NOT MARKING TIME:

Lessons of power: After seven years at No 10, I believe that government retains a great power for good, and that politicians are as impressive, and ethical, as their counterparts anywhere else. The danger is not from hubris, but that governments will believe the myth that they are condemned to mistrust and powerlessness (Geoff Mulgan, May 2005, Prospect uk)

3. Governments overestimate their power to achieve change in the short term, and underestimate it in the long term

Six years after 1997, the strategy unit was commissioned by the cabinet to conduct a "strategic audit." The aim was to take stock of how the country was doing and how well government was performing. The exercise involved a systematic comparison of Britain against other countries, assessments of what was happening in each important area of policy, and anonymous interviews with almost all cabinet ministers and most of the permanent secretaries.

Taking this long view showed up those areas in which Britain was doing well (economic growth and employment, for example, and CO2 reductions) and those in which we were still underperforming (R&D, productivity, congestion and inequality). The countries doing best on many fronts were the smaller ones of northern Europe, particularly in Scandinavia, rather than the favoured models of the past—the US, Germany, France and Japan. All had found distinctive new ways to combine open economies and political systems with high levels of capacity—particularly human and social capital. The countries that had seen the sharpest improvements over the last decade shared another feature: they had focused on the long term and the strategic. Most of the frontrunners in the latest world competitiveness rankings—Finland (1), Sweden (3), Taiwan (4), Denmark (5), Norway (6), Singapore (7)—contained specialist teams within their bureaucracies whose job was to look at long-term strategy and to challenge complacency.

When Labour came to power in 1997, Whitehall's ability to think and act strategically had atrophied. The central policy review staff (CPRS)—founded by Edward Heath in 1970—had disappeared more than a decade earlier. With the wafer-thin majorities of the mid-1990s, No 10 thought in terms of days rather than decades, and the treasury was little better, scarred by its failure to understand, let alone manage, the rollercoaster cycles of the 1980s and early 1990s.

After 1997, Tony Blair moved steadily to build up capacity at the centre. The social exclusion unit, which I helped to set up, established some of the principles: an emphasis on analysis; an open process with as much work published as possible; a 50:50 split between insiders and outside practitioners; and rapid moves to implement conclusions and follow them through under the aegis of cabinet committees. After 1998, the strategy unit (originally the performance and innovation unit) spread these principles across other policy areas and soon became part of the government machine. It drew most of its commissions from ministers rather than just the prime minister, and was helped by a governance structure that carefully wove together No 10 and No 11.

Over the last few years a quiet revolution has taken place, largely ignored by the media, which are bored by the mechanics of government. Each department has established a strategy team, often run by a senior figure from outside government. The five-year strategies published by all the major departments over the last nine months mark a decisive step towards a more serious approach to the business of government, and have generated much interest around the world, from Brazil and China to Russia and Japan.

Taking a strategic approach is difficult in any government—you rub up against pressures of tactics and politics, and can be undermined by personality clashes. But a combination of sound analysis, rigour on priorities and realism about capacities to deliver does pay dividends. This is evident internationally, but it is also clear from recent British history. The clearest message to emerge from a comparison of the 2003 strategic audit with the similar one conducted under the CPRS in 1971 was that many issues that had once appeared intractable had gone on to be treated or cured. Our predecessors had despaired that problems like high inflation, unemployment and strikes were not amenable to policy. Yet as the Times commented on the strategic audit: "What looks insoluble to one generation can be sorted out more completely than would have been thought possible… but governments overestimate their influence and impact in the short term and underestimate it in the long term."

4. Government must draw on independent knowledge

This partial shift to a more strategic style of government reflects a changed relationship between government and knowledge. Past governments drew mainly on ideology, instinct or political calculation to determine what to do. But now that there is far more evidence on what is likely to work in fields as diverse as penal policy and macroeconomics, the craft of government has become a bit more like a science. This knowledge resides in universities, in international organisations like the OECD or EU, and in government itself. Much of the evidence is banal, but often it can show quite counterintuitive results: that there is little correlation between spending on education and results, for example, or that spending on drugs enforcement usually strengthens organised crime.

Government's greatest successes have generally been in areas in which the knowledge base is strongest and where independent validators of knowledge, like the audit commission, are most powerful. So the decision to pass power to the Bank of England has made it possible for decisions on interest rates to be made openly on the basis of evidence and economic knowledge, with peer review and a remarkable degree of frankness about the uncertainties involved. In social policy, my main focus between 1997 and 2000, almost everything we did rested on a strong knowledge base: the new deal drew on the experience of welfare-to-work programmes in Scandinavia, North America and Australia, many of which had been rigorously evaluated. Sure Start drew on a mountain of evidence about the impact of early years support. Pilot studies designed to generate new knowledge have become commonplace, on the principle that it is generally better to test an idea in a small area rather than on the whole population at once.

It cannot be entirely a coincidence that some of the government's greatest problems have arisen from the field—intelligence—that has been most immune to this gradual revolution. In the past, intelligence agencies have been notorious for skewing secret advice to suit their own interests, usually by exaggerating threats to gullible politicians. In retrospect, despite the often sober peer review of the joint intelligence committee, when it came to judging WMD in Iraq, there was neither enough external scrutiny nor enough rigorous assessment of the status of the knowledge. By contrast, the more open systems for managing knowledge in the UN and the media turned out to be rather better at judging the truth.

This growing emphasis on knowledge does not exclude a role for values or ideals. The knowledge base is usually uneven and no amount of it can tell any government what it should do or what it should value. However, it can steer it away from stupid mistakes and futile efforts. And in some fields, evidence can powerfully reinforce values, as in the case of climate change.

5. Governments have to renew or die

All governments risk stagnation. There are natural cycles of growth and decay. Administrations that start their life fresh and full of zest tend to become stale as politicians start to believe their own propaganda, are trapped by old assumptions and mingle only with sycophants. Yet some administrations have renewed themselves, often over many decades. During Labour's first term, I visited several countries where ruling parties or coalitions had remained in power over long periods, including Canada, Japan, the Netherlands and Sweden, and tried to draw some lessons. These turned out to be fairly simple. First, renewal depended on new people: at some point there had to be wholesale changes of personnel, sometimes including the leader. Nothing better symbolises renewal than a selection of younger faces to replace an old guard. Second, there had to be new stories, new ways of describing what the parties were trying to achieve and why. Third, there had to be new policies which embodied these stories. And fourth, there had to be a new way of communicating, since the methods that originally help a party gain power face a law of diminishing returns (John Major's use of a soapbox in the 1992 election is a good example—the antithesis of Saatchi and Saatchi bombast).

The who;e thing is quite good and no truer words have ever been spoken than that because the media is bored by or doesn't understand the mechanics of power great reforms that occur within the government go relatively unnoticed.

Posted by Orrin Judd at May 5, 2005 9:04 AM