Liaison Committee Inquiry: Scrutiny of Strategic Thinking in Government

1. The Cabinet Office is providing evidence on behalf of His Majesty’s Government (HMG) as a whole. We have provided responses to the Committee’s key lines of questioning, providing examples from across HMG.

Introduction

2. The events of recent years - the COVID-19 pandemic, Russia’s illegal invasion of Ukraine, and the ensuing economic shocks - have crystallised the importance of the Government’s ability to think strategically. Now more than ever it is key to our continued national prosperity that we position ourselves in a way that enables work to respond to strategic challenges across an increasingly varied risk landscape, and to capitalise on opportunities as they present themselves.

3. This has to be underpinned by strong collaborative working across departments to deliver a whole of Government response. Recent events have demonstrated our ability to do that: whether that work is driven out of the centre, as has been the case for recent crisis responses, or by departments themselves embedding cross-departmental strategic thinking into their work.

4. The risks we face are not always immediate, with some posing longer term strategic challenges for the UK - and the world more broadly. These include climate change, balancing the UK’s security and prosperity, and the rise of emerging technologies. If we get ahead of these issues, they present opportunities to transform our world - and the services Government provides for citizens - to improve efficiency, sustainability and fairness for future generations.

5. As such, strategic thinking must be at the heart of everything we do - an integral component of how Government operates.

6. We must draw on the work of others - inside Government and in comparator countries - to adopt lessons learned, and continue to challenge ourselves in this space. This will help to stand us in the best position to deal with emerging strategic challenges and opportunities.

7. We welcome the work of the inquiry and look forward to engaging with it over coming months. To assist, we have set out some best practice examples which showcase different ways the centre and departments tackle strategic challenges to respond to both immediate and long-term challenges. We have tailored these to match the case studies you have cited in the Terms of Reference where possible.
   

Inquiry Questions

How well Government identifies strategic opportunities as well as strategic risks and threats;

8. There are various strategy and foresight units within the Government who help identify strategic opportunities, risks, and threats. Some of these are based within specific departments but there are also units that operate at a cross-Governmental level.

9. In response to this question we have drawn on the work of:
1. the Resilience Directorate (RD) in the Cabinet Office to demonstrate how a cross-Government team operates; and
2. the Foreign, Commonwealth and Development Office (FCDO) to demonstrate how a department identifies and manages opportunities and risks.

Case Study - Resilience Directorate

10. Relevant examples of the RD’s work include:

1. The Resilience Framework[1] - this sets out the Government’s plan to strengthen the systems that underpin our response to a range of civil contingency risks. It runs from now until 2030. By bringing together all levels of Government, critical national infrastructure operators, the private sector, and the public through improved data and communications, the UK will be better placed to prepare for, respond to, and recover from a range of risks and hazards - such as extreme weather, terrorism and pandemics.

2. National Risk Register (NRR)[2] - this is the external version of the National Security Risk Assessment (NSRA), assessing risks over 2-5 years. The NRR contains a list of 89 potential acute risks that could affect the country’s safety, security, and critical systems - ranging from pandemics to cyber-attacks, and detailing their likelihood and potential impact. Risks are owned by departments or other Government organisations, who are responsible for assessing the impact and likelihood of their risks.

3. Chronic risks - while the NRR focuses on acute risks, which are those discrete risks that may require an emergency response, the UK also faces chronic risks, which are those more continuous challenges that may erode our national security, economy, society or way of life. Examples of chronic risks include climate change, artificial intelligence, and antimicrobial resistance. In line with the approach to the 2022 NSRA, chronic risks are not included in the 2023 National Risk Register but the Government is establishing a new process for identifying and assessing chronic risks to facilitate planning across HMG.

Case Study - Foreign, Commonwealth and Development Office

11. Relevant examples of the work of the Foreign, Commonwealth and Development Office (FCDO) include:

1. Engagement - The FCDO hold regular discussions with strategy counterparts in other foreign Ministries to help identify strategic opportunities as well as risks. This year to date, they have held discussions with counterparts in the G7, Brazil, NATO, EEAS, Switzerland, Netherlands, India, France and the United States. Topics of discussion have included the conflict in Ukraine and new tools of statecraft such as economic security, critical minerals and supply chains.

2. Foresight - the FCDO Strategy Directorate, working with the FCDO’s Chief Scientist, Chief Economist and Research Analysts, regularly conducts cross-cutting, interdisciplinary analyses of trends and disruptions over the short, medium and long term to inform both the FCDO and wider Government’s strategic decision making. This work has included: assessing the potential global implications of Russia’s invasion of Ukraine; considering those countries around the world who are increasingly ‘hedging’ in an era of growing geostrategic competition; and proposing a UK approach to engaging with those countries.

3. Risk management - the FCDO embeds risk management within their internal control processes reflecting best practice set out in The Orange Book[3] on risk management. These include: (i) the Management Board reviewing risks monthly from both UK Directorates and overseas posts. This involves reviews of FCDO’s overall risk profile and opportunities for more in-depth consideration of certain risks; and (ii) the FCDO Executive Committee ensuring risk is integrated into strategic decision-making, leading rapid reviews of significant risks, and considering risk as part of resource allocation. Each of the FCDO’s principal risks (those most significant to FCDO’s objectives) are then owned by a Director and have a Director General as a sponsor. While principal risks, policies and improvement plans are considered regularly by the Audit Risk and Assurance Committee (ARAC) and FCDO’s Internal Audit.

How effectively Government uses internal and external challenge; how feedback loops are used to ensure that lessons from delivery are fully considered when developing future strategic plans;

12. We recognise the role challenge plays in ensuring Government continuously improves, drawing on lessons learned and deploying talent across departments to ensure we are equipped to tackle the greatest challenges facing the UK.

Case Study - net zero

13. Achieving net zero while maintaining energy security is one of the key strategic challenges our Government faces. We have taken a systems-approach to net zero due to the interconnected nature between the economic, domestic, and international policy areas. This approach has enabled departments to deliver a credible, viable, and adaptive plan, while also managing the risks in transition. The transition itself provides opportunities for our energy security, jobs, and exports.

14. There is robust governance and scrutiny of net zero within Government, led by the Department for Energy Security and Net Zero (DESNZ) with support from the Cabinet Office. These include the Cabinet Committee on Energy, Climate and Net Zero[4], and DESNZ-led official meetings to track delivery of net zero programmes. These internal systems ensure that lessons are captured and considered when developing future plans; and strategic opportunities are harnessed.

15. There are also several external mechanisms that regularly scrutinise the Government’s performance on net zero, including the Public Accounts Committee, the National Audit Office, and – under the Climate Change Act – the statutory role of the Climate Change Committee (CCC). For example, the CCC writes an annual report on Government progress towards its climate targets, which Government is legally bound to respond to.

Case Study - Integrated Review

16. An example in the foreign policy space is the Integrated Review 2021 (IR2021)[5] process led by the National Security Secretariat (NSS). During IR2021 the review team:
1. convened a cross-Government Integrated Review Evidence Working Group to ensure existing and developing evidence products from across HMG informed strategy development;
2. commissioned new evidence products from across HMG to address evidence gaps and ensure multiple perspectives were considered;
3. invited external experts to challenge HMG thinking and offer differing perspectives throughout the process, including through roundtables and a general call for evidence; and
4. held a ‘challenge week’ towards the end of the process, constituting: challenge sessions with cross-Government Directors General; a red teaming exercise run by the intelligence agencies; feedback from key embassies; and feedback from the FCDO Research and Evidence Division.

17. The Integrated Review 2023 (IR2023) process was shorter - a refresh rather than a full review. Challenge activities included roundtables with external experts, a red teaming exercise, engagement with key embassies and continuous feedback from cross-Government officials.

18. NSS ran lessons learned exercises for both IR2021 and IR2023 to inform future national security strategy reviews, including the use of evidence and challenge. In the future this will become part of a continuous process - an adaptive ‘strategic cycle’ - involving: greater use of foresight and expert advice; exercising, testing, red teaming; and external challenge panels.

Case Study - Foreign, Commonwealth and Development Office

19. Challenge is integrated across the FCDO, with the Chief Scientific Advisor, seconded experts and other research teams routinely providing analysis and internal challenge across a huge range of topics.

20. Some of the FCDO’s challenge vehicles include:
1. Strategy Director’s Expert Group (EG) - a monthly meeting convened by the FCDO’s Strategy Director, and in partnership with the relevant subject-matter experts within FCDO, to get insight and challenge from respected foreign policy and development thinkers. 
2. The Private Sector Forum (PSF) - a meeting held every 6 weeks, providing insights and challenge to the Strategy Directorate from the UK Private Sector. 
3. Wilton Park - used as a world-class FCDO capability to shape and deliver our international policy and strategy through frank international conversations and discreet diplomacy, including through constructive challenge and external insights, from diverse partners/interlocutors.

Case study - Project Solarium

21. The Ministry of Defence (MOD) and the FCDO have worked jointly to use the ‘Project Solarium’[6] technique to inform updates of sensitive cross-Government strategies. It was identified that previous strategies needed to adapt to a significantly changed context, so they proposed a strategy development approach based on Eisenhower’s ‘Project Solarium’ model – which develops multiple competing theories of success. For each process, they developed multiple initial theories of success, and ran cross-Government workshops including all relevant departments (including many not usually heard voices) to strengthen the theories, explore benefits and risks, and give detail about what it would look like in practice.

22. The approaches were then tested and scored by an expert panel to identify the best approach. This approach has several benefits – it focuses the process on solving the core problem, it allows for multiple approaches to be developed, and it is an effective way to include input from multiple sources and the scoring system focuses effort on what success looks like. This method led to a clearer articulation of the relevant strategies, more voices being heard, and a better assessment of the risks and benefits.

How No.10 and the Cabinet Office should best lead on these issues across Government;

23. The Cabinet Office leads the Government’s response to cross-departmental challenges. The department is both the command centre during immediate crises as well as the long-term steward and direction-setter for Government.

24. The Cabinet Office supports the Prime Minister and Cabinet to deliver the Government's priorities through:
1. convening and collaborating across Government to ensure the Prime Minister, Cabinet and its committees receive the best advice from the Civil Service by working alongside and commissioning experts within departments;
2. driving forward the priorities of the Prime Minister and Cabinet through convening task force meetings with officials across Government and holding departments accountable for key actions; and
3. helping the Government think creatively about cross-cutting long-term policy problems, through developing strategies and convening groups across Government to discuss these issues.

Case Study - National Security Secretariat - Strategic Cycle

25. Having led the cross-Government processes to produce IR2021[7] and IR2023, NSS Strategy Unit is now establishing a ‘strategic cycle’ across departments. The cycle consists of a regular pattern of processes and an agreed set of structures and behaviours that guide strategy development and delivery across the national security community. It combines strengthened departmental ownership and accountability for real-world outcomes with oversight from regular National Security Council (NSC) stocktakes, supported by improved use of relevant data and analysis.

26. The stocktakes enable the NSC to monitor implementation of the strategy set out in the IR, evaluate its real-world impact, and determine how it should be adapted in a fast-evolving context. This enables No.10 and the Cabinet Office to provide clear oversight and direction so that the Government can navigate the complexity of the strategic environment more effectively.

Case Study - Cabinet Secretary Foresight Group

27. Earlier this year, the Cabinet Secretary established the Cabinet Secretary Foresight Group to consider medium-to-long term economic and domestic issues facing the UK. Under this group, Permanent Secretaries meet with the Cabinet Secretary and the Government Chief Scientific Advisor every two to three months to discuss the strategic policy implications of priority issues at a cross-Government level.

What additional machinery of Government, knowledge and skills are necessary to support strategic thinking and effective strategy and delivery, both within individual departments, and across two or more departments, and how strategy and strategic thinking can be sustained by building consensus between the main parties;

28. Ensuring Government has the right mix of capabilities will enable it to tackle the ever-changing nature of risks and threats the UK faces. This means identifying and nurturing talent, building expertise, deploying skills in the right places at the right time, and being open to adapting approaches when the context around us changes.

Case Study - Joint Data and Analysis Centre

29. Last year (2022), the Cabinet Office increased its analytical capacity by establishing a permanent analytical function in the form of the Joint Data and Analysis Centre (JDAC), which now sits in the Economic and Domestic Secretariat. This move has enabled policy teams to work alongside analysts, ensuring strategic decisions are informed and underpinned by robust analysis (including foresight analysis) that draws on data from industry, Government, academia and open source. JDAC analysts partner with EDS policy professionals to deliver on the Government’s priorities.

Case Study - Joint Intelligence Organisation

30. The Joint Intelligence Organisation (JIO) is a long-established and well understood part of the Government's analytical capability - providing authoritative, all-source assessment to the Prime Minister, National Security Council and senior policy makers. These assessments are used to inform Government strategy and policy making. Although it has maintained its traditional focus on national security and foreign policy, JIO is expanding the scope of its work to consider a broader range of strategic issues, including emerging technology, climate change, and health security. It also promotes Common Analytical Standards across the Government's assessment community and leads projects to test new analytical methodologies.

Case Study - Foreign, Commonwealth and Development Office

31. The FCDO have established four priority policy and strategy capabilities, which are at the heart of putting the ‘Chilcot Lessons’ into practice. These capability offers, which are also being rolled out to other parts of Government, are:
1. Essentials of Policy and Strategy: unpacking concepts, definitions and practical examples of different stages of the policy and strategy cycle.
2. Futures and Foresight: incorporating multiple possible outcomes, probabilities, and risk into policy and strategy. FCDO Strategy, Chief Scientific Adviser and Chief Economist have partnered with GO-Science, other parts of Government and School of International Futures to roll out this capability building activity.
3. Analytical Skills in Policy and Strategy: applying and using data, evidence, research and analysis for evidence-based policy and strategy.
4. Challenge and Red Teaming: nurturing constructive challenge, diversity of thought and mind-set through systematic critical-thinking tools.

Case Study - Policy Profession

32. The Policy Profession, led by Head of Profession Tamara Finkelstein is taking forward work to improve strategy skills and capability in Government.

33. Under this work stream strategy will be explicitly brought into the Policy Profession.  There will be both a sub-profession and a skills development strand dedicated to developing and improving strategy skills. The key deliverables are:
1. a working Government definition of strategy and strategic work to create a common vocabulary across Government;
2. a strategy toolkit, developed in cooperation with experts across HMG, and bringing this together as a practical guide;
3. skills and curriculum development, building on the definition and toolkit, the next step is to define strategy skills, map out existing skills and training offers, and to develop new curricula; and
4. community building, consolidating existing strategy networks across Government, with a view to developing a cross-Government community of strategists.

34. As well as this programme of skills development work, and under the sponsorship of Tamara Finkelstein and the Cabinet Secretary, a small programme of work is being undertaken to explore what models would be effective at developing and setting strategic priorities, and driving forward delivery of them. This work will include assessment of:
1. the feasibility of developing a single strategic framework for Government;
2. consideration of whether a central unit would be an effective mechanism for setting overarching strategy and creating demand, including scope, responsibilities, location and governance;
3. what other structures, including in departments would/could be necessary;
4. what we can learn from international models;
5. the kinds of analyses that would be useful to support this kind of cross-Government strategy-setting, and how best to commission them. This should include consideration of novel techniques and those not currently used in foresight, for example ethnography;
6. how to make best use of the tools and capabilities Government has, for example foresight and horizon scanning; and
7. external challenge and engagement to bring in diverse skills and expertise.

Case Study - Foresight Tools

35. Lastly, foresight tools provide the Government with a structured approach to monitoring and making sense of future change, exploring underlying dynamics and uncertainties, describing what the future may be like and understanding possible risks and opportunities. The Government Office for Science provides support to civil servants to develop skills and use futures and foresight in policy. Examples of Government Office for Science’s work include GO-Science Trend Deck[8], the Futures Toolkit[9], and Systems Thinking Publication[10]. 

September, 2023