This Treasury man has three years to change the way state and industry do business. Not everyone thinks he can. How on earth is he going to make it happen?
Sir Steve Robson does not go in for airs and graces. The self-effacing, straight-talking deputy permanent secretary of the Treasury dismisses his recent knighthood with a shrug. He has the natural gravitas, however, to carry off the accolade, which recognises his role in devising and delivering some of the government’s key construction policies of recent years.

The 56-year-old career civil servant is spearheading no less than a revolution in the way government departments buy their buildings. Under the banner of Achieving Excellence, the head of the financial regulation and industry directorate has set in train a three-year strategy for Whitehall to jettison lowest price in favour of best value. And if shaking up the way Whitehall spends its £7.5bn buildings budget was not a big enough job, creating the successor to the Treasury’s private finance initiative taskforce, Partnerships UK, has also fallen on Robson’s shoulders. Although the reincarnation of the PFI taskforce has not gone according to his original plan, it is now up to Robson to prove that he can at least drag Whitehall into the Egan era.

The first test of the success of Achieving Excellence comes in March. By then, he intends to be able to prove that half of Whitehall’s departments are using key performance indicators to measure best value, are adopting partnering and are using innovative procurement strategies. Robson is quietly confident: “We’ll be having a conference in the early summer at which we will report back to the industry and the public sector on performance against March 2000 deliverables. But right now, we are looking in good shape.”

  Rudi Klein, legal adviser to the Constructors’ Liaison Group, is impressed so far: “The targets are pretty specific and ambitious; they’re not wishy-washy. Getting the public sector to commit to them is a tremendous achievement.”

Sitting in the Treasury’s headquarters in a uniform more akin to a City slicker than a civil servant (blue and white striped shirt, red tie and braces), Robson looks at odds with his surroundings. The strip-lit corridors, faded pink walls and overpolished parquet are more reminiscent of a down-at-heel public school than Whitehall’s senior department. “The refurb is starting this summer and it’ll make a hell of a difference,” he says, referring to the Treasury’s £100m PFI makeover.

One would expect Robson to be less upbeat about the fate of Partnerships UK, for which he masterminded the original business plan. The government announced a fortnight ago that it would act solely as a project facilitator and that it would have about 20 staff, rather than 50. Robson had envisaged a full-blooded funding institution that would take equity stakes in projects – a highly unpopular suggestion in the City and among major contractors.

Robson plays down the scale of the climbdown. “We don’t want Partnerships UK to be any different from what the taskforce is doing at the moment – making the execution of PFI and public-private deals better,” he says blandly. Yes, but wasn’t he disappointed by the emasculation of his proposals? Robson says he was unfazed. In fact, his original vision for the body may yet materialise.

“Partnerships UK will start off at about 20 people and grow. As you say, it probably won’t take equity in deals, but it will later have a royalty payment out of transactions as a way of being repaid for its costs. It may also develop other products over time as well. I see this very much as a kind of evolutionary entity.”

One banker suggested that these “other products” may include long-term equity stakes, bundling or the refinancing of equity. It is also expected to boost its income with consultancy fees for advising overseas governments on the PFI.

The spat with the majors over Partnerships UK was unusual in Robson’s relationship with the industry. A regular on the construction circuit, Robson makes time to meet the heads of industry bodies, as well as a group of 12 senior executives, every three to four months. For its part, the industry respects his clarity of mind and his understanding of its commercial imperatives.

Carillion chief executive Sir Neville Simms says: “Steve is a modern type of civil servant. He is aware that the only way to get anything done is to create a combination of the government’s policy objectives and the private sector’s commercial objectives. He has been very successful in determining what both were and melding them together, both through the people he consults and through his own personal style of management.”

This testimonial is seconded by Jennie Price, chief executive of the Construction Confederation. “He is practical, pragmatic and understands the commercial perspective. He has a good intellect and grasps problems very quickly, so you can get to the heart of issues straightaway,” she says.

A glance at Robson’s CV suggests why the industry opinion-formers are pleased to have a man they can do business with in such a sensitive position. Although he has been with the Treasury since 1969, he made his name by crafting the British Rail sell-off, and his is also the guiding brain behind the part-privatisation of London Underground.

The agenda of Robson’s meetings with the bosses is mainly taken up with implementing the government’s promise that it would be a better client if the industry became a more efficient supplier.

The last of these saw calls for the government to bring out contract forms that would underpin its new procurement policy. “They said: ‘What you are saying is fine; we can see it is happening on some projects; you need to push the pace along; contracts are the way you do it’,” says Robson. The Treasury duly committed to producing standard PFI, prime contracting and design-and-build contracts by April 2000.

These will be administered by the Office of Government Commerce, to be created in April, which will incorporate the state’s procurement practice division. “It is very important that we do get feedback from the industry on what we are doing well, what we are not doing well enough, and where they think we ought to be focusing our attention.”

It is one of the tragedies of this country that the people who change things always have to explain themselves

There are those in the industry who, although they welcome the Treasury’s initiative, wonder how quickly the government can shed 20 years of lump-sum, lowest-price procurement and indifference to what goes on further down the supply chain.

“This helter-skelter rush to turn everything to PFI, prime contracting and design and build, and go from 0-100 in procurement practice in three years may be too much revolution for the government to handle” says one sceptic. “The NAO might find fault with it and put a stop to it,” he adds, referring to the public auditor’s current scrutiny of best value policy.

Making it happen

Robson acknowledges that take-up of his agenda is likely to be patchy in some areas of the public sector. But Achieving Excellence will succeed, he says, because a core group of senior civil servants who, between them, are responsible for about 70% of Whitehall’s construction spend, are committed to driving it forward.

“There is no doubt that the deputy prime minister, senior Cabinet colleagues, [Treasury minister] Andrew Smith and chief secretary to the Treasury here among them, want to see this happen. And we’ve got critical mass around the taskforce table. All the big-hitters – people like Kate Priestley from NHS Estates and Ian Andrews of Defence Estates – are setting the pace.”

Robson is the first to admit that Cabinet-level sponsorship alone will not bring about a revolution across the entrenched public sector. “We need to spread the message and we have – we’ve published guidance, we have a government client forum, we’ve had roadshows going round the country, we’ve had conferences, and we need to monitor progress.

“Creating the desire to change is an important part of it. What you have to do is create a sense that there are some people who are making the change and finding it a good experience. The difficult part about that right now is that there are a number of projects being done the new way, but they have not been finished. So, the guys who are doing them are loath to stand up and say ‘I’m doing it the new way and it’s all looking fine’, in case, for some unforeseen reason, they trip over.”

Robson will continue to evangelise until all government departments and agencies have been converted to his cause. He feels that the private sector already has. “There have been moments when those in the industry have scratched their heads a bit about the direction we are going in. But my sense is that the vast majority are behind us now.”

One area where Robson feels the industry has not responded so well, however, is over the PFI. The problem, he suggests, is organisational rather than cultural. “Some parts of the industry have been very supportive. But because the industry is so fragmented, it’s not necessarily very well placed to respond to these challenges. This limits the extent to which they can take on the risks involved with some of these projects. It could well be that there is a period of restructuring ahead of us. You need big shoulders to get into this game.”

The big picture

And the pace of change generally? At this point, Robson displays a formidable, reforming zeal that makes you believe if anyone can shame the public sector into embracing revolution, he can.

“It is one of the tragedies of this country that it is the people who are changing things that always have to explain themselves – not the people who are standing still. But there will come a point when it is the people who are standing still who find that they are having the bad experiences and having to explain those bad experiences. That’s going to be an explanation they can’t make.”

Robson is also clear about the contribution new procurement can make to the government’s overall economic strategy (not surprising, this – he is reputed to be a trusted member of Gordon Brown’s inner circle). “As you know, this government’s economic policy is balanced on two pillars,” he says, “one, economic stability: steady growth, low inflation, low interest rates, getting away from the volatility, the stop-go of the past.

“The other is to reform the underlying performance of the economy. What we are doing in the construction area is a part of that second leg, which extends over many things, like stimulating entrepreneurship, stimulating competition in the economy and improving government procurement more generally.”

If Robson will go on the record to raise the stakes to that extent, you get the feeling he is as confident of his hand as he appears to be.

Personal effects

Age 56 What do you do to relax? I windsurf on the south coast near Chichester. And I go skiing in Megève, an extraordinarily beautiful old Alpine village in France. What book are you reading? Over Here by Raymond Seitz (a former US ambassador’s account of Britain and the British). Are you interested in architecture and what is your favourite building? Not really. One building I really admire is the Ark in Hammersmith, west London. Where do you live, and who’s in your family? A terrace in Hammersmith with my wife Meredith, a clinical psychologist in the NHS, and two sons, aged 19 and 20. What would you be if you weren’t a civil servant? I’d be unemployed. Unemployable. I studied international economics with a view to working in Third World development. The more I saw of organisations that were active in that world, the less I was impressed by them or what they did.