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    EU exit: tough decisions and prioritisation needed

  • Posted on November 30, 2017 by

    Man faced with many projects to choose from“In light of the UK’s plans to leave the EU, the government should now prioritise the interests of the nation above those of Whitehall departments” said Sir Amyas Morse, Comptroller and Auditor General, speaking at the 23 November central government conference for members of the Chartered Institute of Public Finance and Accountancy (CIPFA). Public Finance Magazine subsequently published an article by Sir Amyas, Deal with Brexit first, and has kindly allowed us to re-publish it here.

    Running the government is more technical and complex than it used to be. In terms of driving efficiencies, the easier things have been done. To deliver further efficiencies or, indeed, just to move forward, we are now talking about very large, complex change processes.

    There are numerous, complex projects designed to transform ways of working within the public sector. It is easy to get lost in those complex projects if you don’t have very good management information in place and professional skills for interpreting that information. That is why talent management and building professionalism are so important and why we have put such emphasis on it in recent reports.

    There has been progress in talent management and building professionalism, thanks to the efforts of John Manzoni, the civil service’s chief executive and permanent secretary to the Cabinet Office. His aim is to give standing to professional judgment and I support that.

    Alongside this, the public sector environment is still characterised by fiscal targets and spending restraint. It is delivering large-scale, complex transformation and change programmes while reducing in size and resources. Through our value for money reports over the years looking at capacity and capability in the civil service, we have built up a picture that shows the civil service is often being asked to do more than resource plans allow for.

    Projects often draw on the same skills pool and many contain an optimism bias that they will be able to meet their skill needs at an appropriate cost in the current funding climate.

    Against this backcloth, civil servants are implementing the decision to leave the European Union (EU). Last July, in a speech at the Institute for Government (IfG), I said that the decision to leave would cause a major upheaval for the public sector, and described it as an “abnormal challenge”. I urged the government to plan to manage its priorities across all its entities. [see IfG speech video and transcript]

    Unlike other projects where the usual answer is for timetables to slip and reductions in scope, leaving the EU could have an immovable, hard deadline.

    Implementation of the programme to leave the EU requires clear focus and priority. We now need to act in the interests of the nation, not those of individual departments.

    Tough decisions and effective prioritisation are needed. This is the government’s role – it is not the role of individual departments. This means reviewing its existing commitments and assessing how many of them can still be managed, and what resources are really required for the priority tasks at hand.

    The government needs to be nimble in reallocating its people and resources across departments to wherever they are most needed, and getting people with the right skills.

    It also needs to act purposefully in managing risk and take a view about where as a whole it is willing to accept risk, and where to act quickly and decisively to lessen it.

    I am by no means alone in Whitehall in recognising this challenge. Let me cite Jon Thompson, HM Revenue & Customs (HMRC) Permanent Secretary, who said at a Public Accounts Committee evidence session in early November that it was not “credible” for HMRC to continue with its transformation programme of 250 projects given the demands placed on it by the decision to leave the EU.

    He – and others doing similar exercises – are right to prioritise.
    Amyas Morse

    About the author: Amyas Morse, Comptroller and Auditor General. Amyas has been head of the NAO since 2009, before which he was a global partner with PricewaterhouseCoopers and Commercial Director at the Ministry of Defence. He has served on a range of cross-government Boards and Groups.




    3 responses to “EU exit: tough decisions and prioritisation needed”

    1. @JagPatel3 says:

      Politicians are forever lecturing the Private Sector on the importance of coming-up with innovations that will transform the UK economy; a Global Britain ready for the post-Brexit era.

      Yet, there is pitifully little from the governing elite on transformative innovations, as they relate to the domain directly under their control namely, the business of government and the extended public sector enterprise – which is certain to be tested to the fullest extent, by problems that will emerge from trying to untangle the UK economy from the EU.

      Central to this challenge is the issue of people – specifically, talent management and building professionalism within the Civil Service, and how to go about prioritising its deployment in the run-up to 29 March 2019, which as C&AG rightly points out, is an immovable, hard deadline.

      Although the Ministry of Defence is not one of the front-line departments of state affected by Brexit, the problems it is facing are no less important – especially as it relates to the ongoing assault on its budget and acquisition of military equipment.

      It is instructive to look at the recent history of defence procurement in the UK – so that people can understand and appreciate the reasons why the Ministry of Defence is in such a mess right now.

      Such was the intense focus of attention and diversion of resources onto examining alternative management models for MoD’s arms-length defence procurement organisation at Abbey Wood, Bristol during the 2010-2015 Parliament, that the urgent need for the existing, flawed procurement process to be replaced by a new acquisition policy which deals with the usual delays and cost overruns, was completely ignored by the then coalition Government.

      The main reason why the Government went down the GOCO route (the so-called Government-Owned, Contractor-Operated governance model) is that it was deemed not to have the necessary skills in-house, to undertake its procurement duties with confidence, and was accordingly persuaded to outsource this role to the Private Sector instead. However, the inability of the Government to find and install a Private Sector operator to run MoD Abbey Wood on a for-profit basis has left it in the worst possible situation – the status quo – which guarantees ongoing failure on defence equipment procurement programmes.

      Indeed, the quality of management skills in the Public Sector is so poor that there is not a single person in the pay of the State who is equipped with the necessary blend of leadership/communication skills, specialist knowledge, cross-discipline expertise or prior experience to, not only correctly identify the deep-seated problems associated with the existing procurement process but also come up with simple, workable, easy-to-apply solutions which will tackle these shortcomings – yet, it is the responsibility of Government to shape, and then implement acquisition policy which will deliver equipment to the Armed Forces that is fit for purpose, adequately sustained in-service and constitutes value for money through-life.

      This lack of leadership talent and management capability within MoD would explain why there is a massive void in defence procurement policy.

      In response to this deficiency, the governing elite has concluded that there is an urgent need to inject Private Sector skills and practices into the business of Government. However, the policy of replacing just the top man at MoD Abbey Wood with someone from a Private Sector background, in the expectation that the commercial acumen he brings will “rub off” onto people around him has not worked at all, nor has it delivered dramatic improvements in efficiency hoped for, and demanded by the political elite.

      What is urgently needed is injection of tried-and-tested Private Sector skills not only at the top, but right down every level of the hierarchy at MoD Abbey Wood – but especially at the coal-face level, where it matters most, in numbers large enough to make a tangible difference to performance outcomes.

      In addition, this top man (or woman) should be given the power to choose lower-tier post holders “in his own image” (as well as releasing the existing lot) so that he can assemble a delivery-orientated management team which is focused solely on results.

    2. David Walker says:

      Given the confusion, it would be odd if all permanent secretaries considered every decision by their ministers to spend public money to be entirely legitimate. If not, some of them will surely be copying the C&AG into the letters of direction they must ask for. If, however, they don’t, are we to assume that every spending decision they take is legitimate or are they just afraid to rock the boat?

    3. Mild not Bitter says:

      I appreciate this opportunity to respond to ‘the big guys’. Elections are ‘democratic’ but far too easily ignored. So am a little heartened by Sir Amyas’ paper.

      As an ex working class octogenarian I have suffered through GB’s slide out of the largest EMPIRE ever known into its present QUAGMIRE.

      Only?? way out is to reduce the mad rush for personal money/power at the expense of the very people who have to work hard to even standstill.Despite the politicians’ rhetoric (working for EVERYone.Ha!)their situation continues to deteriorate. Each generation slipping, inexorably, further and further behind.I feel for them, born onto a treadmill hardly of their own making; confined by ‘austerity’ to a near inhuman existence by the (in-)actions of those who steal YES, STEAL the wealth of this “Self-beleaguered” country of mine.Surely ‘they’- (Motto ‘I have done nothing wrong’.) know all this. I suspect they even revel in it.They certainly protect and seek to enlarge it.

      Time for another Reform Act or three? Time to save the nation? Jeremy??
      At least set an example by taking on Mr Murdoch and respond to the still outstanding Leveson Report.

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