Professional Documents
Culture Documents
The Rise of Managerial Bureaucracy 1St Ed Edition Lorenzo Castellani Full Chapter
The Rise of Managerial Bureaucracy 1St Ed Edition Lorenzo Castellani Full Chapter
LORENZO CASTELLANI
The Rise of Managerial Bureaucracy
Lorenzo Castellani
The Rise
of Managerial
Bureaucracy
Reforming the British Civil Service
Lorenzo Castellani
LUISS Guido Carli
Rome, Italy
vii
viii Preface
Methodological Framework
In terms of methodology, the book has a very strong historical back-
ground (which makes it different from the existing literature), but I will
more thoroughly explain in the introduction some concepts of political
science that I have used as tools to develop my historical analysis, such
as path dependency (Pierson 2004). Furthermore, particular attention
is devoted to British administrative traditions (Painter and Peters 2010),
looking at them in relation to the reforms of the 1980s, 1990s and
2000s. Indeed, the aim of this research is to explain the dynamic of insti-
tutional development of the Civil Service from the Thatcher to the Blair
Governments, giving an account of continuity in administrative traditions
and managerial changes of central government bureaucracy through the
use of legal, public and archive sources. The book can be considered a
mixture of history and public administration, a historical research that
does not abdicate to trace “Weberian models” and to use a methodology
to set up the research and to outline its findings.
Preface ix
As some authors have argued, the British Civil Service can be consid-
ered to be “a case study in path dependency” (Richards 2003), and a
detailed historical analysis of archives and documents seemed to confirm
this theory. From a historical institutionalist perspective, the Civil Service,
and more broadly the British state, can be identified as possessing a path
dependency whose equilibrium has only rarely been disturbed. We can
argue that the British political elite has tended to regard both the con-
stitution and the Civil Service as institutions to be proud of, and thus,
any form of changes should only ever be limited and partial (see Thelen
et al. 1992; Rose and Karran 1994). The central argument of this
research, at methodological level, is that while there have been a num-
ber of periods in the last fifty years in which the British Civil Service has
undergone a process of reform (most notably the 1968 Fulton Report
and from the 1980s onward), the nature of change has been evolutionary
rather than revolutionary. Even when the parties have been elected on
a radical platform—as was the Thatcher Government in 1979 and Blair
in 1997—their period in office has been marked by an unwillingness to
provide a new constitutional settlement that would fundamentally trans-
form the foundations on which both the Civil Service and the state are
legitimised. It is therefore argued here that although in those 30 years
the British Civil Service has undergone structural, cultural and personnel
reforms similar to those experienced by other liberal–democratic states,
the reform process itself has always been constrained by the continued
maintenance of constitutional conventions and administrative traditions
that define Britain’s institutional arrangements. The Westminister model
of government continues to condition the way both ministers and civil
servants operate within the British political system (see Marsh et al.
2001). During the period examined, the different governments reformed
structure, careers and administrative techniques, but their reforms cannot
be regarded as a radical overhaul of the Civil Service they inherited, since
the traditional Westminster model remained intact. Moreover, even if the
governments had a different political colour, their reforms show continu-
ity on both sides: attempting to introduce a managerial culture and new
techniques imported from the private sector and preserving, and reaf-
firming, the institutional/constitutional traditions of the Civil Service.
In parallel, the civil servants reacted to reforms, absorbing and contrib-
uting to introduce new organisational frameworks and to develop new
administrative techniques and reaffirming through a codification process
x Preface
References
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the reign of Henry VII. Cambridge: Cambridge University Press.
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69(1), 3–19.
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theme. Accounting, Organizations and Society, 20(2/3), 93–109.
Marsh, D., Richards, D., & Smith, M. J. (2001). Changing patterns of govern-
ance: Reinventing Whitehall? Basingstoke: Palgrave.
Painter, M., & Peters, B. G. (Eds.). (2010). Tradition and public administration.
Basingstoke: Palgrave Macmillan.
Pierson, P. (2004). Politics in time: History, institutions and social analysis.
Princeton: Princeton University Press.
Pollitt, C. (1990). Managerialism and the public services: The Anglo-American
experience. Oxford: Blackwell.
Raadschelders, J. C. N., & Vigoda-Gadot, E. (2015). Global dimensions of public
administration and governance. Hoboken, NJ: Wiley.
Richards, D. (2003). The civil service in Britain: A case study in path depend-
ency. In J. Halligan (Ed.), The civil service systems in Anglo-American coun-
tries. Cheltenham: Edward Elgar.
Rose, R., & Karran, T. (1994). Governing by inertia. Abingdon: Routledge.
Thelen, K. A., Longstreth, F., & Steinmo, S. (Eds.). (1992). Structuring politics:
Historical institutionalism in comparative analysis. Cambridge: Cambridge
University Press.
Contents
Bibliography 233
Index 253
xiii
CHAPTER 1
Despite these difficulties, the definition from the Tomlin Report is still
the most useful. In the absence of the sort of neat definition that can be
found in other countries with Civil Service Acts, the definition stood the
test of time, until comparatively recently. We have to consider that the
British Civil Service was a peculiar institution for a number of reasons.
Officials did not normally have written contracts, presumably because
they were servants of the Crown, though they had implied contracts.
Defining the Civil Service became a useful example of how the British
unwritten constitution worked in practice. Civil servants were known to
have modest privileges, or benefits, as a result of being servants of the
Crown; for example, they had a non-contributory pension scheme and
they held a job “for life.” As the texts on bureaucracy put it, following
Max Weber’s definition of the ideal type bureaucracy, employment in
such Civil Service was “based on technical qualification and … protected
against arbitrary dismissal” (Blau 1956: 30). The British Civil Service in
the early and middle years of the twentieth century built upon the advan-
tages that resulted from these characteristics. No one contributed more
to this process than Sir Warren Fisher, who regarded the Civil Service as
a fourth service of the Crown, after the armed services. Fisher did much
to encourage a sense of belonging to the service and emphasised the
need to maintain the highest possible standards. His approach was con-
tinued by Sir Edward Bridges, who, when he was the Head of the Home
Civil Service, also tried to develop a sense of belonging and loyalty to a
distinctive service.
Following the creation of the Civil Service Department (CSD) in
1968, the publication Civil Service Statistics also at first accepted the
Tomlin definition, though from 1972 the wording was modified. In
1972 it read, “A civil servant is a servant of the Crown (not being the
holder of political or judicial office) who is paid wholly and directly out
of money voted by Parliament and who works in a civil capacity in a
department of government” (Civil Service Department 1972: 12). This
was further modified in 1976 by adding the sentence: “However, some
civil servants work for Crown bodies which are not government depart-
ments, such as the Manpower Services Commission and its two agencies
or the Health and Safety Executive, and are paid out of grants-in-aid to
these bodies” (Civil Service Department 1976: 12). By 1994, the defi-
nition as it appeared in Civil Service Statistics had been changed again,
this time presumably to adjust to the creation of Next Steps agencies,
especially those with trading fund status. This, the 1994 definition, omits
4 L. CASTELLANI
all reference to what had previously been regarded as the key financial
clause; there is no longer any reference to pay being drawn wholly and
directly out of money voted by Parliament. It stated that “a Civil Servant
is a servant of the Crown working in a civil capacity who is not: the
holder of a political (or judicial) office; the holder of certain other offices
in respect of whose tenure of office special provision has been made; a
servant of the Crown in a personal capacity paid from the Civil List”
(HM Treasury 1994: 18).
This is, on the face of it, comprehensive, though much less specific
than earlier definitions. All officials working in the central administra-
tion come within its sphere, but recent explanations and changes have
tried to clarify what it means in practice. Since the creation of Next Steps
agencies, following the publication of the Ibbs Report (Efficiency Unit
1988), there has been discussion about whether a Civil Service as such
can still be said to exist as a recognisable and discrete service, distinct
from an aggregation of employees of particular government departments
and agencies. This process was stimulated by characteristics of work in
agencies, which operated on business-like lines, where staff increasingly
began to have contracts with pay and conditions of service that vary
from agency to agency, and where staff were given targets to achieve,
with incentives including pay related to the achievement of their targets.
Sir Robin Butler, Head of the Home Civil Service, said he was quite
clear that the Civil Service as a distinct entity still existed, though it is
a service that was “unified but not uniform” (Butler 1993). The 1994
White Paper, The Civil Service: Continuity and Change, was also confi-
dent on this point. It argued that “the importance of the Civil Service
as a coherent entity, rather than simply the sum of the staff of individ-
ual departments performing specific roles, has been recognised for more
than 150 years,” and it goes on to quote Butler’s key principles. These
are “integrity, impartiality, objectivity, selection and promotion on merit,
and accountability through ministers to Parliament” (Cabinet Office
1994, para. 2.7).
Other recent publications have also focused on this issue. Sir Peter
Kemp, known as “the architect of Next Steps,” wrote about “moving
away from the model of a single service monolith to one where a loose
federation of many smaller agencies, units, and cores predominates”
(Kemp 1993: 8). However, he believed there was “no such thing as a
single public service ethos” (Kemp 1993: 33) and that “there has never
been any real unity” (ibidem: 44). Instead, the “unity of the Civil Service
1 THE CIVIL SERVICE: DEFINITION, ORGANISATION … 5
Considering this climate, it would have been difficult for the Fulton
Committee to have said much in a reformist way that was worth saying
and had not already been said. There has long been discussion about the
influence exerted by the Fulton ideas, both in the years immediately after
the publication and in the longer term (Fry 1995). Such debate is still
going on. Without taking position, it would be wrong to claim that the
influence of the Fulton Report ended in a few months or, on the other
side, argue that everything that happened after 1968 had its roots in this
report. Its importance, and what produced such a debate, lay in the fact
that, among all the official reports on the Civil Service, it was the most
critical.
Then, it became particularly influential because it reflected a prevail-
ing trend among contemporary reformers towards the Civil Service. In
the end, Fulton provided a blueprint for those who sought to challenge
the bureaucratic status quo. Indeed, it became the point of reference
for many years to come for both supporters and dissenters. The Fulton
Report opened with this statement: “The Home Civil Service is still
fundamentally the product of the nineteenth-century philosophy of the
Northcote–Trevelyan Report. The tasks it faces are those of the second
half of the twentieth century” (para. 1). The report considered the Civil
Service ossified in the previous century: the very successful framework
of the Northcote–Trevelyan continued to resist, and, despite over one
hundred years of administrative changes, had left the service underdevel-
oped. It issued a list of complaints: specifically, it claimed that there was
too much of the “culture of the generalist,” and specialist knowledge was
not spread among senior civil servants where it was more necessary; the
grading system was too rigid and inconvenient to exploit skills of civil
servants; and these formed a too-elitist institution based exclusively on
an Oxbridge education.
Furthermore, there was too much mobility within departments and
too little career development, and this was partly because the Treasury
was not able satisfactorily to manage both the economy and the Civil
Service; there was a lack of systematic training, a further reflection of the
British philosophy of administration, and this feature was linked with an
excessive emphasis upon advising ministers, so that senior officials were
giving too little attention to the efficient management of their depart-
ments. Finally, there was a lack of clearly defined responsibility and
accountability among individual civil servants within the hierarchy.
1 THE CIVIL SERVICE: DEFINITION, ORGANISATION … 17
again, this approach was applied only in a few parts of Whitehall. Another
prescription was to adopt planning units in the departments in order to
plan costs and activities performed by the department. The dominant view
in Whitehall was that planning was a political responsibility and it should
involve only the policy division and not the Civil Service as a whole.
Dismissive comments by the Permanent Secretary to the Department of
Education in 1976 about “the flabby type of futurological day-dreaming”
suggested that there were senior officials who did not take planning seri-
ously (Barberis 1996).
In the late seventies, the Fulton Report was considered a failure
for the central government. Fultonites complained about “the lost
reforms.” The position of John Garrett, a former member of the Fulton
Committee, was that “in general the Civil Service of 1980 is not much
different from the Civil Service of 1968 … The top management of our
large and technically complex departments of state is still dominated by
generalist arts graduates from public schools and Oxbridge.” Whitehall
had not been immobile, but “there has not been any sense of pushing
through the great strategy for development that Fulton envisaged. After
1969 no politician with sufficient weight cared sufficiently to understand
the strategy or to see the importance of reform.” A civil servant told the
historian Peter Hennessy in 1975 that “Fulton was a joke” because “they
accepted everything he said and then did what they wanted to.” Some
academic observers argued about the administrative system’s “remark-
able capacity to absorb and transform reform proposals, adapting them
subtly to its perception of what is tolerable” (Garrett 1980: 3; Hennessy
1990: 205). The Fulton programme was detuned for the whole of the
seventies, but a decade later the impact of the report was revalued.
After 1979, Mrs. Thatcher abolished the CSD but provided the politi-
cal commitment necessary to implement the Fulton-shaped management
reforms (the Financial Management Initiative—FMI—and the Next
Steps) as well as extending unified grading.
However, even if the Thatcher Government developed many Fulton
recommendations, the ideological perspective of the two initiatives was
very different: Fulton focused on the promotion of more efficiency for
a big Civil Service and Thatcher’s reform aim was to roll back the state.
The Whitehall view in the 1980s and the 1990s was that Fulton had
been a “milestone” on the way to the “lasting reforms” of the Thatcher
years and that it had “laid a trail for many of the key changes in the Civil
Service over the next two decades.” Also some members of the Fulton
20 L. CASTELLANI
Edward Heath was the Conservative Prime Minister in the period 1970–
1974, and he was a former civil servant who was fascinated by reform
of the machinery of government. His approach in government was
managerial, rational and problem-solving. Political adversaries criticised
him as a “civil servants’ Prime Minister” because his key advisers were
civil servants rather than party or political cronies and undoubtedly he
had a high regard for his previous institution, and he was focused on
reform to make government more efficient and to achieve better poli-
cy-making (Theakston 1995: 111). The plan of the Conservatives in
1970 to overhaul the machinery of government was wide and, at the
same time, very detailed. Heath had a very strong and developed vision
of the Civil Service: he “hankered after a French-style Civil Service with
highly trained officials not afraid to take a strong line.” In opposition,
Heath had changed the approach of his party to the reform-enforcing
think tanks through the creation of a party policy group to formulate
solutions for a new pattern of department, the Public Sector Research
Unit, which worked on new analytical, budgeting and managerial
techniques pioneered in the US government and in the private sector.
Former senior civil servants advised the Prime Minister on the crea-
tion of a possible Prime Minister’s Department and a new central plan-
ning staff (Hennessy 1990: 238). As Kevin Theakston wrote: “The
Conservatives’ aim was for ‘less government, but better government’
1 THE CIVIL SERVICE: DEFINITION, ORGANISATION … 21
politics and centralised power further compressed its influence and the
scope of its work for the Cabinet. The think tank was already badly dam-
aged in 1977 for its controversial report on diplomatic service and it was
further undermined by a leak on health policy in 1982. After the election
of 1983, Mrs. Thatcher abolished it.
To conclude, Heath’s “new style of government” was not really
effective. Central government faced the difficulties of giant depart-
ments’ reform then break-up after 1972. PAR was disempowered by
the Treasury and the other ministries and it was ineffective in reducing
public expenditure. Little functions were hived off. The only two suc-
cesses were the administrative unit, but it was too early to extend their
governance to all the public sector as would happen in the late 1980s,
and the CPRS, but the innovative think tank worked effectively and at its
best only during the four years of the Heath government. Douglas Hurd,
Heath’s Number 10 political secretary, argued that “because of his justi-
fied respect for his senior advisers, Mr. Heath tended to exaggerate what
could be achieved by new official machinery … a little more scepticism
about machinery would have been wise” (Hurd 1979: 92–93; Campbell
1993: 222). Like Wilson, Heath seemed to have lost interest in reforming
the central government soon after the oil crisis, and his attention moved
from reshaping Whitehall to other issues. In some ways, Heath’s reformist
ideas about the Civil Service prepared the ground for Thatcher’s proposal
of change. This was, for example, the introduction of businessmen in gov-
ernment, the developing of accountable management and the concept of
separating policy and management through setting-up of administrative
units which were the ancestors of the executive agencies. These issues
came onto the agenda again during the Thatcher years and she didn’t
lose interest in completing the reform of the Civil Service. As Theakston
noted: “She took a much more robust and confrontational attitude than
did Heath to the Civil Service as an institutional interest and, crucially,
maintained tight control over budgets to keep up the pressure to find
more efficient, streamlined, and economical methods” (1995: 114).
of the Civil Service from left and right and especially from the public
was strong. The long and wide economic crisis made by stagflation, the
1973–1974 oil shock and the recourse to the IMF in 1976 meant for
the Civil Service, and for the public sector broadly, that reforms were no
more avoidable. The policies strategy was now focused on economy, cost-
control, cutbacks and the search for greater efficiency. The Treasury’s
imposition of the cash limits system created a short-term control on pub-
lic expenditure that substituted for economic planning in the long term.
The CSD planned a cost of central government review and the Civil
Service manpower policy was oriented towards cuts: between 1976 and
1979, there were 15,000 jobs cut (Fry 1995).
In the meantime, civil servants felt they were on the cliff of a politi-
cal and organisational change. As Painter argued: “There had been the
disheartening spectacle for civil servants of the habitual volte-face by
ministers, as much within the life-span of a single administration as the
product of two-party adversary politics. The trauma of frequent policy
changes had been exacerbated by continuous administrative upheaval.”
The malaise of civil servants exploded against Wilson’s break-up of the
DTI in 1974, because they were “tired of being pushed around from
pillar to post.” The notion of “overloaded government” became com-
mon, and this feeling was shared by some civil servants, who agreed with
the idea that central government had too many functions and too many
administrative and managerial issues to face (Painter 1975: 434). In order
to face discontent of middle and lower grades of the Civil Service, the
CSD created the Wider Issues Review Team in July 1973, which pro-
duced a report in 1975 called Civil Servants and Change. Contesting the
stereotype of the mandarin as a middle-aged, London-based, Oxbridge-
educated man, the report pointed out that a third of staff was under 30,
two-thirds of the clerical class were women and less than a fifth worked
in London. Then, the report put forward a programme for improving
staff relations and conditions. The idea of the Wider Issues was to move
from the traditional Civil Service establishment approach to a moderni-
sation towards a human resources and personnel management approach.
However, the context in which the report appeared was not favourable to
reform using a managerial approach. Indeed, to promote managerial tech-
niques against a backdrop of public hostility towards the Civil Service,
public expenditure crisis, cash limits, staff cuts, and deteriorating indus-
trial relations was almost impossible. At the same time, the old model
of government pivoted on the “good employer” was one of the causes
1 THE CIVIL SERVICE: DEFINITION, ORGANISATION … 27
of the disease. The Priestley pay system, with its idea of a “fair com-
parisons” principle in calculating Civil Service pay, came easily under
attack by the public. To stem this friction, the Conservative and Labour
Governments of the seventies chose to limit, defer or stage Civil Service
pay increases.
The easiest way to control pay for the government in the crisis
of the late seventies was to make the public sector an example for the
other workers. Indeed, in 1976 the Labour Government suspended pay
research and the Treasury’s cash limits now established criteria for pay
bargaining and settlements. This situation transformed the industrial
relations in the Civil Service. Until the early seventies, Civil Service rela-
tions with trade unions had been relatively calm: consensus and stability
in staff relations were the result of fifty years of “Whitleyism,” the prac-
tice established between government and trade unions to agree certain
benefits for civil servants in return for the surrender of the right to strike.
But by the end of the seventies, the crisis of Whitleyism had started, and
Civil Service industrial relations became very complicated. The Civil
Service was intensively unionised. The behaviour of Civil Service unions
became very similar to that of the mainstream unions: they began press-
ing their interests with greater insistence and were willing to use the
strike weapon, which returned in the industrial relations of the public
sector.
The first Civil Service strike occurred in 1973 as a protest against the
Heath government’s income policy. In 1979, there was a series of selec-
tive strikes that defeated the Labour Government’s attempt to reform
Civil Service pay policy. A new adversarial moment was created by the
unions and this meant that “Whitleyism is dead, in spirit if not in body”
(Drewry and Butcher 1991). John Garrett wrote in 1980: “This harsher
climate had taken its toll on the Civil Service before the Conservative
Party returned to office,” and he added, “the innovative and optimistic
atmosphere of the late 1960s has given way to a sour hostility between
the Civil Service unions and the government and between politicians and
the Service” (Garrett 1980: 191).
To conclude, the problems of low morale, discontent with the pay
system and deteriorated industrial relations were inherited by Mrs.
Thatcher, not created by her. The reforms of the new Conservative
Government elected in May 1979 would change the structure, the func-
tioning and the profession of the Civil Service; these reforms became a
great organisational shift in the administrative history of the UK because
28 L. CASTELLANI
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1 THE CIVIL SERVICE: DEFINITION, ORGANISATION … 29
& Spencer, arrived at Number 10 Downing Street with the idea of infus-
ing managerial behaviours of the private sector into the public one. Less
severe in his attitude to the Civil Service than Chapman, he devised, with
the strong support of Mrs. Thatcher, an efficiency strategy which used
civil servants themselves to identify areas of waste and duplication and
to make recommendations for change (Metcalfe and Richards 1987). Sir
John Hoskyns, the head of the Prime Minister’s policy unit, was involved
in the Civil Service debate. Whitehall, he sustained, lacked strategic
direction, a deficit which should be considered particularly severe in the
context of Britain’s economic decline (Hoskyns 1983). He argued that
the civil servants had lost their strategy for national revival. This problem
was exacerbated by their political neutrality, which made it necessary for
them to withdraw the “last five percent of commitment” to governmen-
tal objectives. He believed that neutrality should be abandoned and the
Whitehall professional bureaucracy should be overcome in favour of a
spoils system, in which the executive power would have chosen top-level
civil servants from outside (Hoskyns 1983). From this debate, a num-
ber of problems linked to the Civil Service were delivered to the pub-
lic debate. First, the aim of the new Conservative Government was to
reduce the power of civil servants. In pursuit of this objective, the gov-
ernment proceeded with a strong commitment to attack the influence of
Civil Service unions, to decrease the rights of civil servants to engage in
politically related activity and to introduce measures designed to com-
press civil servants’ privileges (Ponting 1986).
Second, the Civil Service’s efficiency in implementing the government
programme had to be increased. The Prime Minister soon made it clear
that she was willing to “skip a civil service generation” in order to pro-
mote those whom she believed would pursue government policy with
vigour and effectiveness (Hennessy 1990: 631).
Third, the size of the Civil Service would be reduced, a policy consist-
ent with the aim to reduce the public expenditure, a point set as a pri-
ority by the first Thatcher Government. Fourth, private sector solutions
would be adopted to deal with public sector inefficiencies. These issues
were present in the administrative debate by the mid-1960s; in fact, the
Plowden Report of 1961 argued for “management training” for civil
servants. Privatisation and managerial methods would be pursued with
considerable vigour.
Fifth, non-departmental bodies whose primary rationale was deemed
to be survival rather than productivity would be shut down (see Cmnd
7797, 1979).
2 THE RISE OF MANAGERIALISM IN THE CIVIL SERVICE … 33