House of Commons Hansard Debates for 23 Mar 1995

Mr. Brooke: The hon. Gentleman, with whom I have also crossed swords on occasions, knows that when one passes from an Administration, one acquires a certain independence of mind on these matters.

At the end of 15 years as such a territorial I was and am left with one nagging doubt. If I am right, the debate started in the last century by the Earl of Iddesleigh, as he eventually became, will carry on to the next.

When the efficiency unit was starting on its mid-1980s trawl on the future of the service, which was the harbinger of the next steps agencies, I asked the senior official who interviewed me to define the management responsibilities of the Secretary of State and the Permanent Secretary. I continued asking that question at intervals while I was a Minister. I suspect that Permanent Secretaries found the question a little naive, which reinforces my analogy of the regulars and the territorials.

Yet I went on wondering and came to a mild moment of truth in my final month as a Minister, when giving evidence to the Select Committee on National Heritage when its Chairman, the right hon. Member for Manchester, Gorton (Mr. Kaufman), asked who was responsible for what he considered the shambles of the British Library--a narrative 16 years in gestation that was conceived by a Labour Government in the 1970s.

Clearly, no one person has been continuously responsible throughout that period, though the distinguished architect has been involved throughout. It has been a chapter of long-term errors, yet to say that, whatever its underlying truth, is to imply that accountability is dead, so in answer to the right hon. Gentleman's question I said, with full recognition of what I was saying, that I was responsible.

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When it is all over, and that great library is functioning to the satisfaction and admiration of all, it may be a good case history for a PhD to determine where precisely between Ministers and officials responsibility did and does lie. That is as good a coda to this paean as I can imagine. The fact that we can discuss these issues academically, and with the public weal as our lodestar, is the best possible tribute to the quality of the civil service.

8.12 pm

Dr. Jeremy Bray (Motherwell, South): The final theme of the right hon. Member for Westminster, South (Mr. Brooke) put what he said earlier into perspective. It was wholly proper for him to pay tribute to the support given by officials in a variety of offices, but to dwell on the nonsense and disasters of the British Library was to hark back to some of the points made by my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) in a masterful speech which made the Chancellor of the Duchy sound like a used car salesman. When that expression was first used, it was more derogatory than it seems nowadays, when used car salesmen are the summit of creation. I should declare an interest in the subject of the debate as I am parliamentary consultant to the Institution of Professionals, Managers and Specialists. Lest that should be taken as accounting for the origins of my interest in the subject, I remind the House that I chaired the Estimates Committee inquiry which recommended setting up the Fulton committee. I also chaired a Treasury and Civil Service Committee inquiry into the effectiveness and efficiency of the civil service some 10 years ago.

The Select Committee reminded us of the dominant theme of the Fulton report, which was the cult of the amateur and the uncertain role of the professional and specialist civil servant and I shall speak mainly about that.

There is a general demoralisation in the civil service today, but nowhere more so than among professional and managerial staff. It is accounted for partly by the privatisation and contracting out and the unfair terms under which they are able to bid for work, and partly by the Government's lack of understanding of the areas for which the professionals have been responsible.

One example is the Transport Research Laboratory. Not long ago an edict excluding that office from examining road pricing came directly from the Secretary of State for Transport. The Building Research Establishment has been another victim at a time when the public and the building industry need much guidance in the development and use of new materials and the effects on the comfort of people in their homes of a muddle in Government standards, in the enforcement of building regulations and the improvement of standards, particularly in the public sector.

The enormously important role of the Meteorological Office in weather forecasting and the study of climate change calls for a back-up and integration of Government scientific activities generally into the environment, which has not been forthcoming.

The lack of perception by Government of the real role of the professional civil servant is the underlying problem, rather than the management questions. We have seen it in the attrition in the numbers and roles of Government chief

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scientists. The extreme case is the Department of Trade and Industry, where there is no longer any such creature in that sad wreck of a Department. More attention must be paid to the role of doctors, economists, statisticians and, as the right hon. Member for Westminster, South reminded us, the use of architects. My hon. Friend the Member for Kingston upon Hull, North reminded us about the role of information technology specialists. All those aspects have been severely mishandled by the Government in the past 15 years. The Government should consider carefully the point that my hon. Friend the Member for Kingston upon Hull, North made about the role of Electronic Data Systems. I know that the Minister had some background in this area. I hope that he will look up the employment practices and the origins of EDS in the early days and compare them with the standards that he knows from his own experience are necessary in information technology and management consulting. EDS has always grossly exceeded in its promises and failed to fulfil them in many contracts in the United States, and hugely threatens to do so in Britain. Among the parts of administrative history that will have to be written is the story behind the emerging dominance of EDS, which is a sinister development under the present Government. The role of the professional is important not just on the domestic front, but in shaping international debate and the framing of policy. Obviously, health is a key issue. At research level it is wholly possible for Britain to exercise influence in projects such as the Human Genome Organisation. All the ethical and moral debates underlying that will help to condition international attitudes in the emerging area of public policy, which will be of great importance to the future of our race.

Another subject which is less in the future, or at any rate more in the present of current parliamentary debate, is global climate change. Debate is hotting up with the shifting of the Antarctic ice sheet. The evidence will be coming in slowly over the next 10 years. There Britain developed a key role through the contribution of one man, Sir John Houghton, the former director general of the Meteorological Office, who became chairman of the research committee of the intergovernmental panel for climate change. That continues today through the role that Professor Julian Hunt, the present chief executive, is playing in the encouragement of meteorological development in other parts of the world.

The forecasting of the path of tropical storms was a Meteorological Office development, building on the idea of a Chinese meteorologist resident in Hong Kong. For Britain to be involved in forecasting the path of tropical storms which barely touch any remains of the British empire may seem a remote and unimportant development, but underlying it is a major shift in approach to the handling not only of meteorological forecasting but of the management and the forecasting of complex systems distributed through space generally.

The sort of issues that I am talking about can be handled only by Government and at a time of public debate when there is serious, restrained and competent discussion of what are quite difficult issues, not by a Government who think that they know all the answers before they start. Nowhere has that been more disastrous than in the sphere of economic policy, where we have suffered from a succession of Chancellors--excluding the present one--who thought that they knew all the answers

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in advance and who failed to maintain the apparatus, the thoroughness of analysis and keeping up with the state of the art in the framing of economic policy. The Government's handling of appointments in the economic service, and currently in the statistical service, shows a sad rundown in the intellectual leadership that the Government and the public sector once provided. That is important not just for Government but for the way in which these things are handled in society generally.

The Select Committee on Science and Technology was in California a fortnight ago looking at the emergence of the new high-tech biotechnology companies. One thing that is clear there is that the drive and initiative is largely due to the emergence of a new type of animal. The right hon. Member for City of London and Westminster, South reminded us that he was an MBA. I add to that the fact that that qualification was gained at Harvard. Shortly before he gained his MBA at Harvard I was at the graduate school of arts and sciences at the same university. In America today, the MBA that he was and the PhD that I was have become one person. There is the integration, the breadth of skills and competencies at a double post- graduate level, which are the necessary tools of business, administrative and public service development in the future.

Where does that have any chance of emerging in the British civil service as it is conducted today? I just do not see it. In which Department? Where would young men and women with the necessary competencies be motivated to go? An admirable scheme has been developed by the Royal Academy of Engineering and the Institution of Electrical Engineers, financed by David Sainsbury or one of his trusts, for the training of chartered engineers/MBAs. There are some 60 graduates of that double discipline. Will the Minister find out how many of them are working in the public sector? I doubt whether he will find more than three or four of the 60 there. That is not good enough if we are to get the necessary width of background in the public sector.

The themes 30 years ago at the time of the Fulton report were concerned with questioning amateurism and competence and comparing that with the professionalism and specialism that was needed. Today, the questions are much more those of strategic contracting out, market testing and worries about the politicisation of the civil service. Those themes may not be so far apart. The link between them is that they both reflect not so much the problems of the civil service as the problems of Parliament and our perception of the nature of the job of Government.

If we are to achieve a sensible balance in the development of a public service which is competent, which has breadth of vision and which is practical and realistic in the handling of social and political problems, the way forward has to be set in this place. I ask my hon. Friend the Member for Durham, North (Mr. Radice)--I look forward to hearing what he has to say in summing up his admirable report--how far the Treasury and Civil Service Select Committee really taps the frontiers of economic research. Unless the House is doing that, it cannot expect Government Departments to respond. That process will receive a further shift onwards with the new generation of Members of Parliament who will come in after the next election. I am sure that we shall see a continuation in the raising of the technical background of Members of Parliament in many walks of

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life. I am not a pessimist in any way about current developments, but they are not always of the nature that public debate and debate in the House in particular make them out to be.

I hope that when the Minister replies he will deal with some of those points and, perhaps most important of all, that he will deal with some of the practical points made by my hon. Friend the Member for Kingston upon Hull, North, which are of immediate public concern and also very much the concern of some of those civil servants in the union with which I am associated.

8.27 pm

Mr. Nigel Forman (Carshalton and Wallington): I see that it is relatively easy to catch your eye in this debate, Mr. Deputy Speaker, and I am delighted to have done so; but it is a pity that there are so few people in the Chamber on a Thursday evening. I have counted 12 in all on both sides of the House. That is a pity, because the future of the civil service and its relationship to the House and the British constitution is an important subject. I want to say a few words about that in the time available.

Before doing so, I want to take up a point that arises from what the hon. Member for Motherwell, South (Dr. Bray) said. It concerns the potential for British civil servants, as perhaps some of the best in the world, to contribute to the quality of government not only in Britain but increasingly, I hope and believe, in European Union institutions, such as the European Commission.

It has always struck me that the French, from a nation that I have long admired, seem to have the ability to second and post many of their best people, albeit for short periods, from the public service to other institutions, whether public or private, where French national interests can be served at the same time as the wider interest of those particular institutions. Invariably, that means that the French have mastered the art of writing the critical first draft in many Community initiatives over the years and have hogged some of the best positions, the key positions, in European institutions.

I have long pressed Ministers--I hope that they will make a note of this point tonight--to make an even greater effort to see that some of our best, brightest and most imaginative civil servants are seconded and posted to European institutions. That can be in Britain's interest and the wider European interest. I hope that we will give that greater prominence. That thought was prompted in my mind, albeit a bit tangentially, after listening to the hon. Member for Motherwell, South.

In talking about a flexible civil service for the late 20th and early 21st century, it is every bit as important that our civil service, with all its talent and opportunities, should engage, and should be encouraged to engage, in more secondments and swaps with the private sector. I know that there is an element of that now. Perhaps when he replies, my hon. Friend the Minister will give the House the latest figures on the extent of two- way movement of civil servants, in and out of the civil service, for temporary periods, to invigorate the private sector with their perspectives from the public sector, and to do the obverse--to invigorate the public sector with very necessary perspectives of the private sector. I fear that, all too often, those who leave the civil service on short-term secondment-- or what was intended to be short-term secondment--for the private sector do not return, for

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reasons of pay, conditions, morale, and so on. If the figures show that there is a net outflow, it should be a warning sign to Ministers to do something about the problems that might lie behind it. On the more central subject of the debate--the issues raised in the Government's latest White Paper on the civil service--and prompted by the report of the Treasury and Civil Service Select Committee, on which I have the honour to serve, I should like to say how much I have benefited, as always, from the free adult education that is available to those of us who sit on Select Committees. I have served on three Select Committees in my time: Foreign Affairs, Science and Technology, back in the bad old 1970s, and now the Treasury and Civil Service Select Committee. I find them most interesting. Whatever impact we may or may not have on policy in those Committees--in this case, I think that we have had some impact on policy-- they benefit the quality of debate and thought in Parliament by providing a free and top-class adult education for those who are lucky enough to serve on them.

I have played some part, therefore, in bringing about what we might describe as the all-party consensus which lay behind our report. I am delighted to pay personal tribute to my hon. Friend--I do describe him as such--the Member for Durham, North (Mr. Radice), because he gave the Committee considerable wise leadership and went out of his way to build the consensus which helped to make the report that much more influential.

It is timely to pay tribute, like my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke), in whose constituency I live --he is keeping an eye on me--to the British civil service, not only for its qualities, which were mentioned by my right hon. Friend the Chancellor of the Duchy in his opening remarks, but for its ability to manage and, indeed, survive extensive change within its own sphere. That was the subject of much of our investigation in Committee. It is notable and worth setting on record that, during the Conservative party's period in office so far, the overall size of the British civil service has been projected to fall from the 755,000 which we inherited in 1979 to 477,000 at the end of the current Parliament. That is a significant reduction.

Clearly, there have been some worries in certain quarters that such a reduction--indeed, it has been described as a fragmentation--could lead to a severe loss of morale, which could be permanent rather than temporary. I was therefore relieved to see this said succinctly in paragraph 36 of the White Paper:

"The Government accepts that the process of change"--

change in the civil service--

"is unsettling; but the Civil Service, like other areas of the economy, has to adapt if the country is to improve its

competitiveness."

That is a slightly bleak statement of reality, but it would be naive to suppose that our excellent civil service could have stood aside from the process of seeking greater efficiency--and, indeed, achieving it--which the private sector had to go through, very often in even more difficult conditions.

It is fair to put one's hand up on the Conservative Benches and say, "Yes, it is true that we have privatised parts of the state." We have privatised not only the state industrial sector, which used to be called the nationalised industries, but the very heartland of the state itself. That

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was necessary and timely. It has happened in other Organisation for Economic Co-operation and Development countries as well, to a greater or lesser extent. So we are not being eccentric. In my view, the state apparatus that remains--this is the important point--is more open and more efficient and is delivering public services to a higher standard than 15 or 16 years ago. I welcome that. It is one more reason to signal one's gratitude and admiration to the civil servants, at all levels- -from the permanent secretaries right the way down to the humblest clerk in a social security office--who are delivering services in an exemplary way.

One important conclusion to be drawn from civil servants' achievement is that, in parallel with the dramatic reduction in the size of the civil service, indeed even in its thrust--with greater emphasis on policy advice in relatively small Departments at the centre and greater emphasis on the agency principle in terms of the delivery of public services--my hon. Friend the Minister should consider the need for fewer Departments and fewer Ministers. That is perhaps a revolutionary thought, but in the current Government there are about 90 Ministers, in round terms.

There are also all sorts of Ministers-in-waiting, like my hon. Friend the Member for Eastbourne (Mr. Waterson) and others who sit on the Bench here. They are known as parliamentary private secretaries. Admittedly they do not take the Queen's shilling, but I suggest that the whole apparatus is becoming almost overladen, particularly when the civil service itself, the people whom Ministers are supposed to command, in military terminology, has slimmed down so admirably. My suggestion is that the great advantage of slimming down ministerial ranks might include the following points. Lines of accountability could be improved. I have been a junior Minister. I know a little bit about it. I have also been PPS to the Chancellor of the Exchequer, so I have seen some of these things from the inside. There is no doubt that lines of accountability can get blurred, even in small Departments, let alone large Departments like Environment or Trade and Industry, by having a plethora of junior Ministers.

It is fair to say that, in Churchill's first post-war Government, it was standard practice to have only one junior Minister in a Department. Who is to say that the problems that Britain faced in those years were any smaller than the problems today? In many ways, they were greater, because we had our imperial responsibilities, and so on. Equally, PPSs scarcely existed. There were one or two to very senior members of the Cabinet and that was that. I know that the Government Whip is looking worried, but that heretic thought is worthy of consideration.

Mr. Brooke: Is my hon. Friend aware that, in that period of Government in the mid-1950s, it was perfectly possible that if the parliamentary secretary was not available, the PPS might be asked to take a decision himself?

Mr. Forman: That sounds admirable. I am sure that some wise decisions were taken in that way. I remember reading that in the Churchill Administration of the early 1950s, when Sir Winston was seriously ill, the government of the country was in the reliable hands of Mr. Christopher Soames.

Dr. Bray: The hon. Gentleman mentioned the role of junior Ministers. I was told by no less than "Otto"

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Clarke--the formidable Sir Richard Clarke, the inventor of the modern system of public expenditure control--that junior Ministers functioned merely as parliamentary public relations officers for their Departments, and had no managerial policy role.

Mr. Forman: I am grateful to the hon. Gentleman for his copious memory.

I suggested that the first advantage lay in the improvement of lines of accountability. The second is the possibility of more coherent policy making: the existence of fewer, slightly larger Departments would necessitate better co-ordination across subject areas. Thirdly and importantly, Parliament would benefit from more wise contributions such as the one that we heard tonight from my right hon. Friend the Member for City of London and Westminster, South, whose speech was eloquent and even elegiac.

Let me turn to my main point. I intervened on my right hon. Friend the Chancellor of the Duchy of Lancaster in an attempt to establish what he saw as the constitutional role of the civil service--an issue that the Select Committee considered to be central. Either I did not put my question clearly or my right hon. Friend misunderstood: he did what I rather expected him to do, and rehearsed the list of admirable qualities possessed by the British civil service.

We are all agreed on those qualities. I believe that all tonight's speeches will be found to have referred to them, in all sincerity. In a more precise context, however, the role of the civil service raises issues relating to the nature of the British constitution--to the way in which the service, which is sometimes described as an important pillar of the overall architecture, fits into that architecture and to how well entrenched it is. We need to consider whether it is on shaky foundations, and on what its position depends.

My right hon. Friend the Chancellor of the Duchy said that he had an open mind on the question of a proper statute to back up the civil service code that our report proposes. I am glad about that: perhaps by the end of the debate we shall have been able to close my right hon. Friend's mind in our favour--to persuade him of the wisdom of our report. He said that one of the conditions was that the legislation should be narrowly focused. In a letter to the Chairman of the Select Committee, my hon. Friend the Member for Hazel Grove (Sir T. Arnold)--a copy was probably sent to all members of the Committee--my right hon. Friend specifically stated that such legislation, if it went ahead, should not include attempts to extend its scope. I am happy to give way to the hon. Member for Kingston upon Hull, North (Mr. McNamara), bearing in mind his expressed wish to give a fair wind to the legislation. Perhaps he will give an assurance that he would not only give it a fair wind, but not seek to extend its scope.

Mr. McNamara: The Chancellor of the Duchy said that it would be possible at a later date to change the legislation by means of affirmative resolution in the House--by means of a statutory instrument. Given the necessary consensus, that could certainly be done. We

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welcome the principle, but we have yet to see the precise terms of the Bill. We shall want to hold discussions with the civil service unions before reaching a conclusion.

Mr. Forman: I am delighted to hear that. I think that it constitutes some extra progress.

My right hon. Friend said that the constitutional position of the civil service should not change. In a moment, I shall ask what that really means. He also said that there should be all-party support for the change. That is clearly vital in a constitution that involves no single codified document to govern the country's affairs: we must do everything by all-party consensus, if it is to last. As I have said, I am delighted by what the hon. Member for Kingston upon Hull, North has said, and I hope that the hon. Member for Eastleigh (Mr. Chidgey) will say something similarly supportive if he catches your eye, Mr. Deputy Speaker.

What, then, is the role and position of the civil service in the constitution? My right hon. Friend the Chancellor of the Duchy drew my attention, in the second chapter of his reply to me--the first was not quite so forthcoming--to the first paragraph of the proposed new civil service code. It states that the duty of the civil service is "to assist the duly constituted Government, of whatever political complexion, in formulating policies of the Government, carrying out decisions of the Government and in administering public services for which the Government is responsible".

That is a fairly clear statement, but it has important implications.

The statement is, for example, very traditional. In the eyes of the current ministerial team--I do not know whether this would be true of the Opposition, if they ever returned to office--the civil service has no constitutional position independent of Ministers. That is important in the light of the debate about Clive Ponting, and numerous other events in recent years.

Mr. Radice: As the hon. Gentleman knows, one change is contained in the second paragraph of the document: all those duties and responsibilities are subject to the code.

Mr. Forman: That is a potential advantage. If we examine the constitutional lineage of the proposals, we see that the code clearly suggests that civil servants are servants of Ministers in the Government of the day while Ministers, in their turn, are servants of the Crown--hence the expression "Her Majesty's Government". My interpretation is that, strictly speaking, civil servants are not seen by Sir Robin Butler and his senior colleagues to owe any duty to the state over and above their duty to Ministers. That is an important constitutional point.

Mr. McNamara: In my speech, I said that the relationship between civil servants and Parliament--particularly the House of Commons--still needed exploration, as did the question of public interest and "whistle blowers". Both issues will be discussed in Lord Justice Scott's report, which I look forward to reading. My point was that they were thorny questions, but I do not think that that would prevent the Labour party from approving the legislation that we need for the code; the other parties can speak for themselves.

Mr. Forman: The hon. Gentleman was right to mention Scott in this context. Scott was always hanging over the Select Committee's deliberations. We wondered

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when he would report, and what the implications would be. Eventually we decided to press ahead, which was probably just as well: if we had waited for Scott, we might have waited for ever. Ministers should, however, take full account of whatever Lord Justice Scott has to say, and also of what Lord Nolan says. Incidentally, I should be interested to know whether Lord Nolan has officially been invited to comment on the draft code and, if so, when his comments are expected and whether they will be published, along with others.

Because there is a chain of responsibility from civil servants to Ministers to Crown, it puts a particular responsibility on Ministers not to ask or require civil servants to do things that they properly should not do. It is all very well having a code of practice with statutory backing for civil servants--I welcome that--but we need to think carefully about something analogous to cover Ministers. I am sorry to have to say that, but events over the past 30 to 40 years--I go back that far in my thinking--justify our considering it. It makes all the more important the idea of having a code with statutory backing. If a code is simply dependent on Ministers acting under existing powers, through an Order in Council or whatever, that would not have the same authority in these matters and would not enable arbitration to take place on the independent and authoritative basis that would apply if there were statutory backing.

In a system that does not have a codified constitution and where we are living under a regime of alleged parliamentary supremacy, it becomes all the more necessary to give a code statutory backing so that it is credible in the eyes of not only civil servants--all 477, 000 of them, or whatever the figure is--but, just as important, in the eyes of the British public. There is no way at present to entrench such a code other than for Parliament, with all-party consensus, to give its support to legislation designed for that purpose. If and when we have a more far-reaching form of constitutional change, the position might be different. In the interim, for as long as we have the status quo it is vital--and this is my main point-- that there should be clear statutory backing for the code. It is the one area where there is an element of ambiguity in the Government's response to the Select Committee report. Other than that, we welcome the way in which Ministers have responded to what we said. Not only do I believe that there should be such an Act of Parliament but, as a little dicky bird tells me that there is not exactly a plethora of candidates for legislative slots in the coming Session--for various reasons which I shall not go into tonight-- that strengthens the argument for an appropriate Bill finding an early and prominent place in the next Queen's Speech.

8.52 pm

Mr. David Chidgey (Eastleigh): I compliment the hon. Member for Carshalton and Wallington (Mr. Forman) on a thoughtful and thought- provoking speech. I share his dismay at finding the House so empty for a debate on an important part of the fabric of the Government and governance of this country. Indeed, I feel as though I have inadvertently wandered into a rather discreet and erudite

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debating club, comprised solely of the members of the Select Committee. I hope that they will excuse me for gate- crashing what is almost a private affair--

Mr. Radice: Please come in.

Mr. Chidgey: I thank the hon. Gentleman--it is one more to swell the numbers.

I offer my congratulations, which I am sure all hon. Members would wish to share, to the civil service staff for the way in which, over the past 15 years, they have stoically coped with the trauma and uncertainty of major changes in their working culture. I am sure that we all realise that that cannot have been easy and still is not easy. My party and I welcome the concept of introducing a civil service code; we should pursue the suggestion that that be backed by statutory obligations. Of course, it will depend on the detail. It is a vital part of establishing for civil service staff exactly where they stand. I take on board the point made about accountability and responsibility. I shall return to that later.

In his opening remarks, the Chancellor of the Duchy of Lancaster spoke of efficiency and cost cutting in the same breath as retaining the quality, integrity and honesty of the civil service. I shall deal with that in due course. I confess that before I was elected to Parliament I was a consulting civil engineer--so I have been on the other side of market testing, having been successful in securing work that came from that process. I worked closely with civil servants who were about to lose their functions, if not their jobs, so I knew what they were going through. Many of them were dedicated but despondent civil and public servants. Many were high-quality staff, but they had been trained and were operating in a different culture from the one in which we now try to operate our national institutions. Privatisation can be a ruthless tool with which to gear up efficiency. The emphasis should be on the modern management techniques of establishing clear goals and objectives for staff. Staff are flexible and will change, so we should not always rely on the sledgehammer to crack the nut. There is a great danger of discarding dedicated and experienced staff when motivation is the prime ingredient that we need. I say that from my experience of being on the other side of the fence and seeing the effects that the changes had on the morale of staff. It was a great tragedy that that happened.

We have heard a great deal tonight, especially from Conservative Members, about cuts and efficiencies and how the Government's public sector policies have generated enormous savings. We need to look at that claim a little more closely. There is a feeling--indeed, there may be a case for saying-- that the reality is that in some cases the Government are attempting to tackle waste where there is none. I cite as an example the staffing cuts at Customs and Excise, especially among VAT inspectors. I am sure that the House knows what good value VAT inspectors are. Each one costs about £25,000 a year in salary, pension and so on, but on average brings in about £360,000 in revenue. That is not a bad return by anyone's calculations. The number of inspectors has been cut by about 600 when, instead, we should have targeted those resources on combating an increasing problem in our ports--the smuggling of alcohol and tobacco. That is especially true in my constituency as there are several cross-channel ports

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on the Hampshire coastline. Increasing rather than cutting the number of VAT inspectors could result in earning another £500 million a year in tax revenue.

The Government are not dealing adequately with an extraordinary amount of real waste that still riddles parts of Government bureaucracy. I want to deal with some of the key issues. I shall be as brief as possible because I realise that other hon. Members wish to speak.

I want to refer, first, to absenteeism in Government Departments and the lack of policy to deal with the problem. There seems to be an ever- increasing rise in the use of external consultants. There is almost a total lack of information on personnel matters from many Government Departments, which any efficient organisation must have. I should like to examine, and perhaps the Minister will reply to this later, some of the claims for efficiency improvement through job-shedding. The figures that I have seen seem to have gaps. I should like to test that if I can.

Another important issue is the damage to staff morale, which has been mentioned by several hon. Members. When I come to my final remarks, I should like to talk about the vacuum that has been created by the Government devolving their responsibilities to agencies, which the hon. Member for Carshalton and Wallington dealt with. It is an important issue for the civil service's future.

Many hon. Members may have noticed that, in recent months, I have asked Ministers a series of questions. Some of the results that have come through are interesting. In 1993, the Occupational Health Service estimated that the direct cost of sickness absence in the civil service, taking account of salaries, pensions and national insurance contributions, was about £459 million. No one is saying that those costs can be wiped out at the stroke of a pen. Of course there will always be absenteeism: that is a factor in any organisation, business or institution. But the figures show clearly that absenteeism rates are running far higher than the average, and that, therefore, a substantial cost saving could be made. In 1993, the National Audit Office conducted a review of sickness absences in the Inland Revenue. Its review uncovered serious shortcomings in the way in which absenteeism was dealt with. The Comptroller and Auditor General wrote to me on the matter. As a result its work in 1993 with the Inland Revenue, the National Audit Office found that it was necessary to produce guidance on best practice for other departments and agencies to incorporate. The recommendations have stood from that time. I have to ask the question: what has happened since?

Despite the guidance, in 1994, there seem to be more departments and agencies with rising rates of sickness absence than departments and agencies with falling rates. Despite guidance, absenteeism is still rising. More than 60 per cent. of the departments and agencies that I questioned had an absenteeism rate above the figure that the Industrial Society identified as the national average.

I would not wish hon. Members to think that this is a witch-hunt of civil servants who are not performing properly. I am trying to emphasise the trauma, lack of morale and despondency that generate the illnesses that create extra absenteeism, which must be dealt with in this period of change. The position is simply not good enough. The Government must recognise that there is a real waste of resources on their doorstep. They must take steps to tackle it.

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In answer to my written questions, a number of Government Departments claim to have introduced modern management techniques, such as return-to-work interviews and better defined policies on absence and absenteeism. The right hon. Member for City of London and Westminster, South (Mr. Brooke) has an MBA and will be familiar with those two techniques, which are important tools in management. Absenteeism is still rising and it is clearly linked to falling morale.

The Government seem to be conducting a love affair with external consultants--and not a cheap one either. They are spending more than £860 million a year on their services. But having paid the bill, all too often they seem to dump them, to use a current phrase. Time and again, they ignore the advice that external consultants provide, and, speaking as an ex-consultant, I know the frustrations that that can generate. In recent parliamentary replies, not a single Department has been able to identify any savings from expenditure on external consultants. Only two agencies managed to identify any savings at all, which totalled £382,000. That is a pathetic return on expenditure of £860 million. That has come about despite the recommendations of the Government's efficiency unit that Departments should be assessing moneys saved through consultancy work for the benefits expected, and to determine when those benefits are likely to appear. It has not happened.

The lack of information about personnel and staffing is a great cause of concern, especially in relation to absenteeism. What information is available from Government Departments? What responses have I had to questions? From the Foreign Office, I have had nothing; from the Department of Employment, nothing; from the Employment Service, nothing; from the Ministry of Defence nothing; and from the Ministry of Agriculture, Fisheries and Food, nothing. Those five bodies employ about 145,000 people- -more than a quarter of all civil service employees--yet not one of them was able to produce absenteeism figures in response to my questions.

Even more surprising, none of the MOD agencies, which were set up with the aim of improving efficiency, was able to provide any information on sickness and other forms of absenteeism, which are key factors in any study of manpower efficiency. Even when agencies were able to provide me with information on sickness absenteeism and its causes, they seemed to be incapable of getting it right. It appears that different hon. Members received different answers to the same questions.

When I challenged Departments about that, the excuses that I received included the use of incorrect figures for staff in post, the omission of categories of sickness absence, and the inclusion of "certain absences not due to sickness".

The mystery deepens.

Similar unavailability and inaccuracies extended into the external consultancies. For example, the Department of Health produced figures for spending on external consultancies that directly contradicted those given for the efficiency report, while the Ministry of Defence, the Department of Employment, the Home Office and the Department of the Environment all declined to produce figures, despite the efficiency unit's recommendation that all Departments should be able to do so.

I deal now with the number of jobs that have been shed recently, especially in the past year. The Government claim to have made efficiency savings in the number of

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civil servants employed. I believe that the figure currently cited for the number of jobs shed in the past year is about 40,000. I am sure that the Minister will confirm or correct that figure later, but I should like to know whether it includes the jobs that have been created or are being paid for through contracting out. Is 40,000 a net or gross figure? I think that we should benefit from clarification.

Perhaps one of the most important aspects of the developments in, the restructuring of and the changes to the culture of the civil service is staff morale. The constant and arbitrary use of the figure of 500,000 personnel as the target to which the civil service will be reduced, without it being related to specific savings or Departments, is having a devastating effect on morale. Indeed, the report recognises that morale is an important factor that will inevitably affect the quality of service. Of course, it also has a direct impact on absenteeism and the consequent lack of efficiency.

Morale has been badly damaged by the many changes that have so far occurred in the operation of the civil service and it will be damaged further by the Government's proposals for contracting out and for privatisation in the future. Of course, there is a need to increase efficiency, reduce bureaucracy and shed unnecessary jobs--we live in a changing world--but in making privatisation an inevitability the Government have created chronic job insecurity by subjecting staff to constant expenditure reviews and market testing. However, the Government still expect staff to be highly motivated and to perform to the highest standards. Frankly, that is unreasonable. In fact, there is a catastrophic decline in the morale of civil servants, which is manifesting itself in increasing absenteeism, and that must be dealt with. The increasing absenteeism rate is clearly a symptom of something more serious.

It is all very well for the Government to attempt to justify their continual cost reviews and market testing by claiming that "the Civil Service . . . has to adapt if the country is to improve its competitiveness",

but, unless they deal with the trauma and despondency that they have created in the work force, their claims will continue to have a hollow ring.

I urge the Government to look again at the difficulties facing agencies in developing long-term plans and at the periodicity of the review--I know that it has been extended but has it been extended enough?--and, above all, to recognise the need to create a period of stability in the civil service. Agencies could then make proper and meaningful long-term plans and civil servants would be able to regain some sense of job security, job satisfaction, belonging and achievement. The result would be improved staff morale and real improvements in internal efficiency and service to the public. Hon. Members have already mentioned accountability--another matter that needs clarification. The Select Committee found unconvincing the Government's attempts to draw a sharp distinction between accountability, which cannot be delegated by Ministers, and responsibility, which can. I have not found anything in the Government's response to the report or heard anything in the debate tonight that could remove that feeling of uncertainty. Indeed, I found nothing in fiascos such as the Parkhurst break -out, for which neither Derek Lewis nor the Home

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Secretary was prepared to take responsibility, that convinced me that they would not be repeated. It is a very important issue that affects public confidence. Such examples highlight problems that will persist unless some clarification is given and acted on.

Clearly, changes are still to be made in the civil service. Improvements must be made in the efficiency of the bureaucracy. There needs to be better management practice, better long-term planning and some understanding of staff needs and motivation. The reforms need to be addressed further. The Chancellor of the Duchy of Lancaster said earlier--the hon. Member for Durham, North insisted that the right hon. Gentleman expanded on the point- -that it would be ironic if the Government came to regard the most successful reforms for decades in the civil service as simply a transitional phase and a staging post to privatisation.

We need, as the Committee recommended, positive assertions of the value of those agencies remaining in the civil service. Modern management techniques and the stability for which I am calling are the means to address the problems facing civil servants. Frankly, reliance on ham-fisted, dogma- driven policies is not.

9.10 pm

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