07 March 2012

The Cabinet Secretary’s suggestion that civil service policy could be outsourced was met with predictable cries of outrage. There are lots of potential problems, not least the danger of losing core civil service expertise and issues around conflicts of interest. But it would be a mistake to dismiss the idea before we consider the potential advantages.

Before I explain what some of those might be, let’s be clear on terms. I am not advocating the outsourcing of policy functions and I am not sure Jeremy Heywood was either when he suggested that the Civil Service should lose its policy making monopoly. ‘Outsourcing’ implies that we are going to give Deloitte or KPMG a massive contract to do climate policy for four years. We can all agree that this is probably a bad idea.

Contestability of policy making is rather different – it’s the idea that a certain amount of the government’s policy spending might be up for grabs. This is hardly a new idea: consultancies already play a significant if sometimes controversial role in public policy formation. But that role is usually executed away from the public gaze. I think it should be out in the open and that work should go to a wide range of potential policy advisors. For me, contestability is about pluralism, not privatisation.

So if what Jeremy Heywood meant is that we should make departments bid for some of their policy budget against social enterprises, consultancies, service providers in the public and voluntary sectors, or consortia comprising a number of these, then he might be on to something. Some of the benefits might include:

1. Access to a wider range of expertise – why should ministers limit themselves to what the Civil Service can offer? If a project requires specialist expertise, why rule out the opportunity to hire people with that expertise from outside.

2. Promoting joined up government – set up central budgets held in the cabinet office for strategic priorities, then let departments and others bid for the money to do policy and implementation work. All of a sudden, departments will be bidding to show how effectively they can join up with others, rather than talking a good game but failing to deliver.

3. Improve implementation – if some of the people commissioned to make policy are practitioners (eg the VCS and local government officers) then you’re developing policy that is already embedded in the delivery system. That’s got to be a good thing. For an example of it working in action, see page 65 of this Demos report.

4. Upskilling the Civil Service – a little contestability can go a long way towards encouraging civil servants to continuously improve their own skills and ensure that they are in a strong position to win work. At the moment that pressure is sorely lacking.

5. It brings in innovation and creativity: the Civil Service recognises that it’s not good at innovation. Indeed, many civil servants I’ve interviewed are not sure they should be innovative – their job is to weed out bad ideas, protect ministers and deliver implementable and effective policy. It’s not to come up with Hilton-esque ideas. So contestability could bring in a different culture.

None of this has to destroy organisational memory or civil service capacity. I would expect that contestable projects would still have some significant civil service involvement as client and probably as participants in cross-cutting teams. Done well, this sort of system could strengthen both policy making and the Civil Service itself.


Spot on! I worked in New Zealand for a few years and because the public sector is extremely 'lean' indeed in NZ, it is not only better at commissioning but also at working in partnership with other public sector organisations, private and third sector players - including policy development.


"was facing fresh allegations of a conflict of interest after it emerged that A4e had won a separate Government contract to advise the Cabinet Office on how to get problem families back to work"
"The Cabinet Office said it has a £300,000 contract, agreed last August, with a subdivision, A4e Insights, which is designing workfare programmes for local authorities. "

Policy is already being outsourced. So with an average civil servant salary of around 21k, and recent benchmarks such as The Work programme going from political concept to nationwide live running within 9 months due to civil servants - will the consultants produce comparable VFM in their work for the cabinet office?.

Personally I doubt it - If Jeremy Heywood means that such procurements should in future be offered internally before going to market this will no doubt save the tax-payer and boost the skills within the civil service.

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