Sir John Bourn: Whitehall urgently needs to reform its culture

Thursday May 29 2008

An auditor must be much more than a policeman. As comptroller and auditor-general I could examine the accounts of central government and investigate the economy, efficiency and effectiveness of policy implementation. My experience has taught me that fundamental improvements are urgently needed.

The whole culture of the senior civil service needs to be changed. The top jobs should go to those who have successfully managed programmes and projects - in health, social welfare and taxation as well as construction and defence. At the moment they are given to those best at helping their ministers get through the political week. Changing this would produce a new breed of civil servants who would concentrate on securing successful public services. It would alter ambition and behaviour right down the line.

Projects and programmes should be designed to produce good results. Too many schemes today are like the structures children build with toy bricks - unbalanced, constantly wobbling, complicated to shore up and only too likely to come tumbling down - as in the arrangements for child support, and in the recent ill thought-out schemes for capital gains tax and the taxation of non-domiciled residents, which had to be amended even before they were put into operation.

Another example is the defence equipment programme. There are more projects in it than there will ever be the money to buy. Delays, reduced specifications, rising unit costs and cuts in numbers of items purchased are the likely result. The range of projects should be more strictly controlled at the outset.

The machinery of government is in constant turmoil - new departments and authorities being set up and older ones shut down or amalgamated. Such churning costs millions of pounds and is largely irrelevant to the programmes and projects that have to be implemented. It should be stopped.

We should recognise that regional structures add an unnecessary layer of bureaucracy. In the National Health Service, the functions of strategic health authorities could be devolved to hospital trusts and primary care trusts; and responsibility for economic development could rest with local authorities working in partnership with local businesses, rather than regional development agencies, which have never had the resources to fulfil their remits.

Risks must be assessed and managed. Public servants are popularly supposed to be risk-averse. The opposite is the case. They take the most colossal risks but without knowing the risks that they are running. For example, tax credits were launched in the knowledge that many recipients would be overpaid but with no clear plan for how to get the money back from some of the poorest people in the community: £6bn has been overpaid since 2003 and only £2bn has been recovered.

Effective financial management systems are needed. Nearly everyone joining central government from the private sector says how amazed they are that nobody knows exactly what anything costs. Costings are too often moves in the game; figures to argue for or against a predetermined position or course of action instead of the bedrock on which options and alternatives can be reliably considered.

Experience should not be dissipated through too rapid job redeployments. Recruits from the private sector often deplore the absence of collective memories in government. Time and again, the rapid movement of officials between widely differing jobs - often every two or three years - means that the wheel has to be reinvented repeatedly. For example, experience gained in private finance initiative schemes has seldom been maintained and transferred between departments. Officials too often move on instead of specialising and developing skills.

Whitehall stands at a decisive moment. Sir Peter Gershon's programme for "gateway" reviews - aimed at spotting problems with big projects early; the departmental capability reviews set up by Sir Gus O'Donnell, cabinet secretary; and programmes of recruitment from outside the public services all highlight the gaps in present performance and prospects.

Yet Whitehall still holds back its wholehearted commitment to change. The measures advocated in this article could start to be introduced now and would pave the way to fundamental improvements in the provision of services and the achievement of value for money.

Sir John retired recently as comptroller and auditor-general, head of the National Audit Office, the public spending watchdog