Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

James Ashton
Monday 04 May 2015 07:59 BST
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Lord O’Donnell at the offices of his advisory firm Frontier Economics, which he founded after stepping down as Cabinet Secretary
Lord O’Donnell at the offices of his advisory firm Frontier Economics, which he founded after stepping down as Cabinet Secretary

It took God six days to create the world, but only five days for GOD to oversee creation of the last government. Now he has retired as Cabinet Secretary, Britain’s top civil servant, how long does Lord [Gus] O’Donnell – known in the corridors of power by his initials and for getting things done under four very different prime ministers – think it will take this time?

“It could be weeks,” he says, adding, not for the first time in our meeting: “It really does depend on the numbers.” At least it has been done before. O’Donnell featured among the “golden triangle” of civil servants and royal courtiers that made sure power was transferred seamlessly in 2010’s hung parliament to the first coalition since the Second World War. While not quite writing the manual, “I did remind people of the rules”. With the atmosphere febrile, some say he told David Cameron and co to get on with it too.

“No, that is not true,” says O’Donnell, 62, the ultimate Sir Humphrey, who speaks carefully in south London tones. “There is no sense that we were trying to rush things. I think they [the politicians] were aware the world was watching. The backdrop was more difficult than it is this time. We were having a Greek eurozone crisis.”

Lord O'Donnell has been replaced as Cabinet Secretary by Sir Jeremy Heywood

Now, if the economic backdrop is more relaxed, Greece notwithstanding, what is difficult are – guess what – the numbers that mean the make-up of government is impossible to predict.

“It could be multi-party, it could be mixtures of coalitions and deals – and the deals may be written or unwritten. There are all sorts of possibilities. I suspect all parties involved will definitely take more time to consult.”

In 2010, the average time for putting together a government in Europe was 44 days, and that was before Belgium strung out the task for 21 months. Even the German Chancellor Angela Merkel’s grand alliance took almost three months to form. What could speed up matters here is if Ed Miliband forms a minority government and deals with the SNP only on a vote-by-vote basis.

While it is all going on, O’Donnell recites his three principles. The first is continuity of government, so that at all times there is a prime minister. While negotiations take place, Cameron would remain in charge of the country even if he lost his parliamentary seat, he points out. Second, the Queen must be kept above it all.

And third: “Who gets to govern is up to the politicians, not the civil servants. It is the politicians that have to do the deals. It is Parliament that ultimately decides because it is a question of who can get a majority in the house.”

We are in the boardroom of Frontier Economics, the advisory firm that O’Donnell now chairs. It is expanding fast, including new offices in Berlin and Madrid, but it is still far smaller than the 450,000-strong civil service he used to command. At times like this does he miss that closeness to the levers of power? He smiles.

“I am very happy. I feel like a batsman who has played one and got out without losing my wicket.” While he has not been consulted on the best way forward this week, he is friends with his successor, Sir Jeremy Heywood, in whom he has “complete faith” as one side of the triangle that also features Sir Christopher Geidt, the Queen’s Private Secretary and Chris Martin, the Prime Minister’s Principal Private Secretary. What concerns him, though, is legitimacy.

“The relationship between votes and seats is not going to be straightforward. If the predictions are right, a very large number of people are going to vote Ukip and Green for very, very few seats. When you look at the SNP for example, they might get 4 per cent of the UK vote but something like 50 seats.” Contrast that with Ukip which, “chances are, will come second in about 100-odd constituencies”. So will this election result sound the death knell for first-past-the-post?

“It will raise questions. It is not clear to me yet how they are answered.” The Liberal Democrats’ referendum in 2011 failed to gain support for an alternative voting system that ranks candidates in order of preference, so perhaps proportional representation will climb the political agenda instead.

Watch out for another quirk. There is a chance that Miliband will be prime minister, in coalition with the Lib Dems and perhaps having struck a deal with the SNP, but “almost certainly” the Conservatives will have won in England. One thing that O’Donnell thinks has blindsided most people is that whoever is running the country, their first task will be to implement agreements already struck to hand huge new powers to Scotland.

Lord O'Donnell insists the Queen must be kept apart from government negotiations post-election (Getty)

For someone so closely associated with the Establishment, O’Donnell has a reforming streak. He has floated ideas about open primaries, which encourage people without political affiliations to stand for Parliament, and the reform of the House of Lords – even though he is now a member.

“I think a very large number of Lords would agree there are too many of us,” he concedes. And then there is levelling out the population size of constituencies, a coalition plan that foundered and which he describes as representing “a kind of basic sense of fairness”. Other changes that are being discussed now are the closure or merging of some ministries in order to save money.

“Changing the deck chairs probably isn’t the place I would suggest they start,” O’Donnell says. “But medium to long term, yes, I am very much in favour of fewer, larger departments. Consolidation I think makes a lot of sense.” The two biggest Whitehall fiefdoms operate better at arm’s length, though.

“There is a bit of a check and balance between No 10 and the Treasury and I think that is healthy. I have lived through situations where chancellors and prime ministers haven’t got on – curiously enough, if you go back to Nigel Lawson and Margaret Thatcher – but it is part of our system.”

It was Lawson who first spotted O’Donnell’s ability, making the Treasury economist his press secretary. The next Chancellor, John Major, a fellow south Londoner, inherited him and took him to Downing Street when he became Prime Minister in 1990. There were stints at the International Monetary Fund and the World Bank, based in Washington, before a return to the Treasury under Gordon Brown. By the time Tony Blair appointed him Cabinet Secretary in 2005, O’Donnell had earned a reputation for an informal style that enabled him to smooth tensions at the highest level. It speaks volumes that when he retired, his role was split three ways. He was linked to becoming Governor of the Bank of England but never applied for the job. George Osborne went to great lengths to hire Mark Carney.

In his time, the Civil Service had to fight back attempts to politicise it, but the permanent secretaries in each government department succeeded in staying neutral. Often they are a vital continuum. O’Donnell cites the example of a five-year period in which there were nine pensions ministers.

“There is a bit of a fallacy that civil servants like high ministerial turnover to just let them get on with it. You absolutely want the minister to stay around to see through changes.”

Gus O'Donnell was made a Knight in 2011

But the civil service did not escape the knife when the Coalition needed to cut costs. Now there are concerns of a brain drain, especially among those civil servants that negotiate the big, outsourced contracts.

“The area where I disagree with the previous government was in holding down pay for these sorts of people. There are not that many but we do need to be able to bring in the best so that we match the private sector expertise.”

For all his views on what might happen next, O’Donnell is the soul of discretion and has vowed never to spill the beans about his time in the corridors of power.

“For a lot of people, memoirs are therapy and, to be honest, I don’t feel like I need therapy,” he says. Leave that for the people trying to puzzle out the shape of the next government, starting this Friday morning.

The CV: Gus O’Donnell

Education: Attended Catholic grammar school Salesian College in Battersea. Read economics at University of Warwick; MPhil from Oxford.

Career so far: Lectured at Glasgow University before joining the Treasury as an economist in 1979. Became Chancellor Nigel Lawson’s press secretary in 1989, then John Major’s. He was the UK’s executive director to the International Monetary Fund and the World Bank. In 2002, he was made Permanent Secretary at the Treasury and Cabinet Secretary from 2005 until 2011. Chairman of Frontier Economics since 2013.

Personal: Married to Melanie. They have one daughter, Kirsty. Lives in south London. Manchester United fan.

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