Memo to an incoming PM Changing the Downing Street organisation

Under Boris Johnson the size of the Downing Street and Cabinet offices expanded. Each time Boris was persuaded that the centre was not working as it should nor serving him well he would add additional people. It became increasingly difficult to know who under the PM was in charge, who was responsible for any given policy or problem, who might write the  brief for the PM or who might follow up any PM decision and get action from Whitehall once decided.

The simple structure under Margaret Thatcher rested on three senior officials, the Principal Private Secretary, the Head of Policy and the Chief Spokesman. Each of us knew the PM’s mind on things we were handling and each of us made sure in our spheres of action that any wish or decision by the PM was put through the proper Cabinet and Cabinet Committee procedures or referred to the responsible department for decision and action. As Head of Policy I made sure the PM had personal briefing on the major issues coming before her from Cabinet and from inter departmental correspondence analysing problems from a Head of government viewpoint to see if they were in line with strategy and made sense in the light of the government’s other objectives.

Number 10 today has a Chief of Staff, a Permanent Secretary, a Principal Private Secretary, three Deputy Chiefs of Staff, a  political Head of Policy and an official Head of policy, a Cabinet Office Minister of State and various other senior officials. The Cabinet Office has expanded its roles with a Permanent Secretary as well as the Cabinet Secretary who used to run it. Clearly many of these individuals  cannot always be in the room when the PM considers or decides something. There is  no clear structure of who should brief the PM on an issue, attend the meeting and organise the follow up.

The incoming PM would be well advised to slim the structure down and appoint a handful of senior people they trust, with a working plan to ensure that every meeting matters, every meeting with an outcome is properly recorded, and every issue the PM wishes to pursue is properly followed up. The PM also needs to take more control of the diary. Time is the most precious PM commodity. How it is allocated will help determine what gets done and what is important to the government.Slimming Downing Street would be visible proof of the wish to run a leaner and more effective government machine more generally.

Independent Regulators need scrutiny

The public regard Ministers as responsible for many things, including areas where independent bodies have been given wide ranging powers. The independent Bank of England is responsible for keeping inflation to 2% but the public blame the government if inflation takes off and nothing appears to be done about it. The recent failure of U.K. monetary policy to keep inflation around 2% was entirely predictable and was the result of policy error, allied to a bad economic model of the economy and very optimistic inflation  forecasts from the Bank and Treasury. I have commented often on the troubles of too much money creation. Today my case is errors by other Regulators  are all too common. The government will be blamed for what they do wrong. All of them are creatures of Parliament, with management appointed by government and their costs underwritten by taxpayers.

Let ‘s take the case of the Water Regulator. Ofwat controls profits, prices and investment programmes. There has been recent justified criticism of too many dirty water discharges into rivers. You can blame the companies, but they would argue financial controls limit the amount of investment in additional capacity they can put in.The solution to dirty discharges is large spending on bigger pipes to handle growing volumes, which requires regulatory approval of the additional money needed to pay for it and of the physical works.

The water Regulator also helps limit the amount of additional capacity there is to treat and store clean water. Despite high levels of inward migration which argues for substantial extra capacity there has been a reliance on the stretch from old reservoirs. As a result whenever we have a dry season the industry has to dust down rationing plans . Water is the ultimate renewable resource, passing from rivers to sea and recirculating through rain. The U.K. Water Regulator has not served us well over quantity of water supply and over cleanliness of water returned to rivers.

The Electricity Regulator and grid led system keeps us very short of domestic generating capacity. It means we are stupidly dependent on an energy short EU to bail us out in times of high demand and or poor supply. The Regulator has also presided over the bankruptcy of too many electricity supply ¬†companies, landing taxpayers with a big bill for the largest that went under. Doesn’t ¬†this warrant a review? We could do with more private investment in providing reliable power from domestic sources, and reassurance that there will not be future large bail out bills.

The Regulator of Offshore oil and gas has interpreted their brief as rapid rundown of the  U.K. North Sea in pursuit of net zero targets. Unfortunately this just means we import more gas from abroad which costs us far more and entails the production of more CO2 than burning our own. There are now indications of a welcome change of approach. Gas is a crucial transition fuel this decade. We need to do far more to produce our own at a time of gas shortage and the use of gas as a weapon by Russia. A good new policy will bring more U.K. private investment and more better paid jobs.

 

Memo to an incoming Prime Minister Broadcasting and the digital revolution

The BBC and Channel 4 are  being outpaced and outgrown by Netflix and Amazon, Disney and Apple as people  seek their entertainment from downloads rather than tuning into the same scheduled programme as their  neighbours. As a result the budgets of these large corporations to commission films and seek new content are much larger than the UK state institutions. The traditional media are finding it difficult to hold their audiences.

Channel 4 should be sold to new owners. It needs to seek new capital to expand and needs new direction to compete successfully in this multi media world, with audiences beyond one country. I favour giving employees in C4 some shares in the organisation on sale so they have a stake in the business going forward and a greater  sense of alignment of their interests with those of the new dominant shareholders or owners.

The BBC has a well known brand in many parts of the world and has some global reach in both tv and radio. It is being held back by dependence on Licence fee funding. More and more people are dropping their licences by not having tvs at all and not using BBC services, whilst the cost of competing for talent and new material is rising on a global stage. The BBC does need to look for additional revenues from selling its services outside the UK on a global scale. It does not help itself by its systematic global establishment bias and wokish preoccupations. The U.K. competition authorities need to watch to see if BBC subsidised services are preventing competitors emerging or flourishing.

Memo to an incoming Prime Minister Social care

There is no easy answer to the complex problems of social care. Nor is there any cheap fix. One of the problems governments have found in proposing changes of policy is many people do not understand the current rules over social care especially for the elderly. Many families never find out, as their relatives die whilst still  living at home.

Many elderly pensioners continue to live in their own homes,paying for their accommodation and food out of their pension income and any accumulated savings. If their income falls too low then the state helps out with benefits. They qualify for free care from the NHS for all their medical needs. If they need assistance in their homes with everyday living they may qualify for free social services or they may need to pay for support.

If an elderly person needs to go into a home then the state pays if they have little or no capital, but the elderly person pays if they have money of their own. This includes selling their home which they  no longer need and using the proceeds for the care home which they now live in. If their home is still needed by their husband or wife then it does not have to be sold or taken into account. In a  care home they get full free NHA medical care  but have to pay for social care or claim it under the rules from the local authority. They of course pay for their board and lodging all the time they have the  cash.

Some people think this is unfair. They think social care – helping with shopping or dressing or whatever – should be free like health care for all. Some think it is unfair those who worked hard and saved more have to pay themselves and those who didn’t have free provision. Others argue that the elderly person no longer needs or can use their former homes as they are living in a care home for the rest of their life, so why shouldn’t that money be used to sustain their care and pay their food and accommodation bills?

It is clearly the case we all believe those in need of care and accommodation without money should be helped by the state. The issue is how many universal benefits should there  be. If more, which taxes will pay the bills? The social care tax put in by the outgoing PM and Chancellor will pay a small proportion of the total costs involved and is already dwarfed by the public cost of NHS treatment and care home costs for the elderly which the state meets.

Memo to an incoming Prime Minister Public spending does not control itself

The role of Chief Secretary needs strengthening as the Treasury’s second Cabinet Minister. Working for and under the general direction of the Chancellor the Chief Secretary needs to probe and challenge the bids for additional funds and the way in which existing budgets are¬† being spent. He or she should be the voice to greater efficiency and better¬† value for money in everything government departments do.

The need to rein in public spending without damaging main services is obvious from the figures. The first target should be the huge welfare budget, where we need to replace more benefits with work incomes so people are better off and taxpayers save money. It is good to see people  now rejoining the workforce after covid. There is plenty more room to help people find appropriate work for their skill levels and health circumstances to reduce the welfare  bill.

The second target should be to ensure better value for all the extra money going into the NHS.  That requires  the Health Secretary to work with the management to improve effective working and help employees deliver more with the right training, computer and automation back up where that can help. The phase out of special covid expenditures helps.

The third issue to examine is the capital cost of providing housing and public service provision for economic migrants. It might be better to reduce  numbers granted work visas and do more to develop our own workforce, as making provision for new arrivals is expensive given the amount of capital sunk to support everyone of us already settled here.

The fourth issue is to assist UK businesses to make and produce more at home. This will help generate more jobs and assist in delivering more tax revenue

Memo to an incoming Prime Minister It’s not the amount of money you spend that counts

Sometimes the outgoing government has adopted the Labour approach to public services, defining them by the amount spent. This says if I spend extra on a public service it will be better than if I do not. People are told they should be grateful whatever the actual level of service because a service is so expensive. A Minister faced with a public service problem reaches for the cheque  book when it may need intervention over how the existing money is spent and the service is managed.

When I go shopping I do not seek to maximise the cost of what I buy. I do not automatically assume dearer means better. Sometimes the cheaper shop or the cheaper product is as good or better than the dearer. I make judgements of value, fitness for purpose and cost. So shouldn’t we do the same for the public services we sometimes use? Shouldn’t Ministers on our behalf as taxpayers and public service users be the voice for value for money, for quality and efficiency?

The public sector does contract in quite a lot of service and goods supply from the private sector. This can help the public sector by ensuring competitive tenders for the work to be carried out. The public sector needs to be a well informed customer. It needs to be clear about what it is trying to buy with a proper specification. It needs contracts that do not transfer all the risk of non performance to the state. It should not normally be bankrolling any failure by suppliers, though given the size of orders it may need to assist with start up and working capital.

The NHS does not need another top down management reorganisation. It does need a slimming of senior management and of the quango forest that has grown up around our hospital trusts and GP surgeries. Patients will judge the NHS by how easy it is to get access to diagnosis and care, and by how successful the care and treatment is. They will not judge it by how much it costs.

Before agreeing any sum the Treasury needs to establish exactly how the extra money will be spent, and ensure the base budget is also well directed. In successful organisations staff and cash resources are routinely switched from areas no longer in such demand to new pressure points. There is a need for continuous improvement to boost quality and value for money.

Memo to an incoming Prime Minister Personal journeys begin at school

The gap between the best public schools and the below average state school is still too large. Money does buy advantage. The best state schools show this need not be so. Money does not always buy success. The crucial ingredients of a great school are the attitudes of teachers and pupils and an ethos of can do and self advancement, more than they are a more expensive sports field or smarter and more modern school rooms.

I went to a state primary and won a free place at a Direct Grant school. When I go into one of the great public schools to talk I am usually impressed by the adult approach of the older pupils to any lecture and exchanges we have. They are often keen to find out how I got the jobs and opportunities I had. They will respond to a complex lecture on economics or politics with informed questions and see the exchanges as worthwhile in their own right.

We need to create the same can do and will get on approach in all state schools that have to compete with these institutions. Pupils need stretching. They need to hear there is nothing stopping them achieving good things,  but they also need to be told the people who are the most successful are often the ones that work hardest. In sport the more you practice the luckier you get. In academic life the more  books you read and the more viewpoints you consider the better you are likely to perform. If you want to write well read well.

Memo to an incoming Prime Minister Defending our country from harm is the first duty of government

The Russian invasion of Ukraine has alerted us to the need for stronger defences. The Ukrainian army has shown us how quickly they get through munitions and smart weapons in a real conflict, and have needed substantial parts of our stocks as we and other allies have supplied them. We will need to replace those as quickly as possible and increase our own stocks should another need arise.

The problems of getting things out of Ukraine by sea given the mines and other threats to shipping in the Black Sea should also remind us as an island nation that we need to have sufficient home capacity to produce weaponry at home should war create dangerous conditions for shipping in imports. Twice in the last century Germany sought to starve and blockade us out of supplies of many kinds by a submarine and aerial campaign against supply shipping. In the more recent NATO era we have come to a mutual dependence with allies in Europe and the USA which might be a vulnerability should war break out. The UK needs to secure the intellectual property to the weapons and munitions we use, and ensure we have some capacity in the UK to make and assemble. We need to be ready to scale up these activities in the event of serious war.

It is not good that the MOD is still considering reducing our troop numbers by more when we have additional NATO commitments to fulfil in Eastern Europe in this atmosphere of more tension with Russia. We need to get better at procurement. Too many programmes overrun in time and budget and produce too few weapons, ships or vehicles at too great a cost. We need to see the best can  be the enemy of the good, and frequent changes of design and capability after the contract has been entered are costly and breed delays.

Defence is a prime area for spending money better. Instead of debating what percentage of our GDP we should spend we need to ask what force capability we need and then go about finding the most efficient and effective way of supplying it.

Memo to an incoming Prime Minister Global Britain and free trade

Brexit has restored our position on important world bodies like the World Trade Organisation, giving us our voice back in helping guide global policies where a world answer is needed. In world trade we need to work with the WTO to promote freer trade with fewer subsidies, barriers and bans. The UK has been able to negotiate roll over trade agreements with the places the EU had agreements, despite Remain protestations to the contrary. We have also been able to go on and sign deals with Australia and New Zealand and are well placed to enter a major agreement with the Trans Pacific Partnership grouping, which would be a major free trade extension.

The UK has developed closer links with the 5 Eyes security and intelligence group, and has entered a special defence relationship with export contracts with Australia and the USA. We should take our free trade  links with Australia, New Zealand, Canada and other Commonwealth countries further, pursuing mutual recognition of qualifications in English speaking like minded countries. We have a lot to offer and to gain from closer links in the English speaking world, and in the Commonwealth as a whole.

In what will be the Pacific century the UK has to look across the oceans as well as across the Channel. The EU trade deal is being distorted by the disgraceful mis interpretation of the NI Protocol by the EU and by their heavy handed and asymmetric enforcement on some Channel crossings.

Memo to an incoming Prime Minister Levelling up can bring together faster growth with protecting our environment

Levelling up is about the people already settled here, and about the villages,  towns and cities that have fallen behind in providing good jobs and sustaining decent incomes. Levelling up Conservative style is about helping people on their personal journeys, so it is possible for more people from modest backgrounds to set up their own business, get a well paid job, succeed in education and training,  buy  a good home and save for their old age.

It is also about place. Too much of our new housing is built in communities that already have plenty of good modern housing and have attracted people with above average qualifications on above average pay. Planning law should be changed to allow communities to decide how much additional housing they can accept, with a  view to less of this colossal investment going to already better off places and more to the places that need more money to circulate. If more executive homes are built in poorer communities they will attract more people with cash to spend and skills to share, people who can set up businesses or provide more better paid jobs.

Continuing educational reform is crucial to success. People who can read and write to good standards have much more chance of preparing themselves for better paid employment and more chance of gaining worthwhile qualifications. Getting housing right is also crucial to people’s journeys. Owning your own home gives you what is usually an appreciating asset, a pool of capital to fall back on, a financial stake in the community.