Open public services in a global marketplace

Reform-Tata Consultancy Services seminar series Global solutions for open public services Tim Jones, Chief Executive, National Employment Savings Trust Corporation Tuesday 11 September 2012 A flexible workforce: Improving skills mobility for economic growth Mark Harper MP, Minister of State for Immigration Thursday 6 December 2012 The role of the Civil Service in delivering open public services Hon Bernard Jenkin MP, Chair, Public Administration Select Committee Wednesday 12 December 2012

Reform is an independent, non-party think tank whose mission is to set out a better way to deliver public services and economic prosperity. We believe that by reforming the public sector, increasing investment and extending choice, high quality services can be made available for everyone. Our vision is of a Britain with 21st Century healthcare, high standards in schools, a modern and efficient transport system, safe streets, and a free, dynamic and competitive economy.

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Reform-Tata Consultancy Services seminar series

Attendees
Global solutions for open public services
Patrick Barbour Matthew Burgess General Secretary, Independent Schools Council Kate Blatchford Analyst, Office of Fair Trading Richard Bacon MP Member, Public Accounts Select Committee Catherine Davies Director, Cooperation and Competition Panel Tom Frusher Director, Public Affairs and Communications, McKesson UK John Godfrey Corporate Affairs Director, Legal and General Group Savas Hadjipavlou Business Director, Probation Chiefs Association Andrew Haldenby Director, Reform Simon Hill Head of Corporate Affairs, Cerner Richard Jeffery Managing Director, AOM Erica Jobson Senior Advocate (Public Services), Which? Tim Jones Chief Executive, NEST Corporation Tara Majumdar Researcher, Reform Gemma Norman Policy and Research Advisor, Business Services Association Jonty Olliff-Cooper Director of Strategy, A4e Neil Rutledge Partner, Grant Thornton UK LLP Keith Sharp Vice President, Tata Consultancy Services (TCS) Kate Steadman Director, Government & Strategy, Sodexo Justice Services Damien Venkatasamy Director Public Sector UK and Ireland for Tata Consultancy Services (TCS) Ann McKechin MP Member, Business, Innovation and Skills Committee Julia Onslow-Cole Partner and Head of Immigration, PwC Steve Radley Director of Policy, EEF Keith Sharp Vice President, Tata Consultancy Services (TCS) Ceri Smith Director, Labour Markets, Department for Business, Innovation and Skills Damien Venkatasamy Director Public Sector UK and Ireland for Tata Consultancy Services (TCS) Glyn Williams Head of Migration Policy, Immigration and Border Policy Directorate, Home Office Andrew Haldenby Director, Reform Hon Bernard Jenkin MP Chair, Public Administration Select Committee Erica Jobson Senior Advocate, Which? Ed Jones Account Director, Hanover Communications Stephen Kelly Chief Operating Officer for Government, Cabinet Office Tara Majumdar Researcher, Reform Jonty Olliff-Cooper Director of Policy, A4e John Owen Director, Strategic Markets, Serco UK and Europe, Serco Group Zoe Paxton Chief Press Officer, Communications Directorate, Cabinet Office Charlie Pickles Government Relations, Accenture Greg Rosen Consultant Director, Reform Keith Sharp Vice President, Tata Consultancy Services (TCS) Mary Starks Senior Director, Office of Fair Trading John Telling Director, Group Corporate Affairs, MITIE Group Peter Thomas Director, Strategy and Change, Institute for Government Damien Venkatasamy Director Public Sector UK and Ireland for Tata Consultancy Services (TCS) Debra Willis UK Government Relations Manager, HP

A flexible workforce: Improving skills mobility for economic growth
Robert Arnott Director, Performance and Compliance Unit, UK Border Agency Jo Attwooll Policy Advisor, Universities UK Adrian Bailey MP Chair, Business, Innovation and Skills Committee Richard Beamish Interim Chief Officer, Alliance of Sector Skills Councils Jean Candler Interim Head of Current Affairs, Million + Sophie Carter Researcher, Office of Alan Shelbrooke MP Peter Cunnane City Affairs Officer, City of London Andrew Haldenby Director, Reform Mark Harper MP Minister of State for Immigration Carrie Hartnell Associate Director, Intellect Mark Hilton Programme Director for Education and Employment, London First HE Thambynathan Jasudasen High Commissioner, Embassy of Singapore Toomas Kull NASSCOM UK Tara Majumdar Researcher, Reform

The role of the Civil Service in delivering open public services
Richard Bacon MP Member, Public Accounts Committee Marcial Boo Director of Strategy, Communications and Knowledge, National Audit Office Lee Bruce Public Affairs and Campaigns Advisor, Local Government Association Michael Burton Director, The Municipal Journal Ian Dodge Director, NHS Policy and Outcomes Group, Department of Health Jane Dudman Editor, Guardian Public Leaders Network Dr Chris Gibson-Smith Chairman, London Stock Exchange

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Reform comment

Andrew Haldenby, Director, Reform The challenge for the UK in coming years is twofold: to reinvigorate the economy and reform the public sector and government. The recent Tata Consultancy Services (TCS) / Reform series had much to say on these overriding policy objectives. Immigration policy is now recognised as being an integral part of the growth agenda. As with all regulation, businesses are just as worried about uncertainty over policy as the policy itself. The prospect of greater restrictions on skilled immigration in future has been exercising the minds of international businesses in the UK. For this reason Mark Harper’s determination to stabilise immigration policy, and his statement that the Home Office is “signed up to delivering growth”, were highly important. The seminar also identified the importance of delivery. Politicians will not be confident to engage the public on the benefits of immigration if the day-to-day management of the service is unreliable. The seminar benefited a great deal from the participation not only of the Minister but also key Parliamentarians and leading officials from a number of departments. Harnessing global talent will also benefit UK public services in the future. The first seminar in the series presented a valuable case study of global partnership in public service delivery: the successful administration of the NEST workplace pensions scheme by TCS staff in the UK and India. The point is not that all services should be delivered by private operators or indeed by private operators overseas. It is that competition from the widest possible range of providers will reduce costs and increase innovation to the benefit of UK consumers. The seminar discussed natural concerns over the accountability of global partnerships that spend public money. In my experience, one of the great benefits of private sector delivery is that the process of agreeing exact contracts greatly increases transparency and accountability compared to the public sector alternative. All private sector providers should aim to be as open as possible about their contracting (with the exception of their intellectual property). Successful partnership requires intelligent clients on the government side. The third seminar in the series identified the success factors needed to spread good practice in that regard. The Chief Operating Officer for Government, Stephen Kelly, made absolutely clear his personal commitment to reform and improvement. A number of participants emphasised that the frequent rotation of officials greatly hinders the ability of government to develop skills, capability and competence. The discussion supported the new urgency that Francis Maude, the Minister for the Cabinet Office, has brought to the delivery of civil service reform. A country with the right immigration policy, with an openness to global innovation in public services and with excellent government procurement has much to look forward to. The TCS / Reform series will help policy makers move towards that vision.

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Reform-Tata Consultancy Services seminar series

Tata Consultancy Services (TCS) comment
Damien Venkatasamy, Director Public Sector UK and Ireland for Tata Consultancy Services (TCS) On behalf of Tata Consultancy Services (TCS) I am delighted to provide this foreword and to have supported this seminar series. At TCS we are convinced more than ever that the current era of public service transformation will require new thinking and innovative global solutions, which utilise a flexible, mobile and highly capable workforce. We are grateful for the important contributions of Tim Jones, Chief Executive Officer at the National Employers Savings Trust (NEST), Mark Harper MP, Minister of State for Immigration and Hon Bernard Jenkin MP, Chair of the Public Administration Select Committee, as well as all of the other organisations who participated. The seminars were very thought provoking and topical, and I am pleased to have contributed to the debates on these critical issues. Our experience working with both governments and the private sector globally is that where the challenges are really understood and the solution energetically embraced, transformation gives rise to service improvement and cost savings. In many respects, the challenges currently faced by governments all over the world are similar to those that have been faced by the private sector for many years, whereby organisations must evolve if they are to succeed over their competitors. Although the same pressures do not apply to governments, it is clear that other parallels with the private sector hold true. Technology-enabled business change has been at the forefront of tackling the often conflicting priorities of cost reduction and service improvement. Within the UK Public Sector, TCS is partnering with central and local government to deliver technology-enabled transformation of: pensions administration services for the National Employment Savings Trust (NEST), casework management for the Child Maintenance Group (CMG), back-office processes for Cardiff City Council, grants administration for the Big Lottery Fund, and criminal record and barring checks for the Home Office’s Disclosure and Barring Service (DBS). The Benefits of Leveraging Global Solutions and Experience The UK is not unique in needing to transform services and reset the relationship between the state and the citizen. Across the world organisations are adapting and providing citizens with more personalised services, such as new mobile payment systems for Indian farmers or the use of self-service kiosks for probation management in New York. The UK should look globally for the design and delivery of new approaches and import expertise when it does not exist nationally. A key benefit of global delivery is speed – i.e. the ability to scale up and deliver complex projects to tight deadlines. Within this approach, the ability to exploit skills availability and existing assets, such as operational delivery centres, is critical, wherever they may be in the world. By harnessing our global delivery model to support our thousands of permanent UK staff, TCS has been able to transform public services in the UK. The Open Public Services White Paper provided a clear indication that the Civil Service is ready to embrace global solutions, where they are appropriate to the needs of users. We heard from Tim Jones, the Chief Executive of National Employment Savings Trust (NEST), about how adopting a global approach to delivery has helped to ensure the effective administration of millions of pensions’ accounts and hundreds of thousands of employer-customer relationships to deliver
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Reform-Tata Consultancy Services seminar series

auto-enrolment for workplace pensions. It is clear that there are an increasing number of examples whereby a global sourcing approach has delivered benefits to government departments within the UK. The value of workforce flexibility and mobility Businesses of all varieties consider international labour mobility to be critically important for the UK economy and creating growth. Clients demand a blend of skills and experience that cannot always be sourced from the UK’s existing workforce and global solutions require access to the world’s best and brightest people. We welcomed the pledge from the Minister of State for Immigration, Mark Harper MP, that the Government will maintain a stable position on immigration policy in this Parliament. Settled and consistent immigration policy is vital for any organisation seeking to invest in the UK. A critical concern is the need for policy-makers to accept the distinction between different kinds of immigration. Economically active migrants are an asset to the UK, providing tax, national insurance and other revenues to the Treasury. Approximately half of TCS’ workforce in the UK is made up of UK nationals. On average, the remainder are resident in the UK for less than a year, in which time they implant specialist knowledge, purchase goods and services and contribute to the UK economy. Businesses and policy-makers must support global talent by clearly distinguishing and valuing this type of labour mobility.

The role of the Civil Service The fundamental question which needs to be confronted in every government department is how do you define its core function? What are the functions that only the Civil Service can fulfil and then conversely, what functions lend themselves to alternative forms of public service delivery? Although these may be difficult questions for the Civil Service to ask itself, once they have been considered officials are in a position to assess a range of delivery models – joint ventures, mutual or cooperatives, outsourcing to the private sector or engaging third sector organisations – to determine which model will deliver the best outcome to citizens. These questions of operational delivery and capability should not be obscured by debates about leadership and governance, which are important but distinctly separate. It is clear that there are many functions delivered by the Civil Service require specialised knowledge and expertise that are not available in the private sector. Equally there are many areas of the Civil Service that could benefit from alternative approaches and new delivery models. Whatever the conclusion, it is clear from this series of discussions that global delivery models and better use of technology will be pivotal in the future. At TCS we look forward to continuing to contribute to this very important topic of transforming public services.

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Reform-Tata Consultancy Services seminar series

Global solutions for open public services
Tim Jones, Chief Executive of NEST, highlighted how NEST has collaborated with the Department for Work and Pensions (DWP) and Tata Consultancy Services (TCS) to deliver the NEST pensions scheme, a workplace pensions programme. He stated that, “we did a make/buy decision against our big problem which was the scheme administration of millions of accounts and hundreds of thousands of employer – customer relationships and determined it was stupid to make it. It was better to buy it.” Discussing the approach that NEST subsequently took to finding a bidder for the project, Tim said that, “we wanted somebody whose distance from their existing estate of capabilities to our requirements was as small as possible”, and that NEST were “completely global in our outlook.” Reflecting on the nature of the collaboration, Tim stated that: “NEST is a pension scheme designed from the ground floor up, which sits on an estate of capabilities that TCS bring.” Damien Venkatasamy, Director Public Sector UK and Ireland for Tata Consultancy Services (TCS), observed that underpinning the scheme is “a kind of global delivery model, in that much of the front office or front of house pensions administration is delivered from Peterborough where we have an existing facility, and we actually have a wholly owned pensions subsidiary called Diligenta which is based in Peterborough. But a lot of the kind of back office processing is done out of Mumbai by one of our delivery centres there.” Setting out the argument for a global approach to public service delivery, Damien explained: “the reason we’ve done it that way is not just about cost effectiveness. I think the reason why NEST is interesting is that it is a global approach to delivering these services. Now you could say NEST is about as close as you can get to a private sector type endeavour… it just happens to be under a Government nondepartmental public body. But the model works and I think the question that increasingly people need to ask themselves within the public sector is where else could that kind of approach be replicated?” “I think it would be wrong of me to come here today and make the case for outsourcing and global delivery of services given that I work for a company whose core business is outsourcing and global delivery of those services. What I want to do is to at least open up the debate on this because with the Open Public Services White Paper I think it’s very clear that this Government has a view that the Civil Service, rightly or wrongly, is perhaps overweight in places and could be made more efficient and more effective.” “Where it leads to in the public sector is probably a more difficult question about ‘what is the core business of a government department?’ What activities does it need to preserve as its own, i.e. those activities that no other organisation can do or it’s right for any organisation to do. And once you’ve got an understanding of that within a government department or an agency, I think the next step is to look at the balance of activities and ask which of those could be provided more effectively, more cost effectively to a better quality by another provider? And then I think the final step on that piece of analysis is to say if it is something that we choose to get another organisation to deliver, to what extent do they have assets around the world that we can leverage in order to increase the quality and the cost effectiveness of that service?” Simon Hill, Head of Corporate Affairs at Cerner, raised the issue of complicated accountability questions which stem from global public-private partnerships. “When you get a public-private relationship that works well, it’s great. You don’t often really hear about it because it’s not news. What you do hear about is when it goes wrong. And what are the problems? And you’ll find that

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Reform-Tata Consultancy Services seminar series

Savas Hadjipavlou

both sides tend to sort of blame each other. And that’s true because actually invariably when things go wrong there is always blame on both sides.” “One of the things that you will often find the private sector saying is ‘who is the accountable person within the public sector? Who has got the star against their name that if it goes wrong?’ And invariably what you find is that the star moves around from a number of different people, that the star is in one post for a couple of years and then moves to a different post, and when that star appears in front of a select committee they’ll say ‘well actually when I inherited it, it was like this. Now I have done some work to make it like this, but I’m off in a couple of months to do this’. And that is very difficult. You don’t tend to hear the same of the accountable officer on the private sector side.” Tom Frusher, Director of Public Affairs and Communications at McKesson, explained the role of McKesson in the delivery of healthcare in the UK. He stated: “We provide the world’s largest integrated HR and payroll system. We’ve been doing that now for several years in partnership with the NHS Department of Health. That’s looking at 1.4 million employees. So we see that there are real opportunities in
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partnering with the Government. I think in the context of this discussion I have to stress we do that with no outsourcing or overseas type stuff.” “However, we’re very clearly moving forward. McKesson being the world’s largest health IT provider, the oldest healthcare company in the United States. There is expertise and competencies over on the other side of the Atlantic, and when we see those being able to bring over some added value to the UK Government and European countries, we will leverage that wherever possible.” Jonty Olliff-Cooper, Director of Strategy at A4E, discussed how the concept of global delivery has impacted on his own experiences of working in frontline public services. “I work for a company which provides frontline public services, mostly in getting people back into work but also getting people off drugs and to stop them reoffending and a variety of other things. I guess there isn’t an equivalent global role because you can’t do social work overseas, for instance.” But there are some wrinkles to that. We welcome more and more providers coming to the UK even if they’re rivals from overseas. We’re starting to see therefore a couple of players that are a

little bit more global on the front of house stuff rather than just back office services. So Maximus which is a US welfare company, they’ve invaded and stolen our contracts in Devon and Cornwall.” Equally we work in Australia, for instance. So there is a kind of knitting together of some issues of global best practice on this that’s happening through a market mechanism.” “It’s important to remember that there is a considerable export industry in the UK, a growing, booming industry in public services, both in back office services, front office and mixed ones. And actually British companies are leaders in this and are seen as global leaders in this. And because British policy is leading in this area you don’t need to give a kind of subsidy to support that industry.” Neil Rutledge, Partner at Grant Thornton UK LLP, argued that with regards to outsourcing, “it feels to us that bringing in new players to the market is absolutely critical. It’s most likely that your incumbent is not likely to be incentivised to offer the full breadth of what’s available, and therefore there is a real role in the Government about encouraging new entrants, and they have to do a bit more than just slightly open the door. They have to really say we are going to let everybody be clear there will be new entrants coming into that market. And most competitors will welcome that, I think, as you’ve suggested, because it helps enhance everybody’s capability.” Richard Jeffrey, Managing Director of AOM, commented that one of the largest barriers to successful outsourcing is the inherent confidence of both sides. “I think the Civil Service in particular could do a lot to essentially address the concern of ‘are we just giving away profit to nasty third party private sector organisations?’ Well if we’re fit and able, then essentially we’re demonstrating that we are confident about what we do and we’re offering good value to the taxpayer.” “I think the barriers to those things are the things – we’ve got to get into why those options at the moment, the most theoretically attractive, pragmatically are not taken up.” Simon Hill explained that: “we need to have the necessary conditions in place both legislatively and in terms of

Reform-Tata Consultancy Services seminar series

guidance because there is, I suppose, a sort of fear factor that we don’t take it forward because of the history of other public-private sector partnerships which haven’t worked out so well.” Savas Hadjipavlou, Business Director at the Probation Chiefs Association, warned that: “I mean what I’ve heard so far is largely about the large scale, transactional based work which kind of lends itself to each individual component and it’s fairly straightforward, can be automated and so on. The other flip side to that is work the public sector and the public services are involved in which is complex, individually based, largely driven by location, locality. I think it does depend to a large extent on which area of the public service you’re looking at.” “If we do look at something like the justice sector or probation, there is a lot of work and change going on. There is a good deal of challenge. And things are

changing. But I haven’t heard anybody as yet put forward a proposition that you do probation from Mumbai. It doesn’t make any sense.” Catherine Davies, Director of the Cooperation and Competition Panel, argued in favour of: “reducing barriers to entry that enables people to come in and stimulate competition, which is generally a good thing”, while also noting the political difficulties. She said: “my impression is that sometimes within the healthcare sector we talk about competition, privatisation, private sector. It all becomes a very emotive issue and it’s difficult to separate those things sometimes. I think outsourcing and asking the private sector to come in and provide services is sometimes very difficult for people. The idea of the global dimension is just yet another difficulty on top of that. But overall the concept of lowering barriers to entry is a good thing in my view.”

Kate Blatchford, Analyst at the Office of Fair Trading, referred back to the issue of accountability surrounding the concept of global delivery, stating: “I wondered how much of an additional dimension or problem it is potentially when you’re looking at globalised public markets and how you deal with the accountability issues there. How are you accountable when you are a global body, and what sort of levers and mechanisms can we think about in which that can be made to work?” Erica Jobson, Senior Analyst at Which?, observed: “when you look at quite a lot of the open public services agenda, I feel that the Government and businesses are moving quite fast, and there is going to be quite a big lag time for users to catch up with the expectations. If you are having more of a transactional relationship and there are demands being put on you and you are being asked to be a consumer, that’s

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Reform-Tata Consultancy Services seminar series

fine as long as you have what you need to be an engaged consumer, which is information, advice, guidance, choice, and redress. When something goes wrong you need to have someone to take you through the whole process, and an understanding that you’re making a choice.” Damien Venkatasamy, returned to the question of accountability in global delivery in stating: “I think as a global business we’ve been quite careful to keep a relatively flat structure so that accountability is very clear.” “I would say on all of our government contracts we’ve had issues of varying size and complexity. And the accountability for that initially resides with the client partner that’s looking after the public sector. We then operate a kind of geographic structure. So there is a Head of UK. That would be the next port of escalation. And then beyond him it’s directly into our CEO who runs the whole company. So there are only really three points of escalation that we operate.” “The other aspect of it is we’re quite careful to get into relationships, whether it be in the public sector or private sector, with people that we feel we can work with. And ultimately I think that’s how issues get resolved. There has to be willingness on both sides that you’re going to fix the problems and you’re not going to kind of escalate them in perpetuity.” Richard Bacon MP, Member of the Public Accounts Select Committee, spoke on the issue of transparency, noting: “on our committee, which is the value for money committee, we don’t look at the policy. We look at the results of where things – usually; not always – of where things have gone wrong. And accountability is a very big issue for us. When you were talking a bit earlier about the person with the star on his head or her head whom you can follow around, that has been a huge issue.” “I have a telephone provider at home in Norfolk that is constantly winning the best value for money award every year – at least they tell me they are on their bill. But they’re never winning the best customer service award. I know the reason for this is that every time I call them, which thankfully isn’t too often, it’s always a 45-minute wait before I get through to the person in Mumbai. And I’ve often thought I would happily go to
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another provider where I paid more money and I got a service that I liked.” “The difference is I do have that choice. If I’m going along to the Job Centre and I don’t get the service that I want and they want to pay me by benefit, I don’t have the option of saying ‘give me my benefit or I’ll take my business elsewhere’. It’s just not like that. So you’re always talking at one remove. You’re talking about an interlocutor of some kind, an intermediary of some kind trying to provide the service on behalf of a government vendor to the public that isn’t going to change where there’s a natural monopoly.” Tim Jones argued that: “ease, transparency, and empowerment are the three things that our customers asked for. It had better be transparent so I can see what you’re doing with my money. And you better make it easy for me to get as involved or as uninvolved as I want. That’s what the empowerment means.” “We are very transparent in that we are clear about the overall size of the contract. But I’ve got to balance that transparency against member interests. I have not disclosed what we’re paying our providers. I think it’s in my members’ interests to keep confidential the fantastic rates I’ve got from those fund managers because I want them to get fantastic rates for my members again.” Matthew Burgess, General Secretary of the Independent Schools Council, noted: “In my sector, the education sector, the distinction is actually profit versus not-for-profit. There is a great customer, consumer political opposition to bringing in for-profit providers into the education sector. And what you’ve seen is global market players. But they are doing it through not-for-profit entities. And as yet we have not got to the point where the public it seems accepts that in education people should be making profit.”

Reform-Tata Consultancy Services seminar series

A flexible workforce: Improving skills mobility for economic growth
Mark Harper MP, Minister of State for Immigration, began by laying out the Government’s current stance on immigration. He argued that “controlling immigration is a very important political issue. I think it is worth saying because anybody who thinks that by not talking about it, not dealing with it and not controlling it you can have it swept under the carpet I think is kidding themselves. Indeed, it’s much better that we have a firm but fair immigration system because actually then it’s dealt with by rational, sensible debate by mainstream political parties rather than allowing extremists and people who would use these issues in an unhelpful way to be able to lead and set the agenda.” “The last two and a half years has really been about getting policy in good shape and moving to a system where we had controls that would deliver a reduction in net migration but also about delivering more selectivity so we don’t just have fewer people coming here but we have the right people for benefiting Britain and Britain’s economy.” “I see, going forward, a position where we have some policy stability, and I want to really focus in my time in this job on working with our colleagues in the UK Border Agency and Border Force to implement that policy to listen to where businesses and universities have got issues about how it works and make that work better. I have had, just by way of conclusion, very positive meetings with UUK, looking to them about how we can work more closely together in a collaborative framework where our job is to help their members comply rather than catch them out, and to deliver growth.” “To some extent the Home Office is a control department, so clearly we are, by definition, trying to stop people doing things they want to do. But we are very much signed up to delivering growth. I want to make sure we deliver an ability for businesses to bring in the right people for Britain and to make sure that we can do business and the education sector can be successful.” Keith Sharp, Vice President, Tata Consultancy Services (TCS), responded: “saying that policy changes are largely done and we’re moving to a stable implementation era is very welcome news because one of the things we’ve lived with over the last several years is future anxiety- what’s waiting for us around the corner?” He went on to say: “International labour mobility is absolutely key to how we deliver value to UK PLC. We’re able to bring in people on a temporary basis to supplement the staff that we employ in the UK.” “I guess our concern going forward is that although we see it as international labour mobility, at the moment all migration is dumped into the one bucket, and we would welcome some kind of distinction or separation between the types of migration.” “But what the Minister said earlier will alleviate some of the future fear that I was going to talk about, and we do appreciate the way in which the Government has approached its policy towards intra-company transfers”. Damien Venkatasamy, Director Public Sector UK and Ireland for Tata Consultancy Services (TCS), further developed the case for international labour mobility. “We win these contracts because we’re able to hit the timeframes. We’re able to hit the timeframes because we can take advantage of a global workforce. So for us this is not really about taking
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Mark Harper MP and Keith Sharp

Reform-Tata Consultancy Services seminar series

Julia Onslow-Cole

jobs from UK citizens. This is about growing our business which, in turn, is enabling us to employ more UK citizens by augmenting them with skills from overseas that we can’t readily access in this country.” He continued: “When these people are here in the UK they are renting flats. Sometimes they bring their families across and their partners take jobs. They’re putting money into the local economy, buying food and things like that. We also find they bring thought leadership, new ways of doing things, methodologies that both our clients benefit from and also our UK workforce benefit from.” Julia Onslow-Cole, Partner and Head of Immigration at PricewaterhouseCoopers (PwC), argued for an exemption from the cooling-off period for very high earners. “A couple of weeks ago we had a banking client that wanted to hire someone in New York. This is a very rare occurrence now: very big salary, hundreds of thousands, and the bank in the UK was competing against banks in New York. And they could not bring him into the UK because of the cooling off period. We had to actually try and look at alternative routes including the investor route to try and bring him in as an independent investor to get him into the UK.” “I think a very quick fix is if you took people, say, earning over £250,000 a year
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out of cooling off, I think that would alleviate the problems for companies looking at those very big hires.” Adrian Bailey MP, Chair of the Business, Innovation and Skills Committee, raised the importance of finding a political position to underpin immigration policies reflecting the economic needs of the country. “I visit local foundries which I know if they had not been able to recruit migrant workers from east Europe would have gone under, losing a considerable number of jobs for the indigenous white population as well. But unfortunately that is not a message readily understood by the public at large.” Adrian emphasized the economic need to win the political argument for and subsequently implement a more flexible visa system that will “enable industry to tap into the best global brains. There is increasing evidence that we now have global market in talent because clever people know that they can go almost anywhere in the world and deploy their skills to the benefit of that host country, and we are missing out in some of those areas. Secondly, universities are a huge export earner from foreign students – we’re missing out on that. There has been a substantial drop from India, one of our historic markets, and we are underperforming in terms of our relationship with Brazil.” To deal with this, Adrian said, “student visas should be taken out

of the net immigration figures. The Government has got to find a way of managing this politically because I think there is now a huge volume of evidence to demonstrate that our future economic growth could be adversely impacted unless we get this issue resolved.” Mark Harper MP responded: “Trying to pretend that students are not migrants I think is fundamentally just nonsense. If someone comes here to work for two years, we count them. There is no logical reason why you wouldn’t count someone who comes here for three or four years as a student. They are a migrant. They meet the international definition of a migrant. They have an impact on the communities they live in.” He continued: “I want a system where I can do exactly what Adrian wants to do. So we need to go and make the case for global talent, getting the brightest and the best to come to the UK, allowing our universities to get those students here. But we’re not going to win those arguments if people think we have a system that has no controls. We’ll lose that debate, and that will be bad for Britain.” Steve Radley, Director of Policy at EEF, observed that “despite the fact we’ve had fairly weak economic growth, companies are already reporting significant skill shortages. The good news is that they’re getting on with investing in apprenticeships and in retraining the workforce. But at the same time they do need to bring in skilled workers at some time.” “We’ve just completed a submission to the consultation from the Migration Advisory Committee proposing that sunset clauses are introduced on the shortage occupation lists after just a period of two years. But the idea that after just two years we’ll have had a lasting solution to this problem and to introduce sunset clauses, and then there being another year before we can get them back on again, just does not seem to be a sensible approach and not a good example of the selectivity we’re talking about.” Ann McKechin MP, Member of the Business, Innovation and Skills Committee, agreed, stating: “I think we do have to be careful about certain niche areas where there are going to be long-term shortages, and if we want to make sure if we’re in a global competitive market that we’re not losing our edge.”

Reform-Tata Consultancy Services seminar series

Making a plea for post-graduate research, she noted: “I’ve got Glasgow University in my constituency area. We’ve got very large postgraduate centres in medical research. Obviously half of the people there who work actually come from non-EU countries. That is a unique part about the university sector in the UK is actually we have a very high number of people from all over the globe, and we actually do gain from that knowledge exchange, from that ability. That is why our universities are so attractive, and I think we just have to make sure that we retain our edge in that respect.” Jo Attwooll, Policy Advisor at Universities UK, explained that: “What we’re looking for is Government support for sustained growth in legitimate student numbers within universities, not least because of the future links that those students, when they graduate, offer to the UK. I think there was a BIS study earlier on this year which showed that something like 78 per cent of graduating students wanted to build links with UK organisations in future. That is a huge number and there is significant potential there.” Ceri Smith, Director of Labour Markets at the Department for Business, Innovation and Skills, raised the issue of future challenges for policy.

“It seems to me the stuff that goes on now will be setting the context for that debate. And the debate at the moment is very much in terms of net migration and the target around that.” “If the future policy debate continues only to be around net migration, then any government of whatever complexion is going to find it very difficult. My question is how does any government respond to that going forward, given opportunities like the need to increase our educational exports. You can only do that if there is actually an acceptance out there in the public that that is a good thing to do. How does one build public confidence that the borders are secure if actually somehow you’re seen as changing the terms of the debate?” “It seems to me what one needs to do between now and the next election is start laying the grounds for a new framework for debate – not necessarily set out what that answer might be but somehow change the terms of the debate so it’s not suddenly seen as a shift and somehow fudging the numbers. I don’t see, as an official, how we could lay the framework for that going forward. It seems to me it’s not just about Government. It’s also about businesses.” Jean Candler, Interim Head of Current Affairs at Million+, called

HE Thambynathan

for a more positive narrative from the Government. “The ‘brightest and the best’ sends a very negative message externally to overseas countries as well as here. We don’t use these terms because who is the ‘brightest and the best’? What we mean is talented people. We want people who are entrepreneurial and talented and who can offer something. So narrative is really important. If we want to move forward we need to think about how we express ourselves, what messages those words are giving to other countries and to this country.” Mark Harper MP responded: “The reason why we use the language about the ‘brightest and the best’, about selectivity, is we do want our universities to be getting the best people to come here. We’re talking about skilled workers coming in. But we’re clear we don’t think it’s of economic benefit to the United Kingdom for lots and lots and lots of unskilled workers coming here who don’t really bring anything to the party.” Richard Beamish, Interim Chief Officer at the Alliance of Sector Skills Councils, observed: “I think the issue for us is over the public perception. It’s over some of the more extreme political views. People don’t think about net migration. They don’t think about skills and talent. They think about immigration. And the challenge we have is to get the message across to the public as a whole so there is real support for the concept of skills and knowledge transfer, for movement of skills throughout the world because that is what we’re talking about as well.” HE Thambynathan Jasudasen, High Commissioner at the Embassy of Singapore, observed: “in Singapore we come from the perspective that the countries that have the largest concentration of talent will create wealth, and countries that do not have enough talent will decline. And the game now is one of attracting the most number of talented people. So I’m in competition for talent. And all our countries are in competition for talent.” “I’m a major investor here, and I think one of the issues we do have is bringing people here, not so much that it’s impossible to get them in, but just in terms of the time taken. Businesses tend to operate at a much faster pace. And when I sit down and talk to them, their challenge is always to get the processes done quickly.”
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Reform-Tata Consultancy Services seminar series

Robert Arnott, Director of Performance and Compliance Unit at the UK Border Agency (UKBA), noted that immigration controls were needed “to get the operation right, both because that then drives the credibility of the system which allows us to make the political argument, but also because it drives good selectivity in the way in which we do things.” “But we then need very well in operational terms to have a differentiated approach to different categories of people. And we clearly need to up our game substantially for those cohorts of people who want to come to the UK legitimately.” He added: “On average 70,000 people pass through Heathrow Airport every day. Somewhere in the 70,000 are some people who probably shouldn’t be here or who are certainly worthy of a second look. So our operational challenge is to know as much as possible about the 70,000 people before they get here, try to prevent the bad ones ever getting on a plane in the first place. We have lots of international cooperation to help us with that – to spot them as they arrive, and make sure we have a way of realising that we won’t always get things right upstream.” Mark Hilton, Programme Director for Education and Employment at London First, provided a case study: “One of our big four accountancy members employs something like 12,000 people. About 10 per cent of those are non-EU. The greatest proportion of that non-EU workforce are Indians. And the accountancy firm is concerned about the dip in Indian student numbers coming into the UK because they fish from that global talent pool.” “And the reason that pool is so important to them is they employ them, they train them up in London, they develop the skills, and then they export them out to support the work that they’re doing to build trade in the Indo-UK corridor. So it’s not necessarily about employing people to stay here, but it’s using people in that kind of global talent flow way.” Sophie Carter, Researcher at the Office of Alan Shelbrooke MP, said: “it’s really good to hear UKBA is developing, but the people on the front line as far as the universities go are the admissions officers. They see how well
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the UKBA targets are met and whether there is a problem. So obviously the London Metropolitan thing could have been maybe discovered sooner by talking to admissions officers.” Toomas Kull, from NASSCOM UK, closed the discussion with a reference to the importance of open debate and good relations between government, universities and business: “We did make some changes to the immigration rules that were laid before parliament a couple of weeks ago. Clearly there will be tweaks where people give us particular examples that we need to deal with, and we are very open to looking at those. So it’s about having that dialogue really.” “Certainly those of you who engage with officials will find that we want to listen. We won’t always agree, but I think we want to understand the issues and balance them out and try and deliver that.”

Reform-Tata Consultancy Services seminar series

The role of the Civil Service in delivering open public services
Hon Bernard Jenkin MP, Chair of the Public Administration Select Committee, began by outlining the underlying factors that had led to the development of the Civil Service Reform Plan, explaining that it was “a final admission that the government needs a plan in order to change the nature of government. It needs a change programme. But it’s a plan that is both a product of frustration and a determination to do things. The frustration arises from the fact that it’s very hard to get anything done in government apparently, and the solution seems to be to start questioning the very basis on which the Civil Service was established as we know today by the Northcote-Trevelyan Report of 1853 as reinforced by the Haldane model of accountability which has given us a Civil Service that saw us through the 20th century, world wars, economic crises.” “We ask Ministers to go into this extremely highly charged, difficult environment and to assume responsibility in government departments for direct command over people whom they don’t choose. And it’s not surprising how those people are chosen has moved up the agenda in the Civil Service Reform Plan because in no other walk of life is the Chief Executive of a company, for example, required to work with the people that he’s taken over from his predecessors.” “We’re dealing in a political environment which has changed very dramatically even from 20 years ago. There is far more scrutiny of what goes on in government departments. Ministers and senior officials are trying to run

Hon Bernard Jenkin MP www.reform.co.uk 13

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government departments in a goldfish bowl where they are being looked at by 24x7 media, the select committees, freedom of information requests.” “What we need to help Ministers and officials do better is to understand each other and share each other’s concerns and information. What is happening at the moment is that in too many Ministers’ offices and government departments there is mutual suspicion between officials and ministers. They are hoarding information from each other. And if things aren’t getting done and things aren’t going well, then people are working in secret silos.”

“The Prime Minister has become a more superannuated presidential figure with more staff. My favourite statistic is that there are a thousand more people working in the Cabinet Office and Downing Street than there were when Margaret Thatcher left office. All sorts of things that are happening outside of government departments, not least the Prime Minister has his own private policy. You hear people in government departments saying: ‘gosh, you know, everything goes fine until the Treasury or Downing Street get involved and then everything stops because there is a bottleneck’.”

Dr Chris Gibson-Smith 14 www.reform.co.uk

“If we’re going to address the problems of structure, of trust, I think we’ve also got to address the structure of governments.” Damien Venkatasamy, Director Public Sector UK and Ireland for Tata Consultancy Services (TCS), drew a parallel between the challenges currently facing the public sector and the driving forces which drive private sector service delivery. “The first observation that I would have is that in many respects when I look at the situation of the public sector and public service delivery, I see quite a strong parallel in many respects to where the private sector has been for a long time. So obviously the autumn statement recently, the budgetary cuts, and the year of austerity lead you to a conclusion that actually there is a need to reduce the operational costs of delivering public services. And then I guess counterintuitive to that or contrary to that, there is also a rising expectation from the electorate in respect of the level of public service that they want to be receiving. And that is something that the private sector has grappled with for a long time.” Damien alluded to ways in which the public sector could look to tackle this problem in stating: “I think that leads you to a conclusion that something does have to change in terms of the way that public services are delivered in the future, and I guess there is no one answer to that, and it depends on what the function is. But I think there is a very difficult question that every government department, every government agency and every local authority probably needs to ask which is: ‘what is our core function?’ By that I mean what are the functions that only we, the Civil Service, can fulfil, either because of a legal requirement or because, frankly, there is so much knowledge embedded in that function that it would be ludicrous for anyone else to even attempt to do it.” “I want everybody to imagine a spectrum which at the one end has privatisation and then at the other has civil service in-house delivery. And then in between you’ve got outsourcing, joint ventures, mutuals, co-operatives – all kinds of different public service delivery models. Once the difficult question has been asked by a department of what their core function is and therefore what things are they perhaps not best placed to do, that spectrum I think needs to be applied

Reform-Tata Consultancy Services seminar series

Stephen Kelly

to the things that they don’t consider to be core, to say: well, what is the best delivery model for this moving forward?” He concluded by arguing that the public sector should look to the private sector’s embracing of technology to enhance the quality of its service provision: “what we see in the private sector is people are very much milking the back office, using technology to milk the back office in order to feed the front office. And I think that is something that the Civil Service could very much consider.” Jonty Olliff-Cooper, Director of Strategy at A4E, observed: “I suppose there are sort of two Ss which maybe cover what we feel like we’re on the receiving end of. I think one is about bad structures, and the other is about inadequate skills.” “There is a real problem that aspects of commerciality are often just not there. So one department estimated for us to do a programme we’d need £3 million to do that in working capital. We actually needed £38 million. That’s quite a big mis-estimate from them. And the difficulty of raising that money can be sometimes, for some types of

organisation, quite extreme, particularly for charities and so on.” Discussing the strengths of the strategy: “I guess an additional S would be strategy. Our biggest client is DWP and I think that they have been really fantastic in saying this is the direction, and giving you a great deal of clarity. And it’s so important when you’ve got to raise a lot of money, because investors will attach a massive premium to what you’re doing if they think it’s all going to fall to pieces shortly. The DfE have been similar.” John Telling, Director of Group Corporate Affairs at MITIE Group, picked up again on the point of the rotation of civil servants around departments: “I’ve got a suspicion that there are some within the public sector who thought that at this stage through the parliament that things would be a lot better and therefore they didn’t really hurry much to do reform. And my plea really is to say we’ve still got two and a half years left of this parliament and there is an awful lot that can be done.” “When the contractors at the start of this government had to do a memorandum of understanding, we

dealt with eight different teams in the Cabinet Office in relation to that. Every time it comes out, it’s a different team. So that knowledge drain is enormous all the time. Our view would be stick with the teams you’ve got, make them responsible for delivering the projects they’re working on and seeing through the results.” John Owen, Director of Strategic Markets for Serco UK and Europe, was critical of the mutual suspicion between public and private sector providers. “From Serco’s perspective I would say the majority of our employees feel more civil service than the civil servants. They get up and they spend more of their time delivering great frontline services than the average people in the Civil Service. And that’s why they like coming across.” “I’m just shocked why we have public sector/private sector as if one is better than the other or vice versa. It’s public services, and as a consumer I want great public services at a low cost, digested in a way I want to digest them, relevant for me and my society. And I think the key for me is it’s this partnership.”
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Reform-Tata Consultancy Services seminar series

Mary Starks, Senior Director at the Office of Fair Trading, highlighted the significance of the diverse range of skills that must underpin the multiple roles government has to play in the provision of services: “in particular one of the things that has been a big focus for us is procurement and commissioning and how that set of skills is really quite fundamentally different to provision. We’ve had a focus on trying to think about how procurement and commissioning can work, not just so that you get good value for the first round, but such that in 10 or 15 or 20 years you’ve got a vibrant market with a multiplicity of providers and not defaulted to two or three big incumbents. Those questions are quite difficult, and I think it partly comes down to skills.” Marcial Boo, Director of Strategy, Communications and Knowledge at the National Audit Office, commented again about the importance of ensuring continuity: “With ministers changing, with senior civil servants moving around departments as has been outlined, there need to be mechanisms by which both layers – the political layer and the administrative layer – can work effectively together, set and monitor their driving through of long-term change that’s not going to be interrupted because of staff turnover or political fighting.” Dr Chris Gibson-Smith, Chairman of the London Stock Exchange, discussed the importance of leadership and valuing the workforce: “the competency of leadership cannot be disrespected to the standard that it’s currently disrespected. Society is more complex than it has ever been in history. There is no component of society which is not now a lifetime study. If the Civil Service is to do something it has to be of Confucian standards of capability in the face of that complexity, and it must be stable, self-confident, and well paid, and superbly educated. You cannot change the Secretary of State for Transport 16 times in 18 years and imagine you’re doing anything except take the mickey of we the people.” He also highlighted the importance of better financial management: “the second thing is we’ve got to get control of budgeting. I would have a national balance sheet that had integrity. And I would have fiscal budget boundaries with criminal sentences if you broke
16 www.reform.co.uk

them in order to make sure that we understood that they had a purpose and were for real. I’d be very selective with external help. You don’t need a lot of it. Make the people change themselves. And it will take fantastic training and support to get it to happen.” Stephen Kelly, Chief Operating Officer for Government at the Cabinet Office, made the case for haste in implementing the Civil Service Reform Plan during the current window of opportunity: “Let’s not boil the ocean or have a kind of two-year sabbatical Oxford Union debate about ‘is it the best plan?’, but let’s just get on and do the 18 points within it. And it talks about leadership. It talks about capability. It talks about operational skills. And it talks about pretty much all the right things, and then at the end of this Parliament I think it will give us, if we’re sitting here with the Civil Service at 380,000 people rather than in 2010 480,000 people still collecting taxes, still delivering benefits, still supporting the citizens of this country, we’ll be on a whole lot better plane to actually look at the next phase of the journey.” Greg Rosen, Consultant Director at Reform, argued that “the Civil Service Reform Plan does talk about many of the right things, but that doesn’t necessarily mean it will it achieve its goals. And I think it’s really important that if government is serious about achieving its goals that it is open to the idea that maybe the reform plan doesn’t go far enough and is open minded in assessing its progress towards those things.” Hon Bernard Jenkin MP, gave the closing view: “I think there’s a babies in bathwater situation here that we’re in danger of, that because the system isn’t working properly we’re in danger of throwing out some very good things about our Civil Service which isn’t necessary to throw out because if you get the leadership right, everything will follow.”

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T 020 7799 6699 info@reform.co.uk www.reform.co.uk

ISBN 978-1-905730-94-0

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