When is Whitehall not like a business?

PASC has been running a fascinating series of inquiries focusing on leadership and change in Government, covering Civil Service reform, the role of the new Head of the Civil Service and a call for shrinking the number of ministers. Yesterday PASC published the Government’s response. There is some common ground and several valuable ‘wins’ for PASC: Government has accepted in principle that the size of the executive should be reviewed when the Commons shrinks in 2015 and Francis Maude has set out a high level vision for Civil Service reform. Lying underneath, however, is an absorbing tussle between two fundamentally different views on leading change and how these apply to Whitehall as it implements a truly historic programme of cuts and reforms. PASC is calling for “a comprehensive change programme” led by Government, with elements overseen and enforced by Cabinet Office. PASC’s approach reflects a leaning towards the ‘expert’ view contained in much of the business literature on change: have clear leadership from the centre, be explicit about the change being sought and what the new organisation looks like. Government, on the other hand, rejects this approach, so for example it has “no plans to impose central direction from the Cabinet Office” in workforce reductions. Its response is argued from a very practical stance, reflecting the reality that central levers simply don’t exist, even if the Minister for the Cabinet Office had the inclination to spell out in more detail the ‘what’ and ‘how’ of Civil Service reform. Fundamentally, Whitehall is a federation of separate organisations each accountable to their Secretary of State, who is in turn accountable to Parliament, and the Government has no plans to change this. This raises the question when is Whitehall not like a business? Many of the lessons from the business literature apply equally to the Civil Service. And PASC is right that leadership is needed across the Civil Service to achieve Francis Maude’s own stated aims of making Whitehall more integrated, entrepreneurial and pacier, with improved performance management and upgraded skills and capabilities. However, Whitehall is not a single business. If you want a closer comparator from the business world, it is something like the Virgin Group, which contains an array of different businesses covering trains, planes, banking, phones etc., each working separately but under a single brand. One of the keys to success is the clarity and shared understanding about what it means to run a business under the Virgin name – even across completely unrelated markets. Establishing something similar for Whitehall requires a more binding corporate leadership across the cadre of top civil servants from across Whitehall, led by Sir Bob Kerslake as the new Head of the Civil Service. He will need to take the lead on fostering the loose ties that bind for Whitehall.