The State of the Service

A review of Whitehall’s performance

and prospects for improvement

Simon Parker, Akash Paun and Jonathan McClory

supported by the Institute for Government research team

July 2009

1
About the Institute

The Institute for Government is an independent charity with cross-party and Whitehall governance,
working to increase government effectiveness. Our funding comes from the Gatsby Charitable
Foundation, one of the Sainsbury Family Charitable Trusts.

We work with all the main political parties at Westminster and with senior civil servants in
Whitehall, providing evidence-based advice that draws on best practice from around the world.

We undertake research, provide the highest quality development opportunities for senior decision
makers and organise events to invigorate and provide fresh thinking on the issues that really
matter to government.
2
Headline findings

This report brings together a wealth of information on Whitehall’s performance to create an

overview of the state of the UK civil service. It identifies high-performing organisations within the
civil service and internationally to encourage further learning and improvement in government:

1. Whitehall in global context: the UK is among the world’s highest performing governments.
The civil service has a relatively positive public image. However, Whitehall is consistently
outperformed in international comparisons by a cluster of Scandinavian and Commonwealth
countries.

2. Performance: Whitehall’s performance record is patchy. Capability reviews show improvement in

almost every area measured, but many of the 2005-08 round of Public Service Agreement (PSA)
targets were not met, in part because some targets were poorly conceived in the first place.
PSAs that were shared between departments were less frequently achieved. The civil service
appears to have delivered significant efficiency savings as part of the Gershon process, but poor
data quality means some savings are open to question.

3. Leadership and people: civil servants display high levels of pride and commitment, but many
lack confidence in their department’s senior leadership. Civil service culture appears to be
relatively conservative, which may limit the potential for innovation. Recruitment of senior officials
from outside Whitehall is growing, with uncertain implications.

4. The role of the centre: within Whitehall, the UK operates a relatively decentralised model of
government, with departments enjoying high levels of autonomy when compared to the rest of the
OECD. This may contribute to silo working within central government, making collaboration and
cross-departmental innovation more difficult.
3
Contents

1. Introduction

2. Whitehall in global context

3. Performance

4. Leadership and people

5. Role of the centre

6. Conclusion: fit for the future?

7. Acknowledgments, glossary and bibliography

4
Introduction
Over the past five years, Whitehall has produced an unprecedented amount of information about its own
corporate performance. But the data emerging from capability reviews, performance reports and staff surveys
has rarely been brought together in an accessible format.

This report aims to do just that, using the latest publicly available data to provide readers with a clear guide to
Whitehall’s people, performance and prospects for improvement. We have also drawn on international
comparisons to show Whitehall’s performance in context. This report is intended to help UK departments learn
from each other and from the best international practice.

This document is an interim analysis to provoke discussion and provide the basis for a final report to be
published later this year. Given the limitations of the available data, our analysis should be regarded as
exploratory rather than offering a set of firm conclusions. We welcome comments.

The data reaffirms Whitehall’s significant strengths – a committed workforce, skilful strategy development and
rising levels of public esteem. But it also highlights some significant challenges:

• Civil servants are highly committed, but many are not confident in the quality of leadership in their
departments
• Whitehall is improving in some areas, but performance is highly variable across departments and PSAs
have not yet developed into an effective way of ensuring delivery of all government priorities
• The UK has a relatively weak centre of government, which may make it more difficult to lead improvement
and coordinate policy across strong departments.

Whitehall possesses many examples of high performance, but the civil service needs to improve further and
more consistently to become fit for the future. Departments will have to do this in a much tighter fiscal climate.
This report sets out some of the key issues that we believe the civil service must address to rise to this
challenge.
5
Whitehall departments: the basics

• Total government spending in 2009/10 is Government Spending by Departmental Group

(2009/10 plans, £bn)
forecast to reach £662bn, equivalent to
MoJ, 10.0
43% of GDP. This is a rise of about 5% as HO, 10.3
DfT, 18.4
a proportion of GDP over the past decade. Other,
DIUS, 24.1 39.9

CLG, 38.6
DWP, 152.0
• In 2008, the home civil service employed
516,000 people (483,000 full-time MoD, 52.9
equivalents), of which senior managerial DH, 115.2
grades (SCS) comprise just 1%. Devolved,
64.5

DCSF,
• Some 200,000 civil servants are employed 64.8
Chancellor’s
directly by Whitehall departments, with a Depts, 71.8

further 22,000 employed by Scottish and Civil Service Employees by Departmental Group
Welsh devolved administrations. The rest (x1000)
work for government agencies and other CPS, 8.3
BERR, 8.8
public bodies.
DEFRA, 11.3 Other,
42.3
DfT, 19.1
• The four largest delivery departments – DWP, 116.2
Devolved, 22.2
DWP, HMRC, MoJ and MoD – employ
almost three quarters of the civil service. HO, 26.8

HMRC, 93.2
MoD, 81.1
• The size of the civil service has decreased
by over 30,000 people since 2004, and by
250,000 since its pre-privatisation peak in MoJ, 86.4
the 1970s. 6
Sources: Public Expenditure Spending Analysis 2009; Civil Service Statistics 2008
Hundreds of non-departmental public bodies and agencies
comprise a complex world beyond Whitehall

• There are some 800 non- 1200

Number of English NDPBs

departmental public bodies 1100
(NDPBs) answerable to Whitehall
1000
departments. There are now 404
fewer than in 1997, but this is 900
largely due to the transfer of
800
some bodies to devolved
administrations in Scotland and 700
Wales. Once these are 600
accounted for, the actual 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
reduction in NDPBs is 67.
80,000
14.2%

Agency size by staff headcount

70,000 Percentages refer
• The Institute for Government is 60,000
to size of agency
currently conducting a separate 50,000
as proportion of 9.7%
research project looking at the entire civil service
40,000
roles and effectiveness of
30,000
NDPBs. 3.7% 4.0%
20,000 2.3%
1.6% 2.1%
10,000 0.8% 1.2% 1.2%
• A large proportion of civil 0
servants are employed by
executive agencies, such as Job
Centre Plus, rather than directly
by Whitehall departments. The
largest ten employ 41% of all civil
servants.
7
Sources: Cabinet Office 2009; Civil Service Statistics 2008
Whitehall in
global context
Key findings
“Some [British public] services are not as far advanced as in some other countries in
ensuring that all professionals take leading roles in defining excellence and driving
forward the quality agenda, or in moving away from traditional organisational forms”
Prime Minister’s Strategy Unit, July 2009

This section brings together international comparative data to provide an overall picture of the UK
government’s standing among other developed countries.

• Whitehall is firmly within the global government premier league. It also enjoys high levels of
public confidence compared with the civil services of many other developed countries.

• UK government is mid-table when compared to the rest of the OECD, consistently outscored by
a group of Scandinavian, Northern European and Commonwealth countries such as Australia,
New Zealand and Canada. There remains much scope to learn from these successful countries.

• Other countries have been able to secure better league table positions with lower levels of
public spending. This raises the question of whether the UK is ‘punching below its weight’,
although the differential performance partly reflects the varying extent of the underlying social,
economic and environmental problems governments need to address.

• None of the current international indices provide a full picture of government performance. The
Institute for Government plans to develop more sophisticated measures as part of its ongoing
research programme.
9
The UK is within the ‘premier league’ of global governments,
but can learn from Scandinavia and the Commonwealth

International Government Rankings

9.00 Norway
Finland Denmark
8.00 New Zealand
Iceland Sweden
Bertelsmann Management Index

Ireland Canada
7.00 Netherlands
United States Austria
Germany
South Korea Luxembourg Australia Switzerland
6.00 Slovakia Portugal
Mexico Hungary Japan United Kingdom
Spain Belgium France
Italy
5.00 Turkey
Poland Czech Republic
4.00
Greece

3.00

2.00
0 0.5 1 1.5 2 2.5
World Bank Government Effectiveness

International rankings of government performance suggest that the UK government sits comfortably
within the global ‘premier league’. However, within that league it tends to occupy a mid-table
position. Countries that consistently outperform the UK include the Scandinavian nations, Canada,
the Netherlands and Australia.

The complexity of government means that this kind of international comparison will always be open
to challenge, but it does provide a useful indication of the UK’s standing. The two indicators used on
this page are explained in the following slides. 10
Source: Bertelsmann Sustainable Governance Indicators 2009; World Bank Worldwide Governance Indicators 2008
The World Bank suggests that the UK is the 10th most
effective government in the OECD

• The World Bank index World Bank government effectiveness scores

(OECD nations only, 2008)
combines 441 variables
2.5
reflecting government
effectiveness. The data
comes from 35 sources, 2
including surveys and
information from NGOs and
1.5
private sector bodies.

• The UK has improved its 1

position over the last five
years. In 2003, it was 14th
0.5
in the OECD.

• Sources used to compile 0

the UK indicator include the

SWEDEN
SWITZERLAND
NORWAY
BELGIUM
POLAND

SPAIN

JAPAN

ICELAND
IRELAND

FINLAND
TURKEY
ITALY

GREECE
HUNGARY
SLOVAKIA

FRANCE

GERMANY
AUSTRIA

AUSTRALIA
CANADA
UNITED KINGDOM
LUXEMBOURG
CZECH REPUBLIC

NEW ZEALAND
SOUTH KOREA

NETHERLANDS

DENMARK
PORTUGAL
MEXICO

UNITED STATES
Economist Intelligence
Unit, the World Economic
Forum global
competitiveness survey and
measures of political risk.

11
Source: World Bank Worldwide Governance Indicators 2008
The UK is mid-table on the Bertelsmann sustainable
governance indicators

• The sustainable governance Bertelsmann sustainable governance indicators

indicators use a combination of 9.00
government statistics and surveys
Norway
of country experts to create two
Denmark
indexes – one that measures the 8.00 Finland
Sweden
need for policy reform in a
Iceland New Zealand
country and another which
7.00 Ireland
measures government capacity to Canada
Austria Netherlands
deliver reform. United States Australia Switzerland
Luxembourg Germany

Management Index
United Kingdom
6.00
South Korea
• Status Index: measures a Slovakia
Hungary Japan Portugal
range of economic and policy Mexico
Spain France
outcomes, including family policy, 5.00
Italy Belgium
Czech Republic
pensions, social cohesion and the Turkey

quality of democracy. The UK

4.00 Poland
ranks 13th out of the OECD 30 on
the status index.
Greece
3.00
• Management Index: measures
executive capacity, policy
coordination, implementation and 2.00
accountability. The UK ranks 16th 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00
of the OECD on this index. Status Index
12
Source: Bertelsmann Sustainable Governance Indicators 2009
Other countries appear to achieve more in terms of outcomes
despite spending less on public services

• The UN’s human development Human Development Index v Government Spending (2005)
index shows that many countries 0.98
are able to secure better outcomes Iceland
Norway
despite lower levels of public Australia Canada
Sweden
spending. 0.96
Ireland Japan Netherlands Finland
Denmark
Switzerland Austria
SpainLuxembourg
• The HDI measures factors that United States
United Kingdom
France
0.94 New Zealand Belgium
include life expectancy, literacy, Italy
Greece
educational enrolment and GDP Korea Germany
Total OECD
per capita. 0.92

HDI Score
• Countries such as Australia,
Portugal
Ireland, the US and Canada 0.9
Czech Republic
perform better than the UK. The
UK appears in a similar position if
the Bertelsmann indicators are 0.88 Hungary
Poland
used in place of HDI. Slovak Republic

0.86
• The figures used here only reflect
government spending. In some
countries, services like health are 0.84
partly funded by private 25.0 30.0 35.0 40.0 45.0 50.0 55.0
contributions. Government Spending as a Percentage of GDP

13
Source: United Nations Human Development Index 2008 (based on 2005 data); OECD Economic Outlook 85 Database
The UK is relatively centralised for a country of its size

• Across the OECD there is a 100

broad relationship between

size of country and levels of
New Zealand

Central government spending as % total public spending

90
financial centralisation.
Portugal
Luxembourg
Slovak Republic
• New Zealand, with 4.1m Ireland
80 France
people, spends most of its Iceland
Czech Republic
United Kingdom
money in Wellington while
Netherlands Poland Italy
Canada, Australia and Spain 70
Norway
Austria
spend more at federal and
regional levels. Finland
60 Australia Germany
• The UK, along with France,
Spain
seems to be characterised by Denmark
relatively high levels of 50
centralisation, with only a
quarter of public expenditure
controlled at the local level, 40
Canada
though this does not take
account of spending by the
three devolved governments 30
0 10 20 30 40 50 60 70 80 90
(up to 10% of total
expenditure). Population (millions)

14
Sources:CIA World Factbook 2007; IMF Government Finance Statistics Database 2007
The civil service enjoys high and improving levels of public
confidence and relatively low perceptions of corruption

80% 100%
90%
70% Sweden
Switzerland 80%
Confidence in the Civil Service

South Korea 70%

Finland

% trust to tell the truth

60% Canada 60%
France
50%
50% Great Britain 40%
Italy New Zealand 30%
USA Spain
40% 20%
Australia
Germany Japan 10%
30% 0%
Netherlands Mexico

1983

1993

1997

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008
20%
20% 30% 40% 50% 60% 70% 80% Doctors Civil servants
Confidence in the Government Journalists Man or woman in the street

The public has a relatively high level of confidence in the civil service – only six OECD
countries do better. Perceptions of corruption are lower than the EU average, suggesting that
the civil service is seen as having relatively high levels of probity.

Whitehall’s public image has improved markedly over the past 25 years. In 1983, only 25% of
the public trusted the civil service to tell the truth. In 2008, this had risen to 48% - compared
with just 21% for politicians.
15
Sources: World Values Survey, 2005-07; Global Corruption Barometer 2009, Ipsos Mori Veracity Index 2008
Performance
Key findings

“Is being transformational a familiar behaviour and cultural pattern within the Ministry
and the wider civil service? Answer: almost certainly no”
Senior civil servant, 2009

This section brings together performance information for Whitehall departments, including
capability reviews and PSA scores. Key findings include:

• Whitehall is improving – capability review scores have risen almost universally in the second
round of inspections, with the strongest improvements in delivery capacity.

• But performance against PSA targets has been mixed. Only 40% of the 2005-08 round of PSAs
were hit. PSAs that were shared between departments were met less frequently, reflecting the
complexity of issues such as teenage pregnancy as well as the difficulty Whitehall has in joining
up across departments.

• Whitehall’s performance measures do not yet provide a robust sense of whether the civil service
is delivering effectively. The 2005-08 round of PSAs set targets of varying quality, while
capability reviews have so far explicitly excluded performance.

17
The capability reviews appear to have driven significant
improvements in departments

4
• The first round of capability
reviews (2006-07) revealed a
Improving
number of weaknesses in
Whitehall delivery, leadership and 3.5 MoD
capability building. DWP DFT
FCO DH
DfID
• The second round of capability CO

Second Round Capability Score

3
reviews (2008-09) highlights the DfID
significant improvements being DCMS DWP
DfID FCO Leadership
HO CLG DEFRA Capability
made by many departments, DWP
HO DEFRA
albeit from a low base. 2.5 CO Strategy
DH DFT FCO Capability
HO DCMS
DH DEFRA DFT CLG Delivery
• Improvements are most notable MoD Capability
for delivery capability. But both 2 CLG MoD
delivery and leadership capacity
remain highly variable between
CO DCMS
departments, a sign of room for
improvement. 1.5

Deteriorating
1
1 1.5 2 2.5 3 3.5 4
First Round Capability Score

18
Source: Departmental Capability Reports, 2006-09
The PSA system has not led to delivery on many of the
government’s key policy objectives

100
• Across Whitehall, only 40% of all PSA
goals were fully met in the 2005-08 round,
90
with joint targets less likely to be
successful. 80

• This may be because goals were poorly 70

framed or over-ambitious rather than

% of PSAs achieved
60
reflecting a failure of departmental
performance. For instance, DfID faced a 50
series of demanding targets relating to the
Millennium Development Goals, over 40
which the UK has limited influence.
30
• Either way, the low success rate casts
20
doubt over the effectiveness of the PSA
system at delivering government goals. 10

• Further evidence of weak performance 0

management comes from survey data,
which finds that a majority of staff in all
departments think poor performance is
PSA Targets PSA Sub-Targets
not effectively tackled.
Targets Average Sub-Targets Average

19
Sources: Institute for Government analysis of 2008 departmental annual and autumn performance reports; departmental staff surveys 2007-8
Shared targets have proven particularly hard to deliver

• In the 2005-08 spending review Asylum & HO

DfID MOD FCO BERR HMT CO
period, there were 20 jointly- Immigration

owned PSA targets which

included high-profile pledges on Fear of Crime
MOJ
and trust in CJS
child poverty, carbon emissions, Conflict EU
CLG
Prevention Security
and teenage pregnancy. Agenda CPS

• Only seven joint targets (35%) EU Trade

Barriers
FDI Regional Fiscal Rule DWP
Economies Compliance
were reported as fully met. This
may reflect difficulties in working Debt Relief Productivity Full
Employment
across departmental boundaries & Millen
Goals
or the complexity of the issues
being addressed. Fuel
Carbon Poverty
Emissions DfT
• A total of 16 departments were DH
involved, with the hubs of this
Air Quality Child Childcare Child
complex system being BERR, Defra Poverty Sport

DCSF, DWP and HMT.

DCMS
Child Child Teen age
Communication Obesity Pregnancy

NB. Targets are coded green or red to indicate whether they were DCSF
fully met (meaning all sub-elements were met) as reported in
December 2008. For one target (child obesity) it was considered too
early to judge performance – we have counted this as not fully met.
20
Source: Institute for Government analysis of departmental performance reports
Whitehall has exceeded its efficiency goals, but poor
financial information is a cause for concern

• Departments have outperformed Gershon 350%

CLG
efficiency goals and headcount reduction 300%

Headcount reductions
DCMS
targets. This may put the service in a strong 250%
position to manage future expenditure
200% DfID
reductions, but the push for savings may be
hampered by poor data. 150% BERR
CPS

100%
• The National Audit Office (NAO) believes
50%
the headcount reduction figures to be robust,
but in 2007 it encountered difficulty in 0%
0% 50% 100% 150% 200% 250% 300% 350%
validating 23% of the Gershon savings.
Achievement against Gershon targets
• This lack of good financial data was
6
emphasised in 2008 by the Public Accounts
Committee: There are no definitive numbers 5

available for the operating costs of HR and £bn 4

finance in government. 3
2
• Treasury data compiled since then shows 1
wide variations in estimates of public sector 0
back office spending – overall costs could be Procurement Marketing Estates Other Finance HR
anywhere between £16-20bn. The lack of and comms
value for money information – linking spend
Lowest estimate Highest estimate
to outcomes – is a fundamental concern.
21
Source: HM Treasury 2008; Operational Efficiency Programme 2009
Leadership and
people
Key findings

“Saying to senior managers, do this and if you make a mistake, I’ll cover for you
and help you out. This is not normally found in the Civil Service. It’s risk averse.”
Senior civil servant, 2009

This section brings together data on the quality of Whitehall’s leadership, people management and
culture. The statistics show that:

• Whitehall’s greatest asset is the commitment of its people – many civil servants display high
levels of pride in their work, with the senior civil service most committed. Leadership in
government is getting better – capability review scores show that many departments have
improved.

• Many civil servants lack confidence in their department’s leadership and ability to manage
change. However, there is a significant ‘grade effect’ where less senior staff tend to be less
satisfied. This contributes to relatively low scores for large delivery departments such as DWP
and HMRC.

• High levels of recruitment from outside the civil service in recent years raise important questions
about how Whitehall develops talent for the future.

• We have used 2008 survey data in all cases except for DCMS, DfID and the Foreign Office,
which last published their surveys in 2007.
23
Most senior civil servants are proud to work
for their department
100
• One of Whitehall’s greatest assets is 90
the commitment of its senior people. 80
Over 80% of senior civil servants are 70
60
proud to work for the government.

%
50
40
30
• However, attitudes to the workplace 20
10
vary by seniority, with higher grades 0
being the most committed and lower
grades displaying a greater degree of
dissatisfaction even within the SCS.
Pride in Department (Whitehall) Australia (all federal)
Scotland (all civil servants) SCS 2006
• Officials just below the ‘top 200’ senior
100
leaders are also significantly less
confident that they can safely challenge 80
the way their departments operate – a
possible indication that the culture of
%
60
Whitehall breeds conformism.
40

• Below the SCS, pride and other 20

measures of job satisfaction tend to be
lower with significant variation between 0
Deputy Directors Directors Directors General Permanent
departments. Smaller departments tend Secretaries
It is safe to challenge how department operates
to display higher levels of pride. I would recommend working in the civil service
I am proud to work for the civil service 24
Source: Civil Service Staff Surveys, 2006-08
 UK civil servants have relatively low levels of confidence
in their senior leaders

100 100

Confidence in Senior Managers

90 90
Department is Well-Run

80 80
70 70
60
60
50
50
40
30 40
20 30
10 20
0 10
MoJ

HMT
HMRC

CLG
DIUS
MoD

DCSF
BERR
DWP

HO

FCO
CO
DH

DfT
DCMS

DfID
0

UK Australia Scotland Private Sector Norm UK Canada USA

The UK civil service has relatively low levels of confidence in departmental management. Asked
whether they thought their department as a whole was well-managed, 45% of Australian officials and
41% of Scottish officials agreed. Only four UK departments exceed these figures. The private sector
benchmark is higher still.

The pattern is similar when the UK is compared with Canada - 53% of civil servants there are
confident in their senior managers, while a similar number of American officials have a “high level of
respect” for their senior leaders. Only three UK departments surveyed meet or exceed these figures.

25
Source: Civil Service Staff Surveys, 2007-08
Poor internal communication is associated with low
confidence in leadership
100

90

80

70

60
%

50

40

30

20

10

0
DWP HMRC MoD MoJ DH DfT DIUS CO DCMS DCSF FCO BERR DfID
Confidence in senior leaders I understand how my work contributes to departmental objectives
Department keeps me informed about matters affecting me

There is a strong positive correlation between civil servants’ confidence in their leaders and two
indicators of internal communications: the extent to which staff are kept informed about matters
affecting them (+0.89 correlation) and the extent to which they understand how their work
contributes to departmental objectives (+0.74 correlation).

Departments scoring poorly in terms of staff confidence could learn lessons from those further up
the league table. Many of the poorer performers are the largest departments making the
challenge of internal communication greater, though the relationships between confidence in
leadership and being kept informed remains significant even when controlling for department size. 26
Source: Civil Service Staff Surveys, 2007-08
Departmental boards can contribute to high performance,
but they have very different priorities
Frequency of discussion in departmental boards
35%

30%

25%

20%

15%

10%

5%

0%
HMT BERR DfID DH MoJ DCMS

Capability Rev Strategy Comms Perf. Man. Risk Finance

Departmental boards were introduced across Whitehall by 2005 HMT guidance, with the aim of
providing more effective governance.

The structure and focus of these boards reflects the diversity of Whitehall departments. As part of a
broader research project on boards, the Institute for Government has analysed the minutes of six
boards over 2008 to establish the frequency with which different topics appear on the agenda.

More detailed analysis suggests that the quality of boards can contribute to departmental success, and
that the issues which boards focus upon may be key to their quality. These issues will be the focus of
ongoing IfG research over the next six months. 27
Source: IfG analysis of board minutes, forthcoming IfG work on board effectiveness
Whitehall needs to look outwards and across institutional
boundaries in search of innovation

• Civil servants tend to see their own Primary driver of innovation

senior managers as the primary Frontline staff
Individual 6%
source of innovation in government, staff
with little input from frontline staff or 8%
others.
Other Senior
management
• At the same time, civil servants organisations
or middle
19%
consider the key barriers to managers
innovation to be: working with Centre of 48%
government
stakeholders, fragmentation or silos or Ministers
within government, and cultural 19%
resistance to change.
Key blockages to innovation
• International surveys of innovation
Other
have found that successful new 10%
Working with
Difficulty in the private
practice emerges most often at the freeing sector or
frontline and where organisations resources stakeholders
work together or with the public to 17% 25%
solve a shared problem. Reluctance to
Fragmentation embrace new
or silos ways of working
20% 28%

28
Sources: National Audit Office 2006, Borins 2006
Civil service culture may create barriers to innovative
ways of working

Values of UK civil servants Values of Dutch civil servants

Below average Average Above average Below average Average Above average

Security Security

Conformity Conformity

Tradition Tradition
Self- Self-
direction direction
Stimulation Stimulation

Universalism Universalism

Benevolence Benevolence

Power Power
Accomplish Accomplish
ment ment
Hedonism Hedonism

UK civil servants appear to be committed but somewhat conservative. Research based on the
European Values Survey suggests that UK officials are motivated less by power or personal pleasure
and more by conformity to social norms.

In contrast, the French are more motivated by hedonism and tradition, while the Dutch are less
traditional and value autonomy and stimulation.
29
Source: Rouban 2006, derived from European Values Survey data
The UK civil service has become more open to external
competition for senior jobs
70 35
% of openly competed at grades 2+3

60 30

50 25

40 20

30 15

20
10

10
5

0
0
2003/4 2004/5 2005/6 2006/7 2007/8 2008/9
Deputy director Director Director general
Civil service Wider public sector Private sector External recruitment as % of all appointments 2007/8

External candidates have established a firm foothold in the senior civil service, with outsiders winning
over half of openly advertised jobs in most years since 2003-04, including a third of all Director General
appointments in 2007-08. The UK civil service has the second most open recruitment processes in the
OECD, after the Netherlands.

External hires can command a pay premium of around 10% and have a higher turnover rate than
internal promotions. They are particularly well-represented in finance, HR and commercial directorships.
External hiring allows the civil service to bring in scarce skills, but it also raises questions about how
effectively Whitehall is growing its own talent. The Normington review concluded that: we do not believe
that it can or should be a long term strategy to rely so heavily on external recruitment at senior levels.
30
Sources: Civil Service Commissioners, Cabinet Office, Normington Review, OECD 2008
Permanent secretary tenure has remained steady
since the 1950s
25 Maurice Hankey, the first
Average tenure of officials retiring or moving in each

Cabinet Secretary, was in post

from 1916 (when the Cabinet
20 Office was created) until 1938

15
decade

10

0
1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s

Permanent Secretaries (major depts) Cabinet Secretary Treasury PM's PPS

The average length of appointment for a permanent secretary has remained remarkably steady in the
post-war decades. Over the past decade, the average tenure for a permanent secretary has been just
under four years – the recommended period for all senior officials.

The average tenure for cabinet secretaries has fallen markedly over the same period, with relatively
short appointments for Richard Wilson and Andrew Turnbull. The average tenure for a minister is shorter
still, averaging around two years in the parliament of 2001-05.
31
Source: IfG analysis, Political Facts Since 1975, Dod online, Demos
Role of the
centre
Key findings

“The philosophy is that accountability and responsibility for what you do rests
out there, and it’s not for the centre to second guess that”
Senior civil servant, Cabinet Office, 2009

This section brings together international comparisons on the role of the centre of government as
‘head office’ for the civil service, highlighting the high levels of autonomy granted to Whitehall
departments. Our key findings are that:

• The UK’s model of government provides departments with significant freedom to manage
compared to other OECD countries.

• Despite the perception that UK government is very centralised, its central institutions are
actually smaller and may be less powerful than those of many other OECD countries.

• While the centre of government has assumed a major role in setting targets for the rest of
Whitehall, there are few consequences if these targets are not met.

33
The UK’s centre of government is relatively small,
but Downing Street has grown significantly

1.20%
• Despite perceptions of centralisation,
the cluster of ‘head office’ departments at 1.00%
the heart of Whitehall are actually 0.80%
relatively small compared to some other
0.60%
countries.
0.40%

• Compared to the UK, the centres of 0.20%

government in Canada and France are 0.00%
twice as big a proportion of the total civil UK Netherlands Canada France
service
Centre as proportion of national civil service

• However, the number of staff in

250
Downing Street has increased markedly
over the past decade, suggesting a
200
strengthening of the political centre of
government. 150

100
• This chart takes ‘the centre’ to mean
the central political coordination and
50
strategic functions of government, as
well as central providers or coordinators 0
of corporate services such as HR and
financial management.

Number of employees in Downing Street

34
Source: IfG analysis
UK departments have relatively high levels of freedom to
manage their personnel

Level of HRM delegation to departments

• UK departments appear to be 0.8
among the most independent in the
OECD, with high levels of freedom 0.7
over how they recruit and manage
personnel. 0.6

• The human resource management 0.5

(HRM) index reflects the ability of a
department to manage its own 0.4
recruitment, terms and conditions
and levels of staffing. 0.3

• OECD surveys also shows that the 0.2

UK civil service makes relatively
high usage of performance related 0.1
pay – it has the third highest level of
use, behind Australia and Korea. 0

Netherlands
Luxembourg

Portugal
Mexico

Austria
Turkey

Ireland

Norway
Germany
Canada
Italy

Hungary

Iceland

New Zealand
Spain

Switzerland

Japan

Finland
United States
France

Belgium

United Kingdom
Denmark
Korea

Australia
Sweden
• However, UK departments make
only average use of performance
assessments when taking decisions
about staff pay and progression.
35
Source: The State of the Public Service, OECD 2008
UK departments have high levels of budget flexibility
compared to the rest of the OECD

Managers are able to keep efficiency savings

without restriction
Ministers can carry over unused investment funds
without restrictions
Ministers can carry over unused operating
expenditures without restrictions
Ministers allowed to vire funds

System exists for departments to charge each

other for services and is used to a great extent
No central ceiling for each ministry's initial
spending request
Use of multi-year targets/ceilings at ministry level
Hungary
Greece

Netherlands

Spain
Belgium

France
Portugal

Luxembourg

Czech Republic
Korea

Slovak Republic
Austria

Denmark

Germany

Mexico

Australia
Italy
Japan

Sweden

New Zealand
Norway

Turkey
Canada
Poland

Switzerland

Iceland

Ireland
Finland

United States

United Kingdom
Use of multi-year estimates at ministry level

Whitehall departments have a relatively high level of budget autonomy compared to the rest of the
OECD. This chart shows which countries use a range of budgetary mechanisms that are commonly
considered to empower ministries – it is based an a set of OECD survey questions that capture fiscal
responsibility and budget flexibility.

UK departments have multi-year spending allocations and can carry money over between years without
restrictions. They can charge each other for services, and they regularly make use of this power. The
only restriction captured by the OECD survey is that the Treasury sets indicative ceilings for
departmental spending requests, limiting what they can ask for in each funding round. 36
Source: OECD budget practices survey, 2007
There are few penalties for failing to meet
centrally set targets

• UK civil servants are unlikely to Likelihood of sanction for failing to hit performance targets
face sanctions if they fail to hit a 16

government target. The main tool 14

the centre uses to tackle under-
performance is enhanced 12

monitoring. 10

8
• Other successful countries make
6
more frequent use of a wider range
of sanctions, which include 4
eliminating underperforming
2
programmes, budget reductions and
pay or career consequences for 0
senior officials.
France

Denmark
Korea
Canada

Australia
Hungary
Greece

Spain

Netherlands

Poland
Italy
Finland
Belgium
Czech Republic

Portugal

Luxembourg
Slovak Republic
Mexico

Austria
Norway
Iceland
Ireland
Japan

Sweden

New Zealand
Germany

Turkey
Switzerland

United States
United Kingdom
• This index is based on the OECD
budget practices survey. The chart
shows how frequently countries The programme is eliminated
apply the sanctions listed above, There is more intense monitoring of the programme in future
with a score of 0 meaning the
Negative consequences for budget of ministry
practice is almost never applied and
Negative consequence for pay of head of ministry
4 meaning it is almost always
Negative consequence for future career of head of ministry
applied.
37
Source: IfG analysis of OECD budget practices survey, 2007
Conclusion:
fit for the future?
Key findings

“Our challenge is to raise the whole civil service to the level of the very best: building a
culture of excellence everywhere in the service”
Sir Gus O’Donnell, Cabinet Secretary

This section draws together evidence on the challenges facing Whitehall over the next decade. The key
findings are:

• From tackling complex cross-departmental problems to becoming more innovative, there is a

broad consensus about the issues the civil service must address to become future ready.

• Whitehall has traditional strengths in areas such as strategy, but the capability reviews show that
the civil service’s weaknesses lie in the skills it will need for the future. These include developing
innovative delivery models.

• The civil service also needs to increase its capacity to ‘join up’ effectively if it is to deliver on the
government’s strategic goals, which often involve dealing with complex social, economic and
environmental problems.

• Capability building needs to remain a key focus for Whitehall over the next decade. The civil
service needs to consider how to tackle a number of challenges that include talent management,
increasing the credibility and authority of departmental boards and reviewing the relationship
between departments and the centre of government.
39
Whitehall faces a number of well-established
future challenges

Interviews with senior Whitehall officials confirm many of the findings of major reports published about
the civil service over the past five years, which reveal a broad consensus about the challenges
Whitehall faces:

• Reducing the budget deficit – the Institute for Fiscal Studies estimates that £90bn will have to be
cut from public spending by 2016/17 to bring the budget deficit back to a manageable level. This will
require much greater prioritisation of the key functions the state should provide and more effective
strategic focus on a small number of government priorities.

• Tackling complex problems – from climate change to obesity, governments face challenges where
progress can only be made through influencing massive delivery systems and changing public
behaviour. Meeting these challenges will require higher levels of collaboration, innovative new ways
of working and mastery of new skills such as behavioural economics and co-production.

• Becoming more accessible – departments need to become more outward-facing and open with the
public in the way they make policy, while central government services need to provide higher
standards of seamless customer care. This will require the skilful deployment of new technology to
engage with citizens.

• Talent management – given these challenges, the civil service needs to consider how it can
develop the right skills among its staff to generate the public service leaders and facilitators of
tomorrow.

40
Source: IfG analysis of various reports
The civil service has to manage change against
a tough fiscal backdrop

• The current state of the public finances General Government Balance (% GDP)
2
means that any civil service reform will
need to be accomplished alongside a
major programme of budget balancing. 0

• The government balance for 2009 and

2010 shows a major deficit, of c.10% of -2
GDP (£140-150bn per annum).

• Recent Institute for Fiscal Studies’ -4

predictions suggest that public spending
will need to be reduced by £90bn by
2017/18 (equivalent to 13% of total -6
spending, or £2,840 per family).
-8
• On average, Departmental
Expenditure Limits are forecast to grow
by 2.7% from 2008 to 2011, then -10
contract by 2.3% a year in real terms in
the following three years.
-12
• The Institute for Government is
currently exploring the implications of
the fiscal squeeze in a separate project. 41
Source: IMF World Economic Outlook April 2009; Institute for Fiscal Studies May 2009
The civil service must find new ways to address complex,
cross-departmental issues

• The 2008 round of PSAs has

created a complicated new web CO DfT MOJ BERR HMT
of linkages between Whitehall
departments.

• The new shared PSAs will

require the civil service to
develop its ability to collaborate
across barriers. While there are
signs of progress, this approach CLG HO DH DWP
to delivery remains counter
cultural.

• As this map suggests, a

handful of departments have
become ‘junction boxes’ for the
new delivery system – notably
the Home Office, CLG and
DCSF. Following machinery of
government changes, the newly DCMS DCSF DIUS
Department of Business and
Skills (BIS) has also become a
NB. Lines between two departments represent the number of PSAs led by one or other department in which the other
key hub. participates. Red lines indicate there are more than four such links; amber lines indicate 3-4 such links; green lines 2 such
links. Where there is a single link between departments this is not shown. Links with departments other than those
shown never exceed two.
42
Source: Institute for Government analysis of PSA Delivery Agreements – see also Performance Art
 The civil service is weakest in the key capabilities
needed to meet future delivery challenges

Capability review factor

S2 - Base choices on evidence

Capability reviews show
L1 - Set direction that Whitehall is best at
leading strategy
D3 - Manage performance development
L3 - Take responsibility for leading delivery and change

L2 - Ignite passion, pace and drive

S1 - Focus on outcomes

S3 - Build common purpose

D1 - Plan, resource and prioritise

But the civil service is

L4 - Build capability
weaker at the delivery and
D2 - Develop clear roles, responsibilities and delivery management skills it
model(s) needs for the future
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
First Round Scores Latest Scores
NB. L: Leadership; S: Strategy; D: Delivery
43
Source: Departmental Capability Review Reports
Some departments have a credibility gap in their ability
to lead improvement

• Departments obviously have a critical 70

role to play in building skills for the 60

future, but only a minority of civil

% agreeing
50
servants are confident that their 40
department is well placed to manage 30
change. 20
10
• Departmental boards are designed to
0
play a key role in capability building, but
their performance is variable, according
limited availability of data. Nine
departments include staff survey "I feel that change is managed well in this department"
questions about boards. While these 4

First Round L3 capability review

DCSF
questions vary in wording, in no MoD
department do a majority of staff have 3
positive perceptions of their HO CO
department’s board. 2
score MoJ HMT
DIUS
1
• Taking into account capability review DfT DCMS
scores – assessed using the L3 variable 0
(“Taking responsibility for leading 0 10 20 30 40 50
delivery and change”) as well as staff
% having a positive perception of departmental management
survey results, the DCSF board seems board (Question varies)
to emerge as the highest performing.
44
Source: Civil Service Staff Surveys, 2007-08, Capability Reviews
Our ongoing research highlights international
practice the UK can learn from

The Dutch are experimenting with programme ministers to manage cross

government priorities. Instead of taking on a departmental portfolio, the
Joining up government in deputy prime minister has a ‘virtual ministry’ for youth, based in the health
the Netherlands departments but working across government to develop and implement
policy. The government also has eight cross-cutting policy programmes,
each with a budget that is only released once the relevant departments have
agreed on how to spend it.

Canada’s Treasury Board Secretariat is effectively a civil service

Canada’s public department. Its major focus on capacity building has led to several
management innovative improvement initiatives, including the renowned ‘Service Canada’
department approach to citizen satisfaction and an early version of capability reviews.
TBS also provides support to departments on evaluation and governance for
cross-departmental initiatives.

France is developing systems to evaluate the performance of every

Programme evaluation in government programme. Each department must identify the cost and
France suitable performance measures for each of its spending programmes. The
minister must report performance to parliament annually. There are currently
moves to link performance pay to achievement of programme objectives.

The Scottish Government has a corporate strategic board to oversee the

The Scottish work of the government as a whole. It is composed of the permanent
Government’s strategic secretary, six directors general and two non executive directors, to provide
board external challenge. The board monitors progress against the five strategic
objectives that underpin the overall government programme.
45
Source: IfG interviews in each country
But there are big questions left to answer

This review of civil service data highlights some key issues for the future of the civil service:

• In international terms, Whitehall’s ‘centre’ appears to be relatively small with relatively few formal
powers. Does the Cabinet Office have the resources and authority to lead joined-up working,
capability building and public service improvement? Or is there a viable alternative driver of
change?

• Boards in some departments need to improve their credibility with staff. How can top teams
deliver more effective and visible leadership?

• Whitehall can be conformist and departmental, hampering innovation and joined-up working.
What can the civil service do to create a still more dynamic culture?

• What are the new skills and capabilities to make Britain a successful nation over the coming
decade? How can the civil service ensure that it develops a large proportion of these skills
internally?

46
Reshaping the centre – our next steps

Over the next six months, the Institute Reshaping the centre:
for Government is undertaking researching the inner
How the centre
research on many of the questions layers of Whitehall governs the civil
raised by this report. governance service – the role of the
centre and joining up

Our flagship project – Reshaping the How departments

Centre – will examining the inner layers govern themselves –
the role of
of Whitehall governance to establish departmental boards
effective ways to lead the process of How departments
capability development over the next govern their delivery
systems – outside the
decade. It will particularly examine: scope of our current
project
• The role of the Cabinet Office
• Effective joined-up government
• More effective departmental boards

We would welcome feedback and

comments on both this document and
the overall direction of the Institute’s
work.

Contact: Simon.parker@instituteforgovernment.org.uk

47
Glossary

BERR Department for Business, Enterprise and Reducing Regulation (Now Department for Business, Innovation and Skills)
BIA Borders and Immigration Agency
Capability Process led by the Cabinet Office in which every department is externally reviewed and inspected to determine whether it has the right
Review leadership, strategy and delivery skills to succeed in future.
CLG Department for Communities and Local Government
CO Cabinet Office
CPS Crown Prosecution Service
DCA Department for Constitutional Affairs, now Ministry for Justice
DCMS Department for Culture, Media and Sport
DCSF Department for Children, Schools and Families
DECC Department for Energy and Climate Change
Defra Department for Food and Rural Affairs
DfID Department for International Development
DfT Department for Transport
DH Department of Health
DIUS Department for Innovation, Universities and Skills (now part of Department for Business, Innovation and Skills)
DWP Department for Work and Pensions
FCO Foreign and Commonwealth Office
FTE Full-time equivalent: a way of measuring headcount that includes part time staff by adding up their hours and dividing by the hours worked by
a full-timer.
GDP Gross domestic product: the amount of wealth a country produces every year
HMRC Her Majesty's Revenue and Customs
HMT Her Majesty's Treasury
HO Home Office
MoD Ministry of Defence
MoJ Ministry of Justice
NAO National Audit Office: central government spending watchdog
NDPB Non-departmental public body
NIO Northern Ireland Office
OECD Organisation for Economic Cooperation and Development: an international think tank for developed countries.
PSA Public Service Agreements: targets set by the chancellor that each department is expected to achieve over three years.
SCS Senior Civil Service: the top five senior manager grades of the civil service as a whole
WGI World Bank Good Governance Index
Acknowledgements

Many people contributed to gathering and analysing the data for this report. We are particularly
grateful to our co-authors in the Institute for Government research team – Jerrett Myers, Michael
Hallsworth, Rory Geogheghan and James McGibney. Sir Michael Bichard, David Halpern and Tom
Gash provided invaluable support and quality assurance.

We would also like to thank our project advisory group for their invaluable comments:

• David Bennett, former head of the No. 10 Policy Unit and Strategy Unit
• Natalie Ceeney, Chief Executive of the National Archives
• Diane French, Manager, Performance Measurement Practice, NAO
• Susie Gear, former Director of Change, Cabinet Office
• Jill Rutter, Director, Strategy and Sustainable Development, Defra
• William Solesbury, Director of William Solesbury & Associates, and Senior Visiting Research
Fellow at King's College London

All members of the advisory group are participating in a personal capacity.

Any errors or omissions remain our own.

49
Bibliography
Achieving Innovation in Central Government Organisations, NAO 2006, available at: www.nao.org.uk/publications/0506/achieving_innovation_in_centra.aspx,
accessed on 20/7/09
Bertelsmann Sustainable Governance Indicators, available at: www.sgi-network.org/index.php?page=news, accessed on 20/7/09
Borins, S.,The Challenge of Innovating in Government, 2nd Edition, IBM Centre for the Business of Government, University of Toronto, 2006
Butler, D. and G Butler, Political Facts since 1979 and British Political Facts, 1900-2000, Palgrave Macmillan 2005 and 2000
Civil Service Commissioners, Annual Report 2008-9, available at: www.cscannualreport.info/i, accessed on 20/7/09
Civil Service Staff Surveys, available at: www.civilservice.gov.uk/about/who/statistics/staff-surveys.aspx, and on various departmental websites, accessed on
20/7/09
Civil Service Statistics, Office for National Statistics 2008, available at: www.statistics.gov.uk/statbase/Product.asp?vlnk=2899, accessed on 20/7/09
Cleary, H. and R Reeves, The Culture of Churn for UK Ministers, Demos, 2009, available at: www.demos.co.uk/publications/the-culture-of-churn-for-uk-ministers,
accessed on 20/7/09
Departmental autumn performance reports, for instance for the Home Office, BERR and DfID:
www.homeoffice.gov.uk/documents/autumn-performance-report-08
www.berr.gov.uk/files/file49263.doc
www.dfid.gov.uk/Media-Room/News-Stories/2008/DFID-Autumn-Performance-Report-2008/
Departmental Capability Reviews, available at: www.civilservice.gov.uk/cross-government/capability/reports.aspx, accessed on 20/7/09
HM Treasury, 2004 Spending Review: final report on the efficiency programme, November 2008. At: www.hm-treasury.gov.uk/d/pbr08_finalefficiency_612.pdf
Ipsos Mori, Veracity Index 2008, available at: www.ipsos-mori.com/Assets/Docs/Polls/Ipsos_MORI_Veracity_Index_2008.pdf, accessed on 20/7/09
Lonti, Z. and M Woods, Towards Government at a Glance: Identification of Core Data and Issues related to Public Sector Efficiency, OECD 2008, available at:
www.oecd.org/LongAbstract/0,3425,en_2649_34135_40209929_119656_1_1_37447,00.htmlaccessed on 20/7/09
Normington, Sir David, Senior Civil Service Workforce and Reward Strategy: report of the steering group to the cabinet secretary, 2008, available at:
www.civilservice.gov.uk/people/pay_and_reward/scs_pay.aspx, accessed on 20/7/09
OECD International Budget Practices and Procedures database, 2007, available at:
www.oecd.org/document/61/0,3343,en_2649_34119_2494461_1_1_1_1,00.html, accessed on 20/7/09
Operational Efficiency Programme: back office functions and IT, HMT 2009, available at: www.hm-treasury.gov.uk/d/oep_back_office_pu730.pdf, accessed on
20/7/09
Rouban, L. Serviteurs de l’État , Pouvoirs 117, Paris: Seuil, 2006
Strategy Unit, Power in People’s Hands: Learning from the World’s Best Public Services, July 2009, at: www.cabinetoffice.gov.uk/strategy/publications/world-class-
public-services.aspx
The Efficiency Programme: a second review of progress, NAO 2007, available at: http://www.nao.org.uk/publications/0607/the_efficiency_programme_a_se.aspx,
accessed on 23/7/09
World Bank Government Effectiveness Indicators, available at: http://info.worldbank.org/governance/wgi/mc_countries.asp, accessed on 20/7/09
World Economic Outlook: crisis and recovery, IMF 2009, available at: www.imf.org/external/pubs/ft/weo/2009/01/index.htm, accessed on 20/7/09