From “business‐like” to businesses: Agencification, corporatization, and civil service reform under the Thatcher administration

AbstractThis 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 government “efficient” through the adoption of “business‐like” practices. We show that this project was grounded in her Methodist upbringing and the emerging neoliberal economic 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” managers 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.”