Editing Civil Service (United Kingdom) (section)

===Margaret Thatcher's government===
[[Margaret Thatcher]] came to office in 1979 believing in [[free market]]s as a better social system in many areas than the state: government should be small but active. Many of her ministers were suspicious of the civil service, in light of [[public choice]] research that suggested public servants (as well as elected officials themselves) tend to act in ways that seek to increase their own power and budgets.<ref>{{Cite web |title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1986 |url=https://www.nobelprize.org/prizes/economic-sciences/1986/summary/ |access-date=2023-11-29 |website=NobelPrize.org |language=en-US}}</ref>

She immediately set about reducing the size of the civil service, cutting numbers from 732,000 to 594,000 over her first seven years in office. [[Derek Rayner, Baron Rayner|Derek Rayner]], the former chief executive of [[Marks & Spencer]], was appointed as an [[Business efficiency expert|efficiency expert]] with the Prime Minister's personal backing; he identified numerous problems with the Civil Service, arguing that only three billion of the eight billion [[pound sterling|pound]]s a year spent at that time by the Civil Service consisted of essential services, and that the "mandarins" (senior civil servants) needed to focus on efficiency and management rather than on policy advice.<ref>Sampson, pp. 174–5.</ref> In late 1981 the Prime Minister announced the abolition of the Civil Service Department, transferring power over the Civil Service to the Prime Minister's Office and [[Cabinet Office]].<ref>Sampson, p. 171.</ref> The [[Priestley Commission]] principle of pay comparability with the private sector was abandoned in February 1982.

Meanwhile, [[Michael Heseltine]] was introducing a comprehensive system of corporate and business planning (known as MINIS) first in the [[Secretary of State for the Environment|Department of the Environment]] and then in the [[Ministry of Defence (United Kingdom)|Ministry of Defence]].  This led to the ''[[Financial Management Initiative]]'', launched in September 1982 (''Efficiency and Effectiveness in the Civil Service'' (Cmnd 8616)) as an umbrella for the efficiency scrutiny programme and with a wider focus on corporate planning, efficiency and objective-setting. Progress initially was sluggish, but in due course MINIS-style business planning became standard, and delegated budgets were introduced, so that individual managers were held much more accountable for meeting objectives, and for the first time for the resources they used to do so. [[Performance-related pay]] began in December 1984, was built on thereafter, and continues to this day, though the sums involved have always been small compared to the private sector, and the effectiveness of PRP as a genuine motivator has often been questioned.

In February 1988 [[Robin Ibbs]], who had been recruited from [[Imperial Chemical Industries|ICI]] in July 1983 to run the [[Efficiency Unit]] (now in No. 10), published his report [[Next Steps Initiative|''Improving Management in Government: The Next Steps'']]. This envisaged a new approach to delivery featuring clear targets and personal responsibility. Without any statutory change, the managerial functions of Ministries would be hived off into [[Executive Agency|Executive Agencies]], with clear [[Framework Document]]s setting out their objectives, and whose [[chief executive]]s would be made accountable directly (in some cases to Parliament) for performance. Agencies were to, as far as possible, take a commercial approach to their tasks. However, the Government conceded that agency staff would remain civil servants, which diluted the radicalism of the reform. The approach seems somewhat similar to the Swedish model, though no influence from Sweden has ever been acknowledged.

The [[Next Steps Initiative]] took some years to get off the ground, and progress was patchy. Significant change was achieved, although agencies never really achieved the level of autonomy envisaged at the start.<ref>The ''locus classicus'' showing the difficulty of this boundary was the interview of [[Michael Howard]] on ''Newsnight'' on 13 May 1997, which pivoted on the question whether as Minister he had intervened in the detailed management of the Prison Services Agency.</ref> By 5 April 1993, 89 agencies had been established, and contained over 260,000 civil servants, some 49 per cent of the total.<ref>Patricia Greer, 1994,''Transforming Central Government: the Next Steps'', preface.</ref>

The focus on smaller, more accountable, units revived the keenness of Ministerial interest in the perceived efficiencies of the private sector. Already in the late 1980s, some common services once set up to capture economies of scale, such as the [[Property Services Agency]] and the [[Crown Supplier]]s, were being dismantled or sold off. Next, shortly after Thatcher left office, in July 1991, a new programme of market-testing of central government services began, with the White Paper ''Competing for Quality'' (Cm 1730). Five-yearly or three-yearly policy and finance reviews of all agencies and other public bodies were instituted, where the first question to be answered (the "prior options exercise") was why the function should not be abolished or privatised. In November 1991 the [[private finance initiative]] was launched, and by November 1994 the [[Chancellor of the Exchequer]] had referred to it as 'the funding mechanism of choice for most public sector projects'. In 1995 the decision was taken to privatise the [[Chessington Computer Centre]], [[HMSO]], the [[Occupational Health & Safety Agency]] and Recruitment & Assessment Services.