"Next Steps" Agencies (Hansard, 16 May 1991)

§ The Prime Minister

Since my predecessor's announcement of the "next steps" initiative on 18 February 1988, 50 agencies have been set up, and nearly half of all civil servants will soon be operating under "next steps" principles. This is already leading to the real improvements in the quality of service to the public and better value for money which the changes are designed to secure.

In the light of these developments Sir Angus Fraser was asked to examine the relationship between Departments and agencies and how Departments should be adapting their structure, size and methods of working. In his report to me, Sir Angus records the general agreement that "next steps" is going well. There is genuine enthusiasm and energy throughout the civil service for the changes that are taking place, with fresh ideas and increased commitment to improving value for money and quality of service, for the benefit both of the customer and the taxpayer. Running alongside this is a strong conviction that there is scope for more progress.

The report contains a number of ideas for developing the roles of both Departments and agencies in support of Ministers. The objective is that both sides of the relationship between Ministers and chief executives—which lies at the heart of "next steps"—should be strengthened.

For their part, Departments must provide well-informed and authoritative support to Ministers in order that Ministers can give agencies clear strategic direction firmly related to the Government's policy objectives; determine the financial resources to be made available: select and set suitably robust and meaningful targets 248W covering quality of service, financial performance and efficiency; and call chief executives to account for the performance. This means strategic advice and direction, geared to the relationship between each Minister and agency, not day-to-day involvement. As a result, the number of people at the centres of Departments can be reduced.

On the other side, chief executives will need increased personal responsibility and authority for running their organisations in order to achieve the progressive improvements in performance, quality of service and value for money that are required. The Government believe that agencies' delegations and flexibilities can be enlarged as their track record of performance is established, provided that essential controls on public expenditure are not jeopardised.

It is on the basis of these principles that I have asked the head of the home civil service to set in train arrangements to ensure that the ideas in this report are taken forward in each Department and agency in ways which fit each particular activity. The next steps project manager has been instructed to work with the Treasury and Departments to achieve this, reporting to me through the head of the home civil service. I look forward to seeing further improvements in the management of the civil service resulting from this process.

I am grateful to Sir Angus Fraser and his team for their report. A copy has been placed in the Library of the House and is being published by HMSO today.