83. The Man Who Ran Downing Street

24:10So I said, how do we know what's happening with that money? And the civil servant said, well, we do Skype calls with Yemenis. So I said, well, great. Can I see one of these Skype calls with Yemeni? And everyone looks a bit uncertain. And I say, okay, take a month, but I want to see a clip of a Skype call. So a month later, these very senior civil servants come back and they say, Minister, why are you so interested in seeing this Skype call with the Yemeni? And I say, look, I could give 11 pompous reasons why if you're spending 150 million pounds a year in a country, you better find out what's doing.

24:40It was something more basic. I told you to do it. I don't fake it up as far as I'm concerned. Just give me something, right? Another month passes. I go in to see the permanent secretary. And of course, he's a very charming chap like you. So he says, oh, Minister, this is terrible. I'm so sorry to hear this. I'll look into this. I'll try to find out what the problem is. Another month passes, another month passes. Finally, I'm reshuffled and I never see this thing. And I can produce literally dozens of them. I mean, so many of them that I don't bother to put them in politics on the edge because it just becomes boring.

25:10So what's going on here? What is this world where my lived experience as a minister is that many, many of the things that I'm trying to get done never get done. And yet, whenever I talk to someone like you, they'll say, oh, I don't know what's going wrong there. That's not the way our system is supposed to work. Rory, on that particular case, it'd be quite interesting. I'd be quite intrigued as to why you weren't shown this. And I can think of one or two reasons. What would those reasons be? Well, they could have been intelligence reasons. There might well have been things going on. This has happened sometimes where I've had a Secretary of State tell me that they don't want a minister involved in a subject, that they don't want me to show papers in a particular area to that minister because they don't trust them.

25:55They think they'll leak stuff. This has happened quite frequently, actually, and it's really difficult. That minister then completely loses trust in you because you're playing them along. It sounds like you were played along, Rory. The other point I would say is, actually, there may be something about the way you asked. You're a persuasive guy. It's like, Like, surely there will be ways to get this done. Did you try getting the Secretary of State to intervene? Because this shouldn't happen. It is slightly bizarre to me. That's not something I've come across with ministers I've worked with. But that's what they always say.

26:30I mean, that's the very odd thing, right? And often I think it's because the ministers that you often work with are not specialists on the subject. So one of my problems is that when I'm the Middle East Asian minister and I'm dealing with Afghanistan, them. The people briefing me haven't spent any time in Afghanistan, don't speak Afghan languages. So when I'm saying, do not put this money into the Afghan police, that's on the basis of having written books about Afghanistan, spent a lot of time thinking about it. And they then go and put money into the Afghan police at the end of six, nine months of my trying to block them.

27:00One of the things I conclude is that often ministers actually are quite nice people who don't know very much about the subject, don't challenge many of these operational decisions. And so the push never comes to the shove. You never really see what happens if you try to challenge the system, because it's quite rare that actually the minister cares enough about what's happening in Yemen to even know that we don't have staff on the ground. They'll tend to just sign it off. Well, again, I would very strongly say you should confront the civil service on things like that. I'm with you, and it's slightly bizarre to me.

27:34These are things I'm not used to. You know, I'm afraid in my career, I've dealt with ministers who knew a lot about the subject, you know, like, and special advisors when I was in Treasury with Gordon Brown and Ed Bores. You know, they were very keen, understood the economy well. I can't think of a single occasion where we frustrated the things they wanted to do. I mean, frequently, I would question them. I would say, I think you're doing the wrong thing on this or that. And, you know, I would do it in a different way. but in the end you know if that's what they wanted to do we do it maybe it's a question of the best ones being in the bigger departments i don't know my general experience with the civil service was actually quite positive i never felt that they were frustrating as i said i sometimes felt some of them were incompetent and i sometimes felt they didn't understand things but i never felt that we're being frustrated just one point gus on this kind of relationship between ministers and the civil service and i want you to explain a little bit the difference between impartiality and independence?

28:32Because during the election, we've had Rishi Sunak leading the charge on this thing about the Labour are going to put your taxes up by£2 ,000. And keep saying this is put together by independent civil servants. There's no such thing as an independent civil servant. They're impartial civil servants. So how have you felt watching the argument unfold and then seeing them double down on it? Well, I intervened because I felt really annoyed by what they were doing. I mean, one of the grubbiest things I've ever done in my life was put together costings. And to be honest, this is completely across parties, done it in the conservative administrations, labor administrations.

29:07It's horrible. You're asked to produce costings on something with some assumptions, which you know have been chosen to show that that policy is stupid, right? And then you come up with these numbers and they say, oh, the treasury has said this or whatever. So I would really fervently hope that both parties will sign up to never doing this costings business again in this way. If you want to, during the current election, work out what the costs of the various policies are, listen to what the Institute for Fiscal Studies is saying, I would say. We regularly recommend that. And just one similar theme, Gus, through the various administrations you work with, just give us a feeling for the relations between civil service and special advisors.

29:50A lot of focus on special advisors, not least during our time. But, you know, how does that work and where did it work well and when does it work badly? So I've always said that good special advisors are worth their weight in gold and bad special advisors are absolutely disastrous for their ministers. And, you know, to me, it's like I've worked with very good special advisors at Bozé Miliband, for example, Rupert Harrison. And Gus, just remind people what a special advisor is. So a special advisor is a political appointee, right? They are not bound by the impartiality code. They are clearly working for the political party.

30:26And they're appointed by the Secretary of State. You know, there used to be in the old days, two per Secretary of State, but sometimes that's got rather larger, not dramatically larger, it has to be said, but there's more. So yes, when we the Treasury say this policy is good for the country, it does this and the rest of it, the political advisor might come in and say, yeah, but you do realize that the big gainers from this policy are people who support the other party and the big losers are people who support our party. It's a perfectly valid thing for them to say, but it's not something that the Treasury analysis would have shown.

30:59So they have a really important role. They can be incredibly useful if they understand what their master is going to say. So, you know, I could talk to web balls and say, look, you know, we think this is a good idea in terms of improving the way people get back into work to give greater incentives. He would say, well, yeah, I think Gordon's instincts are along the same lines. And so you'd say, okay, we'll work this up. And on other things say, you know, you've got no chance. He's not interested in that subject. Doesn't want to do anything about it. Go away. That's really useful. But when you get special advisors who make stories up, who do things they shouldn't do, in my day, Damien McBride stepped across the line.

31:41There have been various people who stepped across the line. And it's my job then to go in and say, this is just not on. You know, this cannot happen. And these are the difficult conversations where you realize and the ministers realize that you're not their best friend. You're telling them things they don't want to hear. And it can get quite difficult. I think let's take a short break.

32:07Gus, one of the narratives which is very strong and will be very strong for you because you love the civil service, you ran the civil service, you're a cheerleader for the civil service, is essentially civil service good, politicians bad. But I wondered whether you could talk a little bit about the flaws of the civil service, ways in which the civil service isn't all that it could be, ways in which it isn't working, rather than just defending it all the time. Most certainly. But what I would say is, under no circumstances, is the civil servants think civil servants good politicians bad right you only need to work in civil service for a very short time to realize the admiration that we've got for you that have to be up front you know we write you the boring speeches you have to deliver them you're the front person you're up there you know you see it with mps putting their lives at risk so no we have a lot of admiration for people in the who've actually gone that step and decided that they're going to be politicians.

32:59And you see great things about politicians. Now, coming to your questions, I'm not going to be a politician and deflect completely. There are lots of things wrong with the civil service, right? When I interviewed for the cabinet secretary job with Tony Blair, I said that I'm my, because I knew he liked these kinds of things. My four Ps were pride and passion about the civil service, because we should be passionate about the public services and improving public services and making citizens' lives better. But we also need to do that with pace and professionalism. And this comes back to your point, Rory, about the Afghanistan or Esfet.

33:37The thing I hate is when we're not professional enough, when we don't know the subject. We need to be experts, right? And we need real expertise. And then the bit about pace was that there can be too many layers, there can be too many hierarchies, There can be too many checks and balances in the system that don't allow you to fight their way through. You know, look at what happened during COVID. You know, the fact that we got those vaccines turned around, we got through the regulatory system so quickly. So why was the regulatory system so slow in the first place? You know, why can't we do that all the time?

34:10There's all those reasons why I would say we need to get better. The second part is we have these crazy restrictions about pay. If you want really good people, you're going to have to pay for them. So those areas where the market pays much higher than the civil service, you're going to find we are very weak. They will be areas like procurement, delivery skills. We get a really good negotiator of contracts, right? And we're paying them 60 ,000, 70 ,000. And the private sector comes in and says, well, we'll pay you 450 ,000 because this contract is a massive contract. And so you lose talent in specific areas.

34:48You take something like AI. Are we going to be able to bid the best experts in AI into government? Although some of the most important decisions are going to be made within government. No, we're going to be outbid by Google and Amazon and all the rest of it. If you were an incoming Labour government, if there is one, what would you do about that? So I would basically make a switch. One of the stupidest things we do at the moment is we pay civil servants most after they've retired. Right. How bonkers is that? Right. So let's reduce the pensions and increase the pay. I would also reduce the numbers because I remember saying to my civil servants, this will probably horrify the Labour Party.

35:28We needed to have more Labour tribunals. We were not being tough enough on underperformance. We were not sacking enough people. I strongly have always felt that we need to be tougher. And in fact, it's not just me. I started this thing called the Civil Service People Survey. If you ask the civil service, how good is the civil service at dealing with underperformance? They will tell you we're rubbish, right? That's been consistent across parties, across time. It's true actually globally around the world of different civil services. So we need to be tougher and we need to accept the fact that we should get rid of people that aren't performing well because the people who are most annoyed by that are the people who are actually working their butt off to make up for the useless people that are alongside them?

36:14One of the things I noticed is that the civil service can get very caught up in agendas which don't have very much to do with the job I think they're supposed to be doing. Let me give you an example. So I noticed that the Syria team in DFID during the war, when we were saying this was our biggest national security priority, suddenly announced that they were going to shift up to East Kilbride in Glasgow. They were leaving London and they were going to do it because it was going to be great for the economy of East Kilbride. So I said, this is a problem, right? We're having these meetings with the foreign office and the MOD and you're not in the room.

36:43The answer was, don't worry about that minister. We'll always be able to jump on a plane and come down and join you in the committee meetings. Then I don't see them for a few months, right? And go up to East Kilbride. First thing that happens is some cheerful deputy director says, we're pursuing wonderful climate objectives. And we've just discovered that all these people were wasting time getting on airplanes down to London when they could be doing it. And so we've stopped anyone flying down to London. And at no point in the conversation is anyone saying, we are involved in a war here. It's a loss of good stuff is being done in London, which is happening outside the margins.

37:17These meetings can't be picked up in Zoom calls. The MOD and the Foreign Office are plotting away and doing stuff. And you're just out of the conversation because you're pursuing an agenda about regeneration in East Kilbride and carbon. This is a classic example, Rory, that why do you think they're going up to East Kilbride? Why do you think they're worrying about their carbon footprint? Because another part of government is saying to them, this is massively important. We need to get everybody away from Westminster. We need to stimulate local economies. We need to think carefully about our carbon footprint.

37:47So here are the things we need to do. And that would have been ticked off by the Secretary of State for climate change, whatever the department was called at the time. The Treasury would have been saying, yeah, yeah, we need to stimulate these areas. On the other hand, you're saying, actually, this is making things much more inefficient. And I remember having this argument when we move people up to places like Sheffield and East Kilbride that there was going to be a serious problem. Now, I think working from home and the fact that we can do all of this on Zoom or Teams or the rest of it has changed this quite radically.

38:19But I personally believe that we are still far too centralized. I've been up to Darlington to see the treasury offices there, but it's not just the treasury. It's a number of different departments working out of the same building. It's actually a really healthy thing. I would like to see us get more of the civil sermons out of London. And one of the problems we always have with that is ministers would say, well, I'm not going to Darlington. They've got to come to me. Well, it's not, I'm not going to Darlington, Gus. It's that I'm on a three-line whip voting in Westminster four days a week. I cannot get to Darlington.

38:53So if you're seriously expecting me to manage this department and focus on the subject, this moving of people to Darlington is undermining that ability to manage people, deal with them on a daily basis. I mean, I'll give you another example. Well, hang on, Rory. Rory, three-line whip? When was the majority such that it would make much difference if you were there or not? Well, throughout my entire time in parliament, I was on a three-line whip. Yeah, but I mean - No, no, but this is the new world, Gus. I mean, you don't understand. Literally, the three-line whip was three days a week. As a minister, Gus, I promise you, even under the coalition government, we can get the chief whip on to talk about this.

39:29even under the coalition government, when we had a decent majority, even after 2015, it was almost impossible because the slips were given to MPs who had a family illness, who had a serious sickness. There was a huge, senior MPs, but as a working minister, very, very difficult to get out of London and completely unrealistic to design a system that imagines we're going to be in Darlington. I would say that's completely unrealistic of the whips because I bet you weren't dealing with one or two majorities. There were mostly quite substantial majorities. So why weren't they? You know, like the Chancellor, you know, when I was Perm State of the Treasury, if the Chancellor said to me, I can't go to a G7 summit because there's a three-line whip, I'd have said, are you kidding me?

40:10You know, like, let's get this straight. You know, what's more important? You're dealing with something that's massively important internationally. And are you really going to lose by one? No. Can I take you back to the period of your career when I first came across you way, way, way back. This is when you were a press secretary, first of all, to John Major as chancellor, then as prime minister. What's your take on the role of the press and the media in our political debate? And how much easier or harder do they make it for government? I have always been a big fan of a free press. I mean, I think they have a massive role in a democratic society.

40:47I mean, day to day, you're extremely annoying. Let's be absolutely clear about that because you know you're you basically whatever the government's doing it's going to be challenged by part of it i remember with john major you know they love that his name created you know major triumph major disaster and those are the headlines for the same policy but in different newspapers you know that's kind of the way it works and so you learn to live with that but it's changed so radically since since my day as press secretary you know the we were not dealing with social media the way they are now. There's so much disintermediation, if you like.

41:25Young people are not reading newspapers. They're picking up their news and their opinions. The biggest thing I worry about is confirmation bias. People are signing up to follow people whose views they believe in. And so all they hear all the time is things which coincide with what their prior prejudices are. You know, I make a point of listening to people who I strongly disagree with just to find out what the arguments they're making and to see if it turns out I'm right or not. And if you're someone like me, I always go back to the evidence and want to look at evidence and find out from first principles, you know, who's right on this?

42:04Is Rory right about Afghanistan and the money going to police or not? We're coming to the end now, guys. My final question before I hand back to Rory, you've been very keen on the whole wellbeing agenda, mental health and wellbeing. Almost at times I've felt, being a rare voice in British public life, you're almost going towards Bhutan, you know, let's think about gross national happiness as much as GDP. Where has that interest come from? Where do you think that debate is right now? What more do you want to see done on it? So this is probably the most important question you put to me. I am a very big fan of governments having as their success measure, improving people's lives.

42:43The words we could use is improving wellbeing. As an economist, I am very frustrated that a lot of economics journalists have forgotten that GDP was created as a measure of activity, not as a measure of success. So for example, if certain activities increase, they will increase GDP. Let me give you a classic. If you all stop doing your volunteering for mental health, Alistair, and started selling crack cocaine instead or getting into prostitution, both crack cocaine and prostitution will increase the amount of GDP. Volunteering, the fact that you're not doing that will not show up anywhere. So GDP measures activities.

43:22It doesn't care if they're good or they're bad. They can be digging coal up. If you want to increase the growth rate of GDP, reopen all the coal mines. Dead easy, No problem. That will increase GDP. It's not a success measure. So success is do we improve people's lives? And that's one of the things we've been doing since 2010 now is basically asking people all the time, how satisfied are you with your lives? Do you feel your lives are worthwhile? Talking about their happiness and their anxiety. And we're finding that really important things are determinants of that that are really important for public policy.

43:58and you will know, Alistair, that one of the key things we could do is tackle mental health issues. You know, we have so many people with diagnosed mental health problems who are getting no treatment at all and if we were to do the things like that, we know that, for example, unemployment is not just bad because people don't have any income, it's bad because it helps their self-esteem, their feeling of being needed in society, their social connections. You know, I would love for a government to say, we're going to try and improve people's lives. We're going to try and improve wellbeing. And that's going to be the test for whether we've succeeded or not and reduce inequalities in wellbeing.

44:37The way you do that is really getting rid of those with very low wellbeing. They're people who've got mental health issues. They're people who've been in lucky in life. They're unemployed. There's all sorts of issues. And to be honest, when you look at the upper ends of the income scale, a billionaire becoming richer by a few million, that will show up as an increase in GDP. It basically makes absolutely no difference to them whatsoever. Gus, final thing from me. The big challenge, I guess, all over Europe and the US, represented by far-right populism, a massive deterioration in trust and politicians, government, is partly driven by a sense that we're just not performing.

45:16The old idea that, lovely technocrats and evidence-based policy is going to make us all better off. People look at the NHS, they look at the train systems, they look at the prisons, and they're just like, this is rubbish. And the government's about to take over, which has said it's going to stick to£18 billion worth of spending cuts, and that it's not going to raise taxes significantly, and it's going to reduce borrowing, and they don't have any cash. So is it actually possible to bring reforms to these organisations that's going to end up with a radically different performance for people? I mean, how do you really reform those bits of the civil service that are running the health service, etc., rather than what we tend to assume, which is this is just a question of more money because there's not going to be any more money.

45:57Yeah. A, I'd say there probably does need to be a bit more money because the way you would reform these would be by investment. And that would be investment in individuals, investment in services. You take the NHS, you know, like we've all had this problem of getting letters, letters, you know, like in this day and age to come to an appointment. And it turns out the letter tells you to come yesterday. You know, like there's all sorts of things that are wrong with it. So you have to start off by admitting you're exactly right, Roy. There's all sorts of things wrong with the way we deliver public services, but the opportunities are great and our expectations are even greater.

46:35But there will be tough choices, you know, with health. You know, I will be spending a lot more on prevention and a lot less on cure. And I'm afraid that would lead you to some really difficult decisions about what you do in those last few months of people's lives. We're spending huge amounts of money at the end of life for very little gain at times. And I do think these are really difficult topics to talk about. Politicians hate talking about the issue of actually we are all making decisions which do involve us putting implicitly a number on value of life. And you can't have those discussions, I'm afraid.

47:10It's really hard to get a logical discussion about how we should do our money. but you're absolutely right we need to improve efficiency but remember that also the expectations just keep going up and up as to what you get from public services you know when you when you do your contacts and you can pick up a phone or go online and do this in 30 seconds you will remember or you're probably old enough that you've been to the post office with your certificate of insurance your registration book you know your check and all the rest of it things have got a lot better A lot of public services are a lot better.

47:47So let's not denigrate it all. But we have become used to life getting better and better and better. And that's becoming harder. But it does mean we need to invest more. Great. Well, listen, Gus, thanks for all your time. It's been great to know you for so long. My final point is not a question, but you wrote a piece recently for something called the Haywood Quarterly, one of the finest civil servants that we worked with, both of us but certainly during our period in government was Jeremy Haywood sadly no longer with us and his wife Suzanne is keeping his name alive in all sorts of different ways including the Haywood Courtsley where you had a fabulous piece about transition about which we've talked today but we'll put it in the newsletter so that people can read that as well.

48:29Yeah Jeremy's a classic example I've always thought your latest football analogy about leadership and this is all about leadership you know there are level four leaders Alex Ferguson being one who are brilliant while they're there. And when they go, it all falls apart. Level five leaders are the ones that when they leave, it gets better. I'd like to think that when I handed over to Jeremy, if only he'd taken cabinet secretary and head of civil service together, it would have got even more better. But he was a kind of civil servant, I think, across the whole parties. You saw his memorial service in Westminster Abbey, where we had party leaders from all the parties there acknowledging a great civil servant.

49:07Absolutely. Thank you, Gus, very much. Thanks to both of you. We'll see you soon. So, Rory, Lord Gus O'Donnell, I guess if there's a change of government this week, then his successor, Simon Case, will be quite an important player in the week's events. Do you think the podcasters of the future will be talking to Simon Case about how to do transitions? Well, yeah, I'm a bit worried about Simon Case. But I do think the idea of a series of interviewing the cabinet secretaries would be really, really interesting, because they are such big players. And we often talk about this. And we talk about the fact that, you know, you pretend the Secretary of State for Health, we had a great interview with West Streeting, it's going to come in and sort it all out.

49:47But the truth is, it's over a million people, 365 million GP visits a year, all this kind of stuff. And really, it's the civil service, the core of this. And it's these people, Gus O'Donnell, Richard Wilson, that I think we should try to actually infuel the ones that are still alive. Yeah. Well, there's a few of them. Andrew Turnbull, Robin Butler, who was the first with us. Yeah, that could be a good idea. That could be a very good idea as long as they sort of open up and are quite frank and don't talk Delphically too much. I think Gus still does a bit of Delphic. Gus has got a great profile though, because he's not a classic mandarin in his manner in his background and so forth but he's still a very very effective string puller and he's still i guarantee you that at the moment he'll be having regular cups of tea with sue gray he'll be keeping tabs on simon case he'll know the permanent sex and what's going on he's a very very smart guy but he's a very good guy as well and i love the fact he was one of the first onto this whole mental health and well-being agenda and really understanding why it matters i I warmed to him first back in 1997.

50:50I was a diplomat in the embassy in Indonesia, and there was this big Asian financial crisis. And Gordon Brown and Ed Balls turned up with Gus O'Donnell, who I think was then at the IMF World Bank. And I was given the job for the afternoon showing him around Jakarta. I remember going through a big department store with him, and I really liked him, really warmed to him. What I would say, though, is that if I was going to grumble a little bit, you're absolutely right. On the surface, he's this very, very kind of modern contemporary with it guy, but just under the surface, a little bit of the old style Sir Humphrey hidden, not far below.

51:22And one of the things that, you know, I didn't want to get in an argument with him about it, but he really doesn't like criticism of the civil service at all. So, you know, I told this story about Yemen, you know, these guys saying we do Skype calls and they're not showing it to me. And he said, oh, it's probably an issue of national security. I was often asked not to share things in that. Intelligence. Yeah, intelligence. Which implies that somehow A, I'm a security risk and B, there was a really good reason for this. In fact, actually, almost certainly the answer to the question is that the civil servant briefing me panicked and lied and said they did Skype calls with Yemenis.

51:53And they didn't do Skype calls with Yemenis. And they were completely unable over three months to bring themselves to saying, I'm so sorry, minister. Actually, we don't know really what's happening with the money and we don't really do Skype calls. You've got me banged, right? I was bullshitting. Yeah. Which actually, if you'd said it sort of day two, I probably would have been like fine and laughed and we would have gone on with it. So, I think it's probably necessary, isn't it, that somebody right at the top of the civil service, but I see it a lot that they have a kind of pride in the same way as senior generals have a pride in the army.

52:22They really don't like criticism of it. And sometimes I think he's sort of convincing himself things he can't quite believe. So, when I said, listen, often civil servants have a pretty skeptical idea of politicians, he would say, oh, absolutely not. You know, no, no, we see you as absolutely extraordinary. We write the boring speeches. You're doing something. Exactly. Exactly. So the point is that if you took the transcripts and then read it in that voice, you'd see much more about him. Okay, we should do that. We should get our AI to take the transcripts and put Gus O'Donnell's voice into Robin Butler's voice and see whether it comes over very, very different.

52:59That's not a bad idea. Anyway, I think it was very interesting, very enlightening. I think for a lot of people who will be thinking, what on earth happens when a government changes hands? if a government does change hands on Thursday that's going to be a very very useful interview for lots of people and I hope encourages some listeners to think about joining the civil service because I almost think it's more important than becoming a politician getting really talented civil servants so I hope the Gus O'Donnell of the future heard that and thought maybe that could be me excellent see you soon see you soon

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