In 2011 Prime Minister David Cameron commissioned a review of direct government information activities and the role of COI. This review was a first step toward the eventual closure of COI. The following extracts from the review are the Conclusions and Recommendations of the review together with an Appendix giving the Terms of Reference. Review of government direct communication and the role of COI Matt Tee, Permanent Secretary for Government Communication March 2011 9. Conclusions In conducting the review, it has become clear that what is required is not just a solution to the future of COI, but a different approach to government direct communication. While the reductions in public expenditure are one driver of this, it is also clear that some government direct communication has been unrelated to an overall sense of government priorities; has not always been based on the best evidence; has lacked good measures of impact or effectiveness; and has used a media mix which is skewed towards higher cost, less targeted, channels. All of this needs to be considered in a new approach. Many of these issues can be addressed through the central approvals process for direct communication. Most of those who gave evidence to the review supported the principle of these controls, but asked that they be applied in a more sophisticated way. My conclusion is that, in considering a request to undertake a particular piece of direct communication the ERG should, in addition to current criteria, consider whether the proposal meets best practice for: • alignment with government strategy and priorities; • use of insight to develop the proposal; • partnership; • evaluation and return on investment; • minimising spend; • appropriate use of channels; and • a payment by results approach. In order to drive this new approach, however, there will be a need to not only bring some existing functions together, but to create some that do not exist. Some of this has already happened in recent times. Before May 2010 there was no function to look at direct communication proposals across government and decide whether they should proceed. This capability was created very quickly, and has successfully administered the marketing and advertising freeze; however, many respondents to the review have commented that consideration of proposals needs to become more sophisticated. 9.1. A more strategic approach I also conclude that government direct communication will be more effective if a more strategic approach is taken where activity is concentrated in fewer areas of focus and 65 target audiences for campaigns are clearly identified, so that government is not unwittingly aiming multiple messages at the same audience. Government should agree a direct communication strategy, taking into account its priorities, the audiences it is trying to reach and the channels available to it. The strategy should brigade communication around a small number of themes. The themes would represent government priorities for which there is a clear and important role for communications. A theme may well contain campaigns, programmes and contributions from several departments. A hypothetical example might be ‘Britain in the World’. This might bring together and encapsulate work and activities from several departments: • FCO looking after Britain’s interests abroad; • BIS encouraging inward investment into Britain; • DFID providing international aid and support; • MoD looking after Britain’s security; and • No. 10 on international leadership and reputation. The result would be fewer but clearer, more focused activities, which avoid duplication and the bombardment of multiple, fragmented messages to key audiences and partners. 9.2. A Government Communication Centre To enable this to happen, government needs functions for developing an overall direct communication strategy, audience insight and evaluation to happen in one place. These also link naturally with the controls over direct communication spend. It would be possible for these functions to be each hosted in different departments, but I fear that in that model there is a danger of the function being skewed towards working for the parent department and losing the synergy that should come from having such functions in one place. I therefore conclude that they are best housed in one centre, which incorporates the new functions which are necessary to conduct government direct communication in a different way, with those of COI’s functions that will continue. I propose that this is called the Government Communication Centre (GCC). The GCC should also include a pay-as-you-go unit providing direct communication services, which will be self-funding. 9.3. Better partnership – a different relationship A key strand of a different approach to direct communication will be to recognise that, for many of our objectives and audiences, other organisations, or brands, will already have strong relationships with the people we seek to reach. Many of these organisations, which may be commercial, voluntary or civic sector, recognise our goals and are prepared, indeed keen, to work with government on achieving them. There are, however, key and consistent messages back to government on working in partnership: • This involves real partnership, not an assumption that partners will pay for government advertising. • Government must recognise that partners have objectives and imperatives that may not entirely align with government’s, for example profit. • Big brands are tired of multiple approaches from government and a lack of clarity about the Government’s priorities. • Government has few people who are skilled and experienced in this sort of partnership working. • If the partnerships are to go beyond the ad hoc and tactical, government needs to plan as far ahead as its partners – at least 12 months and probably 18 months. My conclusion is that there is great potential for government to build rich partnerships to great benefit for all partners. However, this will require a change of mindset for government, the development of skills and experience, and central co-ordination of links with major partners by the GCC to prevent multiple approaches. 9.4. The common good – a different relationship with media owners and agencies The terms of reference of the review specifically require an examination of the US Ad Council model, in which agencies work for free and media owners give media space for public campaigns. The model is covered in detail earlier in this report. My conclusion is that it would not be workable, or desirable, to attempt to wholly replicate the Ad Council in the UK. However, there does seem to be significant potential in asking agencies, media owners, government and voluntary and community organisations to work together for free or near free on campaigns for the common good. During the review, there was acknowledgement of the strong desire by government to examine the potential for this, but it was also clear that media owners and broadcasters were very wary of any impression that they would carry ‘government messaging’, feeling that this would undermine their independence. 67 My proposal is that government should invite agencies, media owners and voluntary and community organisations to join with it in forming a Common Good Communication Council, separate from but supported by government. The Council could agree the parameters of such a scheme; ensure propriety; and invite bids from the voluntary and community sectors and government for this sort of work. 9.5. The principles of government direct communication Evidence from this review makes it clear that there are occasions when government direct communication is essential: when government has a legal duty to provide people with information, such as changes to legislation, public services, or when marketing and advertising are critical to the effective running of government, e.g. Armed Forces recruitment. My conclusion is that there is an opportunity to move the default away from paid-for communications being seen as the solution to government marketing problems. A blend of options should be considered: • Common good: Could elements of the activity be delivered through channels such as a Common Good Communication Council, facilitated by government, e.g. public information such as road safety or literacy? • Partners: Could elements of the activity be delivered in partnership with commercial or civic organisations that have a strong interest and incentive to get involved, e.g. Green Deal, obesity? • Government: Is government the only agent capable of delivering the activity, e.g. taxation? The GCC should establish clear criteria to identify when government communication should be government-authored and when sole responsibility can be devolved. 9.6. Recognising what we own – exploiting government media space During the review evidence pointed to the inefficiency of government buying commercial media space while making very little use of the media space it already owns and could develop. These owned assets include, for example, all the government websites, including Directgov, poster sites on government buildings and space on government leaflets. Analysis estimates that, properly exploited, these ‘owned assets’ could have an annual value of around £50 million.68 68 COI for Cabinet Office (2010), Valuing Owned Assets [unpublished] 68 Exploitation of these assets will never replace paid-for space, as it is important to use the right mix of channels and locations to reach the target audience; however, it would give us significant free or low-cost options when planning campaigns. Identifying, exploiting and managing such assets is a significant piece of work and should be the responsibility of a team within the GCC. 9.7. Digital The evidence from the review demonstrates that there has been a significant shift in media consumption habits towards digital. Some submissions also indicated that government usage of digital channels might be lower than industry benchmarks. My conclusion is that government should make greater use of digital channels in direct communication and that digital considerations should be built into all communication activity from the start. Government’s use of digital also extends beyond communication and marketing activity into areas such as digital policy, frameworks and contracts, customer services and hosting platforms. Digital policy leads will clearly retain responsibility for their specific remits, but would be able to outsource related marketing and communication services just as Cabinet Office has outsourced certain digital tasks to COI in the past. 9.8. Procurement The benefits of aggregated central procurement for marketing and communication services are clear and quantifiable. A centralised procurement function would also provide the mechanism for the effective introduction of a payment by results regime across government direct communication activity. It is also clear to me that a GCC central marketing-procurement function will need close professional links with the ERG government procurement team, and yet retain and build specific expertise for integrated media planning/buying and creative frameworks. 9.9. Payment by results The idea of government communication being undertaken in such a way that part or all of the fee is based on the results of the campaign is supported in principle, but respondents within and outside government raised concerns about measurement and perverse incentives. The industry also indicated that there had to be upside opportunities if results were beyond expectation as well as downside if they were not. My conclusion is that government communication and procurement experts should work with the industry urgently to establish a common understanding so that payment by results becomes a common feature of government direct communication contracts during 2011/12. 9.10. Professional capability development Evidence from the review makes it clear that government will need to become increasingly proficient and sophisticated at managing and co-ordinating contact with citizens and partners across a complex array of issues and channels. To build high level marketing capability coherently and consistently across GCN requires clear oversight of the quality, spread and scale of existing talent and of future requirements. My conclusion is that, in future, a Government Communication Centre would be best placed to provide leadership for GCN, and oversee professional capability development, talent management, propriety and standards.
9.11. The future of COI COI’s status as an arms length body and its trading fund model, in which its income is derived from the work it undertakes for departments, puts it at a distance from government and amplifies departmental agendas over cross-government priorities. This has kept COI from being as close to the development of government policy and communication strategies as it would like to have been. There has been no mechanism that incentivises the pursuit of cross-government priorities. That said, COI has successfully supported departments in carrying out effective and award-winning work over many years and much of the skills and experience that will be needed for the GCC I propose is present in the current staff of COI. I do also conclude that there is a place in the GCC for the sort of ‘pay-as-you-go’, direct service provision that parts of COI currently provide. I have carefully considered whether to retain the COI brand, recognising its strengths, especially outside government. I have concluded that what I am proposing in this review is a sufficient change in the way that government approaches direct communication that retaining the brand would suggest a greater continuity with the recent past than I think is helpful. I have therefore concluded that upon establishment of the GCC, the COI brand should cease to be used. 9.12. The greater opportunity
The conclusions above – agreeing a government direct communication strategy, brigading communications in themes and the establishment of a strategic Government Communication Centre – would change government’s approach to direct communication, but would do so largely by giving a strategic framework for departments and others to work within. The development and execution of individual campaigns would remain a departmental activity, albeit subject to controls. In looking at how government might undertake direct communication most effectively, several respondents suggested that as well as taking a more strategic approach around themes, government might also aggregate its staff resource in teams working on these themes for departments. In looking at the opportunity, it is important to have some idea of the possible scope of such a proposal. In early 2010 the cross-government benchmarking exercise estimated that there were 6,848 staff in departments and ALBs working in communications roles. Leaving to one side communication staff that departments would want to keep in-house (press office, internal communications, policy communications and some digital) leaves 3,233 staff undertaking the sort of communications activity covered by this review. Anecdotal evidence suggests that reductions in staff because of the Spending Review will reduce this by up to 40%, still leaving 1,940 staff employed on this sort of activity. In taking forward any option involving aggregation this number needs to be robustly tested. Given this background I have concluded that there are three options for organising and funding the future model of direct communication:
• Option 1: Create the GCC from the existing COI and fund its estimated running costs of £10.5 million from a small top slice of departments.69 Adopt the strategic, themed approach described above and designate an appropriate departmental Director of Communications as the senior sponsor of each theme. Leave other resource in departments.
• Option 2: Establish the GCC and aggregate direct communications professionals around six priority theme teams. These teams would be hosted and employed by six lead departments. It is estimated that each theme would have a complement of 80 FTE communications professionals. This would mean that, of the 1,940 FTE, 150 would move into the GCC and 480 (6 x 80) would move into the theme teams. The remaining staff would be retained by their department or ALB and either be redeployed or exited. It has been assumed that some staff would be retained. This option would offer a potential saving of £36 million per annum, over and above the 40% reductions already estimated for departments and ALBs.
• Option 3: Establish the GCC and aggregate direct communications professionals around six priority themed teams. However, the theme teams would be employed by GCN. Individuals would be moved from across GCN (departments, ALBs and COI) into the one single employer: GCN. They would be a flexible resource drawn from the best talent across GCN and deployed against the six priority themes according to demand and need. Under Option 3, all of the estimated 1,940 would transfer to GCN, after which approximately 150 would move into the GCC and approximately 480 (6 x 80) would move into the theme teams. The remaining staff would be surplus and could be exited. GCN would manage the process. This option would offer a potential saving of £54 million per annum, over and above the 40% reductions already estimated for departments and ALBs.
For details of the estimated running costs see Appendix 11.8. 70 For details of these potential savings see Appendix 11.8.
After careful consideration of the options, I have concluded that Option 3 (in which staff working in direct communication in departments and ALBs would be aggregated into GCN as a single employer, and deployed as a flexible resource to staff the GCC and up to six theme teams hosted by departments) is my recommendation.
I do, however, recognise that the staff covered by this recommendation are currently subject to departmental restructuring and uncertainty. I also recognise that there are legitimate questions about the size of the centre and the theme teams. To resolve these I recommend that in 2011/12 we move to Option 1, to create the GCC out of existing COI staff, funded by a small top slice of departments. During 2011/12, the GCC should work with departments to: • develop the Government’s marketing strategy; • decide under what themes activity should be brigaded; • confirm the size and functions of the GCC; • scope the size and role of the theme teams and decide where they are best hosted; • identify the staff to be aggregated from departments and ALBs and the GCC and ensure that the best staff are in the right jobs; and • develop the business case for creating significant savings by moving to Option 3 for 2012/13. The question of whether departments should retain digital teams is strongly linked to the implementation of the Lane Fox report, which recommended moving to a single domain for government. I would envisage that digital marketers would be part of the aggregate pool, while those who maintain corporate sites, especially those focused on information for professional audiences, might not.
Governance Propriety and governance of government communication has often been a sensitive issue and was the topic of a substantial number of the recommendations of the Phillis review. It will be important in creating the GCC that governance and scrutiny remain strong. Governance is important to ensure that the marketing and advertising government undertakes meet four criteria: • The activity undertaken matches government priorities. • The activity undertaken is effective and good value for money. • The activity undertaken is non-political. • The activity undertaken is effectively planned and managed. To ensure that the activity matches government priorities and that the GCC is properly meeting the needs of its customers requires ministerial oversight. I suggest that the Prime Minister should consider the establishment of a Cabinet sub committee, chaired by the Minister for the Cabinet Office, but including Ministers from other departments, especially those that undertake significant marketing activity, e.g. Department of Health. The Executive Director of the GCC should be secretary to the committee. To provide reassurance to the public and Parliament that the activity undertaken is effective, good value for money and non-political, I propose the appointment of three people who have experience of and high credibility in the communications industries to form the Government Communication Oversight Panel. The panel would meet quarterly to consider the marketing and advertising work that government had undertaken to reassure themselves that it was effective, good value for money and cost-effective. Its minutes would be published. The panel would submit a written report each year to the Public Administration Select Committee containing a retrospective commentary on activity during the year. The Executive Director of the GCC should establish the GCC executive group, to oversee the day-to-day work of the GCC. It should include the departmental Directors of Communication who lead on each theme and the Director of Policy Communication Cabinet Office/No. 10. Recommendations Overarching recommendation Government direct communication (marketing and advertising) should be undertaken within an overall government strategy and brigaded into themes. COI should be replaced with a Government Communication Centre (GCC), based in Cabinet Office, which would develop the government’s marketing strategy; operate the central controls on marketing expenditure; be the centre for activities that support marketing across government such as insight, evaluation and partnerships; undertake procurement; and be responsible for the professional development of communicators. It would also have a pay-as-you-go direct service provision function, which would be self-funding. The strategy should be delivered by teams corralled around the six themes, located in host departments but employed by one single employer, GCN. Given the scale of such change, there is a need to fully develop the business case for such a move. My recommendation, therefore, is to establish the GCC in 2011 and to move to aggregation of staff in 2012. Media and internal communication functions should remain within departments providing direct and immediate ministerial support. Strategic communication advisers are key roles that should also remain within departments, acting as the lynchpin with policy colleagues and as expert commissioners of communication activity. 10.2. Specific recommendations 1. Create a new strategic Government Communication Centre (GCC) as a Crown Corporate Service within the Cabinet Office based in the most cost-effective location. 2. The Executive Director of the GCC should be charged with producing a marketing strategy for government at the beginning of each Parliament, aligned with the Government’s priorities. The strategy should be approved by a Cabinet sub committee. 3. The GCC should have four functions: a. To be an intelligent gateway, providing controls on all government marketing and advertising spend. All proposed marketing and advertising activity over a limit of £100,000 should be subject to the GCC gateway, which should include the following in its criteria for approval: - Alignment with strategy and priorities - Robust use of insight - Appropriate use of channels – common good, owned, partner, paid - Proposed evaluation plan - Demonstrable return on investment - Value for money. b. To develop the Government’s marketing strategy and co-ordinate its implementation, including being the lead for those functions that underpin strategic marketing. This includes setting the standards and providing the strategic capability to develop areas such as: - Communication strategy development - Evaluation and ROMI - Audience and behavioural insight, including segmentation - Owned-asset management - Strategic partnerships: commercial, civic and statutory groups - Integrated communication support to the Common Good Communication Council.
c. To procure communications services and media space for government. This will include framework management, standards and procedures, and development of a payment by results regime. d. To be the centre of leadership for the Government Communication Network (GCN), overseeing professional capability, talent management, propriety and standards. The GCC should have an initial staff of around 150. 4. There should be a self-funding, pay-as-you-go unit providing those direct delivery services which are aggregated at the centre. These services will need precise specification but would cover activities directly related to the delivery of communications activity such as design, print, production, copy, digital services, direct marketing, regional and local delivery, and events. 5. The Executive Director of the GCC should be the Head of the Government Marketing profession and joint head of the Government Communications profession, with one of the departmental Directors of Communication. 6. The GCC should have formal links with Cabinet Office/No. 10 communications, the Behavioural Insight Unit, the OGC and Directgov. 7. Government marketing and advertising should be grouped around up to six themes, drawn from the overarching cross-government strategy, which reflect those of the Government’s priorities that can be most effectively supported by marketing and advertising. 8. Government direct communication should be carried out by the GCC and teams for each theme, staffed by aggregating all staff working in these areas in departments and ALBs (Option 3, as described above). Recognising the scale of change required and legitimate questions about the size of the centre and the theme teams, I recommend that in 2011/12 we move to Option 1, to create the GCC out of existing COI staff, funded by a small top slice of departments, as a transition point to Option 3. During 2011/12, the GCC should work with departments to: • develop the Government’s marketing strategy; • decide under what themes activity should be brigaded; • confirm the size and functions of the GCC; • scope the size and role of the theme teams and decide where they are best hosted; • identify the staff to be aggregated from departments and ALBs and the GCC and ensure that the best staff are in the right jobs; and • develop the business case for creating significant savings by moving to Option 3 for 2012/13. For any proposed activity outside the themes, the default position should be to use low-cost channels such as digital and PR. 9. Government campaigns should reflect industry standard use of digital in their channel mix and consideration of digital solutions should be built in from the start of programme activity. 10. Government should work with media owners, advertising agencies and civic society to establish a Common Good Communication Council to generate donated creative and media space for public interest or community campaigns. The Common Good Communication Council should have a separate governance structure from but be supported by the GCC. 11. The GCC, including the self-funding, pay-as-you-go unit providing direct delivery services, would replace COI in its current form and its brand should cease to be used. 12. The Prime Minister should consider the establishment of a Cabinet sub committee to approve the direct communication strategy, oversee its implementation and oversee government marketing and advertising. 13. A small Government Communication Oversight Panel of external communications experts who do not have a financial stake in government communications work should be formed to provide reassurance to the public and Parliament that government direct communication is effective, value for money and non-political. It should report to the Public Administration Select Committee annually. 14. I endorse the ERG guideline that communication services should only be bought through government-approved frameworks, overseen by the OGC. 11.1. Appendix: Terms of reference for the review 11.1.1. Terms of reference To conduct a radical review of those parts of government communication that are currently covered by the marketing and advertising freeze and to consider the role of COI. This will make proposals for the most effective and efficient way to plan, co ordinate, procure and evaluate government’s direct messaging campaigns (marketing and advertising). The review does not cover communications such as press and media relations which are traditionally provided in-house by departments, nor does it cover the announcement co-ordination role played by No. 10. For simplicity the review will be said to cover ‘direct communication and the role of COI’. The review will make recommendations to the Minister for the Cabinet Office as to the functions in relation to direct communication that government should exercise, the role, status and funding of COI and the most appropriate governance of these communications. 11.1.2. Rationale for review taking place The new government has a clear intent to have fewer, more effective communications, a greater devolution of responsibility to partners both commercial and civic and a greater use of non paid for channels. In addition, the need to close the fiscal deficit necessitates greater control of communication expenditure and closer attention to how communication is scoped and measured to deliver a return on the investment made. Thirdly at a time when the Civil Service is shrinking in size and in particular attempting to cut its administration costs, making the most efficient use of resource within a reducing government communications set up becomes increasingly important. 11.1.3. Background to review In May 2010 the government introduced a freeze on marketing and advertising activity. As a result the volume of communications activity by government commissioned through COI has fallen by over 50%. Subsequently COI has engaged in a redundancy programme to reduce its staff numbers by 40%, from 737 to 450. Following the Spending Review a number of departments are making plans for the next four years, including some marketing and advertising work. The marketing and advertising freeze has taught us a lot about both what marketing and advertising is particularly effective (through looking at what happens if you don’t do it), and how best to use central controls to make the most effective use of marketing and advertising. A review now is therefore timely. The review will cover the role of COI, within government direct communications. COI has existed since 1946, being formed out of the wartime Ministry of Information. It is a non Ministerial department, an executive agency of the Cabinet Office and a Trading Fund. This latter status defines its funding; it recovers its costs from activity paid for by central government departments, agencies and NDPBs and a wide range of public bodies.