From “business‐like” to businesses: Agencification, corporatization, and civil service reform under the Thatcher administration
| Published date | 01 June 2022 |
| Author | Christine Cooper,Jonathan Tweedie,Jane Andrew,Max Baker |
| Date | 01 June 2022 |
| DOI | http://doi.org/10.1111/padm.12732 |
SYMPOSIUM ARTICLE
From “business-like”to businesses:
Agencification, corporatization, and civil service
reform under the Thatcher administration
Christine Cooper
1
| Jonathan Tweedie
2
| Jane Andrew
3
|
Max Baker
3
1
Business School, University of Edinburgh,
Edinburgh, UK
2
Adam Smith Business School, University of
Glasgow, Glasgow, UK
3
Business School, University of Sydney,
Sydney, New South Wales, Australia
Correspondence
Christine Cooper, Room 4.14a, University of
Edinburgh Business School, 29 Buccleuch
Place, Edinburgh, EH8 9JS.
Email: christine.cooper@ed.ac.uk
Abstract
This paper sets out an archival account of events leading up
to the mass agencification of the British civil service by the
Thatcher administration (1979–1990). This account holds
lessons for contemporary understandings of the ideological
roots and institutional structures of corporatization. When
Thatcher came to power in 1979, she wanted to make gov-
ernment “efficient”through the adoption of “business-like”
practices. We show that this project was grounded in her
Methodist upbringing and the emerging neoliberal eco-
nomic theories of Friedrich Hayek and Milton Friedman.
Thatcher's efforts to instill a “market mentality”were met
with stubborn resistance from a bloc of Ministers and senior
civil servants. We find that Thatcher used agencification to
break this resistance. Agencification removed Ministerial
control over service delivery and saw “business-like”man-
agers placed in charge of the newly created agencies. This
curtailed the workings of democracy. Like Thatcher's
agencification, corporatization today imperils democracy in
pursuit of “efficiency.”
Received: 29 June 2020 Revised: 18 February 2021 Accepted: 22 February 2021
DOI: 10.1111/padm.12732
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which
permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no
modifications or adaptations are made.
© 2021 The Authors. Public Administration published by John Wiley & Sons Ltd.
Public Admin. 2022;100:193–215. wileyonlinelibrary.com/journal/padm 193
1|INTRODUCTION
There has always been an ebb and flow in terms of the extent of nominally “public services”provided by various
assemblages of boards, charities, and the private sector. After WWII, many strategic industries, seen as vital for com-
petitiveness and job protection, were nationalized by the British Labour Party and other social democratic parties
throughout Western Europe. In the 1980s, the Thatcher government set about reversing this trend, pioneering the
worldwide momentum in privatization. Drawing less attention, towards the end of the Thatcher administration, the
UK initiated another globalized trend—agencification. Agencification (“separating steering from rowing”) was popular-
ized internationally by Osborne and Gaebler (1992) and Osborne and Plastrik (1997), the later work based on UK
archives surrounding agencification.
The ebb and flow of the provision of public services by the private sector continues unabated. The contempo-
rary dominance of private sector provision is being questioned (McDonald, 2014). Governments are bringing for-
merly privatized or outsourced public services “back in house”(Reynolds et al., 2016) and returning the ownership
and management of public services from the private to the public sector (Clifton et al., 2019). Within this broader
“municipalization”movement, governments are also corporatizing—creating state-owned enterprises as service deliv-
ery vehicles (Ferry et al., 2018).
In this paper, we follow other scholars of public administration in studying corporatization as it relates to
agencification (Bilodeau et al., 2007; Lægreid et al., 2013; McDonald, 2014). Grossi and Reichard (2008, p. 606)
explain that corporatization is “a variant of autonomization and goes one step further compared with agencification.”
We see this “step further”as a move from the creation of “business-like”agencies (agencification) to the creation of
businesses (corporatization) as public service delivery vehicles. Both agencification and corporatization remove con-
trol over the operation of public services from elected politicians, doing so in the name of improving efficiency and
effectiveness. In this, agencification and corporatization could simply be seen as “neoliberal”governance devices,
which attenuate the power of the state in favor of market mechanisms. We present a more complex perspective
through a study of recently declassified archives of Margaret Thatcher, demonstrating that agencification, unlike pri-
vatization, was not a central pillar in Thatcher's evolving neoliberal project: privatization was pursued immediately,
and with vigor; by contrast, it was not until 1986 that agencification was even considered. At this stage,
agencification emerged as a pragmatic maneuver by Thatcher to nullify the resistance of those frustrating her mis-
sion to make radical changes to government, which she believed shackled individual freedoms and impeded the “effi-
cient”workings of capitalist markets.
The paper proceeds as follows. We begin by reviewing the literature on agencification and corporatization,
before discussing the Westminster Model of government. We then set out a discussion of the relations between
Thatcher's religious-moral beliefs and her political-economic policies. This is followed by our research methods. Next,
we lay out our archival study of agencification in the UK. We conclude by discussing our findings and providing some
final reflections on the lessons on corporatization from agencification.
2|AGENCIFICATION AND CORPORATIZATION
Agencification is a structural reform to government that involves creating service delivery units operating indepen-
dently (“at arm's length”) from direct government control (Verhoest et al., 2012). The central principle of
agencification is that “myopic”and “self-serving”elected central and local government officials should not be
responsible for administering delivery of public services. Thus, agencification aims to depoliticize government by cre-
ating distance between politics and administration; this distance is intended to shield public services from the vacilla-
tions of politics and facilitate professional, impartial delivery of public services (Wynen et al., 2020).
Agencification accelerated globally in the 1980/1990s in tandem with the ascendancy of neoliberal politics and
the rise of New Public Management (NPM), although agencies existed well before this in some countries (Verhoest
194 COOPER ET AL.
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