No, Minister

Tory plans to cut waste remind David Howell of Edward Heath’s failed initiative of 1970 If the Tories want to know how Wars on Waste work out, the best test is to go back not to 1979 but to 1970. That was the year Ted Heath won the election — against most of the odds and the widespread predictions of experts. And the centrepiece of his platform was, yes, a gigantic war on government waste. There would be, said the Tories, a New Style of Government. There would be less of it and it would be better. The state would shed a vast load, with downsizing, outsourcing and privatising galore, and with more time left for wise policymaking and less time taken trying to manage and provide everything under the sun.

Top businessmen were drafted in from the private sector, teams of management consultants recruited. There would be the most systematic analysis of the entire range of central government activities ever undertaken by a party in opposition. Nothing so thorough had been attempted before. Almost no area of departmental spending would be spared. The New Style of Government became the lead theme in the 1970 manifesto.

The plans were wildly ambitious for those days, although they may sound tame enough today. One or two of the Tory old guard grumbled that it all sounded too ‘managerial’, that cuts would antagonise the unions and so forth and that, anyway, we would never get the Civil Service, which would have to carry it all through, to amputate its own limbs.

But we thought we had the answer to that, too. Scouring round America they had come across a magic tool. It was called PPBS (Programming-Planning-Budgeting-System).

This was the ultimate piece of waste-cutting, activity-questioning machinery. Nothing was safe from its blades. Washington was full of the scheme and the then bureau of the budget chief, Charlie Schultze, a wonderful, fast-talking waste-hunter, agreed to come over and explain its delights to the Brits.

PPBS, we were clear, would do the trick. It would lead to every activity, every objective, in Whitehall being ruthlessly challenged. But how would we get the machine in place and drive everything forward? Here the key was the brainchild of Mark Schreiber (now Lord Marlesford). It was to place in No. 10 a ‘central capability’, giving the PM new clout and authority to bully departments, to squeeze spending, to cut out cen tral functions and to hive off and privatise.

The day of government came. Ted Heath at No. 10 was presented by the business team leader, Dick Meyjes of Shell, with a massive Black Book of detailed proposals for cuts and for the new machinery to implement them. But from there it was all downhill. Almost immediately Heath was swamped by other issues and the War on Waste slid down the list. Downing Street told the mandarins to ‘get on with it and take care of it’ and that, alas, is what they did.

The Civil Service approach was not, of course, frontal obstruction; that would have been far too crude. On the contrary we were assured that the Black Book contained excellent ideas for tackling waste and reforming the machinery of government, and we were clearly ‘on to something’. But similar ideas had already been well examined inside the Civil Service, so the whole endeavour could now be safely left in the hands of officials.

The way forward, said the most senior mandarins, was to set up some committees. There would be a parliamentary secretary’s working group (that was me), a management projects committee and a ministerial committee on the ‘central capability’. My committee’s terms of reference, straight out of Yes, Minister, were ‘to act as a focus for bringing before ministers ideas as to government policies and procedures that needed early investigation, with regard to the government’s general strategy, the improvement of government decision-making, the improved management of government activities and the prospect of reducing government expenditure’.

The committee then gave birth to reviews — lots of them — to look at the proposed Black Book cuts, all to be carried out by the people who were the subjects of the reviews. Needless to say, most were found to be ‘impractical’, ‘unlikely to generate savings’ or ‘too sensitive politically’.

The other committees sounded more high-powered (the PM was in the chair of both) but fared not much better. The management projects committee issued a string of instructions to all departments ‘to undertake a thoroughgoing review of all their functions and aims and to recommend which should cease, be hived off or privatised’. A home-grown version of our beloved PPBS, rechristened Programme Analysis and Review (PAR), was to be deployed. Little more was heard of these reviews either.

The final committee was the loftiest of all and included half the Cabinet. This was the one which was going to install the ‘central capability’ — Mark Schreiber’s original idea and the motor for the whole initiative. It met seven times and went round in circles. The idea of a new central body like this filled Cabinet officials with alarm. On the day he entered No. 10 Ted Heath had received a memo from the Civil Service Department arguing against any radical changes in machinery of this kind, as well as against, horror of horrors, splitting the Treasury another idea which we had floated. ‘Certain improvements’ in the machinery of government were, however, admitted as desirable.

These turned out to be a string of reservations about a new unit at the centre. It should not be working for the Prime Minister alone, not duplicating the work of other departments, not getting in the way of Cabinet office functions — not this, not that.

What was left, and agreed by the Cabinet, was a hopelessly watered-down version, a Central Policy Review Staff which would have several vaguely strategic and mostly analytical roles, none of which included cutting wasteful spending. Our dream of a powerful central unit under the PM evaporated. Officials were insistent that it should work for all the Cabinet, not just the PM, and should focus in particular on early warning of impending disasters — of which plenty ensued, although not the ones the CPRS predicted.

So that was really the end of the New Style of Government. In opposition our preparations for the ‘war’ were worthwhile because they did raise profound issues about government and played well in the media which were looking to Heath for some consensus-breaking ideas.

But once in government we failed because we badly underestimated the official reluctance to wage the ‘war’ and because the essential drive from the top was absent, the PM having been distracted by unions, by inflation, by Europe and by Ulster (where I was eventually dispatched).

Perhaps the comforting thought is that most of the ideas of 1970 resurfaced and eventually took off in the decades following. We were just years too early. The Civil Service certainly had the first laugh at our naivety. Today’s zealous reformers must make quite sure that it does not have the last one.