentary accountability,just as with freedom of information. Forexample, the FDA has not supported those campaigners who argue that civilservice advice to ministers should be available for public scrutiny whendecisions are announced. Similarly,given the multiplicity of monitoring from the centre of the Executive, detailedmonitoring and scrutiny by Select Committees could be extremelyburdensome. However, the FDA believesthat there is too little effective scrutiny by the House of Commons of the workof departments and are disappointed that the Government has rejected proposalsfrom the Select Committee on Liaison to enhance the role of select committeesin a constructive manner. Linked to the failure to enhance accountabilitywithin Parliament has been the clear failure to review the Parliamentaryprocesses, including the way in which legislation is taken through Parliament.

18. Webelieve that there should be an overhaul of the role of select committees toenhance their responsibilities in conjunction with the proposed review ofscrutiny by the centre of the Executive in a way that could develop a morecomprehensive but co-ordinated balance of scrutiny and accountability betweenthe Executive and Legislature. It wouldbe interesting to compare the experience of scrutiny by the Scottish Parliamentand Welsh Assembly with that undertaken within the House of Commons. The key is to achieve a balance betweenscrutiny within the Executive and scrutiny by the Legislature, within anoverall framework of greater transparency.

19. Further,though this may seem like wishful thinking, consideration and debate aboutpublic services, including the role of the private and voluntary sectors,currently suffers from the adversarial approach of Parliament, an approachoften replicated at other levels of government. Too often a Government tries to hide issues about public servicedelivery and reform because it fears taking political flack were it to be moreopen about problems. There is aresponsibility on all political parties in the UK to seek to examine issuesabout the public services and service delivery in a way that fosters meaningfuldebate rather than seeking to score easy political points. Clearly, there are important differences ata political level about the future of Britains public services, but as we areclearly now seeing, the country as a whole has been the loser for the failureto address these issues in a more mature fashion.

20. Amove away from the blame culture, highlighted above in the context of the NHS,and from partisanship would also benefit the work of the Public AccountsCommittee. Too often witnesses aresubjected to hostile, but nonetheless superficial, examination by someMPs.

21. Finally,the Government needs to come to terms with the scale of the task they areundertaking in reforming public services that have suffered from at least twodecades of persistent underfunding and neglect. The Government, for obvious reasons, has not always drawnattention to the level of spending cuts required of the Civil Service and otherpublic services throughout the 1990s, including during most of New Laboursfirst term. The Government often givesthe impression that it believes that the Civil Service and NHS have failed todeliver. At one level this is hard torefute; big problems obviously still exist in many areas of the publicservices, and the Civil Service and NHS managers no doubt share some of theblame (if blame is an appropriate concept).But the Government is at special risk of confusing a failure todeliver with their own failure to lead, and their even more marked failure tounderstand the discrepancy between a realistic timetable for delivery of anymajor change, whether in the public or private sector, and thepolitical/electoral timetable of expectations.

Public Service Ethos

22. TheFDA does not consider that the concept of public service is in any way ananachronism. We also recognise that itis an extremely difficult concept to define.That said, we have been impressed by the recent work of ProfessorRaymond Plant and would draw the Committees attention to his paper A PublicService Ethic? published by the Social Market Foundation. We understand that Professor Plant isrevising the paper in the light of debate fostered by the Social MarketFoundation.

23. Wealso believe that notwithstanding the difficulty of defining a public serviceethos, senior managers and professionals in the public sector are motivated bysuch an ethos, which is internalised by senior public servants and impacts uponthe goals of their organisations.Public servants deliver services (of whatever type) in order to benefitthe wider community and nation, and are accountable, even if indirectly, toelected politicians, whether that be a government minister or a parishcouncillor. This clearly differs fromthe private sector, where the ultimate accountability is to the financialviability of their business, and to the voluntary sector where differentaccountabilities operate.

A Single Public Service?

24. TheFDA has traditionally represented the more senior civil servants. However, as noted above, we represent agrowing number of senior managers within the National Health Service, as wellas representing senior managers and professionals in NDPBs. In addition, although we do not recruit seniorlocal government managers and professionals, we regularly receive applicationsfrom such individuals seeking to join the FDA.We believe that this is in reflection of a recognition, particularly byyounger public servants, that careers in the public services will in futuretend to move across different areas of the public sector rather than, as in thepast, for individuals to work predominantly in, say, the civil service or localgovernment. This is a trend that hasbeen encouraged, rightly in our view, by the Government. In England this trend is particularlynoticeable already within the NHS and Department of Health, where theboundaries for individuals are increasingly blurred, but has also acceleratedin Scotland and Wales since devolution.

25. Webelieve that this process will continue, particularly in Scotland and Wales,and possibly Northern Ireland although there the architecture of the publicsector is somewhat different to that of the rest of the United Kingdom. Given the population and size of the publicsector in Scotland and Wales, we believe this is a positive development and canhelp to ensure that senior public servants have a much better personal grasp ofthe intricacies of both policy making and delivery in different parts of thepublic sector.

26. InEngland the process is moving more slowly given the size of the publicservices, although were the Government to move ahead with proposals forstronger regional government, the process is likely to accelerate.

27. Overall,we believe that this is a healthy development but that it would be unrealisticto expect the creation of a single public service in the short term, even inScotland and Wales. It would also haveprofound HR implications for existing public servants and would possibly be unmanageable. Rather, individuals should be encouraged toexperience work in different parts of the public sector as a natural careerdevelopment and HR barriers to such movement should be minimised as far aspossible.

Joining Public Services from the Private Sector

28. Whilstthere is a natural tendency for any union to protect promotion and recruitmentat senior levels to ensure promotion opportunities for more junior staff, theFDA has accepted the trend for an increasing number of posts to be opened up topublic competition. We recognise thatthis helps to foster greater cross fertilisation even within the publicservices, and of course recruitment to local government and NHS posts hasalways primarily been by public advertisement, and a percentage of postspublicly advertised are nonetheless awarded to serving civil servants.

29.The single most obvious barrier to private sector individualsjoining central government has been the salary differentials between the civilservice and private sector, which become more acute the more senior thepost. Unless there is an overwhelmingbusiness case, because of say a specialist skills shortage, for offering ahigher salary to a private sector applicant than to a public servant, webelieve that this should not be undertaken.A salary is either fair or it is not.However, a more significant barrier for private sector individualsjoining the civil service is often the different levels of accountabilityrequired in senior posts linked with the need to understand the politicalframework within which public servants, and in particular civil servants,operate; this is a feature of civil service work that private sectorindividuals have rarely encountered.

30. Webelieve that three steps can help to minimise the negative consequences ofprivate sector individuals being recruited to senior civil service posts. Firstly, all private sector recruits to thecivil service should be given very early, intensive and comprehensive inductioninto the positive cultures of the civil service, including ethics andaccountability. Secondly, such recruitsshould, as is now increasingly the case, have the opportunity to developcareers in the civil service rather than be offered short term contracts whichinevitably give an individual little stake in the future success of the civil servicenor, for that matter, helps retain their skills for the future benefit of thecivil service. Thirdly, we are pleasedthat there is now a register of both inward and outward secondees to the civilservice, which will help to avoid any public suspicion of conflicts ofinterest. There must also however bevery clear and continued monitoring of individuals who leave the civil service,whether permanent civil servants or previously private sector recruits, to avoidany suspicion externally of conflicts of interest.

31. Examiningthe Civil Service in the round, over and above the centre, we now have asignificant number of appointments made either by secondment, with sketchyprotection of the proprieties from the Civil Service Commissioners, orappointments on a permanent or fixed term basis by open competition. The FDA does not doubt that these aregenerally made on the basis of excellence for the job, although we are aware ofa prior intention in some cases to appoint from outside the Civil Service comewhat may, because ministers want fresh blood. However, the concept of a professional, permanent and politicallyimpartial Civil Service does not stand on appointment by excellence alone itrequires an ability to deserve the confidence of a future government of adifferent political persuasion. Anindividual who wins appointment by excellence, but could not realisticallyserve under another government, ought not to be appointed.

The Private Provision of Public Services

32. The FDA believes thatthere can be a legitimate role for voluntary or private sector providers indelivering public services although the appropriateness of adopting such formsof delivery depends on the service and the circumstances; each proposal shouldbe considered on its merits. However,we are concerned at the framework within which the private sector is involvedwith public service delivery.

33. We believe that all toooften the decision to use private or voluntary sector providers appears to bedriven by political considerations, not the merits of the case. Whilst the Government appears to haveretreated from some of its more strident claims for the benefit of privatesector involvement, particularly in the period immediately following the 2001General Election, there has been a great deal of spin and rather less substanceabout the Governments overall plans for the private provision of publicservices. There are a number of usesthat should be considered if such provision is to continue.

34. First,PPP or similar vehicles must be developed within a framework of greatertransparency and accountability. Alltoo often, such proposals and detailed contracts are shrouded by a catchall ofcommercial in confidence which appears to be being deliberately used byministers to prevent scrutiny either by the public, those to whom a service maybe directly delivered, or by Parliament or elected bodies at more locallevel. Further, all too often theprivate provision appears to be being used by politicians to shield themselvesfrom accountability for service delivery.We see no reason whatsoever why contracts awarded to the private sectorfor the delivery of public services should not as a matter of policy be open topublic scrutiny. Procurement exercisesare already covered by European legislation.Any company that did not wish a successful tender to be public need nottender in the first place. The mainargument against appears to come from companies claiming that it wouldthreaten their competitive advantage were successful contracts to be public. However, publication would put pressure onsuch companies to continue to innovate and moreover would, if these fears arecorrect, simply mean that other companies themselves might become morecompetitive and therefore be in a position to offer the public sector a widercross section of potential service providers in future. Too many tender exercises at present arerestricted to a tiny handful of private sector organisations. Further, given that some PPP contracts runfor up to thirty years, to shackle future governments or public sectororganisations and managements to contracts signed in secret and subject to noscrutiny or accountability whatsoever is storing up trouble.

35. Second,the NAO and Audit Commission must have the right to intervene and scrutiniseany tendering exercise at any stage. Such scrutiny could also consider thedangers of such contracts, in effect, cherry picking more easily deliveredpublic services to the potential detriment of the efficiency of a particularservice overall.

36. Third,the NAO and Audit Commission should agree and publicise value for moneyprocedures that should operate in all cases of private or voluntary sectortendering for public service delivery.These should include agreed methodology and value for money criteriawhich are open themselves to public scrutiny.There should be consistent and open principles and models for theevaluation of PPPs, which would give a much more assured framework forParliamentary or other scrutiny.

37. Fourth,there must be greater clarity about funding for services. All too often where guaranteed funding overthe longer term is necessary, the Government almost automatically sees a PPP asthe preferred option. This appears tobe partly driven by ideology but also by Government accounting conventions(although resource accounting reforms may ameliorate this pressure). Some of the worst decisions in Governmentappear to be made where a PPP is seen as the preferred option for guaranteeingfunding beyond a spending review period.There is a real danger that in a few years time departmental budgetswill be heavily committed to projects that do not offer particularly good valuefor money but the terms of which cannot be varied. It is also highly unfair to criticise public servants when theyoperate within a regime of short term funding commitments with greatuncertainty about the future whilst private sector operators are increasinglybeing offered guaranteed funding over an entire contract period.

38. Fifth,where tenders are awarded to the private or voluntary sectors, the existingaccountability of public servants should transfer. These should include the application of the Seven Principles ofPublic Life, the scope of Freedom of Information and other related legislation,the requirement if necessary for private sector providers to be subject toParliamentary scrutiny, and a declaration by senior staff of other interests toavoid conflict.

39. Sixth,there must be clear mechanisms to prevent any deterioration of service and theability to end contracts if standards are not maintained or targetsdelivered. Similarly, all targets setfor private sector providers should be transparent and public, just as withtargets set for government departments and other public sector organisations.

40. Seven,the Government should ensure that private or voluntary sector providers ofpublic services offer guaranteed underpinning in terms and conditions ofemployment to all staff they have engaged to work in the delivery of publicservices, including equality and diversity commitments.

The Civil Service Code

41.Clearly, the Civil Service is of necessity reskilling, withproject and contract management skills, and a better grasp of financialaccountabilities, all increasingly important for senior civil servants.However, under both this Government and its predecessor, civil servants are nowexpected to offer a more public face on behalf of the Government. This is particularly acute in the context ofprivate sector provision, where civil servants are often negotiating with theprivate sector about the delivery of services which can involve selling andchampioning a policy where for example a PPP is involved, although it is aproblem not unique to such circumstances.This is increasingly blurring the traditional role of the civil servantin representing Government policy and the FDA believes that it warrants areview of the terms of the Civil Service Code to take account of this newenvironment.