Benchmarking an opportunity for Civil Service

Economics: If benchmarking pay increases should have changed anything, it is that we should stop blaming politicians for mistakes such as the PPARS computer cost overrun, writes Marc Coleman.

Having been brought up to, and some would say over, comparable private sector levels of remuneration, those in the Civil Service who investigated, prepared and executed such a decision might fairly be regarded as responsible for it. But to some, working in the Department of Health means never having to say you're sorry.

To be fair, the department is not the only institution to encounter failures in information systems architecture. A depressing fact about information technology is that, whether in private or public sectors, most grandiose schemes such as PPARS, result in failure. The size and scale of what happened is not very different from other well documented cock-ups in the private sector.

But one significant difference is that in most private sector companies those responsible for cock-ups are held accountable.

Another is that taxpayers are not forced to foot the bill. These considerations put the PPARS fiasco, and all the other failures cited in the Comptroller and Auditor General's report, firmly in the public arena, and there is only one response to those who argue that such waste is a small percentage of our annual public spend: it is a very high percentage of our overseas aid targets which would have been unnecessary to defer if half the waste documented in the C&AG's report had been avoided.

There are systemic roots of failure in the Civil Service. The department deserves attention, because it manifests more than its fair share of these. Deficiencies in the Civil Service don't stem from its staff, but from issues relating to organisation, recruitment and human resource management.

Civil servant bashing is not a blood sport of which we should approve. If anything, reforming the Civil Service should be as much about liberating the potential and creativity of civil servants as it should be about improving cost efficiency.

The general nature of the Civil Service recruitment process is perhaps the first problem to be addressed. However excellent and clever, these people have little or no front-line experience of the system over which they make policy.

Nor can they build up the specialist expertise in management, accounting, information technology, human resource management and, above all, medical practice that are needed. Many dedicated staff in the department try and make up for this by night study, but the vital real world experience is often missing.

This system is highly damaging to civil servants. By not having specialist skills that are transferable to the labour market, they find themselves trapped. In a world where diversity of work experience is becoming more important, many civil servants have no effective benchmark as to what their employment conditions should be. It also leaves them with no options if their employment situation becomes unbearable. And as the system of allocating staff to jobs in the Civil Service is famously insensitive to staff preferences, there is a high risk of this happening.

The demoralisation of the individual that can arise from this is compounded by a culture that is highly resistant to change. This stems partly from the effective operation of closed shops for promotion. It is very difficult to bring into the Civil Service managers or experts from outside. When such positions are advertised, it tends to be for temporary contracts.

In the UK's civil service recruitment is more open, with entrants from the private sector coming in at top levels. The reputation, external performance and internal morale has improved as a result.

More competition for promotion needs to be introduced hand-in-hand with systems to assess performance, to reward and to punish. Some shift towards promotion on merit has occurred, but the reward system remains dysfunctional. Performance metrics are developed under the benchmarking verification procedure, but they are crude.

Reward mechanisms are also dysfunctional. If a civil servant builds up vital expertise and does an excellent job, the only way of rewarding him or her is to move them up the hierarchy, losing the expertise that was prized.

And as middle management positions are introduced to create a structure of promotion prospects, needless layers of management are added.This has a huge cost burden on the Exchequer.

If rewards are dysfunctional, punishment is largely absent. Bad civil servants are often exiled to the more obscure areas of policy. In the absence of proper appraisal and feedback, this kind of punishment is destructive.

The victim's behaviour is punished before any constructive attempt was made to monitor or correct it, and it is punished in a way that often leaves no opportunity for redemption.

On the other hand, where no effort is made by staff to correct avoidable underperformance, why should we forego the option of firing them? Bad eggs are fired in the private sector. If civil servants expect the same pay rates as those in the private sector, they must also face the same performance criteria.

The forthcoming benchmarking exercise has an opportunity to remedy these deficiencies. Its objective, as far as the Civil Service is concerned, must be to create a new, dynamic cadre of professionalised civil servants who are willing to face the rewards and risks of the real world that most of us live in.