After six years at the head of the civil service, Gus O’Donnell – jokingly dubbed GOD – is retiring. Matt Ross meets him to discuss his legacy, his successors, and the thorny topics around Adam Werritty and coalition government.

Sir Gus O’Donnell has been a very unusual cabinet secretary. His predecessors, who were mostly Oxbridge graduates from well-off families, tended to fit neatly into the civil service’s careful hierarchies; operated almost exclusively behind the scenes; saw their roles more in terms of management than of leadership. But Gus – as almost everyone calls him – is cut from a different cloth. As comfortable with frontline civil servants as with ministers and permanent secretaries, he’s known for his informal style, his determination to engage with and inspire people throughout the civil service, and his readiness to step outside the Whitehall bubble to fly the flag for the civil service’s mission and values.

O’Donnell’s relatively humble background is also well known, but just as unusual among top officials – many of whom joined the Fast Stream straight out of university – is the way he came to join the civil service. Having spent four years working as an economics lecturer in Glasgow, he visited his professor to discuss his next move in academia. “I was thinking about which research topic, which brilliant new thesis I was going to come out with,” he recalls. “And he basically said: ‘You should leave. You’re a much better applied economist. You’re wasted as an academic: you should go and work for government’.”

The subtext, says O’Donnell , was that “you’re never going to win a Nobel Prize for Economics: you’re not that good” – and the aspiring academic “found that very tough: I was quite upset about it”. But he followed his professor’s advice, joining the Government Economic Service in 1979; and the rest, as they say, is history.
Thirty-two years on, as Sir Gus prepares for his retirement at the end of this month, he can look back on a highly eventful stint in the top job – a stint that both catalysed major changes within the civil service, and coincided with huge political and economic events outside it. Asked how people will see his legacy, he replies: “I guess people will concentrate on the fact that we’ve had a coalition, and that the coalition government came into power relatively smoothly after five days.”

Indeed, O’Donnell has attracted both praise for the way the civil service facilitated the creation of the coalition, and criticism for supposedly pressing politicians to reach agreement fast in order to calm nervous markets. He won’t comment directly on the advice he gave in May 2010, but he does note that “it was a time of difficulty and, surprise surprise, those difficulties are with us now in a much bigger way. I think saying that there would be some tricky issues with respect to the euro was possibly an understatement.” How close did we come to losing the confidence of the markets? “It’s difficult to know; you can’t predict that,” he replies. “But we’ve seen with the euro crisis that when the markets lose confidence in governments, these things happen much more quickly than you’d think.”

Tackling the policymakers’ hegemony

As these comments illustrate, Gus has stood at the heart of some huge political and economic events – but the parts of the job that really inspire him, it seems, are the constitutional and corporate elements. Asked what he’d choose to pick out as his legacy, he names the creation of the Cabinet Manual, the passing of the Constitutional Reform and Governance Act – which put the civil service on a statutory footing – and the catalysing of cultural change in the civil service to increase its diversity and “stop the cultural divide whereby the policy people were kings and the delivery people were somewhat second class”.

“I also wanted to professionalise the civil service – the finance and HR functions, those sorts of things – and make sure that the experts can get to the top, and that expertise and professionalism are really valued,” O’Donnell continues. Much progress has been made on these agendas, he argues, citing a 300 per cent increase in ethnic minority Fast Streamers, a dramatic increase in the number of female permanent secretaries, and a strong crop of top officials who’ve made the leap from delivery operations to running departments.

On the first of Gus’s famous “four P’s” – professionalism – there has clearly been good progress. His second and third P’s are pride and passion, and here he admits that his attempts to inspire, enthuse and encourage civil servants have run up against cuts in pay settlements, pension arrangements and staff numbers. Considering the context, he argues, the results of the recent Civil Service People Survey are rather good: “I’m delighted that engagement scores haven’t fallen, given the tough circumstances, but I really hope that we can push on and get those scores up,” he says. The survey, he adds, shows where civil service leaders need to concentrate their efforts: “People are really pleased with their jobs, with their contributions, with their small units – but as things get bigger and further away from them, that feeling of pride diminishes. That’s something that we really need to work on.”

Has civil servants’ pride also been damaged by ministers’ readiness to attack ‘gold-plated’ pensions, Whitehall’s ‘enemies of enterprise’ and public sector waste? “If you’d heard the prime minister and deputy prime minister at the Top 200, they’re very grateful for all the work the civil service has done,” Gus replies. “And I had a really good message from the Public Administration Select Committee on my final appearance before them.” The cabinet secretary proudly brandishes a quote from Tory MP Bernard Jenkin, in which the PASC chair thanks the civil service “for the spirit with which it is facing these difficulties, and for the loyalty and service that it shows to this country.”

Gus’s final P stands for pace, and here he defends the civil service’s reputation against criticisms by senior ministers. “I do want us to be pacier,” he says; nonetheless, he argues that many of the delays frustrating ministers are not created by civil servants but by laws, regulations and political decisions (see news, p1). “It’s our job to make sure that ministers abide by the rules, and they sometimes shoot the messenger a bit there,” he comments.

Efficiency in pursuing efficiency

The civil service has, O’Donnell points out, certainly moved quickly to implement the coalition’s wide-ranging efficiency reforms. The Cabinet Office’s various ‘control regimes’ may be “rough and ready” but “they have pace on their side” – though he stresses that “it’s important that we have an exceptions regime that works – works with pace, I would emphasise.” Meanwhile, changes to structures and processes are under way and “will show results in the years to come”, he adds, citing reforms to procurement and property management.

Such structural changes can be complex and hazardous – and while he’s fully behind the civil service efficiency reforms, O’Donnell clearly has mixed feelings about structural reform as a means of delivering wider policy goals. Changing structures and institutions can be powerful, he says: he cites Labour’s transfer of control over interest rates from the chancellor to the Bank of England, and the coalition’s creation of an independent Office of Budget Responsibility to make economic forecasts. But nobody should underestimate the challenges around creating systemic change: “Through my 32 years [in the civil service], I have not had a government that hasn’t at one point or another said to me: ‘We’ve got to improve the planning regime’,” he comments. “They’ve all tried. It’s very difficult: you meet barriers at all sorts of levels.”

However, O’Donnell seems to prefer structural change to his least favourite policy tool: new law. “Legislation is very cumbersome. It’s suited to the moment and very rigid, so once it’s there it’s hard to change; and also, what you put in may not be what you get out, because it can be amended in ways that you possibly hadn’t intended,” he argues. So why do departments so often resort to making law? “I hate to blame ministers, but it is the case that ministers all come from either the House of Commons or the House of Lords, and those are legislative bodies, and that’s got to influence them as to how they think they can achieve real change,” he replies. “That’s the environment that all MPs work in, and I think it gives them a bias towards that vehicle.”

There are, Gus adds, plenty of alternative tools: there’s ‘nudge’ techniques, of course, “and you can change the incentives structure, put taxes of various kinds in place, delegate authority down to local areas, set up frameworks so that people can come up with their own solutions – possibly different solutions in different places.” That local flexibility is very hard to achieve through legislation, he says, as laws “tend to be national, creating the same solution for everyone, when quite often our problems need a local approach. This government is very much in favour of localism, so I think maybe now’s the time to realise the implications of that for the balance between legislation and other tools.”

Seeking verity on Werritty

A few weeks ago, of course, O’Donnell had to put aside his work on matters such as policy tools and corporate reform to investigate the relationship between defence secretary Liam Fox and Adam Werritty; it quickly emerged that Fox had broken the ministerial code by involving his close friend in official meetings and overseas visits. Is O’Donnell totally confident that there are no other such relationships around Whitehall? The recommendations in his report should rule out further such events, Gus replies: “One of them is that permanent secretaries sit down with their ministers ‘on appointment and regularly thereafter’, to look at whether there are individuals like that and to ask them about it.” With these conversations now occurring regularly, “if there is anything like this going on, it will be unearthed and dealt with.”

So was the cabinet secretary shocked at the Fox-Werritty relationship – and that it had remained undiscovered for so long? “With hindsight, it’s clear that this should have been escalated more,” he replies – presumably by defence permanent secretary Ursula Brennan, who queried the relationship and was knocked back by Fox. “The issue was raised but it didn’t change, clearly, so at that point someone should have said: ‘We need to escalate this issue’.”

On resigning, Fox claimed in the Commons that the ministerial code should be made more clear to defence ministers. Does O’Donnell understand how Fox might have misinterpreted it? “I don’t. I think the code’s fairly clear,” he says; a pause. “But I’m hoping that the recommendations in my report will clear up any ambiguities that anyone might have.”

Here’s an ambiguity: former diplomat Craig Murray has claimed that Fox and Werritty met British ambassador to Israel Matthew Gould six times, while Gus’s report only identified two meetings. Might his report need updating? “At least some of those meetings, I think, took place while [Fox was] in opposition, and as cabinet secretary I was only looking at the relationship between a secretary of state [and Werritty]. It’s not relevant to me what went on in opposition; if they’re not ministers, they don’t have a code,” O’Donnell replies. It looks a bit odd, though, doesn’t it? “It can look however it looks. What I have to assess is: were there violations of the ministerial code? By definition, that has to be behaviour by ministers.”

Okay, but not all of the meetings identified by Murray took place while Fox was in opposition. “No, there may have been some afterwards, in which case, umm…” The cabinet secretary trails off, then recovers: “The point really is that we established the fact that there were meetings going on that shouldn’t have, Liam Fox took responsibility for that and resigned. That’s clear.”

The FOIbles of transparency law

We move on to another aspect of transparency. Sir Gus has recently spoken out against the Freedom of Information Act, which he says is “constraining some policy discussions at cabinet”. Aren’t policy debates covered by an exemption? The exemption didn’t prevent the Information Tribunal from deciding in 2009 that cabinet minutes on the Iraq war should be released, he replies, forcing the government to use its veto: “There is nothing more important, more sacrosanct, than the fact that cabinet should be able to have a discussion without fear that there’s going to be a request and that it’ll be decided – by someone who’s probably never been in cabinet – that those minutes should be released,” he argues.

The exemptions process, Gus believes, gives “very low weight to the importance of collective cabinet responsibility and a safe space for real policy disagreements – and, I’d stress, for us to do our proper job, which is to record these things accurately.” It’s his duty to record for posterity what was said within government, he adds, “but I am very nervous that the only way we’ve been able to protect that is through what we thought of as the nuclear option of a veto”.

As O’Donnell’s time within the civil service draws to a close, it seems, he’s choosing to speak out on issues that have been bothering him. Perhaps, then, he really is happy to see his job split three ways – for he defends the decision robustly. In a coalition, he argues, the cabinet secretary’s job expands to include the management of policy development between the two parties. Meanwhile, the job of head of the civil service has grown with the decade-long expansion of the senior civil service, and the permanent secretary of the Cabinet Office has a new set of charges including Buying Solutions, the Property Unit and directgov.

Sir Gus’s three replacements – Jeremy Heywood as cabinet secretary, Sir Bob Kerslake as head of the civil service, and Ian Watmore as Cabinet Office permanent secretary – will all be doing jobs which suit them down to the ground, he adds. “With Ian’s private sector background, he was born to run this efficiency agenda; if you look at Bob’s delivery background, he was born to do delivery; and Jeremy, policy,” says O’Donnell. He rejects suggestions that the efficiency reforms may lose momentum or that Kerslake, lacking Gus’s political role and regular access to key ministers, might become isolated. “Bob’s got real authority, and he’s got it incredibly quickly among a group of perm secs – not an easy thing to do,” he says. “He’s got the gravitas, he’s got the respect, he’s got the trust. I think his judgement will carry enormous weight.”

A good time to be somewhere else

So O’Donnell says he’s happy with the succession plans. But why’s he leaving now? “My intention was to think about my future after the 2010 election,” he replies. “As it happened we had a coalition and, to be honest, we didn’t know precisely how to make it work. So it was quite obvious to me that my duty lay in making sure that the coalition could operate as an effective government, and that meant putting in place various procedures, ensuring that the top players trusted each other, that we helped create an environment of trust.” He wanted to see through the legislation fixing the parliamentary term at five years, he adds: that became law in September. And it’s a good time to leave now, while the UK government is quite stable – at least compared to the continent, “where we’ve had in the last 10 days three governments change” – and the new team can get their feet under the table before things get more complicated again.

And things will, Gus believes, get more complicated. He had a taste during the electoral reform referendum campaign of the difficulty of running a government while its two component parties are locked in electoral battle: “Having a referendum when the two [coalition] parties are on completely opposite sides and attack one another isn’t conducive to building trust, believe me!” Looking ahead, he comments, “we’ll hit an unprecedented period going into year five with a coalition government: you’ll know there’s an election in May 2015 and you’ll know that the parties are going to be campaigning separately, and you’ll be trying to keep them together as a government. I had the task of trying to keep them together through a referendum; my successors will have the task of year five, which is going to be an interesting one.” Gus’s relief is clear: will he be very happy to avoid that task? “Yes!” he laughs.

Time’s up – both for our interview, and for Gus’s career in the civil service. Does he have a parting message for the civil service? “Yes! My parting message is: thank you, you’ve done a tremendous job. I’ve been proud of what you’ve delivered,” He’s been thinking about this, and his enthusiasm – his passion, his pride – are obvious as he talks to what feels to him almost like a half-million-strong family unit.

“I’m really confident that you’ll rise to the challenges of the future, which are really tough; unprecedented,” he continues. “What you’ve done – in terms of adjusting to deliver for a coalition government; adjusting to face the massive changes which are required to get the deficit under control, and to live with these budget reductions – gives me every confidence that this civil service, which I joined 32 years ago, will get better and better.”

“And that was my test,” he adds – his test, that is, of his own time at the top. “I always said: ‘I’ll know it’s right if, when I’ve left, the civil service keeps on getting better. And I’ve every confidence that it will.”?


When one becomes two: the job split

The Cabinet Office document setting out the two new roles explains them as follows:

Cabinet secretary
Responsible to all ministers for the running of cabinet government

Core role: Ensuring collective decision-making in support of the agreed Programme for Government; providing high-quality, objective advice and support to the PM and DPM; and, working with the HCS, ensuring the civil service has the leadership and clear policy focus necessary to deliver the government’s agenda.

Role is policy- and minister-focused: Operating at the centre of Whitehall, working closely with departments to ensure smooth functioning of the policy machine; acting as guardian of collective government and propriety across the coalition government; commanding the confidence of all ministers.

Leads on ministerial, special adviser and wider government propriety; national security; line manager of cross-cutting and national security permanent secretaries. Chairs main honours; permanent secretary policy groups as required.

Head of the civil service (HCS)
Responsible to the PM and minister for the civil service

Core role: Providing professional and corporate leadership to the civil service and enhancing the immediate and longer-term capability of the civil service with strong governance and accountability. The civil service values will be promoted, embedded and safeguarded. This will be combined with the existing departmental role.

Role is Whitehall- and outward-facing: Working with all permanent secretaries to lead the immediate civil service reform agenda and build improved capability; enhancing governance and accountability; strong focus on wider public service reform. The ‘face’ of the civil service for media, recruitment and visible leadership.

Leads on civil service propriety and the Civil Service Code; succession planning; line manager for ‘delivery’ permanent secretaries; Civil Service Awards; capability reviews; departmental boards; senior salaries; workforce planning; recruitment; pensions; Fast Stream and SCS Basecamp. Chairs state honours; Top 200; CS Superannuation Board

The two jointly chair Wednesday morning permanent secretaries’ meetings and the perm sec remuneration committee, and share a private office in the Cabinet Office.

Written by Matt Ross, CSW