The Cabinet Office (Hansard, 28 July 1998)

§ Baroness Jay of Paddington

The Government faces many new challenges, and it must be ready to operate in new ways to meet them. So, in January, the Prime Minister asked the Secretary of the Cabinet to review the effectiveness of the centre of government.

The role of the Cabinet Office has traditionally been to help the Prime Minister and the Government as a whole to reach collective decisions on government policy. Since the election, the three principal parts of the centre—the Prime Minister's office, the Cabinet Office and the Treasury—have worked closely and effectively together, and with other departments, to take forward the Government's comprehensive and ambitious policy agenda.

However, Sir Richard Wilson identified a number of weaknesses that need to be addressed. He concluded that the linkage between policy formulation and implementation needed further improvement. He found that cross-departmental issues of policy and service delivery are often not handled well. He diagnosed a weakness in looking ahead to future opportunities and threats, and in reviewing the outcome of government policies and the achievement of government objectives. Sir Richard confirmed one impression of the Prime Minister's own; that, while the Civil Service has many outstanding staff, it has not always implemented the best systems to invest in their development. Sir Richard found that there was scope to improve the performance of the centre of government in promulgating best practice and innovation in government and in the corporate management of personnel, IT, government communications and scientific advice.

We have already taken some steps to address the weaknesses identified by Sir Richard. The Social Exclusion Unit is an example of our innovative approach to tackling cross-departmental issues. And the new Cabinet Committee on Public Expenditure, chaired by the Chancellor of the Exchequer, will play a key role in monitoring departments' performance in meeting objectives. However, Sir Richard has identified an important agenda for reform. The Prime Minister today announced key reforms to address the problems he has identified. Further details will be announced in the autumn.

First, the Prime Minister proposes to merge the Office of Public Service with the rest of the Cabinet Office from today. The main purpose of the Cabinet Office is to help departments formulate policy collectively. The main purpose of the Office of Public Service is to help departments find ways to improve the implementation and delivery of policies and services on the ground. Yet policy formulation and delivery are two sides of the same coin. A unified organisation will help ensure that concerns about policy implementation are properly analysed in the process of developing policy, and help to contribute to more effective follow-through when policies are agreed.

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Second, a new Performance and Innovation Unit will be set up in the Cabinet Office. It will complement the Treasury's role in monitoring departmental programmes and will have two principal functions. First, it will focus on selected issues that cross departmental boundaries and propose policy innovations to improve the delivery of the government objectives. Second, drawing on the work of the successor to the Committee on Public Expenditure, and other sources, it will select aspects of government policy that require review, with an emphasis on the better co-ordination and practical delivery of policy and services which involve more than one public sector body. The unit will be a resource for policy development for the whole of government, building on the experience of the Social Exclusion Unit.

The new unit will not carry out these roles in isolation from other departments. It will assemble teams from inside and outside the Civil Service to carry out studies of areas where cross departmental working needs to be improved, or innovative approaches to delivery put in place, if the Government's objectives are to be delivered. The first group of projects to be carried out by the unit will be announced in the autumn. They will include studies of the Government's presence in cities and the regions, and of how older people can play a more active role in the community.

Third, the Prime Minister has decided to establish a new Centre for Management and Policy Studies in the Cabinet Office, incorporating a reshaped Civil Service College. If the modernisation of government is to be successful, and Ministers are to get the support they need in finding new approaches to policy and its delivery, we will need to ensure that the Civil Service continues to be a learning organisation, open to new ideas, and that staff at all levels get the training they need. The new centre will also provide an entry point at the heart of government for the best new thinking on current issues and new approaches to management. It will commission research into innovation in strategy and delivery. It will act as a repository for best practice in the public sector and elsewhere and be the focus for training the senior civil servants of the future.

Fourth, there needs to be more emphasis on the corporate management of the Civil Service as a whole. The Prime Minister's objective is to meet the corporate objectives of the Government as a whole, rather than just the objectives of individual departments. The reorganisation of the Cabinet Office will give it a new focus as the corporate headquarters of the Civil Service. Ensuring that there is a coherent information technology strategy, and that personnel systems deliver the talent needed for modern government, are just two of the challenges. In order to involve departments in the work of the Cabinet Office as the corporate headquarters of the Civil Service, the Secretary of the Cabinet will establish a team, including a number of Permanent Secretaries, to act as a management board for the Civil Service. The Head of the Government Information and Communications Service will from now on be located in the Cabinet Office. The Chief Scientific Adviser to the Government will also work from the Cabinet Office as well as the Department of Trade and Industry.

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So far as possible the new Cabinet Office needs to be located together. Its main base will continue to be in 70 Whitehall. Plans are being drawn up to locate the rest of the office, including the new Performance and Innovation Unit and the Centre for Management and Policy Studies, in the currently unoccupied accommodation in Admiralty Arch, Ripley House and Kirkland House.

The Cabinet Office will continue to report to the Prime Minister and Minister for the Civil Service. The Prime Minister will continue to account to Parliament for matters of collective Cabinet responsibility; the Minister for the Cabinet Office will report to Parliament on the management of the Civil Service and allied matters and, in particular, will oversee the major programme of reform the Prime Minister announced today.

The aim of this programme is to create a focus for the drive to modernise government to tackle the new challenges it faces. The broad outline of the programme is clear. A lot of work, and consultation with staff, is now needed to put in place the detail and implement the measures the Prime Minister has described. Further details will be set out in the Government's White Paper on Better Government, which will be published in the autumn.