Britain’s civil service is like an insular “monastic order” that thinks the same way and “lacks the skills for coping with a modern society”, according to Tony Blair’s former chief of staff.
In a damming indictment of the officials he worked alongside in Downing Street for 10 years Jonathan Powell said there was a “strong case” for a royal commission to be set up to forge a new system of governance, admitting piecemeal reforms had failed during his decade working with Mr Blair and subsequently.
Specifically he suggested reducing the power of the Treasury – stripping it of its role allocating spending to Whitehall departments.
He said his preferred reforms would include the creation of a powerful new body - similar to the US Office of Management and Budget - to control both the spending and priorities of individual departments.
Giving evidence to the Public Administration Select Committee Mr Powell controversially compared civil service culture with a “monastic order” that led to everyone thinking the same way over a lifetime in the job, calling for more outside expertise to be brought in and more failing civil servants to be removed.
The former diplomat added that the civil service “lacks the skills for coping with a modern society and a modern political system”.
“There is a strong case for a really good look at the civil service again, properly right across the board, thinking about how to change it rather more dramatically,” he said.
“One of the mistakes maybe we made in government was trying to make a series of incremental changes hoping that would make things better.
“Actually I think you need to look at the whole system because what you tend to do is introduce perverse incentives; if you change one bit over here and one bit over there, they tend to work against each other.
“So I do think, with the experience of lots of bitty bits of reform cobbled together, you would be better off with a root and branch look at it through a royal commission.”
Mr Powell said the Number 10 operation should be kept relatively small, arguing it would damage authority to have phone calls made by “some young person who has no idea what the Prime Minister thinks”.
He said there was a case for more political appointments to the upper echelons of the civil service but not on the scale seen in Washington, Paris or Berlin, and that senior ministers should have more of a say in the appointment of permanent secretaries.
But the man who was among Mr Blair's closest advisers throughout his time in office indicated that his main priority would be to reduce the power of the Treasury.
“I would have something more like the OMB in the American system or the departments in many European governments, where you bring together setting priorities for spending along with setting priorities for personnel,” he said.
“So you would have the Cabinet Office and the spending bit of the Treasury together as one powerful department at the centre with a cabinet minister in charge of it and that would actually align your incentives for government. You would have the money and the instructions flowing in the same direction.”
The Government is currently trying to push through a civil service reform plan but has made clear it will go further if it feels that its proposals so far are being frustrated.
A Government source said: “The civil service needs substantial reform to make it fit for purpose in the modern world. This is in part to compensate for a long period where management was lacking and essential skills were eroded.
“If the Government's modest reform plan cannot be effectively implemented, the case for more significant changes will become ever harder to resist.”