HC Deb 26 June 1968 vol 767 cc454-65
The Prime Minister (Mr. Harold Wilson)

With permission, Mr. Speaker, I would like to make a statement. I apologise for its length, but the importance and complexity of the subject make this necessary.

The House will recall that on 8th February, 1966 I announced the Government's decision to appoint a Committee to examine the structure, recruitment and management, including training, of the Home Civil Service and that Lord Fulton had agreed to be Chairman of the Committee. The Report of Lord Fulton's Committee has now been received and is being published today. Copies are available in the Vote Office.

May I, first, Mr. Speaker, express the great appreciation of the Government to Lord Fulton and the members of his Committee for the thorough and devoted manner in which they have carried out their task and for the wide-ranging and fundamental review they have produced. It would also be appropriate here to mention the contribution to the work of the Committee made by the right hon. Gentleman the Member for Birmingham, Handsworth (Sir E. Boyle) and my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon).

When I announced the setting up of the Committee I expressed the hope that its inquiry would be in the great tradition of past inquiries such as those carried out by Northcote-Trevelyan in 1853 and the Tomlin Commission in 1931. I also expressed the hope that its recommendations would enable the Civil Service to meet the country's need for many years to come. I am sure that, when they have read the Report, hon. Members will agree with me that the Committee has fully justified the hopes placed in it and that we are all in its debt. I am confident that the Report will stand comparison with the historic Northcote-Trevelyan Report of more than a century ago.

Just as the Northcote-Trevelyan Report called for a replacement of patronage by a system of independent selection based on intellectual attainment, the Fulton Report, while reaffirming the continuation of independence in recruitment, finds that insufficient attention has been paid to management in the Service, and calls for a new system of training, organisation and career management.

This Report is an essential contribution to the modernisation of the basic institutions of this country, including law reform, on which a strong start has been made. A vitally important further contribution will be the long overdue reform of local government which will follow the reports of the Royal Commission on Local Government in England and Wales, presided over by Lord Redcliffe-Maud, and the Royal Commission on Scottish Local Government, presided over by Lord Wheatley, two Commissions which are reviewing a system of local government which, in its main essentials, is largely unchanged since the latter years of the 19th century. The decisions of the Government and of this House on trade unions and employers associations, which will follow the consultations now in train as a result of the Royal Commission on Trade Unions and Employers' Associations presided over by Lord Donovan, will, of course, provide a corresponding degree of modernisation in another of our great Estates.

As hon. Members will see when they study the Fulton Report, it analyses in depth the present situation in the Government service and makes a large number of recommendations. Both the Report and its recommendations are being studied. I can, however, tell the House that, broadly speaking, we accept the analysis, though not every criticism it contains. As to the recommendations, here again, some of the detailed proposals will need very careful study, but the House will wish to know that the Government have decided to accept the main recommendations of the Report and to embark on the process of reform outlined by the Committee.

First, we accept the proposal to establish a new Civil Service Department on the lines advocated by the Committee and the steps to bring this about will be taken at the appropriate time. Specific and formal arrangements will be made to ensure the continued independence and political impartiality, within the new Civil Service Department, of the Civil Service Commission in the selection of individuals for appointment to the Civil Service.

Secondly, the Government have accepted the recommendation to set up a Civil Service College to develop the training of civil servants broadly on the lines recommended in the Report. The timing of this will, of course, have to be fitted into a programme which takes full account of public expenditure control.

Thirdly, the Government accept the abolition of classes within the Civil Service and will enter immediately into consultations with the Staff Associations with a view to carrying out the thoroughgoing study proposed by the Committee, so that a practicable system can be prepared for the implementation of the unified grading structure in accordance with the timetable proposed by the Committee.

This does not mean that the professions as such will disappear from the Civil Service; but it does mean that movement throughout the Service for them and for all civil servants at all levels will be unimpeded. This will mean that for everyone in the Civil Service, whether from school, whether from a college of technology, or from a university, whether he or she comes in from industry or from a profession—all in future, the school-leaver, the graduate, the accountant, the engineer, the scientist, the lawyer—for all of them there will be an open road to the top which, up to now, has been, in the main, through the Administrative Class.

Decisions on the remaining recommendations of the Committee will be announced in due course following the necessary full discussion with those concerned, including particularly, as I have said, the Civil Service Staff Associations.

The carrying out of the Committee's recommendations will involve additional cost, though the greater part of this extra expenditure will not arise until five years or more from now. The timing of the implementation of such recommendations will have to take account of this fact and will be related to the stringent public expenditure programmes which this House will be asked to approve in successive Estimates.

At the same time, the emphasis of the Report on efficient management and economy within the individual Departments should ensure that additional expenditure on management and training will in time lead to substantial offsetting savings in the day-to-day operations of the Civil Service.

In this connection, the new Civil Service Department will have as its first remit the continuation of the work already being carried out by my right hon. Friend the Chancellor of the Exchequer to achieve the targets for Civil Service manpower announced in my statement of 16th January last. I hope shortly to inform the House of further measures which are to be taken to ensure the fullest scrutiny and control of Civil Service manning.

The House and the public will wish to study the very detailed recommendations of the Report. These recommendations are designed to produce a Civil Service for the fourth quarter of the 20th century, which, while preserving the best of the old, is adequate in every way to deal with the problems of the fourth quarter of the 20th century. For example, in addition to the three main recommendations to which I have referred, hon. Members will welcome the Committee's desire for two way movement between the Service and other areas of our national life, such as private and public industry, local government and the professions.

There is one particular aspect of this which is implicit in the Report, but which Her Majesty's Government intend to make explicit in our actions in implementing the Report. This is the emphasis on regionalism. It will be our intention that new Civil Service recruits will be given abundant opportunities of working in the regions, and wherever possible in services which will bring them into direct contact with the public.

This emphasis on regionalism will inspire our approach to some of the comments on the machinery of government which hon. Members will find in the Report. Decisions on this will be taken when the Government have received and published the reports of the Royal Commissions on Local Government. On what the Fulton Report refers to as social administration, the Report of the Seebohm Committee on Local Authority Personal Social Services will also be highly relevant to changes in Government machinery so far as the social services are concerned.

I have said that many of the detailed recommendations will need careful study by the Government. In this, we shall need to take full account of the public reaction to the Report. But there is one issue on which the House will expect me to comment today. In recommending the transfer of responsibility for the Civil Service from the Treasury to a new Civil Service Department, the Report says: The new department should be under the control of the Prime Minister. We hope that he will retain direct responsibility for senior appointments, machinery of government and questions of security. Outside this area, we suggest that the Prime Minister should delegate day to day responsibility to a non-departmental Minister of appropriate seniority who is also a member of the Cabinet. I have asked my right hon. Friend the Paymaster-General, the noble Lord, Lord Shackleton, who is, of course, a member of the Cabinet with no Departmental duties, to undertake the duty of assisting me in the discharge of the functions recommended in the Report, to supervise the setting up of the new Department, and to control its day-to-day operations when established. My noble Friend will be engaged in this work from now on, and I propose in due course to inform the House, after consultations with the Opposition, about the arrangements which the House may find convenient for the tabling of Questions about the implementation of the Report and about other matters affecting the Civil Service. In the interim, Ministerial responsibilities and the arrangements for answering Questions will remain unchanged.

Mr. Speaker, it would not be right for me to end this statement without attempting briefly to put the Report of the Committee into perspective. The Report makes a number of criticisms of the present organisation and structure of the Civil Service. This was to be expected: had there been nothing to criticise, there would have been no need for the Committee to be set up. The reorganisation of the Service which will now take place will no doubt occupy a good deal of time in public discussion over the coming months. In our discussions, we would do well to remember that, whatever criticisms are levelled at the organisation, structure or methods of the Civil Service, including training and personnel management, the Committee has paid high tribute to the calibre, devotion and competence of the staff and has pointed to the very considerable strengths of the Service which have, to some extent, obscured the need for reform, particularly the capacity of the Service for improvisation.

It is right and necessary that changes should now be made. It is, however, also right for us to pay tribute to the very able men and women at all levels in the Service who, with the highest standards of integrity and impartiality, have served the nation's interest under successive Governments so well for so long.

Mr. Heath

May I join with the Prime Minister in his tribute to Lord Fulton and his colleagues on the Committee and to the Civil Service? We will, of course, want to study the Report carefully. As this is a Report of such importance, as the Prime Minister said, the implementation of which will affect future Governments and the relationship of the Civil Service to Parliament, I hope that we shall have a debate about it shortly. Of course, we shall join with the Government in discussions about how Questions on the Civil Service should be handled.

As I understand, what the Prime Minister has said means that the management of the Civil Service is now taken from the Treasury and handed to a new Civil Service Department. If that is to be the case, the sooner we have consultations about the handling of Questions, so that they can come under the new arrangements, rather than the Chancellor of the Exchequer, the more convenient that will be.

Does not the Prime Minister recognise that, although management and training for the Civil Service are immensely important, and although the reform of local government in Scotland and in Wales are also of great significance, they are all but one part of the changes which have to be brought about in the structure of government as a whole?

The Prime Minister

I readily agree that the House will want appropriate time to debate this very important Report. There will obviously be consultations through the usual channels about that. I cannot promise that it will be early, but in any case hon. Members will find that they have a vast mass of reading with the publication of four of the five volumes which make up the Report, including the written evidence and the very important volume of the Management Consultancy Group's Report.

No exact time has been fixed for the transfer to the new Department which will be the responsibility of the Prime Minister with the help of my noble Friend. When that happens, the change in Questions will become operable, but it is too early at this stage to say what will be appropriate for the Transfer of Functions Order from the Treasury to the new Department.

I certainly agree with the right hon. Gentleman that this is part, but only part, of the great modernisation requirement of our institutions, including regional government and including the machinery of government, as the right hon. Gentleman has said. Many of the most important and the most far-reaching decisions which will have to be taken, and which will be taken about the machinery of government, must also await the Report of the Redcliffe-Maud Commission on which, as the House would wish, we cannot place too much emphasis and which deals with the needs of regionalism in the operations of the Government and the Civil Service.

Mr. Sheldon

I thank my right hon. Friend for his generous remarks about the work of the Committee and I warmly welcome the early acceptance of the main recommendations of the Report, particularly the abolition of classes and the setting up of the Civil Service College and the Civil Service Department. Has my right hon. Friend considered the possibility of using the Greenwich site for the Civil Service College? Secondly, while awaiting the final decision on how Questions about the implementation of the Report are to be answered, will he consider the possibility of an annual report, to set out what progress has been made?

The Prime Minister

I hope, as the Committee did, that the Staff Training College for the Civil Service would be made available more widely than just for the Civil Service itself. The Greenwich site has been one suggestion which has been considered. I think that I made the suggestion myself. However, my hon. Friend will be aware that there are many competing claims for this valuable and important piece of property. Certainly, it will be considered.

As for Questions and keeping Parliament informed, my hon. Friend knows better than most of us of the recommendation in the Report about a follow-up and the Committee's insistence that the Government, Parliament and the public should be satisfied about the speed, direction and methods of the follow-up. We shall have to consider the alternative proposals put forward by the Committee about how that should be looked at, whether by a further Committee, or by a Committee of the House, or in some other way.

Mr. Lubbock

Is the Prime Minister aware that, although we shall need time to study the Report, we welcome the decisions which he has already announced, particularly the abolition of classes and the opening up of career opportunities for scientists and engineers in the Civil Service?

My first question is about the arrangements for secondment. The Committee said that it desired to see a two-way movement between the Service and other areas of our national life. Is it the intention to make arrangements so that civil servants can spend sabbatical periods in regional hospital boards, local authorities and the nationalised industries, for instance?

Secondly, does the Prime Minister realise that merely to send civil servants to the provinces is no substitute for devolution and the creation of regional authorities?

The Prime Minister

I agree with the hon. Gentleman's last comment. It is very important that civil servants should have the opportunity not only to see all parts of Britain from various regional centres, but to see London from the outside, not just seeing the outside from London.

As for secondment, what I call the two-way movement, I think that the hon. Gentleman will find that the Report goes much further than the illustrations which he mentioned. It is envisaged that not only would there be a regular flow of recruits on a temporary basis from private and public industry, the universities, the professions, local government, finance and commerce, but also that established career members of the Civil Service would be encouraged to work in industry and in local government, with appropriate safeguards of course, so that there would be a two-way flow of experience in these matters.

Mr. Woodburn

Did the Committee study, as I suppose it did, the Report of the Select Committee on National Expenditure, which carried out an investigation over which I had the honour to preside during the war and which recommended the establishment or organisation and methods departments, and the recommendation, now repeated, that the Civil Service should be placed under the Prime Minister's own charge, with a deputy Minister? Was there any reference to the Committee, presided over by Ralph Assheton—now Lord Clitheroe—after the war, on the education and training of civil servants, which produced a very fine report and did some very valuable work?

The Prime Minister

I think that when he studies the Report in detail, not least the Management Group's Report in its own volume, my right hon. Friend will find that the new thinking and the work which he has described was not only seized and used by the Fulton Committee, but followed up and vastly extended in its thinking. Many of the recommendations by my right hon. Friend and the Committee of the noble Lord Lord Clitheroe have been acted on by the Civil Service as it now is, particularly in relation to Organisation and Methods.

The Fulton Report calls for much more professional management at all levels, including economic management and business management within the Civil Service and for social management within the Civil Service. I think that my right hon. Friend will be impressed not only by the wealth of evidence, but by the Committee's conclusions on this subject.

Mr. Peel

In deciding about removing the management of the Civil Service from the Treasury to a new Civil Service Department, would the Prime Minister give consideration to removing the permanent service to this House and Parliament away from the Treasury and putting it under our control, the control of the sovereign Parliament?

The Prime Minister

That raises another question which was not dealt with in the Report, long though it is. I understand that evidence has recently been given on this matter. That is something for separate consideration. It does not arise out of the Fulton Report.

Mr. Albu

May I add my thanks to those of other hon. Members to Lord Fulton and his colleagues for their extremely valuable Report? May I ask my right hon. Friend whether the Report gives any support to the view sometimes expressed that Government policy is made by anonymous civil servants and that Ministers are merely their creatures?

The Prime Minister

No, I do not think that it gives any support to that view, because it would not be true under any Government. Any Minister who was sufficiently passive to have all his views formed for him by civil servants should not be a Minister for more than 24 hours.

Mr. John Hall

As one of a group of Members on this side of the House who, in an excellent pamphlet called "Change or Decay", five or six years ago, advocated many of the recommendations about which we have heard this afternoon, may I express my admiration for the work of the Committee and for the determination of the Government to give effect to its recommendations quickly?

In dealing with the question of secondment, is it recommended that opportunity be given for an exchange of places between the various colleges, both at the new proposed Civil Service College and the industrial colleges, so that industrialists can take places in the Civil Service college and vice versa?

The Prime Minister

The answer to the second question is, "Yes, certainly". It is intended that the college be organised in such a way that it can have a considerable number from outside the Civil Service. This will be of great help to the education of civil servants, and the other way round.

With regard to the hon. Gentleman's pat on the back, as a former colleague on the Public Accounts Committee, I realise the deep interest which he has taken in these matters for a very long time and the authority with which he approaches these problems. I know how pleased he will be that we have moved out of the period of decay into a period of change.

Mr. Moonman

I should like to ask my right hon. Friend two questions. First, while waiting for a decision on the findings, would he consider obtaining advice from a number of organisations like the Tavistock Institute about the possibility of setting up one or two pilot schemes concerning management development and staff training within the Service? Secondly, does the published Report include a specially commissioned survey of attitudes between the Civil Service and the general public? It has been suggested that it might not.

The Prime Minister

I should need to look through the very long list of those who gave evidence to be able to answer my hon. Friend's question about the use of various expert authoritative bodies. He will be able to do that for himself. I should be very surprised if there were anyone who could give evidence on the subject who was not invited to give evidence, and on whom the Committee did not rely in producing its very authoritative Report.

With regard to what has been published, what my hon. Friend had in mind will appear in a volume yet to be published which will give a great deal of expert information which was furnished to the Committee on social questions, questions of attitude, and many others. However, I should like to check that before being sure about it.

Mr. David Howell

Will the new systems of organisation and management about which the Prime Minister speaks include new systems of management and accounting in Whitehall to replace the archaic and absurdly over-centralised system of financial control in the Treasury?

The Prime Minister

I think that the hon. Gentleman will find that that is dealt with in the Report, and I hope that he will agree with the Committee's recommendations. The Committee has not addressed itself to the detailed way in which public accounting should be undertaken because this is a matter of such vital importance to this House that it is for the existing Select Committees of this House.

Mr. Dalyell

On the question of the two-way movement between the Civil Service and public industry and the professions, does my right hon. Friend accept that the complex matter of the trans-ferability of pensions is crucial? May we hear the Government's thinking on this subject at an early stage?

The Prime Minister

The transfer-ability of pensions is crucial in any system of secondment or two-way movement of this kind. It was dealt with very fully by the Committee. Its recommendation about pensions would involve an additional cost. That is why I said earlier that these matters, some of which would not be expected to materialise for several years, must be fitted into the general system of public expenditure control approved by the House. The question of pensions will have to be very carefully associated with the Government's decisions on pensions policy, including the transferability of pensions generally.