Working to make government more effective

Insight paper

Government in 2023: what challenges does Rishi Sunak face?

How the prime minister can avoid another wasted year in UK government.

Prime Minister Rishi Sunak during his first major domestic speech of 2023 at Plexal, Queen Elizabeth Olympic Park in east London
Prime minister Rishi Sunak delivers his first major domestic speech of 2023.

As we begin 2023, the tough choices and difficult trade-offs involved in governing a country are more evident than ever. Governments around the world are dealing with geopolitical tensions, the health and economic consequences of the pandemic and the pressures of the climate crisis. But the UK also faces additional home-grown challenges: from the continued reverberations of Brexit to growing tensions within the union. And recent turmoil in the Conservative Party has made the task of governing even harder than it needs to be, diminishing trust in politics and disrupting the business of government.

Now, as the fifth iteration of Conservative government since 2010 establishes itself, the drum beat of the impending general election – no later than two years from now – is heightening the pressure on ministers and civil servants to address the most urgent problems facing the country.   

In contrast to the chaos and controversy that marked out the final days of his two immediate predecessors, Rishi Sunak's first weeks as prime minister have demonstrated a welcome degree of calmness and pragmatism, and a recognition of the importance of prioritising his core objectives. But the new prime minister’s 4 January speech made clear that he wants to do more than surmount the low bar for effective government set in 2022. And the public will expect him to do so because the problems facing the country in 2023 are great.

The problems for UK government in 2023

As the year begins, almost no individual and organisation in the UK has been left unaffected by soaring energy prices and the cost of living crisis. The country is paralysed by strikes as workers struggle with the impact of inflation on real wages, and the NHS and other public services are under greater strain than ever with pre-existing underinvestment and backlogs exacerbated by the pandemic. 

Many of these domestic problems have been aggravated by international events including Russia’s invasion of Ukraine, a year ago this month, and labour and supply-chain problems in the wake of Covid. Sticking points in the UK’s changed relationship with the EU – notably the controversial Northern Ireland protocol – remain unresolved, and have placed new responsibilities on government, including for agriculture, trade and immigration. None of these important shifts could have been firmly predicted a decade ago. And even if each individually could reasonably have been identified as a potential high-impact event, their convergence was never anticipated. 

What has been foreseen are the long-term social, technological and demographic trends that for decades have been changing what the UK population needs from, and expects of, its government. Low economic productivity, systemic failures in the social care sector, regulation of global corporations the size of small nations, and an ageing and longer-living population all underpin many of the UK’s current problems. But past governments have failed to address them adequately.

These failures have been magnified and gained new urgency in the context of sudden domestic and international shocks. The pandemic and the energy crisis have drawn public attention to questions of resilience and national self-sufficiency; these will inevitably rise in salience as the impacts of climate change are increasingly felt. The enormous economic support packages provided by the government to individuals and businesses during the pandemic shifted public perceptions about risk and state intervention; enthusiasm for such support grew still further following the government’s energy price intervention in response to the war in Ukraine. 

Meanwhile, the vast costs of these programmes have focused attention on the UK’s growing debt-to-GDP ratio – close to 100% since the pandemic hit – which will be hard to reduce given the UK’s entrenched problem of weak economic growth. And the demographic pressures that had been steadily increasing pressure on the health service have been intensified by the impact of Covid on hospitals and primary care, apparent in their struggle to return to a pre-pandemic equilibrium.

That some current problems facing the UK have deep roots does not absolve today’s politicians of responsibility for addressing them. Indeed, it makes their task more urgent. The trends shaping today’s problems are only likely to make them harder to resolve in the longer term, placing ever greater strain on public services and increasing the difficulties experienced by citizens.  

Pound coins on a gas burner

Almost no individual and organisation in the UK has been left unaffected by soaring energy prices and the cost of living crisis.

2023 may be a wasted year

Despite this urgency, 2023 risks being a wasted year for UK government. The past year – with its rapid succession of prime ministers and ministerial merry-go-round – provided possibly the least propitious circumstances for effective government, distracting ministers and limiting the civil service’s ability to make progress as priorities lurched from one objective to another. We begin 2023 with a more stable government but with the consequences of 2022 for the country, and the Conservative Party, still reverberating, and the clock counting down to the next general election. 

The prospect of that general election, by January 2025, is already shaping Sunak’s government. The electoral cycle is of course an essential aspect of our democratic system, but a two-year deadline is particularly unhelpful for a new government taking office. Being put on an election footing so early into their terms in office risks reducing ministers’ political appetite for the longer-term planning so necessary to address the nation’s current problems. That is not to say it will not happen – the Climate Change Act that set decades-long rules on carbon emissions was passed with cross-party support two years before the 2010 election – but the prospect of such work, vital today for issues such as social care, will require a level of political cooperation not seen in recent years.

As Sunak showed in his 4 January speech, he has a strong incentive to differentiate his government from the problems of his predecessors, and to demonstrate that his government has made progress before the next general election. But his ability to do so will be constrained by the particular circumstances of his appointment. His task is to meet or ditch the commitments of the 2019 Conservative manifesto on which he stood as an MP – many of which are now wildly outdated given what has happened since, a fact Sunak cannot admit without making the case for an election he does not relish. He must also reconcile these commitments with the promises he made to a narrow party ‘selectorate’ during the first leadership campaign last summer, along with the ‘people’s priorities’ as he now judges them. All the while he must also consider what he can realistically achieve in parliament and the likely electoral consequences. 

So far, Sunak’s response has been to define a set of goals of limited ambition: halving inflation, reducing national debt and cutting NHS waiting lists, (all of which are already set to decline on some measures); growing the economy (a goal largely beyond his immediate control); and, passing laws to stop illegal immigration via small boats (the specific commitment being to legislate rather than to actually reduce the number of boats). The electorate will reach its own judgement on whether he succeeds – but this may, or may not, be on the terms that the prime minister has prescribed. 

Meanwhile, the new chancellor, Jeremy Hunt, used his autumn statement to calm the financial markets after the chaos of the Truss administration but also conveniently to push the pain of specific budget cuts into the ‘never never land’ beyond the next election. If current polls are accurate, that would leave implementing the actual cuts as a welcome gift for Rachel Reeves as incoming Labour chancellor. While it was sensible for Hunt not to define the details of specific cuts two years before they are to be implemented, voters will expect to hear more from the Conservatives before the next election about how they would manage the future cuts they have outlined. In fact, questions are already being asked about whether the government can sustain their spending plans in the run up to the election, given the degree of pressure for higher pay in public services.

Over the next two years, the Sunak government’s ability to achieve its goals will also be constrained by the approach and actions of his predecessors. Boris Johnson defined himself as a rule-breaker, prepared to challenge conventions and break things (including international law and ethical standards) to fulfil ‘the will of the people’. Liz Truss denounced what she saw as the ‘anti-growth coalition’, asserted her intention to dispense with ‘Treasury orthodoxy’ and disregarded widely respected sources of advice such as the Office for Budget Responsibility. 

Sunak himself was part of a Johnson government that felt – in the words of the cabinet secretary – that it had a “mandate to test established boundaries”. But his reputation as a solutions-focused, rule-follower was immensely valuable in allowing him to undertake his most urgent task on taking office of restoring the confidence of the financial markets and the public. These traits will be important in sustaining that confidence, and, in the long run, are more likely than those of his predecessors to lead to effective, predictable and well-run government. 

Nonetheless, they may make Sunak appear less energetic and exciting than his immediate predecessors, fuelling dissatisfaction within his party (even strengthening calls for the return of Johnson). This is significant because Sunak’s success in achieving even the limited goals he has framed for himself will be shaped by the attitude of his backbenchers, many of whom face the prospect of losing their seats if Labour’s poll lead is translated into electoral victory. This has changed the calculation for some, who now seem to be more interested in seeking to please their constituents than in supporting their new leadership or seeking preferment as ministers in a government with an apparently limited life expectancy. 

There is already speculation that this is encouraging Conservative backbenchers to spend more time in their constituencies, rather than taking on extra parliamentary responsibilities such as select committee roles, and to be more willing to rebel and force changes to government legislation than they might previously have been (even if regicide appears a less attractive option, at least for now).

Of course, the impending election is shaping the behaviour of the official opposition too. Sir Keir Starmer’s own new year speech, delivered a day after the prime minister’s, illustrated his awareness both of his party’s remarkable poll ratings and of the exceptionally difficult circumstances it would inherit if it won the next election. Starmer sought to lay down a marker that Labour knows it will not be able to rely on the ‘big government chequebook’ to solve the problems the UK faces. But at the same time his speech was vague on detail about the policy answers his government would pursue. 

Tempting as it may be for Labour, while riding high in the polls, to avoid publicly articulating concrete policies that might be stolen or derided, it should focus on developing and consulting on tangible priority policies that will be ready to go on day one, should it win the next election. This work has apparently begun but – with an election just two years away – is now an urgent task.

British Prime Minister Rishi Sunak delivers his first major domestic speech of 2023

Rishi Sunak showed in his 4 January speech that he has a strong incentive to differentiate his government from the problems of his predecessors.

Government reform should be the priority for 2023

But 2023 need not be a wasted year for UK government. 

The Institute for Government’s recent work has identified numerous problems which are impeding good government – many of which, if overcome, could support progress on the issues that matter most to citizens. Rapid churn of ministers and officials delays and disrupts the business of government, militating against a long-term approach to issues such as health, childcare and regional economic policy. Failures to bring external expertise and evidence into areas of policy such as energy and transport undermine quality. The confusion of accountabilities between ministers and civil servants encourages risk aversion and buck-passing, as illustrated by the exams policy fiasco in the Department for Education during the pandemic. The federal nature of Whitehall inhibits cross-departmental policy making on issues such as climate change, and the widely acknowledged over-centralisation of some parts of government limits the ability of mayoral combined authorities to realise the benefits of their local understanding of context and priorities.

The Conservative government’s ‘Declaration of Government Reform’, published in June 2021, echoed much of the Institute’s analysis – as well as highlighting other problems including a tendency towards group-think and London-centrism, and a lack of proper performance management. In the two years since the Declaration was published, however, momentum has stalled and the extent of Sunak’s commitment to the reform agenda remains unclear. 

Downing Street sign

Momentum has stalled on the Declaration of Government Reform and the extent of Sunak’s commitment to the agenda remains unclear. 

Civil service reform is urgent

The lack of energy behind the government reform agenda is a serious problem because the need to improve and strengthen the civil service has only grown over the past two years. The civil service derives its authority from its effectiveness, so it is profoundly in its interests – as well as those of all citizens – for it to work as well as it can.

Civil service morale has been sapped by low-trust relationships with politicians and depleted by public criticism from ministers – to which civil servants have no public right of reply. Ministers’ sackings of permanent secretaries have called into question the impartiality and permanence of the civil service, with destabilising consequences. But the problems of the civil service do not all stem from the political class – its reputation was dealt a severe blow by the implication of officials at the highest levels in ‘partygate’ and a lack of visible leadership in dealing with the consequences.

Budget and pay constraints in the context of rampant inflation and the cost of living crisis have decreased job satisfaction and drastically increased levels of churn among existing civil servants: 2021/22 saw more officials leave the civil service than any year since 2015/16. They have also limited scope for the implementation of some reforms – such as efforts to bring in more professionals from outside government. Difficulties in recruiting from outside the civil service, aggravated by problems with recruitment processes, mean that the civil service continues to lack some of the skills needed to tackle the new challenges government faces. Meanwhile, in public services, emergency injections of cash are not generating the improvements in productivity the public might expect and certainly need.

Unprecedented political turmoil and ministerial churn have distracted politicians, limiting the ability of the civil service to progress the government’s reform agenda and requiring civil servants instead to focus on inducting and understanding the priorities of a succession of new minsters. A continuous cycle of crises has driven superficial, reactive and short-term policy making by a generation of officials who have little experience of working differently, having arrived during the rapid expansion in civil service numbers after 2016 (which followed the austerity-driven hollowing out from 2010).

And the civil service is now being directed and scrutinised by a generation of politicians of all parties who have never seen government operate in any other mode. The third of MPs who joined the Commons at or after the 2017 election have only seen parliament operating in the exceptional circumstances of Brexit and the pandemic, both of which constrained normal scrutiny processes. Expedited law-making, the creation and use of sweeping Henry VIII powers and skeleton bills are all now seen as normal, as is an approach to government which stretches the flexibilities of the UK’s uncodified constitution to its limits.

If Sunak is to turn around his poll numbers, he needs to focus not just on achieving his chosen policy goals but on demonstrating that he can deliver the wider outcomes the electorate cares about. This means making his government operate as effectively as possible. Laying the groundwork for reforms would prove a valuable legacy whatever the outcome of the next election, but improving the running of government would not be a purely altruistic goal. It would create short term wins too – by equipping government better to spot and resolve problems and handle crises, addressing the frustrations for ministers of a government machine that doesn’t deliver as well as they might wish.

Government reform could also challenge public disillusionment with government, and the prevalent public narrative that “Britain isn’t working”. This has become increasingly established in social and mainstream media, illustrated with particular reference to problems in public services and the impact of strikes – from which government itself is not immune. This week it was announced that 100,000 members of the PCS union representing civil servants will go on strike on 1 February, coincidentally the morning after the launch of the Institute’s annual Whitehall Monitor. Taking action to address public concerns would be beneficial for perceptions of the government and of Sunak’s grip as prime minister.

Labour too needs to think about the ‘how’ as well as the ‘what’ of government. If the party wins the next election it will need a clear view of how it wants government to work, as well as what it wants it to achieve.

Aerial view Whitehall

Civil service morale has been sapped by low-trust relationships with politicians and depleted by public criticism from ministers.

The job of government must go beyond managing crises 

The problems the UK faces are severe and pressing, and the first priority of government and opposition should be to frame serious responses to the NHS, energy and cost of living crises – and to the associated pay disputes that have led to widespread strikes. 

But the job of government must go beyond managing crises. Sunak and Starmer face a series of political choices about where to spend their energy, time, and – in the prime minister’s case – public money ahead of general election. Both have started to signal the choices they want to make in their new year’s speeches, but both need to do more to flesh out their commitments. Neither should neglect the significance of government reform in enabling them to deliver on all their policy promises and to make progress on the long-term change. That should be a central goal of any serious party of government.

Ambulances waiting outside an A&E department

The first priority of government and opposition should be to frame serious responses to the NHS, energy and cost of living crises. But the job of government must go beyond managing crises.

The IfG’s work in 2023

Both government and opposition need to ensure they understand the problems limiting the effectiveness of UK government and develop strategies to tackle them. The Institute’s work programme in 2023 will continue to do both – not just identifying the problems but identifying solutions and highlighting good practice.

For example, we have already argued for changes to the HR and pay policies that encourage civil servants to move within and between departments in search of better salaries and career opportunities. We have encouraged prime ministers to avoid unnecessary reshuffles, to reduce the destabilising effects of ministerial churn. We have made recommendations about how external expertise and skills can be brought into government, for example by bringing in more engineers to accelerate progress towards the government’s net zero goal, and argued for the importance of detailed plans and mechanisms to drive accountability for meeting it.

We have highlighted the value of independent institutions and worked with government and academia to identify the most effective ways of ensuring high quality research and evidence inform government thinking – good practice that was so deliberately set aside by Liz Truss in her tax policy making. Forthcoming research will demonstrate how better use of data has the potential to make policy better targeted, more agile and possibly cheaper.

This year, our work to encourage evidence-based policy making will be taken forward under the auspices of the new IfG Academy, along with professional development work to equip politicians and civil servants with the skills and expertise they need to better fulfil their roles in government. And we will build momentum behind our argument that the respective roles of ministers and civil servants should be articulated more clearly by putting the civil service on a statutory footing and increasing its accountability to parliament – as the public has a right to expect.

Having identified how problems in the working of the centre of government have contributed to crises and failures in recent years – from a lack of grip on pandemic decision making to an inability to carve out capacity to address long term policy problems like social care – we will be looking systematically at how the centre of government should work. We will dive into the work of government departments, including the Treasury and the Home Office, examine systemic policy problems such as asylum and obesity, and return to our previous work on net zero to see how government can best support industry to help deliver the goal, and the role of mayors.

Building on our long-standing analysis of the state of public services we will undertake new work on the conundrum facing the NHS: why it is struggling to translate extra staff and funding into shorter waiting times and waiting lists. And in the light of both parties’ focus on regional economic inequality – ‘levelling up’ for the Conservatives and the recent Brown report for Labour – we will look at the next steps in the English devolution process and how the map of mayoral combined authorities can be completed.

The Institute looks forward to working with ministers, civil servants and politicians across all political parties to build a shared understanding of the problems facing UK government in 2023, and how to tackle them.

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