The first thing I want to say today is that the Conservative Party value and support the Civil Service.
Our system of independent and impartial public servants dedicated to implementing the programme of the elected Government is one of the jewels in our constitution and is admired throughout the world for the way in which it serves the elected government of the day.
We have come a long way - 155 years - since the Northcote-Trevelyan reforms created this model. There has been much progress. But the values of political impartiality, advancement on merit, the public service ethos, are as much to be cherished and nurtured today as ever. I'm delighted that at long last the Civil Service Bill that was foreshadowed in the same Northcote-Trevelyan Report in 1854 is at last on its way through its Parliamentary stages. This will entrench the impartiality of the Service and give statutory basis to the Civil Service Code. There is at most a few months before this Parliament is dissolved, but I undertake that we will do our best to ensure that at least the Civil Service clauses in the Constitutional Reform and Governance Bill make it onto the statute book before dissolution.
The second thing I want to say is about our approach should next year's General Election result in a Conservative government. We seem these days to have very long electoral cycles. Conservatives held office for eighteen years; Labour have held office for twelve years so far. It is easy for the opposition to assume that during these long periods of ascendancy the impartiality of the Civil Service becomes sullied. How can you work for one party for so long, some ask, without being influenced by their preferences and doctrine?
Many of Tony Blair's new ministers in 1997 made this mistake. They assumed that officials must have taken on the stamp of their Conservative political masters; and that the rest were institutionally reactionary, pre-programmed to resist any radical reform. They'd watched too much "Yes Minister", and assumed it was a documentary.
We are determined that if we form a government next year we will not make this mistake. The truth about civil servants, whatever political preferences they have - and I've never succeeded in extracting from any civil servants, even good friends, which way they vote - is that the best like working in an energetic and purposeful government, with ministers who know their minds, who listen to advice, even if they don't eventually take it all, who give credit to their officials and who take responsibility for what is done in their names.
The third thing I want to say is that we will be confident enough to encourage candid advice from officials. As I say, we may not always take it. But it is a clear obligation in our view to seek and listen to advice; to challenge and interrogate advisers and accept challenge in our turn; to understand the duty of Civil Service advisers in private to speak truth unto power; and not automatically to interpret candour as obstruction.
In the conduct of government, there is a clear and valuable role for the special adviser. If nothing else they can provide protection for the impartiality of civil servants; they can be a source of crucial political and specialist advice and support. But they should never be used as a routine cut-out between ministers and officials. Ministers should be confident enough to engage very directly with their official advisers.
The peril of ministers insulating themselves from candid advice is illustrated vividly by the well-documented saga of the introduction of tax credits. Advised from all sides that his scheme was impracticable, and would be susceptible to error and fraud, the then Chancellor forged ahead regardless. The result? Hundreds of thousands of hard-working families on low incomes, trying to do the right thing, traumatised by a demand to repay thousands of pounds overpaid by the government in error. Sleepless nights; dreadful anxiety; huge stress; all because of one Minister's refusal to listen to advice.
I want our Civil Service to be renewed and revived to play a central role in the governance of our nation. I'm publishing today for consultation a set of proposals with this objective in mind. At their heart is the desire to make better and more rewarding the lives of hardworking dedicated civil servants. For the Civil Service is not working today as effectively as it needs to. Surveys show low morale and frustration. Absenteeism is growing, a telltale sign of depleted morale. The current system fails to incentivise excellence, to support poor performers, is opaque and inflexible, and allows inefficiency to continue without exposing it to proper scrutiny and remedy.
These reforms seek to encourage three qualities. First, transparency, so the performance of various departments, agencies and public bodies can be properly scrutinised and compared. Second, accountability, so high performers can be rewarded and underperformers addressed. Last, efficiency, so that in this time of fiscal crisis taxpayers can be assured they are indeed getting more for less. These reforms form part of our overall government productivity programme. They build on the reforms George Osborne and I set out in January in our paper "It's Your Money", which addressed the need for significantly enhanced financial management in central government. They take forward the proposals for enhanced departmental governance that I announced last month. Philip Hammond, the Shadow Chief Secretary, will make further announcements tomorrow. And in the coming days I will publish a paper on a new approach to government ICT, where there is yet more opportunity to get more for less.
My proposals today are neither earth-shattering nor headline-grabbing. We have developed them in the course of long and serious discussions with many people steeped in the public service ethos. We believe that they will make a serious contribution to meeting the demands of a fiscal crisis where the government is spending £4 for every £3 it gets in tax revenues.
First, transparency. We want both public servants and the public to be able to understand clearly what departments and quangos are doing, and how much these activities cost. Not very radical, but essential. The vague and confusing system of PSAs and DSOs give little insight into what departments are meant to be doing. Annual reports can be up to 450 pages long, deeply impenetrable, and tell us very little about real performance. Trying to understand how the efficiency of one department compares with another is nearly impossible task. And for up to date information on how many quangos there are and what they do, the Taxpayers Alliance is a more reliable source than the government.
So we will scrap PSAs and introduce in their place three year rolling departmental business plans, which set out clear priorities for departments, are simple to understand, and are accompanied by dates and means by which they are to be achieved.
Second, we will require, except in emergency, the financial costs and benefits of all new policies to be exposed to the public and reported to Parliament.
Third, we will publish a departmental scorecard every six months which benchmarks departmental efficiency in areas such as average costs per square metre of property, absence rates and average staff costs, and tracks how well departments are progressing against their business plans. We will include department-specific measures which can be compared internationally, so we can see how we are performing against the rest of the world, and see where we can learn lessons.
Fourth, we will scrap annual reports in their current wordy and impenetrable format, and will require departments only to report on the key financial information, how they are meeting their business plan priorities, and provide updates on how their key projects are progressing. We will also ask the key government-wide Heads of Professions for Finance, Human Resources, Information Technology, Procurement and Communications to publish annual reports on the quality and effectiveness of their professional streams, using recognised benchmarks which can be compared to the private sector.
Fifth, we'll put online organograms, job descriptions and staff numbers for all Whitehall departments and quangos. We'll publish online the salaries of the 35,000 most senior civil servants. We'll publish online every item of central government spending over £25,000. We'll publish online all government tender documents for contracts worth over £10,000.
Last, we will lay out clearly what quangos do and how much they cost, and ensure that the Cabinet Office and Departments carry out a full review of the purpose and expenditure of each quango every three years. This review will include testing whether the quango meets one of the three criteria laid out by David Cameron for continued existence outside of departments, so they will need to demonstrate that they perform a function necessary for transparency, impartiality or perform a highly technical function in order to continue.
I'm under no illusion: these changes will make life uncomfortable both for ministers and officials. We will all be well out of the comfort zone. But we're convinced that change is essential if efficiency and effectiveness are to make the crucial next steps forward.
Next, accountability. Recruitment and advancement on merit was central to the Northcote-Trevelyan approach. Yet performance management seems to many in the service to have taken a back seat. In the last Senior Civil Service survey, over 80% of the respondents felt that poor performance was not dealt with effectively in their departments, and over 65% were dissatisfied with the performance management. No-one likes to work for an organisation where people who underperform are not held to account. Most people in the Civil Service do a fantastic job. Those who excel should be properly rewarded and fast tracked, not treated the same way as the under-performers. Much of this is down to leadership.
We want to introduce some reforms which will strengthen departmental leadership and help it more from its staff.
As I said at out party conference last month, we will introduce a new model for departmental boards. These boards should be the forum where senior ministers and officials come together to form the collective leadership of the department are brought together, chaired by Cabinet Ministers who will be actively engaged with their departments' operations. The majority of non-executive board members should be from the commercial private sector, with a proven track record of running large organisations. There will be a 'senior non-executive' with access to the Prime Minister and to the Head of the Civil Service who would chair a regular meeting of non-execs from across the government. Non-executives will be involved in the recruitment and appraisal of executive board members. To ensure that the new non-executive board members have real teeth they will be able in the last resort to recommend to the Prime Minister and the head of the Civil Service that a Permanent Secretary whom they judge to be an obstacle to delivery should be removed. We will ensure with the Civil Service Commission that there is a process for the appointment of the non-execs that gives comfort that these are people of substance and robust independence.
In addition, we will change improve the appraisal system, so it becomes clear that the best performers are treated differently from the worst. Appraisals must be clearly focussed; allow high performers to be identified and promoted quickly; and enable poor performance to be addressed. Focussed support should be given to the poorest performers for six months, and if their performance does not improve they should expect to leave. It is an affront to the dedication and public service ethos of the many that a few should be allowed to damage the reputation of the whole.
We also believe that if you start something you should see it through. There should be a presumption that the Senior Responsible Officer for a project should stay in that role for the duration of the project. This would be routine in the private sector. Yet suppliers to the government tell us that it's not uncommon to be dealing with two or three SROs in the course of a single project.
Stronger leadership, real appraisals and accountability for seeing through projects which you start. It's not rocket science but we believe it will make a difference.
Last, efficiency. In our 'It's Your Money' paper we outlined proposals to promote efficiency through stronger financial management in the Civil Service. We propose to introduce in Civil Service employment contracts a fiduciary obligation to taxpayers. We'll strengthen the role of financial managers, including enhancing the status and authority of Finance Directors.
Today we want to go further.
Departmental teams who make cost savings tend to see their budgets cut, a poor reward for those who have taken the difficult decisions needed to take out cost. If the culture is to change there must be the ability for some of the genuine savings to remain with the department and its officials. So we will enable departmental remuneration committees to use their bonus pools to reward teams who have cut costs in a demonstrable way. Bonuses for executive board members will be closely linked to progress against business plan and efficiency targets and we would make 50% of all other senior civil servant bonuses linked to departmental performance to encourage officials to work as a team to achieve the best performance for the least cost.
People often talk about the risk-averse culture in the Civil Service. We think this is a real problem. It acts as a brake on innovation. We have a vigorous audit culture in Whitehall and Westminster, constantly fuelled by the media, for whom every failure is culpable and who demand a scapegoat for every mistake.
Yet the best organisations know that they learn as much from the innovations that are tried and don't work as from those that do. They promote a culture where innovation is encouraged, where people are not blamed for trying something that doesn't work, as long as they front up when it's clear that it isn't working, and then ensure that the organisation learns from it. They understand that without constant innovation you have no chance of getting periodically the dramatic breakthroughs that drive spectacular productivity advances.
Yet for Whitehall the fear of being pilloried by the Public Accounts Committee for a failed initiative can kill initiative and innovation. Wouldn't it be good to hear the NAO and PAC occasionally praising a team that had made a sensible informed decision to do something that happened not to have succeeded? It's rare to hear of a public servant's career suffering from presiding over an inefficient status quo, yet careers are frequently damaged by trying something new that fails. So we would encourage the NAO and PAC to query departments where there has been insufficient innovation or reform.
Part of this risk aversion flows from the lack of clear delegated authorities. In the best organisations people and teams have clearly defined mandates. They're told what outcomes they're expected to achieve. There are some common standards to which they must conform. But within those boundaries they're given the space to operate in the way they can make deliver best. The lack of these delegated authorities leads to too many decisions being referred all the way up the chain of command, slowing and complicating decision-taking, stifling innovation and eroding responsibility and initiative, while creating unnecessary bureaucracy. We would seek greater delegation of powers, so individual civil servants and teams have a real mandate and clearly defined responsibilities within which they can innovate and reform.
Finally, we agree with the government that the Civil Service Compensation Scheme needs to be reformed. The current scheme is significantly more generous than others even in the public sector. We want to work with the unions to adjust these payouts to levels more akin with those that prevail in the private sector.
I genuinely want government to be a better place to work. These reforms will not make life comfortable for civil servants or ministers, but progress is never easy. We are under no illusions that there is a quick fix. But this is an amazing country. We have a superb tradition of public service. If we can deliver more public service for less money in any country in the world, then that country has to be Britain. We really are all in this together and the sooner we get going the better. Thank you.