The head of the influential centre-right think-tank Policy Exchange, Neil O’Brien, tells Joshua Chambers that his organisation aims to build its recommendations around evidence, not ideology – unlike some of its rivals.

In a period during which press and political antagonism towards the civil service is de rigueur, it is deeply unfashionable to call for a stronger civil service, let alone to suggest that the highest-paid civil servants earn too little and the lowest-paid earn too much.

Yet Neil O’Brien, director of the centre-right think-tank Policy Exchange, believes just that. “What we’ve tried to do is argue for a more flexible service where promotion, seniority and pay are all much more strongly linked to performance,” he says.

Given that Cabinet Office minister Francis Maude says on the Conservative Party’s website that his “proudest political achievement” is the establishment of Policy Exchange, it’s worth taking note of the organisation’s views on the civil service. Further, it has close ties in other areas of government policy: the first chairman of the think-tank was current education secretary Michael Gove, while at its 2011 summer party David Cameron urged the organisation to continue developing new ideas for his government to implement. So far, it claims credit for initiating the Office of Budget Responsibility, the Green Investment Bank, and the proposed election of police commissioners, among other policies.

The think-tank was formed after the Conservatives’ disastrous election defeat in 2001. “The right appeared to have learned absolutely nothing between 1997 and 2001,” O’Brien explains. There had been “a second equally crushing landslide, no progress intellectually or politically, so there was a great desire to have ideas that would move things on a bit, and that’s still the mission”.

Ultimately, he says that Policy Exchange sees itself as “the most centrist of all centre-right think-tanks”, and a “pragmatic” organisation, “rather than the more ‘heroic’ approach that you sometimes get from other think-tanks, like: ‘Why don’t we just privatise the NHS?’” Indeed, Policy Exchange preached caution on the coalition’s NHS reforms, and said that GP commissioning couldn’t be implemented to the proposed timescale. O’Brien also says his organisation is non-partisan, and looks to work with the other two major parties on public sector reform.

Policy Exchange prides itself on its evidence-based approach, and plans to launch a research project in the autumn setting out just how a leaner civil service could operate. But O’Brien doesn’t come to the project entirely without his own views: he thinks the civil service is bogged down by secondary objectives and needs to be liberated. “Government shouldn’t be allowed to impose regulatory burdens on the public sector that it’s not happy to impose on the private sector as well,” he says. For example, he says, the civil service has been made to locate jobs in deprived areas to reduce unemployment, and to adopt the equal pay audits introduced by the Equality Act before the private sector. “The problem with doing this is that the costs are invisible. It’s hypocritical for politicians to simultaneously demand that the public sector has to do lots of things that the private sector doesn’t, for political reasons, and then to say: ‘Why are your costs so high?’”

Ultimately, O’Brien backs market provision for delivering many public services. However, he is nonetheless wary about the extent to which the coalition is expanding the use of markets. “People like us who are generally impressed by the power of markets, and sympathetic to the idea that they can be used more widely in some areas, should also be the people who are most cautious about markets,” he says. For example, he warns, it’s possible that outsourcing could result in the loss of many skilled civil servants to the private sector, where they could out-negotiate the public sector in procurements and win favourable deals.

As the government expands its use of markets, O’Brien believes, it will also hit other problems. “It’s quite a different set of skills for the commissioners – civil servants [who are] currently running conventional, command-and-control services,” he says. For example, civil servants will have to “estimate how much profit it’s reasonable to make, try and set results and payment structures to reduce ‘creaming’ and ‘parking’, and try and impose a reasonable level of competition – but not so high that you obliterate the market.”

In particular, O’Brien says that there must be close attention to the payment structures used. When markets were introduced into social care, he warns, the payment structure made it very expensive to use voluntary agencies, though many had a strong record. This was despite government research showing that the total cost of running publicly-owned services was the same as outsourcing to the third sector, he says.

He also warns about expanding the payment-by-results model into complex policy areas where it is difficult to measure outcomes. There is a binary outcome in employment, which makes the use of payment-by-results viable, he says, but there are now proposals to introduce the model when tackling problem families – something given additional relevance by the riots that took place a week before this interview. “If I deal with this problem family in such a way that they get jobs and stop reoffending, who gets the money? What happens when all these payment-by-results schemes start to overlap? That’s just one of the many complexities that’s going to emerge as government gets more and more interested in this sort of stuff,” he says.

O’Brien can happily expand on a topic until he has reached a natural stopping place; then he tends to sit quietly, awaiting the next topic. So we move on from markets and onto digital service provision – an area into which Policy Exchange is moving. It seems fitting that this pro-market think-tank itself acts in a capitalist manner, constantly looking to expand into new policy areas where it can seek to influence the government’s agenda.

O’Brien is shocked by how poorly the public sector uses IT. “There’s so little technology in public services, it’s just mind-blowing,” he says. The government’s aim to increase digital delivery is laudable, he thinks, but there will be huge pressure on civil servants to introduce IT projects that work well – particularly systems that allow multiple services to collaborate. On this topic, O’Brien is all questions and excitable outbursts; but he hasn’t yet decided where he stands on some of the bigger issues, such as whether to sell government data for a profit, or alternatively whether to release it for free. He hasn’t seen any hard data either way, he says, before detailing the arguments on both sides.

However, he is clear that any data released should be published in a usable format, and that government should take responsibility for this. “Government does need to think a bit about getting stuff out there in a usable format, not allowing these things to be perverted. We say: ‘Publish your data,’ and it ends up that departments publish things in horrible PDFs, non-machine readable, complying with the letter and not the spirit.” It’s not acceptable to expect “armchair auditors” to be able to sift through it all, he adds.

As a comprehensive-educated man from Huddersfield, it does seem a little odd that O’Brien has been attracted to right-wing politics at a time when there are very few northern Conservative politicians in positions of prominence. This background may also seem surprising given that just before David Cameron embarked on a tour of the north of England in 2008, Policy Exchange caused a furoré by suggesting that many northern cities were “beyond revival” and urging mass-migration to the South of England. O’Brien giggles as he describes the first interview he did in the job; it was with a reporter from the Yorkshire Post, who started by asking how he could possibly work for such an organisation. He believes it was an “eminently sensible report” which was doomed by a “spin-failure”.

Not that O’Brien seems that interested in the press, or the cut and thrust of politics. For him, the job is interesting because “this is where the intellectual life is at the moment”. Much of the left is in the same position as the Conservatives in 1997, he thinks: unable to grapple with the changes required. Indeed, he recounts that he “had dinner with a very senior Blairite minister a while back, and he said: ‘I’m very worried that my party might have the misfortune of getting back into government in four years’ time and we’ll have, as things stand at the moment, nothing to say’.”

Speechlessness certainly isn’t a problem for O’Brien. He seems keen to dip into every policy area, from police reform to energy markets, and as I leave he presses various policy documents into my hands. He sees his job as getting the “right ideas to the right people at the right time,” he says. Given that he has so many of them – and the ears of many prominent Tories – it would be wise to assume that some of these ideas will stick.

CV highlights
2000 Graduates from Oxford with a first in Philosophy, Politics and Economics
2000 Joins the ‘Business for Sterling’ campaign against UK membership of the Euro
2005 Founds Open Europe think-tank, campaigning for European reform
2008 Joins Policy Exchange as director

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Written by Joshua Chambers, CSW