Report looks at government capability reviews

• Report: Assessment of the Capability Review programme
• Public Accounts Committee

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"The introduction by the current Cabinet Secretary of a programme of published, external assessments of the capability of individual government departments is a significant advance. The programme has encouraged changes in the way departments operate. What cannot yet be demonstrated, however, is a link between such changes and actual improvements how public services are delivered.

"Assessments currently rely too much on qualitative and subjective measures. A wider range of objective quantitative measures is required. There must be quantitative comparisons with the best private and public sector organisations. And the culture within the civil service of managing the performance of individual staff, with incentives to reflect success and sanctions to tackle failure, must be greatly strengthened. Senior leaders in poorly performing government departments seem proof against dismissal in a way that leaders in local government are not.

"Where departments differ conspicuously from many private sector organisations is in having a much poorer understanding of what their customers want. Without a culture than focuses consistently on the needs of the user, improvements to performance in delivering services will simply not happen."

Mr Leigh was speaking as the Committee published its 45th report of this Session which, on the basis of evidence from the Cabinet Office, examined taking forward Capability Reviews to link more clearly with demonstrable improvements in performance, improving leadership and management throughout the delivery chain, and changing the culture of the civil service.

In 2005, the Cabinet Secretary launched a programme of two-yearly Capability Reviews. They involve published external assessments of departments with the aim of achieving a major improvement in civil service capability. The programme is a significant step forward in how government departments are assessed. To have publicly available commentary, sometimes critical, of important aspects of departments’ capability is an initiative of great value, with real potential as a driver for improvement. It is vital that the programme becomes permanently embedded and is developed in line with this report’s recommendations. We intend to return to this subject after two years to review progress.

The first-round reviews, in 2006–07, showed that departments had a long way to go. Overall, departments were rated as less than ‘well placed’ in two-thirds of the assessed elements of capability. In response, departments have made changes in the way they are run, particularly in terms of board and senior executive team visibility and leadership. The 11 departments that have had second-round reviews have achieved significantly higher assessments. However, the recession and a tighter budgetary context will increase future challenges by requiring departments to achieve more with less.

The link between Capability Review scores and delivery performance is not clear because assessments are based largely on qualitative and subjective evidence. The close involvement of the Cabinet Secretary has provided a valuable challenge and check of reasonableness. But it will be essential, in order to achieve sustained improvements in departments’ ultimate delivery, for there to be more objective and quantified metrics to link assessments to demonstrable improvements in performance. It will also be necessary to introduce a strong element of external benchmarking to drive greater improvement.

The second-round Capability Reviews show that staff confidence in senior management is improving but is still too poor. Alongside the need for further improvements to senior leadership, Capability Reviews do not yet give sufficient attention to middle management, front-line staff and departments’ delivery partners and agencies. And unlike local government assessment, which includes political leadership, Capability Reviews do not consider how well Ministers and senior management work together to achieve desired outcomes.

The Cabinet Secretary intends to use Capability Reviews as a catalyst to change civil service culture so that it is more collaborative, dynamic, customer focused and innovative. We applaud this aim but note that there is a long way to go. Departments need much more robust staff performance management, better insight into their customers’ needs and preferences and greater use of innovation.