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Lord Browne - Successes but ragged at the edges

Does Whitehall welcome businesspeople?

The impact of outside businessmen on Whitehall has often been patchy and limited. There has been cultural resistance, as well as unrealistic expectations and the sheer messiness of politics. But John Browne, Lord Browne of Madingley, will step down at the end of January after more than four years as the Government’s lead non-executive director recording successes as well as frustrations. As he told the Financial Times, ‘things will always be ragged on the edges, far more ragged in government than in business’.

What is striking is how Lord Browne and other prominent business figures who are lead non-executive directors on 17 Whitehall boards have gained acceptance from departmental permanent secretaries – the very group who most strongly resisted their introduction by Francis Maude in 2010. Cynics might see this as producer capture, but there are positive indicators, even if there still needs to be a systematic, independent evaluation of the impact of non-executive directors. A common view among permanent secretaries in 2010 was scepticism about exaggerated claims about injecting private sector discipline into the Civil Service. The view was that Whitehall is not like business, departmental boards can never be like plc boards, and the role of non-executive directors (Neds) in Whitehall is inherently different from the legally defined duties of boards in the private sector. All true. The primary focus in departments is on a chain of accountability through civil servants to ministers to Parliament. That means Neds can never be more than advisers. But that is precisely where they appear to have been most valuable, as permanent secretaries have seen the advantage of having leading businessmen offer advice from their background of running large, complicated organisations and projects. The value of the enhanced role of boards since 2010 is less clearcut and dependent on the varying commitment of secretaries of state. Lord Browne’s annual report in the summer noted that, on average, just a third of non-executive’s time is spent in board meetings and two-thirds on other work. Where business experience is relevant is not over policy, the prerogative of ministers, but over the way departments are run, the implementation of Business Plans, and operational and delivery issues. Neds have highlighted shortcomings in management information, the running of big projects, HR/talent management and commercial skills. The Neds role has also broadened into assisting with the appraisal of permanent secretaries and being involved in the selection of senior officials. In his FT interview Lord Browne gave boards six out of ten for performance. That is also a success for Mr Maude in consistently supporting a stronger role for Neds as part of his drive for civil service reform and efficiency. Any future government should retain the idea of using prominent outsiders, with experience of large organisations in the private and other sectors, to advise departments in this way. Lord Browne has also been involved in the broader debate over civil service reform, and, here, the frustrations have been greater because he has been operating as an adviser, a symbol and guru, rather than as a leader, in a world of strong departmental baronies and complicated ministerial and civil service accountabilities. There are some pluses, in the work of the Major Projects Authority, and the efforts to improve project management, digital, commercial and commissioning skills. But there have also been negatives. Lord Browne’s criticisms of the muddled introduction of universal credit are widely shared. There is also a long way to go in many areas. John Manzoni, his former BP colleague, only took over as civil service chief executive last month and his role is essentially to drive reform and the central functional units in the Cabinet Office, since he is not in charge of departmental permanent secretaries. Lord Browne himself argued in a speech in June 2013 at the Institute that the traditional departmental model should be re-examined. And the need for further transformation is underlined in the Institute for Government’s new publication Whitehall Monitor 2014, published today.

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