George Osborne and Francis Maude promise rewards to money-saving civil servants

The Telegraph and Daily Mail report that the next Conservative government will "rewrite civil service contracts to include a new legally-binding "fiduciary responsibility to taxpayers"."  Civil servants who are "judged to have failed to spend public money prudently will be disciplined or dismissed."

ConservativeHome welcomes this incentive-based approach to cost-reduction.  It is hard for an information-starved opposition party to identify comprehensive savings.  Empowering frontline public sector staff to deliver appropriate economies complements the party's belief in (1) professionalising the public services and (2) in decentralisation.

Shadow Chancellor George Osborne and the shadow cabinet minister in charge of the party's preparations for government, Francis Maude, "will also publish a dossier entitled "It's your money" detailing examples of wasteful spending - including the billions spent on the NHS super computer, ID cards, refurbishing the Ministry of Defence and Government consultants."

Tim Montgomerie

Comments

[rugfish]

Since the civil service is responsible to the crown rather than to a parliament. I think they could also consider changing it's accountability to a cross party privy committee, particularly when otherwise it leaves opportunity for whitewash, cover-up and leaks. It would possibly be better if it were accountable to a privy council rather than government to instill confidence that we have open and accountable government which could reflect the new fiduciary requirements too.

Official secrets could still be classified as such by the government, but normal day to day running ( and spending ), would be open and would lead to less waste simply because decisions could be immediately held subject to scrutiny and made public.

[James Maskell]

The devils in the detail here and the Conservatives are no different to Labour in this regard. Ill wait for more on this before comment.

[Eveleigh]

This is a very good move. For too long (maybe forever) one of the best ways for a public servant to develop their career has been for them to play up the importance of 'their' area of responsibility, putting forward a compelling case for extra funding, more staff, a higher profile. As the size of the department grows they rise (usually) by sitting near the top of the inflating bubble. There have been no disincentives to this process. Communication departments generally repay close scrutiny - especially when one considers that the government is the biggest purchaser of advertising. I wonder who will scrutinise the effectiveness of the "change4life" campaign - you know - the one that apparently makes people think of jelly babies...

We also need to accept that we need junior ministers prepared to work themselves out of jobs and shrink their own 'terribly important' departments... ;-)

[Eveleigh Moore-Dutton]

This is a very good move. For too long (maybe forever) one of the best ways for a public servant to develop their career has been for them to play up the importance of 'their' area of responsibility, putting forward a compelling case for extra funding, more staff, a higher profile. As the size of the department grows they rise (usually) by sitting near the top of the inflating bubble. There have been no disincentives to this process. Communication departments generally repay close scrutiny - especially when one considers that the government is the biggest purchaser of advertising. I wonder who will scrutinise the effectiveness of the "change4life" campaign - you know - the one that apparently makes people think of jelly babies...

We also need to accept that we need junior ministers prepared to work themselves out of jobs and shrink their own 'terribly important' departments... ;-)
The frailties of human nature are not confined to civil servants.

[Letters From A Tory]

The latest unemployment figures out today make me sick. The number of people in public sector employment was up 14,000 from June to September 2008 while the
number of people in private sector employment fell 128,000 in the same period - and I can imagine that the last quarter of 2008 was even worse. It's a national disgrace and I'm delighted to see the Conservatives all over this.

I blogged today about how Yasmin Alibhai Brown is distorting unemployment figures, which is almost as annoying as Labour's attitude.

[David_at_Home]

“Civil servants who are "judged to have failed to spend public money prudently will be disciplined or dismissed."”

This sounds good but the Civil Service does not really work like this since all significant decisions on major items expenditure are decided by a hierarchy of committees and approvals, often with a minister making the final decision. Furthermore, civil servants will say, with some justification, that much of the money that is wasted can be explained by incoherent, contradictory and unstable political policies.

To be effective, the next government will require a good team of competent ministers and well thought out “joined up” policies based on rational analysis rather than a need to make “nice” sound bites. Thus far, the Cameroons do not fill me with much confidence.

[ricardo's ghost]

i cannot believe govt employees are not contractually obliged to spend OUR money as efficiently and frugally as possible and that includes politicians and civil servants. To reward them for performing a task that they should be doing as a matter of routine is quite staggering.

I appreciate the system of rewards to change behaviour but there is another method. Sack them if they don't do what they are told by politicians who are elected to carry ensure OUR money isn't wasted!

Digby Jones has said on record that he believes the public sector could operate with around 50% less staff than they employ at the moment considering the levels of waste and duplication.

I suspect Cameron won;t address this issue because quite simply he hasn't got the balls to take on the unions and those invested interests within the state sector.

Osbourne hasn't any balls full stop as he's regarded as a joke anyway but we desperately need a tory govt who can open up govt, give money back to those who earn it, destroy Brown's public sector constituency and remove the ID system.

cameron needs to be bold and courageous in all aspects of govt activity but i suspect, unlike thatcher, he's as much part of the establishment as is brown.

a predict a very sad decade ahead

[ricardo's ghost]

moreover why isn't there someone in cabinet who represents the taxpayers interests?

every interest group is protected except the one group that pays for ALL govt spending ie the taxpayer

why why why?

[Edward Huxley]

Giving extra pay to people for doing the job they are supposed to do sounds just like the Labour idea of rewarding children for attending school.

[David_at_Home]

"Giving extra pay to people for doing the job they are supposed to do sounds just like the Labour idea of rewarding children for attending school."

Quite. This is a crazy policy which, in its guise as the "bonus culture", has brought our banks to their knees. Most people are motivated to do a good job, within the limits of their ability. Those that are not should be dismissed.

Motivation is important and those who cannot motivate should not be in senior positions, least of all ministers. Reward should be by praise, salary and, where appropriate, promotion.

[Lindsay Jenkins]

David_at_Home is spot on.

Only the other day Lord Digby-Jones remarked that "Frankly the job could be done with half as many." He also said that the civil service was "honest, stuffed full of decent people who work hard".

What the civil service needs - in places - is streamlining. (But not nearly so much as local government and all those quangos).

The PR function, so disgracefully corrupted by Labour, should be restored.

What troubles me above all is that every time Osborne and Co pronounce their lack of business experience - or any experience - screams at us.

[Lindsay Jenkins]

David_at_Home is spot on.

Only the other day Lord Digby-Jones remarked that "Frankly the job could be done with half as many." He also said that the civil service was "honest, stuffed full of decent people who work hard".

What the civil service needs - in places - is streamlining. (But not nearly so much as local government and all those quangos).

The PR function so disgracefully corrupted by Labour should be restored.

What troubles me above all is that every time Osborne and Co pronounce their lack of business experience - or any experience - screams at us.

[David_at_Home]

"What troubles me above all is that every time Osborne and Co pronounce their lack of business experience - or any experience - screams at us."

Lindsay Jenkins,

I quite agree. I don't have a good feeling about the lack of experience (of doing anything outside politics) of many on the Tory front bench. Cameron is still concentrating on winning the election (which he will win anyway) rather than planning for comes next.

[Rog the Tory]

As a councillor I know what needs streamlining and oh how much those councillors in the public sector (Conservatives are in essence "banned" from holding cosy public sector jobs like Age Concern, CAB etc.) spend their time on full pay playing at politics. In fact unless you are public sector or retired being a councillor and working full time doesn't mix anymore. However councils need butchers bakers and candlestick makers to bring reality into the public sector. By streamlining local govt (as suggested by Lindsay Jenkins) you'll throw out the baby with the bathwater. I can tell you that here (in Halifax) we are totally altering the local authority and most of us doing it are full time employees in the private sector. Please don't sack us until we've secured it and Shameron is in no. 10 and letting us down.

[Lindsay Jenkins]

I agree, David_at_Home.

The debate comes back again to the 'politics as a career' issue - PPCs should have good, esetablished track records outside politics.

Meanwhile the electorate is turned off - dangerous.

[Lindsay Jenkins]

Oh dear Rog the Tory - I didn't mean sack you!

I'm lucky to be in Hammersmith and Fulham where very large numbers of council employees have gone - and (sadly for them) they are not missed. As a result everything works better and our council tax has gone down for the third year running.

[Notory]

What a load of tosh. When I joined the National Assistance Board I had to sign a document acknowledging that it was tax payers money I was using and that I had a duty to safeguard it as well. As the years went by you had no chance of that because politicians threw money at all and sundry to make themselves look good. The result being the sink estates you see today because you removed the reason to work.Whenever you were asked how could things be impproved the answer was make it simpler. That was just filed away in a bin.I remember the idea of empowerment was introduced, that didn't last long , the top realised they would lose control. The only realistic way to save money is to have less Government and simpler and fewer rules so that the population understands. So the first thing to do is re-encact the NAB and dust off the old A code, Save on Civil servants and billions of tax payers money. Get out of the EU, and stop immigration. Thats one Department sorted out now look at the rest. Tinkering will be a utter waste of time.

[The Bishop swine]

The civil service should not have to be rewarded (given extra) for doing their Job's. They should of course face the prospect of being forced out if they fail to preform it adequately. Its not like the Civil service is badly paid now is it? Of course I would support a system of one year contracts for the most senior roles, with those failing having to reapply for employment.We really do need to end the gravy train culture that dominates Whitehall.
George is of course only sucking up to his pals in the civil service. I believe we need a far reaching Conservative revolution were those who do a good job are rewarded with better job or a wage rise not a bung or bonus. How can we award Bonus's from the tax payers purse? it makes no sense. This recession is a direct result of a greedy bonus culture, lets have the guts to end it.

[Mark Fulford]

I'm not at all sure about this policy announcement. Does it fit Tim's weekend advice to the party that, in “landslide territory”, there is no need to rush out poorly thought-through policy announcements?

First, I can’t see how this is going to work in practice. You can’t empower people to make decisions without also empowering them to make mistakes. Is there going to be a disciplinary panel that reviews paperclip purchases?

Second, we’re missing the target. Civil servants are not the enemy. Compared to the average, I think they are disproportionately decent people who take their work very seriously. The culture of waste and bloating comes from the political masters, not the workers.

However, despite my reservations, there is a culture of impunity in public service and this does need to be tackled. For example, planning officers should have good reasons for their decisions. When those decisions are overturned, with costs awarded against the council, it’s clear that the officers were more than wrong, they were badly wrong. Unless there are personal consequences, these officers become demigods, able to call upon state machinery to win their battles.

[rugfish]

Civil Servants are paid to do a job for the taxpayer and part of that job is to be careful with their money. If they cannot fulfill the job then they shouldn't be there. "Bonuses" for doing the job should not be used to try to improve spending, when all it takes is a hand to turn the money tap off and a big red marker to cancel orders in place.

The country cannot afford "bonuses".

I want Maggie's sensible home economy back !!

[resident leftie]

This is a bloody stupid idea. Civil servants are professionals whose job it is to implement government policy. Bonuses (as we have seen in the bank sector) are not a good idea. To incentivise a particular behaviour can lead to very strange and unexpected consequences. If ministers want cuts, they should make them.

[rugfish]

Crisis claims Iceland government

http://news.bbc.co.uk/1/hi/world/europe/7851415.stm

Iceland's coalition government has collapsed amid an escalating economic crisis.

[Martin Wright]

'Civil servants who are "judged to have failed to spend public money prudently will be disciplined or dismissed." '

As David at Home has already explained, this is not how the Civil Service works. It is alarming that potential Ministers are talking in such an ill-informed and confrontational way. It is not possible for a civil servant to spend any money independent of agreed departmental budgets and policies. And as those budgets and policies are ultimately agreed by the department's minister, it is hard to see how any civil servant could ever breach his/her fiduciary duty

All public expenditure has to come from approved budgets within departments. Obviously at a minor level this is delegated and done according to well established civil service rules e.g travel and subsistence (no John Lewis list for civil servants!)

At the medium level things like running costs are all budgeted and apporoved ultimately the Permanent Secretary will have his Minister's approval.

And when it comes to big ticket items whether capital (aircraft carriers/new NHS computers) or spending (e.g increased benefits)nothing can be spent without ministerial approval and a "vote" from parliament.

Traditionally Whitehall works as a constant battle between the parsimonious Treasury and the main spending departments, where the Minister and Permanent Secretary fight for the largest slice of cake they can get. Once ministers enter office they tend to "go native" and want to expand their own empires.

Now if the party were to suggest that it would reward civil servants for cutting as much waste as possible that would make sense. And the same principles should apply to the incoming Ministers too. David Cameron should reward those who can cut costs while at the same time improving actual delivery.

[Ashton]

re: ricardo's ghost

the taxpayer is already represented in cabinet. by every single member in fact, since they are all elected by taxpayers.

And whilst I agree with this noble, innovative and economically sound policy, it does sound like a Yes, Miniater proposal that is doomed to failure by Whitehall resistance/cheating. I can see mandarins artifically bloating their initial schemes and then cutting away the fat a year later so they can claim the reward

[Ross.warren]

"the taxpayer is already represented in cabinet. by every single member in fact, since they are all elected by taxpayers."

Well that is true, but it's not quite what it seems. The MP's are selected by their party's not by every single taxpayer.

[David_at_Home]

"The MP's are selected by their party's not by every single taxpayer."

Everyone has the opportunity to vote for their MP at least once in five years and, with a bit of effort, anyone can stand for parliament themselves.

We should be far more selective in whom we vote for, ensuring they have both adequate intellect and a track record of achievement in the world outside politics.

Democracy comes with a price and using our votes wisely should be part of the deal; if we were more discriminating the political parties would soon get the message.

[anon]

This policy is disjointed at best and incoherent at worst. Martin Wright and David_at_home have captured the main problems.

The issue here is applying clear contractual principles between Ministers and civil servants - i.e. a clear articulation and delegation of responsibility for the outputs of an intended policy/ programme, specific performance-based funding attached to those outputs, and an allocation of relevant risks where these are best managed. Once these principles are embedded in a prorgamme area, the assumption would be that Ministers would then lay off... and the civil servants would then be clearly held accountable for implementation.

The report clearly condradicts itself - on one hand says that civil servants will be held to full account for achieving vfm, and then asks them to become less risk averse. What happens when these two objectives collide? (as they frequently will). What do you think the average civil servant will do when faced with this dilemma in a practical context?

[anon]

This policy is disjointed at best and incoherent at worst. Martin Wright and David_at_home have captured the main problems.

The issue here is applying clear contractual principles between Ministers and civil servants - i.e. a clear articulation and delegation of responsibility for the outputs of an intended policy/ programme, specific performance-based funding attached to those outputs, and an allocation of relevant risks where these are best managed. Once these principles are embedded in a prorgamme area, the assumption would be that Ministers would then lay off... and the civil servants would then be clearly held accountable for implementation.

The report clearly condradicts itself - on one hand says that civil servants will be held to full account for achieving vfm, and then asks them to become less risk averse. What happens when these two objectives collide? (as they frequently will). What do you think the average civil servant will do when faced with this dilemma in a practical context?

[Patsy Sergeant]

I can remember when Heath committed himself to 'slimming down' the Civil Service in 1971, because I was in the Civil Service at that time. I agreed to be made redundant, and was given the princely sum of £2000!, which was quite a reasonable sum of money in those days.

In fact I wouldn't be where I am today if I hadn't taken advantage of that offer, and changed direction altogether! It was definitely worth it!

[Julian Melford]

Francis, you'll have to come clean that a lot of money is wasted in having to police and enforce EU regulations that have little use.

The Climate Change Act is another bubble of hype about to burst. When climate change is turning out to be global cooling, needlessly forcing hair shirt behaviour on our economy will prove to be a poisoned chalice. Don't drink from it, Dave...

[Deborah]

I'm afraid I agree with Ross - MP's are selected by their party, not by the taxpayer. Most voters know little about the candidate - they vote for a party, naively assuming that the party has selected the best person for the job. If only that were so.

"with a bit of effort, anyone can stand for parliament themselves."
In this two party system the odds are well and truly stacked against an independent candidate.

If we want to get the best MPs, we need open primaries.

[Charles Miller]

The comment at 10.10 is correct. The process should be seen as end to end - there is no clear boundary between Ministers and officials when it comes to spending and efficiency decisions/implementation, so should the otherwise sensible proposal not apply to Ministers as well, or is it to be one rule for them amd none for us?

[Mark Williams]

This sounds like hot air, because value for money *should be* (but manifestly is not) one of the objectives of civil servants, but all major spending commitments are drawn up by committee and approved by politicians.

Cost savings should be driven by ministers and their advisoers.

[chris southern]

Any more bright ideas like this one guys and you will lose this vote for starters.

Strip everything back to the bare minimum and you will get rid of most of the waste.
Then dump the quangos and goverment funded charities (common purpose for starters) you can always ask people for advice without paying them, the people who realy want to help will give a little of their time for free if they can spare it, parasites always want money.

End the policies not allowing funds to be transfered and if they aren't spent then that amount is lost, that wastes a ridiculous amount of tax payers money due to the unspent budgets being used to redecorate or replace computers that are new!

A simple and stripped down public sector is effecient, but only when common sense is allowed to operate.

[Bill]

Why would Civil Servants be interested in saving money when they are rewarded so handsomely for the much easier task of wasting it?