The capability review process is a powerful driver for change, Home Office permanent secretary Sir David Normington has said – but the system should more clearly recognise the differences between departments’ roles and situations.

Speaking at Whitehall & Westminster World’s conference Transformation, Innovation and Delivery in the UK Public Sector, Normington was frank about the poor state of morale and internal communications in his department at the time it experienced its first capability review.

“Soon after I joined the Home Office, our capability review was conducted at the same time as [former home secretary] Charles Clarke resigned. The reviewers leant over the atrium watching the resignation, and I thought: ‘This isn’t going well’,” he told a group of top civil servants. “‘People were very fed up.”

When Clarke’s replacement John Reid called his own department “not fit for purpose”, added Normington, “It was very painful to hear our own home secretary putting us in the dock and saying: ‘you’re not good enough’.”

Staff “didn’t like what John Reid said about them and what the capability review said, and their reaction was to go into their own teams and say ‘Well, we’ve done a good job’. Initially, even our senior team retreated and didn’t talk to each other enough.”

In response, Normington said, he acted on five fronts. He “moved very fast, to produce an action plan in six weeks”; “completely reshaped” his top team and “performance managed” people across senior management; concentrated on hitting service delivery and staff reduction targets; “focused relentlessly” on risk and crisis management; improved internal skills and capabilities; and sought external recognition through awards schemes and positive media coverage.

Normington praised the interim reviews process, noting that the scrutiny was “irritating” but essential to maintain the pressure for improvement: “It’s not working if people aren’t grumbling about the pace of change,” he said. But he offered a number of criticisms of the process, suggesting that the system is inflexible in dealing with a diverse range of departments.

The current process, said Normington, “doesn’t give enough weight to actual performance,” and concentrates on internal systems rather than external impacts: “There’s always a danger that process become more important than results.”

Second, “the complexity or scale of the challenge is not sufficiently considered”; so the system measures absolute progress rather than achievement. Third, “the uniformity of the process gives the impression that departments all do the same things – but we don’t”; the system can create inconsistencies by attempting to apply a uniform model to ministries that have very different roles, objectives and structures.

Finally, Normington suggested adopting a risk-based approach, in which the best performers are relieved of some of the burdens of inspection: “I don’t see why we should all be on the same relentless two year inspection process. I think there’s scope at the top for those departments to be reviewed less frequently”

Normington said that the capability review system had formed an essential foundation for positive change within his department; with a positive re-review under his belt, he hoped to show continuing improvement.

“It wasn’t the capability review that was at fault; it was the Home Office,” he said. “But I wouldn’t be telling this story if it didn’t have a happy ending.”