WIREDGOV

Whitehall must up its game to cope with continued austerity post-2015, says new Institute for Government data report

The Institute for Government has yesterday published its second Whitehall Monitor annual report. The report uses government’s own open data releases to build up a comprehensive picture of government in the UK in 2014, using more than 120 graphics.

According to the data, Whitehall has achieved unprecedented spending reductions since 2010, while taking forward radical ministerial programmes. At the same time, Whitehall has cut staff by almost 20% without a collapse in morale. And the day-to-day business of government – passing legislation, responding to MPs, answering FoI requests – has continued apace.

But the data also highlights the ways in which government needs to up its game after the 2015 General Election:

• The Government needs greater insight and tighter controls to ensure the sustainability of spending cuts
• The Civil Service needs to change how it works if it is going to cope with the further cuts it faces
• Departments need more stable leadership
• Whitehall needs to continue raising its skills to successfully deliver government reforms
• Politicians need to convince the public that they can run government effectively.

Greater insight and tighter controls are needed to ensure the sustainability of spending cuts

While departments are spending even less than predicted in 2010, it is virtually impossible to tell what is actually happening, and therefore how sustainable these reductions are. No department succeeded in transparently explaining all of the changes to its budget over the period. It is vital that the Treasury succeeds in strengthening Whitehall’s financial management – a task it set itself last December in its Review of Financial Management in Government.

Government’s already significant liabilities are increasing, including in the Department of Health (where the provision for clinical negligence claims has grown by 53% since 2010) and Department of Energy and Climate Change (nuclear decommissioning, up 26%). Public spending is subject to strict controls, but there are fewer rules around the management of assets and liabilities across government.

The Civil Service needs to change how it works if it is going to cope with further cuts to its own size

Despite a strong start in 2010, reductions in the size of Whitehall are now falling behind expectations. The Government had estimated that the Civil Service would be 23% smaller in 2015 compared to 2010. Staff numbers have fallen by nearly 20% (the equivalent of 70,120 full time posts), but in recent quarters the rate of these reductions has dropped and will need to pick up again sharply if the Government’s expectation is to be met. As the outgoing Head of the Civil Service, Sir Bob Kerslake, has argued, further cuts after the election will force Whitehall to change its ways of working and organisation. It will need to join up more services, rather than replicating the same capability in 17 different departments.

Whitehall also needs to keep its staff motivated. Despite the cuts so far, morale has generally held up in Whitehall – with the exception of some departments (the Department for Education) and some specific issues (pay and benefits). Workforce morale, and Whitehall’s ability to retain key staff, could come under more pressure with further cuts and continuing pay restraint. This means leaders of departments will have to find other ways of motivating their staff.

Departments need more stable leadership

Turnover of ministers and permanent secretaries is a perennial problem that can hamper government effectiveness: only six departments have the same Secretary of State (SoS) as appointed at the start of the Coalition. The turnover in Cameron’s first four years (1.74 SoSs per department) was similar to Tony Blair’s first term (1.88). And only one department has the same permanent secretary as in May 2010 (Sir Nicholas Macpherson at the Treasury).

Whitehall needs to continue raising its skills to successfully deliver government reforms

What some departments actually do, day-to-day, continues to change in the light of government reforms. The Ministry of Justice, for example, has opened up areas like probation to competition and contracting. The Institute for Government has highlighted gaps in commercial skills as more services are contracted out: it is vital that initiatives like the government’s new Commissioning Academy continue and succeed in bridging the skills gap.

The government’s £488bn portfolio of major projects will continue to stretch departments. The new Major Projects Authority (MPA) is starting to bring greater discipline and transparency to how these projects are managed. Its ratings have largely provided a realistic assessment of government projects, and show that while 21% of projects face major risks, 36% are progressing well. It’s important that no projects are allowed to opt out of this system for the sake of political convenience, as happened when the Department for Work and Pensions’ Universal Credit was counted as being ‘reset’ in the latest MPA data.

The number of non-departmental public bodies (the biggest class of arm’s-length body) has fallen from over 2000 in 1979 to around 450 in 2014. However, reform of arm’s-length bodies (ALBs) should not be seen as a numbers game (the so-called ‘bonfire of the quangos’) – governments have often focused on reducing the number, whereas the most important reason for change is to improve the effectiveness of how government as a whole operates. Last week’s Public Administration Select Committee report highlighted that the landscape of ALBs is still ‘confused and opaque’ and recommended that government adopts the Institute for Government’s framework which would make clear how much independence arm’s-length bodies have and ensure proper accountability measures are in place.

Politicians need to convince the public that they can run government effectively

The public thinks politicians prioritise party-political point-scoring and getting re-elected over keeping their promises and running the government effectively. When asked as part of an IfG poll to name the three things they wanted politicians to prioritise, 46% said ‘Fulfilling the promises they make before getting elected’, 45% said ‘Getting best value for tax-payers’, 41% said ‘Taking decisions about the long-term direction of the country’ and 40% said ‘Running the government professionally’. However, when asked what three things they thought politicians currently prioritised, 53% said ‘Getting re-elected’, 51% said ‘Scoring political points against other parties’ and 43% said ‘Making big announcements in the media’.

Government transparency has allowed us to build up a better picture of what is happening in Whitehall than ever before. But there are still areas where improvement is needed – in explaining changes between spending plans and actual outturn, in presenting a comprehensive picture of government contracting, and in how departments measure and report their actions and impact.

Julian McCrae, deputy director of the Institute for Government, said: “Whitehall deserves credit for the way it has managed unprecedented reductions in spending and staff since 2010 while also taking forward radical ministerial agendas. But sustaining these cuts, and other tough political choices, will put a great deal of pressure on Whitehall after the next election.

“Any government elected in May 2015 will need to have more stable ministerial leadership, greater insight into (and tighter controls on) spending cuts, change its ways of working to cope with more staff and budget cuts and raise its skills to deliver government’s reforms. But it will also have to face the expectation gap between what the public expects of government and what they think government actually does.

“There have been improvements in how Whitehall works over the last five years. It is vital these improvements are maintained and built on after the next election. The temptation to sweep them away because they are seen as too challenging or unimportant has to be resisted.”

Gavin Freeguard, a researcher at the Institute for Government and one of the report’s authors, added: “Charting government in this way is only possible thanks to the commitment of this government and the previous government to transparency and open data.

“Government is more transparent than ever, but there are still areas where it is difficult to work out what’s going on. For example, changes to government spending plans, the details of government’s contracts with private providers of public services and the impact departments have on the real world could be much more transparent.

“A vital test for any future government will be to resist the temptation to hide its problems. A retreat to opacity would damage our knowledge of government, the ability of government to improve how it operates and the public’s ability to hold government to account.”