Gus O'Donnell: Be under no illusions – Brexit is an enormous challenge for the civil service

Posted On: 
17th November 2016

To win at the dice game Perudo, players need to calculate risk and read their opponents. No surprise, then, that Gus O’Donnell is a master. Britain’s former top civil servant talks Blair, Brown and life after Brexit with Sam Macrory 

I play O’Donnell rules. Slightly different rules from the ones on the box … which are not quite right, but anyway.”

Is this the secret of Gus O’Donnell’s success? Well, kind of. But the country’s former top civil servant is actually talking about his love of Perudo, a South American dice-based game which, he says, has lessons for anyone at the sharp-end of the decision-making process.

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“It’s a great game because it reinforces in your mind that you need to work out probability, risk and uncertainty, and secondly because just knowing these things is not enough. The best statisticians round the table very rarely win. Really, it’s about reading people.”

To calculating risk and reading people well, add O’Donnell’s easy-going, apparently unflappable manner and you get the rules for succeeding at the top of the civil service. He moved in the mandarinian stratosphere for the best part of a quarter of a century, but O’Donnell couldn’t come across as less of a grandee if he tried; and if he was trying you probably wouldn’t know it.

State-school educated and the first of his family to go to university, O’Donnell, whose accent remains true to his Battersea upbringing, first joined the Treasury in 1979. It was a distant era when British Airways was in public ownership and Christian names were rarely used in Whitehall. The young economist’s talents were spotted by the then chancellor Nigel Lawson, and he rose to become John Major’s press secretary, with the two south Londoners battling together through the turmoil of Black Wednesday.

After the 1997 general election he returned to the Treasury, later serving as cabinet secretary to Tony Blair, Gordon Brown, and then David Cameron, having earlier authored a blueprint guide to coalition-formation which saw him jokingly referred to as the coalition’s midwife.

But the nickname which sticks is the one derived from his initials, and for more than two decades ‘God’ was present at the side of four successive prime ministers before leaving the civil service in 2011.

His post-civil service portfolio career includes chairing Frontier Economics, a consultancy firm whose shiny open-plan offices – complete with table tennis table, bar football and a fridge full of high end soft drinks – feels a long way from Whitehall.

Shirt sleeves rolled up and tie-free, O’Donnell clearly enjoying being part of a private sector with “less ambiguities, more clarity about what you’re trying to achieve and more freedom about how you are trying to achieve it”. But he hasn’t left SW1 entirely; from his vantage point in the House of Lords, where he sits as a crossbench peer, O’Donnell remains part of the political process.

He was a vocal supporter of the UK remaining in the European Union – in one of just three tweets he has ever posted O’Donnell says he voted with “head and heart” – and made headlines in August with his suggestion that the UK could remain part of a “broader, more loosely aligned group”. To his annoyance he found his words interpreted as ‘Former cabinet secretary argues that Brexit is not inevitable’.

“That is a form of Brexit,” O’Donnell insists. “In answer to the question ‘could I envisage any circumstances where we might not leave?’, I said that in a sense that is out of our hands. If the EU … said ‘actually this is not working very well for us’, and responded by the euro integrating more and having a smaller, proper single currency approach, and there was a looser wider group, it might well be that we could be part of that.”

It may well happen, he says, but that’s “far more about the other 27” EU countries, in particular the outcome of next year’s French and German elections. In the meantime, Theresa May pushes on, with O’Donnell certain that “parliament will be consulted along the way” and dryly observing that it would have been “wonderful if we’d actually had this debate before the vote”.

So what is his assessment of her approach to government?

After Blair’s sofa government and the tight-knit, quad-led discussions of the coalition, the new PM appears to favour a more formal cabinet-style of government. Blair’s style, says O’Donnell, “was probably never as bad as people painted,” but civil servants certainly prefer “cabinet meetings, proper papers, right timings, proper cabinet committees underneath it”. 

It is also reported that May prefers to wield power with the assistance of a tight-knit inner circle led by chiefs of staff Fiona Hill and Nick Timothy. O’Donnell knows both from their time working for May at the Home Office, and recognises that while “good special advisers are worth their weight in gold, bad ones are a disaster for all concerned, in particular for the ministers”.

He picks out two former Treasury SpAds called Ed Miliband and Ed Balls – you may have heard of them – who “worked incredibly well” but warns that the “bad ones tend to think of their loyalty entirely to their secretary of state … they will brief for their ministers against other ministers and that’s really bad for government as a whole”.

O’Donnell has many thoughts on what makes for good government. Ministers not publicly criticising their civil servants should be “management 101, but curiously it hasn’t got through,” while “this Yes Minister-ish idea that the civil service likes weak ministers that move on all the time is absolutely not true”.

Not surprisingly, he enjoyed the relatively reshuffle-free coalition years and much about the “coalitionising” of government decision-making.

He stayed on another year once the Conservatives formed a majority government in 2015, but that was long enough to leave him baffled by Cameron’s pledge to reduce immigration to the tens of thousands. “It wasn’t even clear what the proper definition was and there were no policies which went along with this target,” O’Donnell complains, admitting that he has found himself frustrated by the political discourse over immigration because “people’s perceptions about immigration are miles away from the reality”. Someone, he pointedly adds, “needed to get out there and start changing perceptions”.

And it’s a complaint which he says rings true for British perceptions about the European Union, with opinions “that did not fit in with the facts” shaped by “the constant rhetoric of ‘we’re going to Brussels to fight for British interests because they were fighting against us.’”

There is much that worries him about the uncertainties of Brexit, not least the potential effects across the Irish Sea. Proud of his work with first Major and then Blair during the Northern Irish peace process, O’Donnell takes a deep breath when asked if Brexit could see that unravel. “For that to be disrupted … All sides know that it’s a terrible place to go back to, so I genuinely hope we will find a way not to let that happen, but it’s certainly another risk.”

While favouring scrutiny of the government’s plans, those many years as part of the executive leave him partly sympathetic to the government’s reluctance to reveal its Brexit intentions. “Surprise, surprise, the French can read Hansard,” he says. “If you’re playing this game of negotiation [then] you’re trying to get the best deal for the country and that doesn’t mean showing all your cards. You have to do it carefully.”

The Brexit challenge is not just one for MPs. Does he think the civil service is ready – both in size and in skills – for the challenge?

“There’s a simple short answer to that, and it’s no,” O’Donnell bluntly replies, before making it clear that he has full confidence in his former colleagues. “Nobody should be under any illusions, this is an enormous job. They are in the process of building themselves up, gearing themselves up to be ready for it. They will get there.”

But as Brexit “imposes a lot of extra requirements on the civil service,” that means a choice for the government between whether it “chooses to beef up [the civil service] – they’re going to have to put a lot of resources into delivering Brexit – or stop doing some of the things they are doing at the minute.” O’Donnell is also concerned that Brexit will “crowd out other things”. Such as?

“Modernisation. We live in a dynamic world and policy needs to move on radically. I hope that won’t be stopped by people having to negotiate on our relationships with the EU, outside the EU. It will last for years.”

May has attempted to restructure Whitehall to respond to the post-referendum world, but O’Donnell is not convinced by the creation of Departments for Exiting the European Union and for International Trade.

“I’m slightly puzzled by the way they’ve been set up – it’s not quite how I would have advised,” he argues. “There are a lot of issues there. For example, international trade: we’re going to come to the non-EU stuff post-leaving, there will be some informal stuff before, sure, but this whole business is very much related. I think if we’d had one department dealing with all of it, it might have been a bit easier.”

I wonder if a part of him wishes he was still there, working through what he calls a “tougher task” than any he faced. “I’ve been there, done my time,” O’Donnell insists. “They will manage this and I wish them well.”

There will be plenty of talks and negotiations to come, with civil servants required to make decisions – and understand how other people make decisions. Rather as they might if they were playing a certain dice-based game.

“Those game theory behaviours … those are the skills we need in the Brexit negotiations. Absolutely.”

So perhaps the ministers and officials charged with making Britain’s departure from the EU a success should be briefed in the art of Perudo first? O’Donnell smiles, and replies: “It’s a definite step forward.” It wouldn’t be the first time that O’Donnell’s rules have come into play.