23 December 2010

Those undertaking independent reviews for the Coalition or making policy inside government would do well to pay attention to the story of the Pensions Commission.

Lord Turner, Baroness Drake, James Purnell and other officials  involved in the Turner Commission on Pensions recently shared their experience with the Institute (PDF, 189KB) as part of our series looking at policy successes of the last 30 years.

With the Coalition's commitment to over 40 independent reviews, the story of the Pensions Commission shows how an external review can successfully help solve a difficult problem. Established late 2002, it had to solve two big problems – namely, how to:

  1. ensure that Britons did not face impoverishment on old age
  2. bridge the gap in thinking between No.10 and No.11.

Lesson 1: Take your time

The Commission did not produce its final report until April 2006 – with its main proposals published in November 2005. The languid timetable was initially imposed as a way of putting the issue safely beyond the election, but what emerged in the reunion was that this was a huge asset.

Lord Turner told us the commissioners had agreed their recommendations by summer 2004 – little over a year from when the Commission really got going.

Rather than spring their findings on an unprepared world, they published a voluminous amount of analysis and challenged interested parties – the public, stakeholders, government and the media – to disagree with it, or accept it as the basis for going forward.

That report was key in creating a consensus about what the problem was and getting people to accept the need for action. But governments rarely go through this stage, preferring to rush to the answer before there is agreement on the nature of the problem.

Lesson 2: Back to basics

The Pensions Commission was data driven. Officials were immersed in the chair's McKinsey like approach. One admitted that it was a dream for geeks who never normally get to see ministers and to work for commissioners who craved facts and loved spreadsheets.

Models were built from scratch; long-term trends analysed; Office for National Statistics assumptions reworked. The end result was that the Commission had an unmatched grip on what was going on and a much stronger evidence base than for many policies developed in-house.

Lesson 3: Pay attention to stakeholders

The Commission was a masterclass in stakeholder management. It took people through the logic, crafted proposals that shared the pain, engaged the public through deliberation, and finally was  prepared to compromise in order to preserve the overall approach.

Lesson 4: Technocrats who can do politics

The Commission worked because the commissioners could do the deep data drill, the analysis and the 'small p' politics.

Lord Turner could leverage his background in the CBI and Baroness Drake her role in the TUC. Both were politically skilful enough to navigate the politics within government – even the very restrictive terms of reference the Treasury initially imposed.

People remarked how three proved to be a lucky number – small enough to gel (over dinners they cooked each other to discuss proposals) but able to cover more bases than a single reviewer.

They also could provide continuity and focus – over the same period DWP had four secretaries of state.

Lesson 5: Ministers and officials matter too

The final message was that independent commissions can do so much. They can identify the horse and find the water, but it is ministers supported by officials who need to make the horse drink.

Participants singled out the roles of John Hutton as Secretary of State and James Purnell as minister, and the importance of the PM's personal attention. At critical times Tony Blair was spending 5-6 hours a week driving through to a successful conclusion.

At the same time, DWP developed internal capacity to respond to the report. Many of the team who supported the Commission came back into the department to implement it.

A final reflection

The Pensions Commission will be a hard act to follow. Margaret Thatcher once notably said that "every prime minister needs a Willie" about her fixer Lord Whitelaw. As the Coalition Agreement commits to over 40 independent reviews, the Coalition might need to find a way of cloning Lord Turner.


I think these lessons are good, but might be a little sanguine about the politics of this...

The Pensions Commission was an amazing analytical siege and a credit to Turner, Drake and Hills. (And I really liked the fact that they published all the spreadsheets). But it really was long in the making, too long in my view: the Pensions Commissions was announced in Dec 2002 and its final report was in April 2006. And didn't they mainly tell us what was obvious or could be easily, if crudely, modelled? Making a sufficient intellectual case to support fundamental change was achievable (and probably achieved) in 6 months. What was lacking was a political will to confront the underlying drivers in demographics and the labour market and make the necessary changes that flowed from the analysis. It would be hard to describe the pallid 2006 pensions white paper as revolutionary. The measures reflect the character of the leadership politics of the time, with pensions reform tossed around in volatile and juvenile battles of the day.

An interesting contrast is with the Coalition's approach to reforming the welfare state for working age people... Changes that are at least as profound as pensions reform have been introduced with limited (publicly visible) analysis, noisy, short and populist public debate, and apparently without the involvement of Adair Turner or equivalent policy superstar. The difference is on the political side: in this case an ideological conviction and a political desire to act decisively and quickly - perhaps to the point of recklessness. In the pensions case, there was a political stalemate in which deeper analysis was a really a displacement activity.

Isn't there a middle ground? Energetic and decisive politics demanding vigorous analysis, with enough patience and diligence to rely on it? The missing lesson above is to ensure that the political client is ready, willing and sufficiently powerful to act... and perhaps to be clear who the political client really is. Perhaps there is a lesson about getting the big stuff underway early in a parliament as appetite for structural change varies with the electoral cycle.

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