1986 to 2002: Next Steps 

The Next Steps report had far-reaching consequences, but not entirely in line with what the authors intended to achieve. It introduced some ‘hard’ changes in the operating model of the Civil Service. Between 1988 and 2010, 217 arm’s-length agencies were created, while 131 were terminated through merger, closure of functions, change of organisational form or privatisation.

 

There is evidence that suggests greater freedom from the centre contributed to a greater focus on customers and led to tangible improvements in frontline public services.

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• Companies House reduced the amount of time taken to process documents from 25 days to 4 (by 2002). Its unit costs fell by 18% over the three years to 2001. 

• By 2002, HM Land Registry had reduced its fees by 40% and achieved a 40% improvement in efficiency since becoming an agency in 1990. 

• The UK Passport Agency reduced the amount of time taken to process a passport from 95 days to 10 days (by 2002).

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The initiative changed the way policy makers in the remainder of the Civil Service thought about policy. It also fundamentally changed the agenda on staffing and appointments. It gave a push to openness and the idea that people other than civil servants could effectively run certain delivery functions.

 

This led to greater acceptance of open advertisement and the value of bringing people in from the private sector. This precipitated changes to orders-in-council in 1996, which meant that civil service commissioners no longer had to make all external Senior Civil Service (SCS) appointments, allowing for far easier external recruitment of chief executives.90 These themes were directly built on by the Bringing In and Bringing On Talent reform agenda from 1999.

 

Next Steps instilled a clearer idea of what officials were supposed to be delivering. The framework agreements were seen as exemplars of setting objectives and resources as well as facilitating measurement of performance. This encouraged people to look closely at a department and ask what it was there for, laying the foundations for the Public Service Agreements (PSA) agenda, which identified objectives for each department from 1998.

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For better or worse, the initiative also strengthened the federal nature of the Civil Service through a huge shift to delegation and decentralisation. Senior managers who remained outside agencies saw the freedoms that agencies now had and wanted similar freedoms from central controls.

 

These changes have not been without problems and challenges. First, lack of clarity around the roles and accountability of ministers and chief executives mired the effectiveness of the later, more controversial agencies such as prisons and child support.94 Second, some senior officials found it difficult to embrace the new culture of devolved management and continued to involve themselves in managerial issues.95 Third, despite the intention of ‘joining up’ policy and delivery more effectively, the creation of agencies in fact widened the divide between the London-based policy core and regionally based delivery staff.96 The 2002 Agency Policy Review noted that some agencies had become disconnected from their departments and needed clearer accountability frameworks and roles for non-executive board members.