16 November 2010

The news of the demise of the Prime Minister's Strategy Unit does not come as a shock - but it does risk leaving a hole at the heart of government which may be felt in years to come.

The Prime Minister's Strategy Unit (PMSU) was created out of the merger of Performance and Innovation Unit, designed to challenge conventional policy-making form the centre, and the No.10 Forward Strategy Unit.

The FT has reported it is now to be broken up, with members moving to:

In the short-term this may all make sense. The government has come into office with a clear sense of what it wants to do and it needs the capacity at the centre to drive that agenda rather than develop a new and competing one.

The area where meat needs to be put on the bones is on the Big Society – which means a very different role for the Office for Civil Society compared to its predecessor, the Office of the Third Sector.

The reasons for the Strategy Unit

It is in the longer term that the lack of a Strategy Unit may be noticed more.

Let me declare an interest. I worked in the No.10 Policy Unit in the mid-Major period. What became clear then was that it was too small to do anything other than get drawn into day-to-day fire fighting on behalf of the Prime Minister.

Eight of us – a mix of civil servants and advisers – shadowed the whole domestic policy agenda. The Cabinet Office played its traditional coordinating and brokering role – but did nothing to move departments from their entrenched positions and look for positive solutions that cut across departmental boundaries.

A meeting on policy on lone parents chaired by the Cabinet Office, full of Grade 7s briefed not to concede an inch of departmental turf, was one of the most dispiriting two hours I ever spent in government.

The Prime Minister – and the government – lacked a capacity to develop forward looking policies and to do the hardest of all things – renew itself in office.

It is there that the ability of the Strategy Unit to take a fresh look at issues (particularly those  not on the immediate political radar and that do not sit neatly in departmental boundaries) and its ability to both challenge but also work with departments will be missed.

A brain at the centre

In 2006 the Public Administration Select Committee held an inquiry on Governing for the Future (PDF, 334KB).

It concluded the creation of the Strategy Unit had brought valuable additional capacity to the centre – though departments need to be more involved with its work going forward.

In my role as Strategy Director at Defra, I was summoned to give evidence to that inquiry. The committee clearly expected me to say that the PMSU was a nuisance – trampling over departmental territory.

But based on my earlier experiences I was very positive about it. I explained this was because "when I was at Number 10, you noticed the lack of a 'brain' at the centre."

As our Shaping Up report showed, we have a centre which is long on administrative power, but short on capacity to drive forward strategically.

It may be that the Office for Civil Society becomes that de facto capacity on the domestic policy side, or that the Policy Unit manages to resist the demands of the day to day to perform that role.

But if not, in the longer run, Prime Ministers may begin to notice a gap they need to fill.

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