Permanent revolution? Yes, minister

Podium: From the inaugural Vice Chancellor's lecture at City University given by the head of the Home Civil Service

LORD SALISBURY is reputed to have remarked to Queen Victoria: "Change, change, why do we need change? Things are quite bad enough as they are." I would of course take issue with the last part of his remark, especially in relation to the Civil Service. But I know that quite a lot of people sometimes feel that we have had quite enough change, thank you very much.

I am afraid that "no change" is not an option. For the last 20 years or so the Civil Service has been undergoing substantial reform.

If you entered in, say, the 1960s (as I did), the literature would have told you that senior civil servants were policymakers. They were not expected to know the cost of the resources they controlled. They would not have described themselves as managers. This was the responsibility of the people beneath them, the executive staff.

Reform began in the early 1980s with manpower controls, a very blunt instrument. After that we moved on to the financial management initiative and the drive for efficiency through Rayner scrutinies.

Probably the most important reform began in 1988 when we moved to the introduction of Next Steps Agencies. Like all the best reforms it was based on a simple idea: that you should give the people running a large operation a clear framework with targets and key performance indicators.

Three-quarters of all civil servants now operate in such agencies. I would stress that the agencies are very much a part of the departments to which they belong. The reform is a management reform, not a constitutional innovation.

Along with Next Steps, the development of the Citizens' Charter focused us on the need to provide an excellent service to the public.

We launched major programmes of contracting out, privatisation and market testing. The latter were often not only a very worrying experience for the staff directly affected but a sobering one for senior levels of the service. For years we had been arguing to the Treasury that we had no further fat to trim. We now learned that savings of the order of 20 per cent or more could routinely be achieved through greater efficiency.

Through all these reforms ran a strong thread of decentralisation, to a degree that many of us beforehand had thought unlikely.

I would not claim that the manner in which we implemented all these reforms over the years was a model worthy of emulating.

Some of this has been very demanding on our senior staff. People who want to get to the top nowadays must have a wider range of qualities. Policy-making still is important. But we now require people in public service to be good managers and good leaders and to know how to achieve results through the application of project management skills. They also need to have good presentational skills: to be prepared to appear in public, on television, before select committees.

A new political generation has come to power. When anyone of any political party takes office for the first time there is bound to be a learning curve. It is true in any job. What is perhaps less obvious is that not having been in government before can be an advantage.

One challenge for the civil service arises from the fact that there is now a much sharper focus on the outcomes that the Government wishes to deliver in the community, untrammelled by any sense that this department does some things and that department does other things.

The Government has set out very clearly its priorities, stressing, in particular, health and education. These priorities have been reflected in the allocation of resources following last year's Comprehensive Spending Review. Every department across government has entered a "public service agreement" specifying the targets and outputs which it is committed to delivering.

We need to consider how to make the delivery of real, practical outcomes which make a practical difference to the ordinary members of the public - part of our core values.

And we need to bring about a real culture change which values diversity. We have far too few women and people from black- and other ethnic-minority backgrounds and people with disabilities in the senior parts of the civil service.

I do believe that we have one of the best civil services in the world. We may not always be good at advertising ourselves, but you only have to look at other countries beating a path to our door to realise that we have an institution which is valuable and a world leader. However, we will only retain this position if we constantly strive to improve what we do.