Public Administration and Constitutional Affairs Committee
Oral evidence: Civil Service Human Resources, HC 1399
Tuesday 20 June 2023
Ordered by the House of Commons to be published on 20 June 2023.
Members present: Mr William Wragg (Chair); Ronnie Cowan; Mr David Jones; John McDonnell; Tom Randall; Lloyd Russell-Moyle; Karin Smyth and John Stevenson.
Questions 1 - 57
Witness
I: Rupert McNeil, former Civil Service Chief People Officer 2016 to 2022.
Witness: Rupert McNeil.
Q1 Chair: Good morning, and welcome to the Public Administration and Constitutional Affairs Committee. Today, the Committee is holding a session exploring human resources related issues within the civil service. We are joined by Rupert McNeil, who, until last year, was the first civil service people officer with responsibility for HR related matters across the entire civil service.
Our session today is an opportunity to hear from Mr McNeil, with his reflection of his time in the role and his view on current HR related issues affecting the civil service. Good morning, Mr McNeil. I wonder if you might introduce yourself for the record.
Rupert McNeil: Thank you, Chairman. I was, as you said, Government Chief People Officer between January 2016 and April 2022, which was a great privilege. I am currently back in the private sector, as chairman of a lithium-ion battery recycling business and a consulting business.
Q2 Chair: Thank you very much. Mr McNeil, relations between Ministers and the civil service have been described in the press as, “At an all time low”. Do you think this is a fair comment, and what is your impression of the general relationship?
Rupert McNeil: It is a very complex relationship and it does not really have many parallels outside Government and outside the UK Government context. What happens is you have a political leadership coming in with an agenda and very clear views about what they want to do—as I have said to this Committee in the past—perhaps not as prepared to understand the various levers in the system that can be used when they come in.
My experience though was that relations between Ministers and civil servants were generally very good. At a time when I was there, which experienced both Brexit and Covid, a remarkable amount was achieved. You could see that in some of the innovations that happened during the Covid period particularly, but that had started in Brexit with joint committees, which brought the political leadership and the leadership of the civil service at an operational level much closer together than they had been before.
Q3 Chair: How significant a problem is that picture I have described, as quoted in the press and, if so, what factors are driving it?
Rupert McNeil: You currently have a civil service that has gone through a very difficult period and a Government that have gone through the same difficult period. My hypothesis, and I noticed this towards the end of my term, is that when you have a period of national crisis—you cannot call either Brexit or the Covid period anything other than that, whatever your views, as they required a lot more co-ordination and consideration—naturally the system has to come closer together, so you have what you would call centripetal tendencies in the system. It becomes much more controlled in a system which, traditionally in the UK constitution, is distributed through the Cabinet system.
When that crisis or crises recede, naturally the centrifugal forces come back in place. One of the things that I noticed—which I think was a source of frustration for Ministers, particularly in the Cabinet Office—was actually a symptom of that function. Was it a function of the civil service? Was it a function of resource in the civil service, or was it actually, as I suspect, just the fact that those centrifugal forces were re-establishing themselves?
Q4 Chair: Some Ministers, and particularly some former Ministers, have complained about a “blob” working to stifle the Government's agenda: did you see any evidence of this, and why do you think this complaint has gained such traction?
Rupert McNeil: The civil service system is very complex. First, it is a sector; it is not a single organisation and even within Departments there are many sub sectors. One of the sources of frustration is, potentially, the extent to which, from the Cabinet and as a Minister around the Cabinet table, you can then exert control onto this very distributed and complex system.
That is the first thing. If I were to say there was one area in Government that needs a good look, it is what happens at the very centre: at No. 10, at the secretariats, and the way in which they operate, because they are the programme management office of Government, if you like, and they are responsible for co-ordinating the whole system. Although we made great progress in improving that capability during the Brexit and Covid periods, it is still what is needed and we still do not have what is needed to deal with, frankly, the horrendous challenges of the 21st century. It is not responsive enough.
Q5 Chair: What would you diagnose as problematic? What is faulty with it, as it were?
Rupert McNeil: There are a number of missing features in the centre of the system at the moment. If I enumerate them, the first is that there is no risk management function in Government. There is, but it is very focused on the national security and defence side. If you look at the infrastructure that you have on the national security and defence side, from the Joint Intelligence Committee to intelligence assessment capabilities, that is not replicated in any way on the domestic side. When you have an issue, like Covid or Brexit which are predominantly domestic issues, or non-security issues largely, you see that problem and you do not have the maturity of co-ordination that occurs on the national security side. That is the first thing.
I spent 10 years in banking and working in environments that look at risk management very seriously so know from experience that you need to have a system, a way of looking at not just risks in individual areas, but the way in which those risks interrelate. In the course of preparing for Brexit, and this paid off when we were looking at Covid, as an HR function all the HR directors and our teams sat round and said, “What are all the things that could go wrong in the next two years? Let’s imagine we are on the brink of no deal and other things are happening.” What did we list? Interestingly, pandemic. Bridges events, because that would have an impact on the military, which is a source of contingency. What would happen if we had widespread public service strikes and how we would deal with that? We had a matrix that showed each area of activity by Department—DWP, HMRC, and so on—plus those risks and how we would be able to deploy resources across the system if one of those risks arose. I do not believe that system exists in Government but if you were in charge of a large, private sector entity as a CEO or the chairman of the board you would expect to be getting a very succinct summary of what the risks are on a regular basis.
Q6 Chair: This blob therefore is not some malevolent force of its own agency, it is simply a description of Ministers wishing to pull levers, press buttons, and nothing happening.
Rupert McNeil: One needs to look at the system. I am actually reminded of a time at Aviva when the top 80 executives were being talked to by the new chairman, John McFarlane, and a survey had been completed by those top leaders that said they were frustrated by the organisational bureaucracy. He said, “Well, you are the top 80 people in the organisation, why are you not fixing it?”
If I could just add two things, Chairman: one is risk management. In a corporate context, you would have the line management, the departmental management, the Minister's responsible for that area, who would be responsible for risk management day to day. The second line of defence is the people who challenge that; that is the function which is currently missing. There is a need for a compliance function in the centre of Government. The propriety and ethics team in the Cabinet Office cannot be that constitutionally, but it is actually very important because otherwise you have no means of performing assurance activity on the system and making sure it is doing what it is meant to be doing.
Q7 Chair: If I am correct in summarising that very helpful detailed response, the blob is a myth and the frustration that Ministers have comes from either incorrect or faulty wiring within the system, or systems that do not exist, or them not knowing how to use it properly?
Rupert McNeil: I would add two things to that, Chairman: one is that the blob—to the extent that one thought there was a blob and was observing it—is a symptom of other issues. Such symptoms are not surprising in such a large complex system as the UK civil service and the UK public sector, which is one of the most complex, integrated and sophisticated sectors in the world. I also think that there is a question of transmission loss and the way in which different parts of Government have not quite caught up with the way it needs to operate.
To give an example: in my observation over the period I was there, one thing that improved a lot was interactions through the Cabinet Office and the Treasury, but there was a need to break down this very long established hub and spoke mechanism of the Treasury, where you have spending teams working with Departments. By the end of my term, the spending teams and the HR teams, for example, were working much more closely together on issues like workforce planning, but that should have happened sooner.
Q8 Chair: We have seen an increase in leaks to the press—apparently from civil servants—about Ministers’ conduct. To what extent does this reflect a lack of alternative outlets for complaints?
Rupert McNeil: That is a very good question. A very interesting thing happened last year, and I must declare an interest here as I am still a member of the FDA—a great union. We had an interesting experience over one particular episode of alleged bullying that did get decided in the courts. The most interesting thing about that decision was that the ministerial code is justiciable, which is as it should be—so should all codes. Some of these issues arise because, ultimately, a Minister, Ministers in a Department, are fulfilling the roles of employers in Departments. They are the top of the employing entity and there is a need to make sure that the processes in any employer are operating effectively and that people have good channels.
However, when you join the civil service, or any part of the public service, you are signing up to the Nolan Principles. You are signing up to the civil service code if you join the civil service, and there are plenty of channels that do not require you to go to the press to raise your concerns or dissatisfaction. It is always disappointing when that occurs and the danger that it creates, from a security perspective and many other perspectives, is very significant. I would always condemn it, but you should always be looking at ways in which you could find appropriate channels for people to raise their concerns.
Q9 Chair: If that route is pursued, does it almost give credence to the otherwise mythical notion of a blob?
Rupert McNeil: When you do see those things occur, one of the characteristics is they occur in different parts of the system. It is a very complex system. There is a general question, which we might come on to later, that is about line management capability in Government and line management capability means, are you getting the best out of your people? Are you supporting them? Are you developing them? Are you holding them to high performance standards? That applies to line managers with only a few people reporting to them further down the system, but it also applies to Ministers, who are line managers of a large system.
Q10 Karin Smyth: Thank you. We would like to pick up on some of the bullying issues. Essentially, how big a problem do you think bullying of civil servants by Ministers is?
Rupert McNeil: In my experience, it is an overstated issue. If you have people who are confident in their roles and able to assert their position and say, “That behaviour from the person above me is unacceptable”, you quite quickly see the type of culture that you want. In the very good report that Sue Owen did there was a distinction between what you would call bullying behaviours and what might be called abrasive behaviours. That is an important distinction, but line managers should not be demonstrating abrasive behaviours either. One of the problems that occurs is that, in many cases, you have people in senior positions, civil servants and Ministers, going into these roles who perhaps have not had the line management training and experience that they should have done that would have made them realise that that behaviour is counterproductive.
Q11 Karin Smyth: Do you think some of those allegations, then, are vexatious or politically motivated?
Rupert McNeil: I would not want to comment on any particular case, but if I look back over 30 years of seeing these things in many organisations, they look very similar and they are more due to misunderstandings, lack of confidence on both sides, and sometimes bad behaviour which needs to be addressed very rapidly. The key thing is that there should be very clear behavioural expectations on both the side of a manager and the person they are managing, and that is an absolute two way street. Both sides of that need to have the opportunity to escalate if they have a concern with it.
Q12 Karin Smyth: You commented that the FDA is a good union; they have suggested that few officials are actually confident that complaints about bullying will be dealt with fairly. Do you agree with them on that?
Rupert McNeil: I do not think the data showed that, actually. I thought that was interesting as an FDA survey and knowing who their base is. If you are a senior civil servant—and that is the basis of the FDA's membership—you should be resilient enough to deal with situations that might be perceived as being pressured or bullying. That is clear.
Q13 Karin Smyth: Just to be clear for the record, I think you have said this, but what is your view about how these matters are dealt with in the civil service compared to the private sector? You talked about the ability of some to change things themselves.
Rupert McNeil: Yes, that is a very good question. They are dealt with very well, actually.
Karin Smyth: In the civil service?
Rupert McNeil: Yes. If you look at the people survey, for example—I have not seen the most recent version, but I was tracking that very carefully when I was in post—you will see that, do people feel they can speak up? Actually, generally yes. Do they think they could raise a concern? Are there mechanisms for doing that in terms of raising grievances, and so on? One of the interesting things that has happened in the UK generally over the past 20 years is that, by putting in place mechanisms that allow for mediation between line managers and staff, the number of cases that get to tribunals, or get into formal grievance processes, has generally reduced and that is the right way to deal with those things.
Q14 Karin Smyth: You talked about the lack of risk function, lack of management function, in No. 10, the Cabinet Office and, I think you said, projects office, and said that they were not very responsive. You also said that civil servants needed to be able to talk up, if you like, to be able to challenge Ministers in a positive way but recognise that behaviour was not acceptable. We obviously all just spent a lot of time yesterday looking at the report into No. 10. In terms of the ability of the head of the civil service to challenge some of that behaviour that happened in No. 10 through that period, do you think that is a missing part of the process?
Rupert McNeil: That whole episode is exceptionally disappointing but what happened in a very small part of the civil service does not reflect the incredible hard work that was happening in many other parts of it. It is absolutely clear that in any organisation the tone is set from the very top, whether that is the political leadership or the management leadership. The fortunate thing now—I have observed this—is that at the permanent secretary level in Government you have a group of leaders who are among the best in the world. I genuinely believe that. A hugely impressive group when you look at them. When I have seen them leading their organisations, I have been very impressed and things have generally improved over that period as you have better and better leaders in those posts.
Q15 Karin Smyth: If the head of the civil service cannot do that for the people that work underneath them, to support them in their role, then that is obviously deeply problematic for their own morale, and ultimately—
Rupert McNeil: Well, yes. What is the job of a leader in any organisation? It is to set the cultural tone and direction and support, and keep morale maintained. We are seeing a very good example of differences in that type of leadership, sadly, in the east of the continent.
Q16 Mr Jones: Lord Maude, who was responsible for introducing the cross-departmental functions, expressed some frustration at the process. Did you encounter any departmental resistance in attempting to establish the HR function across Government?
Rupert McNeil: That is a great question. Actually, what Lord Maude did and put in place—we should give him enormous credit for it—was start to establish the functional model in that first period. I came in after the first five years of that exercise, and I am sure that was very hard work to turn. When I arrived, one of my colleagues told me that the civil service was transforming from a 1970s conglomerate into a more contemporary model of matrixed organisation. Was there resistance? Not a great deal, I have to say.
When you are setting up a new structure like the HR function, or any of the functions that we are putting in place, you are requiring people to break proven habits that they believe have been the best way to operate for a while. You are doing it in a context where the organisation is a sector; people are doing very different things and they do not necessarily have a sense of collegiality or community in that function. What I found was that by involving people, by bringing the HR directors and their teams together, by understanding what we could do collectively and what, frankly, was best done at the departmental level, we were able to get a huge amount done but we would not have been able to do that without what Francis Maude did at the outset.
For me the test, functionally, was watching Carillion. There is no doubt in my mind that the fact that so little damage was caused by that was because of the commercial function being set up and then, as we moved into both Brexit and Covid, the functions built on that and came into their own. I would say little resistance.
Q17 Mr Jones: Would you say that the Cabinet Office is sufficiently empowered to achieve change across Government?
Rupert McNeil: As I have said, it lacks some very fundamental tools. If it had the ability to look at risk in a meaningful way, if it had a compliance function that was meaningful—or there was one in Government—it would be more effective. Generally, programme management across the whole system, and management of the portfolio of programmes, which did improve during Brexit and Covid, is, I suspect, still not adequate
Q18 Mr Jones: You mentioned Brexit and Covid as the two major crises that you encountered during your time in post: what particular challenges did Brexit present to you, and in what ways did the functional structure of the civil service help, or hinder, the response to Brexit?
Rupert McNeil: I have thought a lot about this and there were two problems that we faced. First, if we think about the referendum date, 23 June 2016, we were in a very strange situation which was that—whether you regard it as reckless or arrogant—the Government had decided not to prepare for the possibility of a no vote. Now some of us of course were always thinking that that might happen, but we had really to go from a standing start and very quickly put structures in place. The civil service did that and new Departments were stood up within weeks, but there was still a major vacuum.
You could divide the problems up into problems of the what and problems of the how. We did not really have clarity on the what—I could see this in some of the conversations I was having—until the Lancaster House speech, so that was six months in. Up until that point, we could not really plan. If you think you are going to go down a soft Brexit, we are going to be part of a customs union, route, that will generate one set of requirements, but if you are realistically facing into a no deal, then that is going to have another set of requirements. I am not attributing any blame for that, that is just the nature of the political process, but that meant it was quite hard to plan for that.
On the how, there were large parts of the system that needed to be reconfigured. If you think about a Department like DEFRA, it was so bound into EU operations that when Brexit came through it had to entirely reinvent itself and do quite different operations. So the functions were useful for a number of reasons: they provided a framework for co-ordination and a way of identifying what skills and resources were required. If you take an example like the commercial function, which is a very successful example of that, or, I hope, the HR function, we were able to move resources around thousands of people and we were able to meet those challenges.
Q19 Mr Jones: You mentioned skills: did the process you have just outlined identify any particular skills gaps in the civil service?
Rupert McNeil: It reinforced a number. Let me list what I think we experienced. First, there were technical skill gaps. UK trade negotiating capability was completely atrophied and so that had to be replaced, which was very hard. The general set of project management, digital skills, integrating policy and operations, that requirement for hybrid policymakers and delivery leaders, was missing and we were able to build that up quite quickly. I was very pleased that when we did a campaign for deputy directors who were specifically able to do policy and project management, over 60% of the successful applicants were external which was quite revealing, to the point about porosity. So we needed to do that.
A general issue, which is always an underlying theme and I have mentioned, is line management and the capability there to reorganise. At the system level, there was a real challenge of prioritisation and how that would be done. There was something that I am now actually experiencing in my new world as chairman of a small business: there was, and, from what I am seeing, I suspect there still is, a quite dangerous skill gap regarding whether officials really understand the laws and regulations and the frameworks that they are operating in at the level of detail they need to, and science and technology, as well as where those things come together. As an example, I am deeply in the lithium-ion battery supply chain, and do I think the Environment Agency understands lithium-ion batteries? Absolutely not. Do I think that they understand the regulations and how those need to change, particularly in the international context? It is a very internationally regulated area, because it relates to waste. I am certainly not finding that. Looking at that from my old position, I am thinking, well where is the training about legal precision? Where is the training about new technologies that those, frankly, very well intentioned but very overworked people in their Department are demonstrating in how they deal with us?
Q20 Mr Jones: Civil service has, historically, always been generalist at the highest levels. To what extent do you think the civil service should become accustomed to buying in the skills from outside on an ad hoc basis, as and when they require them?
Rupert McNeil: The problem that you are stating has a number of solutions. The first is that the civil service is a large enough system to grow its own specialists, undoubtedly. To grow people who are able to cross disciplines, project management and technology, you cannot really do that. The policy operational delivery distinction is, in a sense, somewhat artificial, so how do you bring those people together? You do need to bring in people to refresh and where you have particular skill gaps; I mentioned trade, for example, where those skills did not exist or more recently, when the Ukraine situation started out, there was a big gap in sanctions capability that needed to be brought back in quickly and it was quite fragmented. That is one solution.
I do not have many regrets about things that I was not able to do while I was in post, but probably the biggest regret is the following. We did a lot of work on producing a very cost-effective proposal for civil service reservists, and this came out of watching what had happened in both EU exit and Covid where, had we been able to call people back in to supplement things, whether it was in the civil contingencies area or in specialisms, that would have been an amazing capability, and actually one in which people who have left the civil service but would still be willing to come back were very open to doing. In a way, that is probably the ideal solution, which is what the military have done for 30 years.
Q21 Ronnie Cowan: Thank you very much. I did not want to interrupt your flow earlier, but if I can just maybe take you back a little bit. You spoke about the civil service almost wargaming potential outputs: Brexit, pandemic. When it came to light that these things were happening, how much of what you had war gamed actually came to fruition?
Rupert McNeil: In the context of this focal point of no deal and thinking how that could have gone, almost everything on that list, in the past period, has come to fruition, but not necessarily at the same time. That shows that these things are somewhat predictable. Let us take the example of pandemic: that has been on corporate risk registers for decades. My grandmother had Spanish flu, her nurse died, those things happen every 100 years; it should be on your radar.
Q22 Ronnie Cowan: Did you share that information with the Government?
Rupert McNeil: We were doing it at a functional level. We were saying, “Okay, so we have a task which is to make sure that if we have that no deal situation, if we have the demands that come in from Brexit, would we be able to cope with them?” Did we report that up the line? Yes.
Q23 Ronnie Cowan: What about Covid-19?
Rupert McNeil: Covid was the same process. Actually, the main thing for us as an HR function—the way I look at any organisation—is you have your organisational purpose, your strategy to fulfil that, and then an operating model. The key is: is your operating model able to deliver the strategic objectives: can you get through the pandemic? Can you get out of the European Union? Can you deliver all the services that citizens need? The inputs to that are money, people, technology and data. Our responsibility was to make sure that the people bit of that was adequate and that we were feeding in, even if trains hit us from the side, like another pandemic which was a real prospect. Had there been a massive flu epidemic on top of Covid, what would that have done to the availability of people to serve the Government?
Q24 Ronnie Cowan: Are you telling me that Government officials, Cabinet Members, had been briefed in advance of Covid-19? That if we had such a thing, this is what we should be putting in place?
Rupert McNeil: I cannot. That was not my responsibility and I cannot comment on that.
Q25 Ronnie Cowan: But the information existed?
Rupert McNeil: The information existed in as much as, if you are doing any form of workforce planning in any organisation, you need to have a range of contingencies and you need to be aware of what you would call high impact, low probability events, and that you are ready to deal with those. That was what we were doing. It is a very good question; it arose in the context of facing into no deal. Did we have the systems in place to do that as a matter of course before Brexit and Covid? No. And that comes back to the point about risk management systems. That is what a risk management culture gives you. That is the key thing that was missing and I would not attribute any blame because I do not think that, as I said, there is any public sector system in the world as complex as ours and I do not think any public sector system has successfully implemented such a risk management framework. But we definitely should.
Q26 Ronnie Cowan: When push came to shove, what challenges did the Covid-19 pandemic present, and how important was the functional structure and the response?
Rupert McNeil: The functional structure was very important. On the commercial side, for example, it was extremely important in terms of what it did to support vaccines and other contingency planning. There were some quite serious issues of making sure that things could be resourced quickly and particularly important was moving teams of people around, or the activity around. The main challenge—and this is a very interesting one actually—from a technological perspective was the different, if I use a term from the military, concept of operations of different Departments, particularly ones that were customer facing.
If you take the example of DWP and HMRC: as I understand it, a number of years before, HMRC had taken a decision to issue laptops and tablets to all their staff. That meant that they could go remote extremely quickly. DWP's operating model is based on jobcentres and call centres. It also has a very dedicated workforce, many of whom, or a significant proportion of whom, turned out to be carers and so had to be sheltered for that reason. DWP was able to mobilise very well, but it was slower than HMRC, so that was one of the challenges.
Again, if you had a risk management framework in place, you would look at that and say, for two services that are not that different in how they are operating, are we comfortable with the difference in their operating models?
Q27 Ronnie Cowan: From an HR perspective, how well equipped was the civil service to tackle a large scale challenge like working from home?
Rupert McNeil: Compared to other organisations, it was able to move very quickly into that mode and people were able to operate very effectively in that way. Actually the whole system was. I was sitting in on Cobra Sub-Committee meetings with Ministers and officials which were operating very effectively during that time and it was pretty well set up. What I thought fascinating was even the intelligence agencies were able to move to that model.
Ronnie Cowan: Maybe they work from home more.
Rupert McNeil: Interestingly, it was a massive cultural change for them, but they were able to execute it, which shows that if they can do it, anyone can, from a security perspective.
Q28 Ronnie Cowan: Having had to respond to Brexit and Covid in quick succession, has the civil service changed as a result?
Rupert McNeil: I think it has. I say this with a lot of humility, because I have not been in it for over a year, but from what I see, hear and observe, many of the things that were in the civil service have remained. I always felt that, after Covid, there was a window of about 24 months to really bake in some of the lessons, and unfortunately as that crisis recedes and other things arise, I fear that some of the lessons that needed to be learnt are not going to be embedded.
Q29 Ronnie Cowan: Can you expand on that?
Rupert McNeil: Yes. The thing that worries me most is response time. I remember having a meeting, probably in the February before the pandemic started, and being told by the permanent secretary for DHSC and the chief medical officer—impressive individuals—that this thing was coming and that we would need to stand up resources quickly, in about two weeks. I fear next time we will not have two weeks. Throughout my time, top of my mind was: is this civil service system resilient and able to deal with the shocks that will be coming in the 21st century? We are seeing shocks, which are not just natural; they are also intentional state actor shocks. If we have two days, or two hours, how able will we be to respond and to mobilise?
Ronnie Cowan: This is within a climate of cuts within the civil service.
Rupert McNeil: With cuts, the question is, are your resources in the right place? Do you know what your resources are? Could you re-deploy them? What we saw during Covid and EU exit was that we could re-deploy them quite quickly. Are you using technology in the right way? I am doing some work at the moment with Governments in the Gulf, and it is really interesting to see how they are putting in place some of the technology and governance mechanisms which will make them much more responsive.
Q30 Ronnie Cowan: Can you share that?
Rupert McNeil: One very important part of it is looking carefully at the distinction between policy and delivery, and making sure that there is absolute clarity of mandates between Departments and what we call their arm's length bodies. Interestingly, they are looking at the same issues that we have been looking at here, like porosity, capability and performance management. Many of their public sectors are significantly larger than ours, as a proportion of their population. A general theme of my time talking to other Governments is that we were facing very similar issues, but the stakes here are very high, and through reservists, through risk management, through agile systems, I would like to have more confidence that we would be able to respond to big threats very quickly.
Q31 John Stevenson: Earlier you mentioned that the commercial function had been a success. Do you think all functions should be organised along similar lines?
Rupert McNeil: If the commercial function had been created later, I do not think it would have been created the way it was. Functions are most powerful when they are a column in a matrix of rows that are very embedded in their organisations. In practice, that has happened somewhat with the commercial function. One question that was raised quite a lot in my time was, should the HR function be centralised? Should the HR function be one entity? Should everyone be employed in the function? The answer is, you do not need to do that. The job of functions like HR, finance, commercial and technology is to support and control the work of the Department. However, it is an “and” not an “or”, because you can achieve everything you want by having common standards and processes, and by moving people around a common culture. The commercial function was of its time and quite effective.
Q32 John Stevenson: It was a success. Going back to HR, which you touched upon there, should it become a single employer in the way private sector organisations of a similar or larger size tend to have an HR department that looks after the whole organisation?
Rupert McNeil: It is a very legitimate question. The approach that has been taken, and is still being continued, is the right one, which is to say, let us look across Government and have an agreed operating model for each function and the HR operating models being put in place. Let us look at areas where we can de-duplicate and share resources. The HR function was quite advanced in doing that, because we had a centre of expertise, which Departments paid for, which was very good, and therefore that kept the standards up for us. I was accountable to the Departments for the quality of that expert service they were getting as well as exercising controls and procedures as the head of the function. As long as you can move people around, and people are on the same terms and conditions and the same standards—so you know that a business partner or a reward specialist in DWP is equivalent to one in HMRC, and you can move them around in that way—I do not think you need to have a single employer.
Q33 John Stevenson: That is an interesting point. In the past, as I understand it, Departments had different terms and conditions, etc. Have we changed that? Are we more uniform across the civil service?
Rupert McNeil: We were certainly moving towards that. There was a move in the last century to delegate many of these employment matters. That had passed its sell-by date, and what you now need, as Covid and EU exit demonstrated, is the ability to move people around for their own careers and for the system. To do that, you really do need to have common terms, conditions and processes. Of course, that exists with the senior civil service, where they have common terms and conditions in the civil service management code. You want that at the functional level as well.
Q34 John Stevenson: Following that theme, is there an argument that Departments should, to a certain extent, be relinquishing certain responsibilities and giving them in to a more centralised function?
Rupert McNeil: That is exactly what they did in the case of the HR function. As long as they felt they still had control over it, through the various governance bodies, and also accountability, I think they were very comfortable with that. That is the way you remove the need to duplicate. In a sophisticated complex organisation, sensible leaders want to share and lay off their risk.
Q35 John Stevenson: Should we be doing that with other functions as well?
Rupert McNeil:: Definitely, without doubt.
Q36 John Stevenson: Two of the largest professions, policy and operational delivery, have no function, but should they?
Rupert McNeil: Policy and operational delivery are interesting. They are families of functions. To say that you are a policy specialist or an operational delivery specialist is a bit like saying you are a banker. You want to know whether you are a retail banker or whether you are doing credit or risk. You have an example of that in the analysis function, which is also an agglomeration of professions in different functional areas. Policy covers a wide range of activities. It is unique to Government—in its current form, it is unique to the UK Government because of the way we operate, particularly in this parliamentary system—but it also has some really important capabilities, which I do not think are always recognised. It has the ability to generate informed consensus. That is what policy people are doing, and making sure that they are bringing all the facts to bear on the situation and working out how to fit those together.
The operational delivery function covers everything as diverse as people in call centres in HMRC to prison officers. That is probably rather too broad a church, although I give huge credit both to policy and operational delivery, but I will call out operational delivery particularly, for bringing together operational leaders and training and developing them. That is itself a special discipline. One of the things which I was particularly struck by was that, over the time that I was there—and it might have been a function of Brexit and Covid—you had people who would traditionally want to stay in the policy track, who saw that, in order to develop, they should go into the operational track. It was interesting to see that people wanted to be, for example, chief operating officers, where they had not wanted to do that before.
Q37 John Stevenson: Finally, if you rationalise certain functions, there is a potential for savings. As you had one centralised HR Department, were there savings there? Was there a reduction in the head count? Was it a more efficient function?
Rupert McNeil: On the plans that I left, there certainly were savings. There has been quite a large growth in numbers in the functions since 2016, and I think a significant part of that is duplication. If you take a cluster of Departments using the same enterprise reporting system, like the Cabinet Office and BEIS, as it was then, do they both need to have reward teams in their HR function, or can they be shared? They probably can be shared. There are lots of opportunities like that across the whole system.
Q38 John Stevenson: Was that actually happening in your time?
Rupert McNeil: It definitely was happening.
John Stevenson: The Departments were reducing their HR function and buying into a more centralised one?
Rupert McNeil: They had already done that before I joined through the creation of the expert services for employment and HR in the centre, for which they were paying, and people came in and out of that, moving between departmental teams. I am not close enough to it now, but my understanding, from people I have spoken to recently, is that this work is actively well under way.
Q39 John McDonnell: You mentioned the benefits of having common standards and terms and conditions for flexibility, but that is not on pay, is it? There are still about 200 individual negotiating units within the civil service.
Rupert McNeil: That is true, because each is a separate employer, although rather too much has been made of that over the years, and there could be much better co-ordination on pay. As an example, one of the largest Government sites is in Newcastle, where you have HMRC and DWP staff in buildings next to each other. If you do not have some level of co-ordination, inevitably you are going to have competition between those two organisations with people doing the same type of activity, particularly those in the operational delivery profession. More co-ordination there is helpful.
The slow-burn work on capability-based pay, which requires one to look carefully at common standards in functional areas or in specialisms, is a prerequisite of getting to that point. The intention, when I left anyway, was that this would need to move into the delegated grades as well. Co-location particularly makes it important.
Q40 John McDonnell: Would sectoral pay bargain be an advantage?
Rupert McNeil: I am not sure that is necessary. What I would like to see generally is a closer relationship between the civil service’s trade unions and Ministers and their management, because that is the way in which some very tricky issues, which will need to be faced into over the next two decades, will be best addressed. That is something I certainly said when I left: start having the conversations now about the inevitable workforce reductions that will be necessary because of AI; start having conversations now about how you will change the pension deal for civil servants, because it will not be acceptable to the UK public in 10 years' time.
Q41 Lloyd Russell-Moyle: There have been longstanding complaints about the level of churn in the civil service. Previous Ministers have pointed out that sometimes they are there longer than the civil servants. The finger has been pointed at that to explain some of the delays in projects. Are those complaints legitimate, or are they just a good whipping horse for other problems?
Rupert McNeil: The data shows they are founded. There are several dimensions to it. The first is that the system, certainly on the policy side, was not incentivising people to stay in their jobs. Why do people stay in their jobs? They should stay in their jobs because they understand that they need to acquire experience. Therefore, the acquisition of experience should be a criterion when you are applying for a new job. They move because there is pay arbitrage, and they can get a higher salary elsewhere. Just as I said to Mr McDonnell’s point, that is something that should also be managed.
Q42 Lloyd Russell-Moyle: Do you think that reducing the pay differential between Departments and pay progression scales is one of the areas that could help solve churn?
Rupert McNeil: I do, undoubtedly. An example of that would be where we had a real issue around competition between Departments for quite a small but critical set of IT skills. The way we addressed that was to say that we were going to have a common remuneration set for that. We cannot change HMRC or DWP salary scales, but we can top them up to the same level with a special allowance. The way we encouraged the payment for that with the Treasury—and we have a mechanism for approving this—was, as you got rid of contract labour, which is one of the things you use to respond to churn, you could reinvest the savings from that into these allowances. The business cases for that started to increase, and it was very effective as a way of dealing with it.
I mentioned line management earlier, and there is some great work being done on line management standards by the Cabinet Office and Fiona Ryland, my successor, and Carol Bernard, who is the SRO for this. Whether we are talking about managerial behaviour, as we talked about earlier, or planning or getting people to want to stay in their current role, line management capability is extremely important. You can invest huge amounts in your HR function, but unless you do that and you have good line management capability, it is going to be into the wind. The fact that this is being done, as well as the work on the HR function, is very important.
Q43 Lloyd Russell-Moyle: Minimum assignments have been introduced, where there is an expectation that someone will stay a minimum period of time, but it is not legally or contractually binding. They are just statements of intent. Have these been useful, or are they a useful management tool when you are saying to someone, “You have not yet fulfilled your time”?
Rupert McNeil: That is an interesting question. You could make them more binding. You could say, “You have signed up for a project, and therefore you will stay and see it till the end and see out consequences.” You could do that, but—
Lloyd Russell-Moyle: You could make it consequential on other public sector hiring as well. You could say, we look down on it if you are applying for a job before your minimum time is up.
Rupert McNeil: You could. That is particularly useful way of doing things when you are managing careers within a functional profession. The military do this very effectively. You say, “We are helping manage your career. Therefore, you are not quite ready to move yet. That is our advice.” Of course, you have to move to a role, but with fair and open competition, you cannot stop anyone applying for a role; it would be wrong to do that. I do think that the best thing that could happen with minimum assignment length is that people understand that, culturally, they need to stick around to acquire the skills. You cannot acquire the skills in these sort of specialist areas in a period of, frankly, less than two to three years. You should not be moving in that period.
Q44 Lloyd Russell-Moyle: Is there a problem with the general mindset of the civil service in that the idea is, you are a generalist who dips into lots of different things and never really stays in one Department for the building of a career, at senior level?
Rupert McNeil: The generalist mindset or model is a very dangerous one. It suggests that you can get away with breadth and not depth, when in fact you need both, and you build up both over your career. I mentioned the permanent secretary cadre that is in place at the moment, and any civil servant starting their career should look at that cadre and see the diversity of people there and where they have come up from. People have spent time in the Treasury in operational roles, running inquiries, dealing with crises, and that is the type of skill base that you want to build up.
Q45 Tom Randall: The Government initially committed to reducing the size of the civil service by 91,000. Is that a target that you had any involvement in drawing up, and do you know how that figure was arrived at?
Rupert McNeil: Yes, and I think it was a sensible number. It comes out of arithmetic and it raises some much bigger issues about the size of the civil service. I strongly believe the reference point should be the size of the civil service in 2016. It grew massively over the EU exit and the Covid period. We did a very collaborative piece of work with the Treasury and Departments, where we broke down where that had arisen. You would find that it arose from duplication of functional activity, which should be eliminated through the work on a target operating model. It arose from lack of de-prioritisation of things which were not necessary. One of the questions was, what is the extent to which there is new sovereign activity required from leaving the European Union, and how much of the residual activity is just legacy of Brexit activity that was no longer required? It also meant looking at technology and seeing where there are opportunities to automate or improve processes.
At that point, the Treasury introduced headcount aspirations in its spending letters for the first time. I do not know whether that has lasted, but it was a sensible workforce planning move. The trick is to do this over a sensible length of time and to look at it very strategically. Where is the opportunity in the system? As I have said, there are opportunities to de-duplicate and there are certainly opportunities to automate.
Let us take an example: parliamentary correspondence is an area which is ripe for automation. I am not sure how many people you would eliminate in that way, but it has been done quite successfully in a couple of Departments. The automation of the letters has not been done yet, but it brings on the interesting question of generative artificial intelligence. I have written my first documents and reports with the help of that in the past two months, and there is no reason to think that will not be transformative of every area.
Tom Randall: I have often wondered if letters are written by machines already.
Karin Smyth: Indeed.
Rupert McNeil: Quite possibly. There are opportunities like that, which could significantly affect the policy and operational delivery function. Then there is a question about how big the whole system should be. There are some general rules of large organisations, which are pretty well established, which say that no organisation needs to have more than nine layers. If the top layer is the top of the executive—Prime Minister, Cabinet Secretary—and the bottom two layers increasingly in modern organisations are being done by bots and AI, then you have a much flatter structure. The question is, how many people should there be? The number that I reached was, by the mid to late 2030s, the civil service should be about 150,000 people, if you take all those things into account. Now it is closer to half a million. That requires all sorts of investment in technology and in the way in which you are servicing the public, and also an acceptance that maybe you do not need as many Departments and layers.
Taking the example of Departments, to be a bit radical, HMRC and DWP essentially do very similar activities. Should they not be one entity? There are real opportunities like that. I had a conversation with Jeremy Heywood within the first few days of joining, and I asked him, what is the interest in merging things? He is a very wise man, but his view was, “There will always need to be so many Jaguars.” However, as we move into dealing with the challenges the 21st century offers, we do need to look at that type of question.
Q46 Tom Randall: One phrase that jumped out when you were speaking was, “lack of de-prioritisation.” Do you recall an example of that off the top of your head?
Rupert McNeil: That is a good question. I am trying to think of a good example. I would need to come back on that, to really reflect on it, but the place where it became particularly acute was during the EU exit period, where you are looking at the portfolio of things, and you are saying, “Actually, does that need to be done? Could that thing not just wait and be done sequentially?”
Q47 Tom Randall: In your view, could the volume and the quality of the civil service be improved in spite of the reductions that were envisaged?
Rupert McNeil: Definitely. Any modern organisation is going through a journey from a pyramid to a diamond to a kite shape, which means basic activities should be automated, and then you have a high-skill, high-capability team further up. That does not necessarily mean the people at the very top of the organisation but rather those who are the managerial layer.
Q48 Tom Randall: How does that fit with the Government saying that cuts would not be made to frontline civil servants? What does that mean in terms of the landscape that you are painting there? You are talking about a wholesale reform across the whole system with AI and so forth. That would affect everybody, presumably.
Rupert McNeil: I find it an interesting statement, because every form of service that we experience—let us take banking as an example—has improved, generally. People like branches, but actually all you are getting in branch staff is someone using the app for you. People are interested in efficient service and speed, and that is going to come from automation, particularly in frontline roles.
However, frontline roles also change. I observed two signature things from automation, and it was a huge privilege to see this with the variety of jobs in the system: in universal credit, where you could see the way in which the job coach in the jobcentre was able to give more quality human-on-human time to the people they were helping, rather than spending time on admin; and in a prison, where there were automated terminals for ordering food and visits and things like that which meant that prison officers were doing what they should be doing, that is, spending time rehabilitating prisoners and spending time with them. There is a rather hackneyed phrase that says, “The point about automation is it takes the robot out the human”, and I think that is a good aspiration.
Q49 Lloyd Russell-Moyle: You mentioned Treasury and DWP mergers, and I am very much in favour of having one Department there. The response is always that you need a certain number of people around your Cabinet table to make sure that all your people are represented. Is there a problem with having two Secretaries of State, effectively, in one Department, which would be the consequence if you did not want to reduce the numbers of political appointees?
Rupert McNeil: It is a great question. I go back to basic human organisational principles from the work of people like Robin Dunbar and others. What are effective human numbers? I do not think that a committee of more than 12 people is effective. That is just what the science says.
Q50 Lloyd Russell-Moyle: Is it your view that there should be a reduction equally in numbers of Secretaries of State with maybe more Ministers underneath them that can cover the different bits?
Rupert McNeil: Completely. Fewer generalists. It is that type of radical thinking that is probably required.
Lloyd Russell-Moyle: It is very sensible, but I doubt it will ever be implemented, unfortunately.
Chair: Committee room 14 always reminds us with a picture of Gladstone's Cabinet, which was much smaller.
Rupert McNeil: It can be done.
Chair: John McDonnell for a final set of questions.
John McDonnell: Can we come on to porosity?
Rupert McNeil: Yes, please.
Q51 John McDonnell: Successive Governments have been committed to bringing external hires into the civil service. You are an external hire. What are the positive and negative implications of that?
Rupert McNeil: If you take the reason that the post was created: a need was identified. They were looking for someone who would come in and take the HR function to the next level. That is true of the generation of functional leaders that I was part of, and I hope we were at least partially successful. It is really interesting seeing who thrives and who does not when they come in from outside. You need to go into the system—I have moved between sectors as well and between different forms of employer—and I came in and quite quickly realised that Government were much closer to the professional services firms that I had worked in than it was to corporate organisations. Therefore, things were going to need to be done by influence and by really demonstrating value rather than by direction.
If you come into Government and you are used to being very directive as a leader, you will be profoundly frustrated. You will also be frustrated if you do not accept that the public sector is very different from the private sector in terms of the level of accountability and the fact that you are working for the public and have powers in respect to the public that are held very tightly to account. People come in and they do not realise that Government are actually quite efficient in how they work.
I remember saying, “Five-hour meetings in banks, half-hour meetings in Government.” You do not have the ability to buy yourself out of your mistakes, which you have in the private sector to a much greater extent. You have to be able to accept all of those things. The way in which it would be best to generate porosity is for people to be making that move multiple times in their careers at different points.
Q52 John McDonnell: Going back to the question, though, are there negative effects?
Rupert McNeil: There are negative effects if people come in and they are not able to respect the cultural and public service requirements, or they are not sensitive to them; that is probably a better phrase. You saw that, sadly, in the exceptional strangeness of the Partygate situation. Do I think that that would have happened in a No. 10 full of career civil servants? Absolutely not.
Q53 John McDonnell: Some elements, over successive Governments, have suggested that bringing people in externally is part of a process of changing the culture itself. Is that outcome realistic, or is it desirable?
Rupert McNeil: It is interesting. I think it is actually misconceived. The culture needs to change from within. You bring in people to contribute to that, and they become part of the organisation and part of that cultural change. In a healthy organisation, you will have people coming in and out all the time. That is the best way to look at it. If you look at some of the things that happened in that Maudeian period when new functions were established, a few people were brought in to particular functions which did not exist before. They were very unsuccessful, and it was because they perhaps thought they had a brief to be disruptive, and that will not work in the system.
Q54 John McDonnell: You mentioned Partygate; I do not want to dwell on that, but is there a danger that some of those valuable aspects of the existing civil service culture, such as the priority that is given to propriety and impartiality, are undermined in any way?
Rupert McNeil: The question of whether they understand about propriety is absolutely critical that when you are selecting anybody for any civil service role. Really, it is all in Nolan. Do you understand what that actually means? You can test that. You can take references on people over that. One of the jobs of recruitment in any system is to avoid the problem of a false-positive hire, where you bring in people who are very disruptive and do not fit with the culture. Also, you want to make sure people understand what that culture is. Even more orientation on that would be helpful.
Q55 John McDonnell: Coming back to pay, when the pay differentials are so wide between the civil service and the private sector in a number of jobs and professional roles, is that a real issue in attracting the right people?
Rupert McNeil: As I understand from the data, it is definitely not an issue regionally, where civil servants are well paid in the regions relative to others. It is an issue with people who are in London at middle and senior levels, generally, but the answer to that is get them out of London and let them have their careers outside London.
You do not join Government mid-career—I did so, to the latter end of my mid-career, and I am still working in another area—for the money. You come in because you want to contribute to public service, but also because the work is fascinating, and you learn a lot. I had the opportunity to qualify as an accountant while I was there. Would I have had that opportunity in equivalent roles in the private sector? No, I might have been looked at more narrowly. Development is one of the main things.
We felt quite strongly that we need to advertise the fact that the Government context is so unique and complex that, if you want to broaden your senior managers, it is really good for them have experience in the public sector, because they will be able to acquire skills they would never be able to acquire in their existing organisations.
Q56 John McDonnell: Because of the range of challenges?
Rupert McNeil: Absolutely.
Q57 John McDonnell: We are discussing how we can get people out of London. The problem is they want to be in the proximity of where power is, and that is usually where Ministers are located. Getting Ministers to locate outside of London is an issue in itself.
I have one final question. We, as well as the Committee on Standards in Public Life, have recommended that the business appointment rules be extended to prohibit employment in sectors in which the official has had policy or regulatory responsibility, rather than just from the firms with which they may have had a relationship. Does this risk reduce the attractiveness of the civil service to external hires? Is it necessary anyway?
Rupert McNeil: I just wish they would implement the Boardman recommendations, because ACOBA is not fit for purpose, with great respect to it; nor are the business appointment rules. It is more important to have a much more focused structure, as Boardman recommended, that is much more linked to people's employment. I have a debate going on at the moment about what lobbying is and what it is not. It is a ridiculous theological debate, but if they put in place Boardman, that would do it.
Chair: Mr McNeil, thank you very much for your time this morning. You have given very useful information to the Committee. You mentioned there were some other things you might follow up on; if you wish to do so in writing, we would be grateful to receive them. For the moment, thank you very much for your time.