John Manzoni, chief executive, UK Civil Service: Exclusive Interview
A businessman brought into a top job in government, John Manzoni tells Matt Ross about the huge task of transformation facing the UK civil service
For centuries, the UK civil service has grown its own leaders. Most of those who reach the top have spent 30-plus years tramping departmental corridors – learning skills, making contacts, and internalising Whitehall’s unique culture. But now the prime minister (PM) is conducting a fascinating experiment: what happens if he instead hands civil service-wide organisational reform and development to a leading businessman?
Civil service chief executive John Manzoni, fresh from a 30-year career in the energy industry, is a year into the process of answering that question. After an eight-month stint leading the Cabinet Office’s Major Projects Authority (MPA) – a crash course in navigating Whitehall’s intricacies, sensitivities and fallibilities – he became chief executive in late 2014, charged with deputising on corporate issues for cabinet secretary and head of the civil service Sir Jeremy Heywood. Manzoni has also been made permanent secretary of the Cabinet Office, giving him control of central functions such as the MPA and Government Digital Service.
In hiring a corporate executive, the prime minister hoped to inject new skills and a very different style into the top of the civil service. He certainly got that: Manzoni answers questions directly, for a start. The chief executive has just witnessed the UK’s three-yearly Comprehensive Spending Review process – what did he think? “Mindboggling!” exclaims Manzoni. “I understand why it’s done the way it is, but it could be done more collaboratively, no question.”
The way it’s done is for HM Treasury (HMT) to negotiate with individual departments, which argue their case for funding; critics note that this system of ‘divide and rule’ empowers HMT, but misses opportunities to foster collaboration across Whitehall. “It is an interestingly bilateral process between the Treasury and independent departments; and that is, I think, just the way that it’s always been done,” comments Manzoni. “The question is: in an age of increasing restraint, how do you raise up the issues and then make the choices across the system? That is still a very unfamiliar process in our system, and something I think we ought to aspire to”.
Shift your gaze
Manzoni has, in part, been brought in to ask such awkward questions. His mission, he says, is to “bring a lens of execution or delivery into the civil service”. Rather than always “looking up” towards ministers and policymakers, he argues, officials should spend more time “looking forwards and down” – focusing on making policies workable and projects deliverable. And he’s clear that these delivery challenges involve the fundamental rewiring of government itself: “We have a substantial amount of transformation of government to do, and that is something we’re just not, frankly, equipped to do,” he says. “We haven’t done it for a long time; we don’t have the right skills”.
What levers does the new chief executive have in this mammoth task? “Umm… charm, charisma!” he jokes, before emphasising the importance of “functional access”: using “strands of professionalism which go from the centre and cut through distributed organisations”.
So the Cabinet Office is strengthening key civil service professions, increasing their powers over departmental operations and their influence among departmental staff. This, explains Manzoni, improves the civil service’s ability to train and deploy technical experts throughout government; the professions’ ability to set and police universal quality standards; and the centre’s ability to catalyse better collaboration across Whitehall. All three will be needed if departments are to realise the eye-watering savings set out in the spending review, which average close to a quarter of administration budgets – and come after five years of cuts in which all the easy efficiencies have long since been delivered.
Blunt on the blunt object
Over those five years, Cabinet Office minister Francis Maude introduced many reforms – creating, for example, the central capabilities and powers underpinning Manzoni’s “functional access” strategy – but the new chief executive says a new approach is now needed. Maude “had a group of people outside the system, and they basically went in with his authority and stopped stuff,” he explains. “You know: ‘That’s wrong; you can’t do that.’ Boom! That was incredibly necessary because it was a jolt to the system.” Given the power to block projects, Maude’s new central functions squeezed spending and broke bad habits in key fields such as digital and commercial operations. “So it stopped the bad stuff,” Manzoni continues, “but it was not designed to enable good stuff.”
That “good stuff” involves deep-rooted transformations within departments, reforming internal processes to realise the potential of digital technologies. “There are two aspects of digital transformation,” explains Manzoni. “One is making services better to the customer on the outside – and we did some of that in the last Parliament. But we did not get to the heart of the machine: we didn’t transform the business processes”.
Simply squeezing costs can probably cut spending by 30-35%, Manzoni explains, but reaching the 45% cut anticipated during 2010-’20 will require something much more ambitious. “The last ten or 15 percent is really hard,” he says: without transformational change in the very biggest departments, “we can’t meet the spending round.”
The shape of these reforms will be set out in the ‘single departmental plans’ due to be published in the spring: they are currently, Manzoni acknowledges, in “variously finished form”. As departments move on to delivering their plans, he notes, the Cabinet Office will have to balance its supportive and critical roles: “The judgement – which is the essence of good leadership and a centre that works well – is: when do I come in and support, and when do I come in and challenge?” But these reforms must, in essence, be run by the departments: the Cabinet Office will not be as interventionalist during the next five years as it was in the last five.
Take the digital agenda. The Government Digital Service has just won £450m to build common platforms for use across government, but Manzoni says it won’t be taking a leading role out in the departments. “In the end any transformation can only be done by the leadership of the operation you’re transforming, because they’re the only people who understand the level of risk that they’re prepared to take,” he says, adding that the GDS’s budget is dwarfed by the sums being spent on digital reforms by the departments themselves.
Looser but tighter
To support reforms from the centre, Manzoni says, the Cabinet Office and functional leaders “need to be very wise, very senior, very experienced, very powerful – and to never use their power.” Building this capability presents a recruitment challenge for him; and indeed for the departments, whose transformations will require “commercial people in their hundreds, probably; technology people maybe in their thousands, because we require more technologies inside rather than outsourcing it to providers.”
To attract these senior specialists – and to prise top experts away from their departmental employers, enabling the centre to deploy them where they’re most needed – Manzoni is working on plans to place some staff in dedicated teams run by the functions, rather than the departments. He is, for example, “making a proposal for the senior commercial people in the civil service, that they are actually a self-contained unit that can be deployed out into the system”. Meanwhile, some departments are being granted the freedom to break the longstanding 1% pay rise cap for staff whose jobs will change dramatically under reform plans (see news article).
Such freedoms represent a more sophisticated approach to the civil service-wide spending controls introduced by Francis Maude. “I personally believe that we need to vest more flexibility in accountable leadership to meet an envelope, as opposed to specifying exactly how things are done,” says Manzoni. But he’s obviously sensitive to concerns at the centre that easing controls could undermine the strategy that has produced billions in savings over recent years: “It’s a journey, and we’ve started the journey, let’s put it that way. But we have to be very thoughtful about how we do it, because it’s easy to lose control of that.”
On other fronts, meanwhile, those spending controls are growing ever stronger. Most dramatically, the spending review announced that all central government properties are to be taken over by a central unit: the twin aims, Manzoni explains, are to improve asset management across the estate by running it as a single portfolio, and to “create the right financial incentive for departments” – charging them a full market rent to minimise the government’s footprint in high-value central London (see news).
The creation of the “biggest property company in the country”, with a mandate to hike the rents paid by departments occupying some of the country’s most desirable office space, creates new opportunities for the property industry – both in providing advice and management services, and in buying up released properties. So the selection of Liz Peace – who for 13 years was CEO of the British Property Federation, the voice of the commercial property industry – as the new PropCo’s chair raises a potential conflict of interest. “She’s a non-executive chair, to be fair,” responds Manzoni. “And we want property experts in that organisation. I’m completely confident we can be careful and that it’ll be run to all the right standards and values; I don’t think there’s going to be any issues with that.”
Matching work and wonga
These are interesting times for the civil service. Francis Maude’s central spending controls are being finessed in some quarters, but dramatically extended in others – the blunt object is being reforged as a stiletto. And the civil service reform agenda is largely passing to departments, with the Cabinet Office entrusting its momentum to budgetary settlements that leave organisations little choice but reform. Asked what legacy he’d like to leave, Manzoni says he wants “the civil service to be world-renowned for execution and delivery as well as for policy; I want the leadership of the civil service to feel more confident throughout; and I want the civil service to have got its mojo back – because I think we’ve been a little bit back-footed in the last Parliament.”
His biggest task, though, will be to help departments squeeze their operations into the spending review settlements – a task whose outlines we’ll see in the single departmental plans next year. It will, it is clear, be a task of Herculean proportions. Will the civil service really be able to match its ambitions to its resources? “Do I think we’re going to end up doing too much? The answer is yes,” he replies. “We’ve got to get increasingly clear about how we prioritise, and be ruthless – because ministers will say: ‘Could you just do…’ And I’m already finding that I’m saying: ‘Nice idea, can’t do it’.”
“Our system as a whole is going to have to get used to being a bit more careful, because it’s going to get tight,” he concludes. “No question, it’s going to get tight.”