Keir Starmer Should Finally Fix The Central Government Machine

Keir Starmer’s difficult start as Prime Minister does not have a single cause. Some problems have been self-inflicted – including a lack of clarity about the government’s overriding purpose and rivalry between aides. Others, including the difficult economic inheritance, are outside his control.

Somewhere in the middle is the fragility of the government machine that surrounds him in No 10. Upon taking office he made no major reforms, but his bumpy start is yet more evidence of a Downing Street that is too weak to support the Prime Minister. While the recent dysfunction in the building, culminating in Sue Gray’s removal as chief of staff, seems partly driven by personality clashes, it is also a symptom of deeper structural problems that have festered for a long time.

As far back as 1981, Margaret Thatcher complained that “she did not have the same access to advice or ability to inject her own views as did a minister in a department”. Proposals were put together for a Prime Minister’s Department, but they did not meet her approval. “NO,” she scrawled in the margins of a paper presented to her by the head of the civil service, Robert Armstrong. “This system would produce a strengthened bureaucracy. I want a strengthened strategy section. Totally different.” The changes were never made.

In Thatcher’s case, the problem was arguably overcome by her Stakhanovite work ethic and willingness to delegate to secretaries of state who furthered her agenda – which she set out with stark clarity of purpose. This meant that, despite the structural weakness of the machinery around her, she was able to transmit her priorities across Whitehall. But it also meant that the underlying institutional problem Thatcher identified – of a No 10 unable to provide sufficient strategic direction to the rest of government – remained.

The other great modern prime minister, Tony Blair, came to a similar conclusion to Thatcher. In 2003, work was commissioned to review the structures at the centre. Most famously this included John Birt’s plan, dubbed ‘Operation Teddy Bear’, to break up the Treasury. But the question of how to organise Downing Street itself was also a live one. A note from Peter Mandelson to Blair once again got to the heart of the problem. As he put it: “The aim of your reorganisation is to enable you to become more strategic in everything you do”.

Another note, with no credited author (candidates include Andrew Adonis, Alastair Campbell, or Mandelson again) was clear that the problems were not just about the quality of No 10’s people, but its structures and incentives. It warned the prime minister that “if your first and primary reaction [to your problems]… is simply to say ‘but who are the people, give me their names’ it means you have not appraised adequately (with respect) the depth of your problems or needs”.

Subsequent reforms helped, and ‘peak Blair’ is often cited as the period in which No 10 operated most smoothly in recent times. A highly capable chief of staff and private office sat at its centre, supported by a constellation of distinct units – policy, delivery, strategy and communications – each with a clear remit which contributed to Blair’s well-defined agenda.

But the problem was never solved entirely. After Blair left Downing Street, the system that largely worked for him was found wanting by his successors. Brown, Cameron, May, Johnson and Sunak all grappled with the difficulties of setting direction from the centre. And when last year the Institute for Government ran a commission evaluating the centre of government and recommending improvements, we found the strategic gap at the heart of government as present as ever. Blair himself told our commission that “today I would have a completely different skillset at the centre of government”.

The centre needs to evolve again and it remains early enough in Starmer’s premiership for him to make the bold decisions necessary for it to do so, particularly with Sue Gray’s exit providing the opportunity for a reset. New chief of staff Morgan McSweeney and new principal private secretary Nin Pandit are in the post. A new cabinet secretary will follow. But Starmer needs to be thinking about more than personnel.

Immediate changes should be made. Chief among them is bolstering No 10’s economic capability ahead of the multi-year spending review. No 10 should recruit a new economic unit, able to provide the Prime Minister with quality analysis and advice to support proper engagement with the Chancellor.

The government should also be less reticent about bringing more external advisers into Downing Street, either as party political special advisers or non-partisan policy advisers, to give clearer direction to the civil service machine.

The risk is that Starmer goes into the spending review with a policy agenda that remains ill-defined. The strategic vacuum this would leave would result in settlements being allocated according to the Treasury’s preferences alone. In the medium term, it would mean any priorities that Starmer decided to pursue would have to be retrofitted to pre-existing budgets, not the other way around.

Bigger structural changes should follow once the spending review is complete. There is a strong case for Starmer and his team to create a proper Department for the Prime Minister and Cabinet (DPMC). It would bolster his direct support, providing more policy and analytical expertise, and giving him stronger functions to track progress and unblock delivery. It would enhance the authority of the cabinet secretariats while ending the unhelpful fiction that they are a neutral broker between the centre and departments.

Perhaps counterintuitively, a stronger DPMC would also feel better able to devolve and decentralise. Part of the reason why No 10 tries to grip everything tightly is to compensate for its structural weakness.

A DPMC would also create more coherence at the centre. The Cabinet Office currently comprises No 10-facing secretariats, policy teams and the civil service’s corporate functions. It lacks clarity of purpose. Moving the PM-facing parts of the Cabinet Office explicitly into a new Prime Minister’s department would allow the rest of the organisation to regroup as a Department for the Civil Service, focusing on the crucial (but often overlooked) capability and reform agenda.

Starmer’s first three months have been bumpy, but he has almost five years left before the next general election. Making the tough but important decision to restructure his centre would not be pain-free. But failing to do so will only hinder his chances of delivering change – and winning a second term in office.

Alex Thomas is programme director at the Institute for Government think tank. Jordan Urban is a senior researcher at the IfG.

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