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October 12, 2011 10:19 pm
Congratulations, Jeremy Heywood. You’ve got Britain’s best public sector job. All the fun of being prime minister – but without losing your private life. You’re about to get enough policy papers to make Westminster miss its recycling target. But I’m writing because I’m worried that none of them will be about your most important task as cabinet secretary: getting Britain a strategy.
Britain is worrying about its short-term deficit. A much bigger problem is that we do not have a strategy for what happens afterwards. Harvard professor Michael Porter once said that the essence of strategy was choosing what not to do. No one could accuse Britain of that. We’re committed to ambitious goals on pretty much everything: ending child poverty, spending 0.7 per cent of gross domestic product on aid, cutting greenhouse gases by 80 per cent, and so on. These goals were set by Labour. None has been abandoned by the government, despite the cuts.
This is not a strategy: it is an eat-all-you-can buffet. The consequence? We’ll continue to have a long-term structural deficit, even after eliminating the short-term one. It would cost an extra 6 per cent of GDP to fund the goals that have been legislated for – so even on the most conservative assumptions, we’ve got a long-term deficit.
The good news is that the British state is good at fixing problems. Think of Margaret Thatcher after the 1978-79 winter of discontent, Tony Blair after years of winter crises in the health service or chancellor George Osborne now. Whatever one thinks of the pace of the cuts, it’s hard to avoid the contrast with the fiscal deadlock in the US or monetary hesitancy in the eurozone. Britain’s state governs. It’s one of Britain’s real competitive advantages.
Unfortunately we tend to use this reactively rather than proactively. When I look back at my 12 years in Whitehall, there’s something missing. There were white papers, performance indicators, ministerial statements, press releases, policy submissions, cabinet committees. But where was the discussion about what they were for? Yes, there were strategy units – but there was never an overall strategy.
Some say that’s what manifestos are for. But manifestos can only ever be declarations of intent. Others counter that this is what prime ministers are for – David Cameron has his Big Society, Tony Blair had his public service reform. But these address how government should be run, not what it should achieve. As class politics has declined, we have replaced it with method politics. Governments have become fuzzy about goals and fixed about methods.
But that is the wrong way round. Sometimes a top-down central machine is efficient – for example, to pay benefits or to get the newly unemployed back to work. In other cases, you need freedom rather than standardisation – for example, to turn around failing schools. But that decision – whether to be top-down or bottom-up – should be pragmatic.
Whitehall’s secret is that it never has a discussion about what the big choices should be. Are we going to be a larger Sweden, with world class public services but no military aspirations? Or a more successful Ireland, with low taxes but targeted welfare? Or a smaller Brazil, creative, unequal but flexible and prosperous? We avoid vision and don’t attempt strategy.
The closest Whitehall comes to this discussion is during the triennial spending reviews. But these only ever result in a reallocation of modest savings to the departments that are flavour of the year. Of course, such decisions are influenced by a view of where the country should go. But we only move there by increments. Instead of meeting two goals well, we pursue five badly. That’s how you end up with aircraft carriers without aircraft.
Your job, Jeremy, should explicitly include responsibility for making sure the government has such a strategy. It’s not just a question of fiscal consolidation. It’s also about competitive adaptation. From leaving the empire to entering the European Union, we have always ended up doing that once we have been driven into the ditch – it would be good to use Britain’s competitive advantage proactively for once.
How? Britain’s governments should set long-term goals. Its Office for Budget Responsibility should evaluate whether they are affordable. Opposition parties should get access to civil servants to develop manifestos. There should be a fundamental strategy review before each spending review. That’s my feedback, for what it’s worth.
I know that’s not very “Yes, Cabinet Secretary”. But isn’t it why, Jeremy, you joined the civil service – to shape the “what”, not just be relegated to the “how”?
The writer is a a senior adviser at BCG and a former cabinet minister
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