Corporate report

Building a great Treasury

Updated 11 December 2014

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

0.1 Foreword

By the Treasury’s Executive Management Board

The Treasury is a great institution. Exceptional people work here.

We know from our staff survey that 83% of staff are proud to tell others they are a part of the Treasury – well above the standard in other high performing public sector organisations. 81% of staff have confidence in the decisions made by their managers and 67% of us would recommend the department as a great place to work.

The Treasury has been through significant change over the past few years. We have embedded a significant set of structural reforms so we can operate as a smaller, more nimble and responsive organisation.

Nevertheless, we face stiff challenges across a range of areas. We must continue to retain and recruit outstanding people. And we must tackle a number of persistent specific weak points in our organisational model highlighted in previous departmental reviews and our own staff survey.

Treasury turnover remains too high. Partly as a result, too many of our stakeholders are frustrated. We do not place the right value on specialist skills and deep experience. And we need to continue to improve our diversity.

This is what ‘Building a great Treasury’ is about. We have agreed a small number of targeted actions to address what we have heard from staff and stakeholders.

Specifically, we will:

• introduce a professional policy development programme, open to all, as well as a tailored induction programme for all new graduate entrants
• fundamentally review the specialist, policy and more generalist skills and depth of experience we need and determine how to meet any gaps, including through our future graduate requirements and continued professionalising of Group Management Services
• benchmark all our stakeholder relationships, holding directors to account for making improvements where best practice is not in place; require structured and specific feedback from external stakeholders through individual appraisals; and actively use our alumni to support policy making, recruitment and retention
• move our management practices from good to great through a formal Management Compact embedded into the appraisal process; continued use of the B-C Steering Group; and a new management training programme for managers of new graduates, new managers and new deputy directors
• take steps to promote and support all forms of flexible working, and continue to challenge all forms of unconscious bias

A set of volunteers drawn from across the department worked hard to shape these actions, and there will be opportunities for active engagement and participation in taking this forward.

As your Executive Management Board, we will hold ourselves to account for delivery, put resources in place to deliver the reforms and seek feedback along the way. We hope every member of staff will play their part in helping us make this plan a success.

Nick, John, Sharon, Mark, Julian, Indra, Dave, Charles, James, Alison and Kirstin

Treasury Executive Management Board, December 2014

1. How we have changed since 2010

In 2010, the Treasury undertook a Strategic Review to shape the way the department would live within its Spending Round settlement. The aim was not just to get smaller, but also to become more flexible in how we manage ourselves, more focussed in prioritising what we do, and to develop our capability. We have achieved much of what we set out to do:

1.1 A smaller Treasury

We have reduced in size, meeting our plan for a core Treasury of around 1,000 staff in March 2014. Our budget has reduced by £68 million between 2010 to 2011 and 2014 to 2015. The 2012 move to desk sharing has enabled us to share space in 1 Horse Guards Road with Cabinet Office, the Northern Ireland Office and UK Export Finance, generating rental income of £13 million in 2013 to 2014. A greater reliance on employee self-service, and moves, where appropriate, to share corporate services with other departments ensure we continue to support staff more efficiently from the centre.

1.2 A more flexible Treasury

We have taken steps to ensure the organisation is able to respond flexibly and professionally to new and fast changing priorities, by:

• implementing a Group structure, led by directors and supported by new Group Management Services – ensuring greater flexibility to deploy staff across related policy areas
• implementing an annual business planning round, including time limited roles and delegated Group budgets, and holding senior management to account for delivering objectives and managing risks – ensuring managers are anticipating resourcing pressures as much as possible
• establishing a strategic projects team and developing contingency planning mechanisms on financial services to ensure resources can be mobilised quickly in year to respond to new pressures
• modernising our working environment by moving to more flexible laptops, flexible telephony and smaller, more flexible IT contracts

1.3 A focus on core functions

We are more focussed on our core economics and finance ministry functions, using the business planning process and regular engagement with ministers (including through the Treasury Ministerial Board) to identify key priorities and allocate resources to them. We have scaled back work in some areas, for example international development policy and oversight of smaller taxes, while also making space to deliver new priorities such as Help to Buy and policy development to support pensions reform.

We have combined this with greater emphasis on strengthening relationships with our key strategic partners – Her Majesty’s Revenue and Customs, the Cabinet Office, the Foreign and Commonwealth Office, the Bank of England, and the Office for Budget Responsibility.

We have also strengthened our focus on improving core finance and commercial skills both in-house and across Whitehall following the Financial Management Review. Within the department we are continuing a more structured approach to embedding these skills in spending control, and looking at ways to integrate commercial work with policy development. One example of this has been the establishment of the Competition Markets and Regulation team to help integrate the principles of competition into policy-making.

Across Whitehall, we are developing our broader cross-government leadership role in finance, commercial and internal audit, to complement our existing leadership role in economic analysis. Our departmental commercial capability reviews and strengthening of internal audit through a single shared service for departments are just some examples of this. Additionally, Infrastructure UK’s commercial specialists are increasingly called upon to offer expertise on commercial aspects of policy development across Whitehall.

1.4 Investment in our people

Staff are central to our ability to deliver our objectives. Over the period since the Strategic Review, we have increased our focus on developing and retaining the right staff, by:

• updating our accelerated development programmes Prospects and Catalyst
• introducing a new competence point at range D, and a new higher range E2 grade, in order to reflect experience and expertise, and to support retention at these levels
• introducing a Treasury specific mentoring programme, which has had excellent take up
• setting up the Group Management Service to help staff deliver professional business support service and gain from the tailored management offered by our team of GMS managers
• implementing a formal talent management process for ranges E, E2 and the SCS
• taking swift and decisive action following the recommendations of the Financial Crisis Management Review, which included the creation of a Financial Services Secondments Committee
• launching the Better Business Cases programme – an externally provided, self-financing accreditation and training programme to raise and sustain improved capacity for the development and control of spending proposals across the public sector
• supporting staff to undertake specific career development opportunities such as international and domestic secondments, and specific training such as PRINCE2 project management
• recruiting 17 apprentices since the scheme began in 2012, and supporting their development with 7 now permanent, 2 of whom have been promoted within the Treasury

1.5 Inclusion and fair treatment

Throughout this period, we have focussed on delivering on our commitment to ensure the Treasury is a diverse place to work. For example, we have:

• implemented the Reasonable Adjustments passport for disabled staff
• signed the ‘Time to Change’ pledge on mental well being
• introduced training on bullying and harassment for all staff including tailored training for Treasury Supporters
• introduced specific guidance for managers on how to support part-time working and job-sharing, and
• won an award for our work in supporting the National Mentoring Scheme for ethnic minority students

We have continued to make progress in increasing the share of women in SCS roles, though, as the board has identified, we still need to make further progress in other areas of diversity, notably in progression for black and minority ethnic (BME) staff to range E, and for disabled staff.

Diversity statistics against targets

Cohort	Target	March 2014	Performance against target
Women
SCS	42%	42.7%	+0.7%
Range E	50%	41.4%	-8.6%
Range D	50%	44.4%	-5.6%
BME
SCS	5%	4.5%	-0.5%
Range E	14%	5.5%	-8.5%
Range D	18%	20.8%	+2.8%
Disability
SCS	5%	4.5%	-0.5%
Range E	6%	4.7%	-1.3%
Range D	8%	6.6%	-1.4%

Source: HM Treasury diversity data

1.6 Management excellence

We know that excellent management is crucial. Our staff survey results tell us that – reflecting the sustained commitment to improving management over several years – we have made good progress.

Phase 1 of the Management Excellence programme, launched in 2012, embedded an SCS feedback tool, and followed the introduction of the SCS assessment centre in 2011 to ensure that only those with the right leadership and management skills are promoted to the senior civil service.

In 2013, 81% of staff reported overall confidence in the decisions made by their manager – well above the standard in high performing organisations.

Quality of management

Source: Civil Service People Survey 2010 to 2013

1.7 Our staff survey results

The results of these actions are reflected in our staff survey results. 83% of staff are proud to work at the Treasury, which is well above the standard in high performing organisations. In fact, we perform well in comparison to other government departments, and other high performing public sector organisations, across many key issues.

Key staff survey metrics (2013 data)

Source: Civil Service People Survey 2013

This is a good place to be, particularly in view of the changes we have gone through over the last few years. The next section of this document explains how we will build on what we have achieved so far with a small number of targeted actions to make further improvements.

2. Where we are going

The Strategic Review was about becoming more professional in our processes and structures, with fewer resources. ‘Building a great Treasury’ is about becoming more professional, and expert, in the way in which we work, to improve further our service to Ministers, our stakeholders and to each other.

Our vision is for every member of Treasury staff to play a full, productive and valued role in helping us achieve our purpose and in ensuring we operate as a high performing organisation, in an environment that fully reflects our values and is a rewarding and supportive place to work, whatever their grade, background or office location.

This plan focuses on five areas – taking us to the next level on policy professionalism so that we can continue to lead Whitehall in this core aspect of Treasury work; targeted actions to strengthen and embed skills and expertise with a focus on those most relevant to our core economics and finance ministry functions; bringing the best of stakeholder management to the whole department; raising our expected standard of management from good to great and – throughout all of this – making sure that we are living up to the commitment of a department that values everyone. Alongside this, we will continue to improve the way we support staff through IT and other services, building on reforms since 2010.

2.1 An open, challenging Treasury – policy professionalism

We found…

• staff enjoy the dynamic and exciting way in which we make policy, but we are not systematically training, supporting people to develop, and improving in this central area
• there is demand, including from ministers, to take more innovative and creative approaches to policy development, to learn from others in a more organised way, and to put in place a clear standard of expertise and a core set of tools to follow beyond submissions

So we will…

• introduce a professional development programme for policy in the Treasury. Open to everyone, this will take the form of training to improve the skills and tools we use to develop high quality policy advice, underpinned by a set of policy principles. Finance and economics skills will be at the core of this programme, as well a focus on open policymaking and the interactions between policy and delivery. We will develop the content of this programme over the rest of the year, pilot it with some staff during purdah/spring 2015 and launch the programme later in 2015
• introduce a mandatory, high quality induction and development programme for all graduates joining us from autumn 2015. Existing policy staff will be heavily involved in the design and running of the programme, and we will consider an assessment at the end to test learning

2.2 A challenging, appreciative Treasury – strengthening skills and expertise

We found…

• stakeholders are concerned by the lack of consistent, deep expertise we have in key areas; and that this, coupled with high turnover, risks having a significant impact on our key relationships and our ability to deliver our objectives
• staff appreciate the large variety of roles here, but aren’t always sure about how to navigate individual careers or where to focus their personal development

So we will…

• undertake a fundamental review of skills – what we have, the skills we need, and how we will address any gaps, including revisiting how we deploy staff across the department. The review will consider explicitly the balance between specialist, policy and more generalist skills, including a clear articulation of the level and type of financial management and commercial skills we need in different roles, as the core recommendation from the Financial Management Review. We will run this review alongside business planning for 2015-16 and the results will inform resource allocations and future recruitment decisions
• commit now to further increasing the depth of expertise we have by increasing how long our staff spend in policy areas or in individual postings. We will draw this work into the wider review of skills and capability
• implement a new graduate recruitment model for 2014-15, including specific outreach to universities with high calibre candidates from a wide range of backgrounds, and using the business planning round to identify Groups’ future graduate requirements
• look honestly at what progress we have made in supporting the career development of Group Management Services staff through a formal review, and consider what actions we can take to further professionalise this service

2.3 An open, collaborative Treasury – working with stakeholders

We found…

• staff at all levels have good relationships with their stakeholders as individuals, across Whitehall and beyond, borne out by the feedback we sought
• some areas of the department are being genuinely innovative in how they manage their stakeholder relationships, such as the thematic visits programme we are undertaking in advance of the 2015 Spending Round to build our knowledge and expertise on public service reform, and the improvements we have made to strengthen engagement around fiscal events including the use of digital tools. But this best practice is not embedded throughout the department

So we will…

• promote excellent stakeholder engagement by supporting staff to learn from best practice across the department. We will ask every Group to take an honest look at how they manage their relationships through a Treasury-wide stakeholder benchmarking exercise, which will set a clear standard for what excellent stakeholder management looks like, including in knowledge management practices. We will run this exercise after Autumn Statement 2014, and we will hold directors and Groups to account for making improvements
• mainstream good practice in stakeholder management by requiring all staff to seek specific, structured feedback from external stakeholders as part of the appraisal process, starting in April 2015. We will also continue to seek feedback at organisational level, sharing this with the department
• develop the new Treasury alumni network to support policy making, recruitment and retention in the department, by proactively sourcing new members, establishing a regular channel of communication to members, and holding an event specifically targeted at alumni with relevant policy experience

2.4 An appreciative, open Treasury – management excellence

We found…

• we have got better at management, reflecting several years of continued focus on this as a priority. We now need to move from good to great
• staff need not only the right working environment to contribute and flourish, but also proper career development tailored to individual situations

So we will…

• set out, clearly and simply, what excellent management in all its forms looks like, through a formal Management Compact. This will comprise a short set of behaviours that we expect all managers at all levels to demonstrate, and we will hold managers to account for these. As part of this, we will review the content and use of the SCS feedback tool. We will pilot this Compact in some areas at this year’s mid-year review, and introduce for all from April 2015. This is the next phase of our Management Excellence programme
• address some of the concerns specific to ranges B and C through the new B-C steering group, which Sharon White, one of our second permanent secretaries, will chair three times a year to maintain momentum
• provide better support for all managers, initially by focussing on all managers of new graduates joining us from autumn next year, implementing a structured management training and peer learning programme for this cohort over the length of this critical management relationship. We will roll this approach out to all new managers and new Deputy Directors

2.5 Valuing everyone

We found…

• staff enjoy working in an organisation that allows a wide variety of flexible working patterns, be it for caring responsibilities, disability or personal preference; and that there is now a high level of confidence with the set of tools available to support this - laptops with wifi access for all staff, and mobile phones for those who need them
• but individuals have been left alone to navigate and negotiate these flexible paths, and there is a wide variation in Groups’ interpretation and staff experiences. Together with our often informal ways of working, this is causing a significant retention problem for some groups
• staff survey results on personal experiences of bullying and harassment remain a cause for concern, particularly for disabled members of staff

So we will…

• develop a set of practical solutions for the organisation to promote and support all forms of flexible working, with a particular focus on the role of line managers in actively managing flexible working
• build on the mandatory training to remove any unconscious bias rooted in the organisation, by delivering bespoke workshop based training for all Treasury SCS in autumn 2014. Alongside this, we will challenge ourselves on all forms of unconscious bias, and specifically consider whether there is more we can do to support new staff on our ways of working to ensure we retain staff from a diverse range of backgrounds and experience

The Treasury will continue to take a zero-tolerance approach to acts of bullying, harassment and discrimination and throughout the delivery of this plan we will keep the Treasury values – challenging, appreciative, collaborative, and open – at the heart of everything we do.

2.6 Improving our working environment

Following the Strategic Review in 2010, the Treasury has been implementing a phased programme of change to modernise our working environment and drive efficiencies from better use of our building, in line with the government-wide The Way We Work programme.

While much of this has been delivered, there is an ongoing programme to be delivered and the focus in the coming period will be on:

• IT equipment: New laptops are being rolled out in 2014. The introduction of Windows 8.1 will mean much faster log in times and internet browsing speeds, as well as better supporting flexible working
• IT contracts: Moving to a new set of suppliers at the start of 2015 will mean we can respond to our changing requirements in IT more rapidly, and is expected to cut annual IT running costs by 15%
• Implementing a new electronic case management system: E-case will improve the handling of Parliamentary Questions, Freedom of Information requests, and correspondence

3. Delivering this plan

To ensure we deliver the commitments we are making in this document, we will:

• retain an implementation team in our central Strategy Planning and Budget Group; and put in place specific additional resource across the centre and the Corporate Centre Group to own and deliver each of these actions, including five specific pieces of implementation for our Catalyst accelerated development programme
• take the plan forward with the active engagement and participation of staff; and ensure we deliver changes as far as possible through established processes such as the appraisal system and in how we induct staff
• sequence this work, particularly in the pre-election period. The actions are deliberately a mix of proposals ready to implement now and further development required over the next 18 months to 2 years. Having specific resources in place to deliver these will also to help minimise any burden on Groups and individuals
• hold ourselves to account through quarterly reporting to the Strategy and Capability Board, the Executive Management Board, and yearly updates to our Non-Executive Directors; as well as regular reporting to Cabinet Office
• review key elements of the programme every year into the next Parliament, and publish an update; with the first review in summer 2015 after the election *measure our success against these commitments through a set of key milestones and metrics for each of our priority actions, as well as a short set of metrics to test progress against our overall vision (see Annex A).