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Most observers emphasize the subordination of local authorities to the national government. Parliament and the Prime Minister have the authority to recast local government, to effect change in management arrangements, to proscribe functions, to prescribe approaches, and to conduct audits. During the 1980s a host of legislation and innovations in service distribution mechanisms reduced the shrinking domain of local authorities. The reach of Treasury – or previously the Civil Service Department – in determining specific subnational institutional arrangements is not addressed in the available sources. Nevertheless, these arrangements are increasingly unified, though still partly decentralized.

In the UK there is no comprehensive statute under which the structure of the civil service and its conditions of employment are legally defined. Rather, continuing adherence to the principle that one department should act as a supervisory and coordinating agency, with powers to exercise general management functions, has been reinforced through reform.

Since the creation of a modern civil service subsequent to the Northcote-Trevelyan Report of 1854, numerous reforms have attempted to rationalize institutional arrangements. The Haldane reforms of 1918 encouraged the recruitment of generalists capable of working in any of the new post-war ministries and departments, and formalized the classification of civil servants. The Fulton Report of 1968 voiced concerns about the service’s lack of competence and managerial ability and disregard for efficiency. Concerned that higher civil servants as well as middle managers required additional training in resource management, economics, and accounting, the government revised the criteria for promotion, eradicated long-standing divisions between administrators, professionals and specialists, and established a Civil Service Department and Civil Service College.

These institutional reforms reflected the doctrine of the period on the role of the executive, the composition and function of the civil service, and best practices in management. Most recently, the managerial ethos embraced by Margaret Thatcher brought large changes in institutional arrangements. The Scrutiny exercises executed by Rayner’s Efficiency Unit identified problems with civil service management. In short, the Thatcher government was eager to see high- and mid-level civil servants focus attention on the management of resources, guided by the principles of value-for-money auditing.

These reforms came to constitute the foundations of the new public management (NPM). As indicated below, the civil service experienced the NPM through changes in approach to recruitment, remuneration, and other employment conditions, as well as through performance management. Both the Financial Management Initiative of 1982 and the Next Steps Programme of 1987 again reoriented these institutional arrangements. Thus far, Labor has given few signs that it wants to roll back these reforms.

The national government can exercise control over subnational governments (local authorities) because no constitution, laws, or conventions prevents this. Indeed, the Thatcher government refused to sign the Council of Europe’s European Charter of Local Self-Government, claiming that local government is a domestic matter. Local authorities do not have a power of general competence, and the national government determines which functions they do perform.

Thatcher’s efforts to use privatization as the foundation for a transformation of local government did not constitute the state’s withdrawal from local domain. Instead, reforms increased both centralization and executive dominance. The Local Government (Housing, Education, Finance) Acts in the 1980s reinforced the center’s right to control and limit local government. This legislation forced local authorities to sell housing stock and land, deregulate local transport, and generally rely on contractors to deliver services. The 1988 Local Government Act compelled local authorities to introduce competitions for garbage collection, maintenance, and management of sports facilities.

The central government also attempted to circumvent local authorities through the creation of alternative administrative structures. The Urban Development Corporations, first established in 1980 by the Secretary of State for the Environment, Michael Heseltine, were corporate structures with a Chief Executive and administrative, technical and managerial staff. The UDCs had jurisdiction over land acquisition, environmental improvement, infrastructure, fire fighting, public health, and other activities previously organized by the local authorities.

Policy/Strategy

The Northcote-Trevelyan Report recommended merit-based recruitment and the establishment of an independent board or commission to administer recruitment efforts. After the Haldane reforms, the Treasury acquired control over policy and personnel management. In 1968, subsequent to the Fulton Reports, the Civil Service Department (CSD) took over these functions. The Prime Minister acted as Minister for the Civil Service, though delegated the tasks of day-to-day management to a senior minister.

The CSD maintained control over the civil service for thirteen years. During this period it was responsible for personnel management, recruitment, training, and setting the criteria for promotion and advancement. The CSD also developed and disseminated administrative and managerial techniques, supervised the organization of departments, oversaw interdepartmental arrangements and monitored the general work environment. With the assistance of the Treasury, it set policy with respect to the pay, pensions and supplements.

In determining these institutional arrangements, the Civil Service Department worked with the Civil Service Commission, with which it was merged. The Commission had been responsible for organizing training and recruitment.

Although the CSD had been the focus of criticism for many years, the Thatcher government renewed the attack after a parliamentary committee noted that the CSD had lost control over the growth of the service and failed to promote efficiency. The Thatcher government abolished the Civil Service Department in November 1981. The Treasury formalized its control over the management of resources, and a newly-established Management and Personnel Office took responsibility for personnel and appointments and promoted initiatives to improve the overall efficiency of the civil service. In 1987 Treasury assumed authority over the civil service – determining policy on pay, conditions of service and management.

In 1987 the Next Steps Programme transformed civil service institutional arrangements. The new Executive Agencies were to manage policy and programs in specific areas, with resources and jurisdiction approved by the appropriate Minister. The Executive Agencies would be responsible for their own personnel management needs, a flexibility that was meant to enhance both efficiency and effectiveness.

At the subnational level, the center’s creation of alternative administrative structures has transformed the management of personnel by local authorities and shaped the broader outline of policy.

Legislation and Regulations

At the national level, the major reforms and subsequent adjustments in institutional arrangement have been facilitated through executive orders, enabling legislation and regulations. As noted above, both parliamentary acts and government directives have produced transformations of local government structures.

Designation. National civil servants and sub-national civil servants have separate designations. That said, the recent Secondments Initiative Program permits a temporary exchange of national civil servants and their local government counterparts. The program is relatively small, however.

Recruitment. Since 1991, national agencies and departments have been responsible for recruitment. They must abide by the frameworks established by the Treasury and the Minister for Civil Service, such as the requirements for merit-based competition. Beyond that, departments and agencies can choose whatever form of recruitment best suits their needs.

The new Recruitment and Assessment Services Agency – a reconfiguration of the old Civil Service Commission – fulfills personnel recruitment functions, but on a payment basis.

At the subnational level, the Local Government Acts have made managers responsible for personnel recruiting. As the national government controls expenditures and budgets, it sets limits on numbers. One analyst noted that those managers with proven NPM or private sector track records have had some leeway in personnel management, but this is clearly anecdotal evidence.

Structure and Career Management: Establishment Control. The CSD, and later the Treasury, has evaluated the demand and/or need for staff in each department, and set policy on actual numbers and grading. With the Next Steps Programme, more agencies and departments have a larger role in establishment decisions.

At the subnational level, the central government has actually de-established positions, as part of privatization reforms. To maintain some control over the process, local councils have begun their own preemptive downsizing.

Structure and Career Management: Appointment and mobility. At the national level, departments and agencies have control over appointments. However, consultation with the Civil Service Commissioners is required for special appointments or appointments made for senior staff. At the subnational level, councils have control over appointments.

Employment Framework. Since the turn of the century the Treasury has regulated, standardized and controlled the system of remuneration. With rationalization, pay scales were linked to rank and position classifications. Fixed annual increments and standardized conditions of employment also predominated.

As part of the Thatcher government’s campaign to de-privilege the national civil service the resources available to the civil service were reduced and pay structures were refashioned. Efforts to correct the double imbalance in public service pay structures produced a pay squeeze for the lower grades of the bureaucracy and an increase in pay for the upper ranges of middle management and top civil servants. Pay research (i.e., systematic annual comparisons with private sector equivalents conducted by a semi-independent body for use during pay negotiations) was annulled for the middle and lower levels of the civil service. Instead, civil service pay for these grades would be determined more or less by market forces. The Senior Salaries Review Body, which recommends pay levels for high civil servants on the basis of private sector comparisons, remained in tact.

In 1984 discretionary performance-related pay was introduced, at first on an experimental basis, but later as a regular feature of the pay regime. However, it was not implemented at the very top of the civil service hierarchy. Grade 1 civil servants did not receive discretionary pay points, although chief executives of Executive Agencies did after 1988. Grades 2 and 3 received extra pay points as a reward for performance on the basis of department head appraisals. The funds available for performance-related pay were small: in Grades 2 and 3 the sum was approximately 2% of the pay bill. In 1992-93 a pay regime was adopted for the top 25% of middle management’s pay scales. This allowed performance-related one-off yearly bonuses, not consolidated into salary.

As of 1995, performance-related pay has been further rationalized and its application expanded. All new pay agreements are based on performance pay. The one exception is senior staff; their pay is determined individually, based on responsibility, assessments of performance, experience, and skills.

At the subnational level, local authorities are encouraged to cover costs with local revenues. The national government maintains financial control over local authorities. The Secretary of State for the Environment reviews budgets and can set limits on a budget he/she considers excessive.

Performance Management. Performance measurement was a focal point of Thatcher’s revolution and the NPM. According to the FMI, managers in each department were to "have a clear view of their objectives" and were to measure output and performance in relation to these objectives. In addition, managers were to develop strategic plans to improve "managerial responsibility, financial accountability and control."

Individual agencies and departments can create their own performance appraisal and promotion arrangements. A 1993 review of civil service career management recommended greater transparency with respect to criteria, standards, and procedures during performance and promotion appraisals.

No information is readily available on performance measurement at the subnational level.

Training and Development. In response to the Fulton Report, the Civil Service College has offered mid-career civil servants training in economics and public management, as well as provided short-term courses for new recruits. The Office of Public Service and Science in the Cabinet Office is responsible for assisting the departments and agencies in the development of their management training programs. The Civil Service runs several training programs for managers. These programs often include a Civil Service College component. Additionally, the Treasury and the OPSS have designed a program to educate and train candidates for the higher civil service. The Fast Stream program identifies civil servants with high potential and provides them with a specific set of postings and specialized training.

No information is readily available concerning training and development at the subnational level.

Accountability. The Civil Service Management Code (1993) sets out general rules of conduct and appropriate behavior and defines the lines of acceptable practice. Although they are not bound by law to do so, national agencies and departments rely on an internal audit to review for efficiency, compliance with rules and regulations, and protections against corruption and fraud. Additionally, the audit is intended to help establish standards and improve management. The independent National Audit Office conducts external audits with an emphasis on value-for-money auditing.

At the subnational level, a special Audit Commission audits and appraises the performance of local authorities in England and Wales. In Scotland, the Scottish Accounts Commission has the same function. The Commission collaborates with citizens, experts and members of local authorities during the selection of indicators. The Audit Commission publishes the results of its reviews so that the public can assess and recognize differences in performance. General oversight is the responsibility of the Local Government Management Board.

 

This page was authored by Robin Silver with Nick Manning. It was submitted on 11/1/00.

 




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