POLITICAL & COMMERCIAL INTELLIGENCE

We help companies affected by political change. To access our political and commercial intelligence service, email GUIDE’s Chief Executive on greig@theguideconsultancy.com


Predicting the new Cabinet

Sadly, predicting the new Cabinet is a mug's game - at this stage, the even the Prime Minister elect doesn't know the final line up. Cabinets are formed through a mix of merit, political balance, personal ties and blind luck (the PM does not know, for example, who might decline their first offer). We should know where the cards have fallen by the weekend.

Public sector contract terms will change dramatically in light of new Cabinet Office plan

The new Cabinet Office and Civil Service workforce plan to 2020 has three major implications for commercial suppliers to Government.

1/ Changes to Senior Civil Service recruitment and pay will encourage mutual secondments between Departments and suppliers, but will also increase the risk of key staff being ‘poached’ by the public sector.

2/ The Civil Service will recruit according to “potential not polish” (i.e. it will hire people from wider socio-economic backgrounds) and it will establish a requirement to collect more demographic data on staff. Both “voluntary” features are highly likely to be passed on to suppliers, too – initially through an “invitation” to agree “a common national

set of measures for employers to use for understanding the socio-economic background” of their staff and potential recruits. As a result, major public sector contracts will only be won when firms toe the line and can demonstrate the diversity of their own workforce.

3/ The workforce review allows the Cabinet Office to grab even more power over wide-ranging functions across Government. There will be “a centre of expertise within Cabinet Office, centralising the senior recruitment function”. In other words, senior officials in all Departments will be chosen by – and answer to – the Cabinet Office, rather than their own Department. This makes engagement with the Cabinet Office more important than ever.

As an aside, the review also poses some prickly political challenges. For example, while Senior Civil Servants are in line for pay rises by November (“flexible rewards for scare skills”), there will be job cuts elsewhere (“in future the Civil Service will need to be smaller”). Indeed, if the review represents an effort to stuff the mouths of top mandarins with gold but leaves frontline staff demoralised, Theresa May’s new administration could quickly find that when it pulls the levers of Government, nothing happens.

The full Cabinet Office workforce plan can be found here: https://www.gov.uk/government/publications/civil-service-workforce-plan-2016-to-2020

The Conservative leadership race

Two factors make this race to be Tory leader and PM unusual. First, it comes hot on the heels of the referendum, which means backbench MPs have recent experience of when they can give, withdraw, or withhold their public support for one side or the other to maximum effect. Second, the incumbent Prime Minister does not have a chosen candidate in the competition, which makes it much less likely that the party machinery can sway the vote (as happened when Michael Howard appointed Francis Maude as Party Chairman to boost David Cameron, for example).  

The biggest political story the papers won’t cover

For all the excitement of the two leadership races, important decisions are being taken in Whitehall as well as in Parliament. There will be a rare coincidence of the two worlds this week, when the Procedure Select Committee will take evidence on scrutinising the Government’s supply Estimates from PAC Chair Meg Hillier MP. The Estimates set out what the Government is spending and where. Contrary to popular belief, the Budget only describes changes to spending, rather than giving the full picture – so for those who want to understand where political power really lies, the Estimates are the best place to start. However, there isn’t much chance of this seemingly dry accounting exercise bumping party politics off the front page over the next few days…

Lessons from the Dove at Dargate

On Sunday we had a pub lunch in the beer garden of the Dove at Dargate – a typically welcoming Kentish country pub. Strikingly, the families on every table around us were talking about the EU referendum, with the friendly banter turning a bit sharp more than once. While there has been much speculation about “revenge” and “reconciliation” reshuffles to bring the Conservatives back together, something else is more important… On Friday we will see how deeply split the country is over an issue of fundamental importance, so the Government must strive to bring the public back together or else, whoever wins, defeated voters will seek new vents for their frustrations.

GDS consultation deadline approaches

Away from the referendum melee, much of the business of Government – and the business with Government – continues. The Government Digital Service (GDS) consultation on Whitehall's Technology Code of Practice, which will shape tech spending within Government Departments, will close on 8th July. The Code is set to help GDS move towards multi-supplier contracts, promote competition among suppliers, build in-house where appropriate and use a more “adaptive” approach. More prosaically, GDS is also reviewing spend controls for Departments, so the consultation will determine the commercial prospects for tech firms supplying the public sector.

Known knowns after polling day

The EU vote may be too close to call, but three things will be certain on Friday.

First, the Government’s working majority of 16 will be dwarfed by defeated Tory malcontents (and the administration will still be heavily outweighed in the Lords, too). Second, George Osborne will be at serious risk of political reprisal – either through punishment or sacrifice. And third, the deluge of delayed legislation and the need for a ‘referendum dividend’ means the Government will be under pressure to announce a flurry of new Bills, even if it does not have the political capital to deliver them.

In short, whatever happens on Thursday, this extraordinary period of high drama in British politics will continue for many months to come. 

The GUIDE to the week

Inevitably, it’s nearly all referendum this week…

One step forward, two steps back

It’s a truism that David Cameron is renowned for getting out of political crises – and for getting into them. However we vote next week and whomever is Prime Minister after the summer, the Government will face another big difficulty, in that it will need to give a referendum dividend by the Autumn Statement. This will include significant policy changes that will need either a specific political mandate or the ability to cajole opposition parties. And the Conservatives’ hopes of either of those essential factors are not helped by Cameron ceding the stage to Corbyn et al now. In other words, a short-term tactic is – yet again – storing up trouble for the future.

Money can buy you love

Companies that get our procurement intelligence reports are already familiar with Whitehall’s rule on social policy through procurement. Later this summer, all private sector suppliers to Whitehall will have an idea of what the Government really wants when it signs a contract. The Cabinet Office has promised to give examples of contracts that deliver on the Social Value Act – and chosen case studies will be a strong signal of what it wants suppliers to do beyond what they are actually getting paid for. It will also be a big hint on whether or not major programmes like the Apprenticeship Levy will be rolled out on time…

Divided they fall

I wrote an article for Labour Uncut on why left-leaning MPs should be worried by their unity for Remain. The gist was that senior Labour types have contented themselves with Tory infighting, instead of weighing the real social justice dilemmas of Leave or Remain – Brussels promotes workers’ rights whilst stopping interventions to save the steel industry, for example. The article doesn’t argue for a particular side in the referendum, but the monochrome debate in Labour (about how loudly to campaign, not what to campaign for) suggests the intellectual innovation needed to regain power is still missing and that even MPs with a ‘safe’ seat should worry. The full article is up on the GUIDE site, too.

The man in Whitehall knows best

In times of high drama, a common cry is “Government should do something”. Drawing more lessons for the modern age from Niall Ferguson’s biography of Kissinger, perhaps it shouldn’t… In the Cuban missile crisis, Government officials almost sparked nuclear holocaust by the mundane (vital messages were delivered late because of traffic), the incredible (classified messages were sent to Moscow via Western Union) and the farcical (a bear wandering onto a US Air Force base set off very worrying alarms). After the various cris de Coeur in our EU referendum campaign, the public may be less inclined to call on Westminster to solve its problems. 

Will Corbyn or Cameron create the next Tory leader?

Kissinger was dismayed by the race for the White House in the early years of his career – and especially by Barry Goldwater, who was the Donald Trump of his day. Kissinger explained Goldwater as a result of “the pragmatists who pride themselves they’re steering the precise middle course between extremes [but are] bound to produce the extremes which everybody deplores”. If true, this suggests it was inevitable that Cameron would lead to Farage and Miliband would lead to Corbyn. Looking ahead, whether the next Conservative leader is an ‘extremist’ or a ‘centrist’ could depend on whether they are the natural political reaction to Corbyn or to Cameron…


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