Examination of witnesses (Questions 120
TUESDAY 16 MAY 2000
and MS HELEN
120. You mentioned earlier that the first objective
of your Department is to raise standards. How do you then, on
the basis of PSAs, see the cost-effectiveness of the different
strands in order to raise standards?
(Sir Michael Bichard) I think that is an interesting
question. Whether or not you can justify the additional expenditure
that is required to produce a one per cent increase in numeracy
or literacy, for example, I think is the point you are making.
When I say it is an interesting question, it normally means I
do not have a fully fledged answer. At the end of the day I think
it is a question of judgment. What is it in terms of our competitors
performance on literacy and numeracy? What is the level that we
should be aspiring to if we are going to compete in the global
market in the next 20 years? Secondly, what is it going to cost
and can we afford it? That is something which we will have to
address at each stage of our discussions with the Treasury and
will, I am sure, be part of the Spending Review discussions in
the coming couple of months.
121. Essentially, you are an Education Department
and you are raising standards as opposed to setting targets and
achieving them in a range of options.
(Sir Michael Bichard) We are an Education and Employment
Department. I am sorry. What was the second part of your question?
122. Essentially the remit of the Department
in employment and education is to raise standards and get more
people into work, and that must be the criteria against which
you are judged, not achieving a range of targets in terms of facts
and figures which are essentially more tangible and easier to
diagnose than the ultimate achievement of raising those educational
standards across the board and getting more people into employment.
(Sir Michael Bichard) If all you are measuring are
the things that are easy to measure, you have a problem. Your
targets have got to reflect what you want to happen on the ground.
Sometimes that is quite difficult. Of course, in this country
for 20 years we were seduced into believing that you could not
measure anything in the world of education, that education was
too complex to be measured and for there to be targets. I think
over the last 10 years we have made a lot of progress. This country's
education system now is more accountable than probably any other
system in the world because we do measure what we can measure.
We draw conclusions from what we measure. There are some things
that it is impossible to measure, but from what we can measure,
I think we can draw some pretty firm conclusions as to whether
or not the system is improving or getting worse.
123. You mentioned your Policy Innovation Team
earlier. Can I ask whether they are looking at the role within
the description you have just given of your Department that the
LEAs play and how cost-effective you think they are in this programme?
(Sir Michael Bichard) The Policy Innovation Unit is
not currently looking at the role of LEAs, but of course, the
role of LEAs is a live issue, not least because of the OFSTED
inspections and the intervention that we have found necessary
in 12 authorities so far, not least because of the concern of
schools that too much money was resting with LEAs and not getting
to schools. That was one of the reasons why in the recent Budget
there was a direct funding of schools with the additional £1
124. Will that really be a direct funding? The
Chancellor mentioned a cheque going direct to schools.
(Sir Michael Bichard) It will go to local authorities
but it is to be passed on without any overheads being taken to
the school, and there is a formula, as you know, for each school
depending on the number of pupils. The answer to your question
is that of course the role of LEAs is a live issue at the moment.
We are discussing with local authorities and LEAs how we can perhaps
revise the funding system, how we can ensure that LEAs add value.
This is very much Helen Williams's area, and I wonder if I can
just ask her to comment.
(Ms Williams) One of the things that we are considering
at the moment is the code of practice on LEA/school relations,
which defines the way in which LEAs and schools should work together.
I do not know whether you are familiar with the document. It is
a rather lengthy document, with 60 pages, and there is a general
feeling that it would be helpful to have a more succinct and clearer
statement of the LEA role in relation to schools, and we are working
on that at the moment. In general, I think we are also in the
code reflecting the delegation of funding over the last couple
of years to emphasize the importance we place on the school itself
managing the school, as the main agent in delivering the Government's
standards agenda. We will define the role of LEAs as essentially
an enabling role, supporting schools.
125. Where is the constitutional issue going
to be directed? Who is going to question the accountability locally
and nationally in terms of the democratic accountability of the
funding both nationally and locally? It may not be a question
for you, but I do raise it in this context.
(Sir Michael Bichard) It is an issue which goes well
beyond the responsibilities of the DfEE and is ultimately the
responsibility of the DETR and the Prime Minister. The intention
is that there should be a Green Paper on local authority expenditure
published some time in the summer and part of that will address
education expenditure and the LEAs' position there. What that
will contain I have no idea at the moment. It is quite possible,
I would have thought, that it will contain a number of options
and there will be a debate over a period of time around this very
important issue that you have raised, because local education
expenditure is clearly a massively important element of the local
authority expenditure and therefore is a constitutional democratic
Mr Derek Foster
126. Can you give us any indication at all about
the kind of ideas that the Department is feeding into this review?
(Sir Michael Bichard) I do not think I can because,
as I say, it is in the early stages and I think you will have
to wait and see what is in the paper, but I think it will be a
range of options rather than one preferred solution.
127. I think everything you have said has highlighted
what we believe, that you are very much committed to Public Service
Agreements. You are negotiating a new tranche of these with the
Treasury at the moment, I believe.
(Sir Michael Bichard) Yes.
128. Would it be possible for some details of
this to be given to the Committee so that we can actually be part
of that route rather than out of the route so that we can make
a contribution to the process?
(Sir Michael Bichard) Public Service targets will
depend very much upon the resources which are allocated in the
Spending Review. That must be the case. It is a question of your
needs and aspirations, which are also constrained by your expenditure.
So we are not actually, at the moment, in negotiation with the
Treasury or anyone else as to what the Public Service targets
will be. We will see what we are likely to get in cash terms and
then we will have those negotiations. Of course, if the Committee
has views on what the Public Service target should be, then it
is for the Committee to express those views, and doubtless they
will be taken into account in the negotiations.
129. Let me give you an example. This Committee
shares a view on ICT training. I know both the Chairmen of this
Joint Committee share this concern. You know of the recent Microsoft
Summit in Brussels, which showed the enormous skills gap in information
technology skills, not just for this country but Europe, as against
our major competitors. Would something like our inability to produce
the right number and volume of ICT skilled people, would that
be part of a Public Service Agreement, that this will be one of
the targets? Is that a possibility?
(Sir Michael Bichard) I think that is a possibility.
Clearly we will be talking, as part of this Spending Review, about
our investment in IT and in IT skills. It is already pretty substantial.
There is a lot of money going into schools. Internationally, we
do not do that badly in terms of hardware, and increasingly we
do better in terms of teaching skills. There is a lot of money
going into schools and IT learning centres. There will be 750
of those this autumn around the country. There is a lot of money
going into the UfI. I do not think we have to assume necessarily
that we are slipping behind our competitors, certainly in Europe.
I do not believe that to be the case.
130. Europe is the point. As part of Europe
we are slipping behind. The real competition is not in Europe
(Sir Michael Bichard) If you look at the United States
in terms of their investment in schools we do not compare too
badly. However, there is no room for complacency. The knowledge
economy is upon us and if you believe that IT skills are going
to be critical to make us competitive, then we must not be complacent.
It will be something, I am sure, that is discussed as part of
the Spending Review, following which we may well decide or not,
depending on other priorities, that this should be a Public Service
target. But there is nothing to stop this Committee making an
input publicly at this stage.
Mr Derek Foster
131. If I can pursue that a little bit further.
It is about twelve months ago that the Chairman of Motorola and
the Chief Executive of EPS told me that within their industrynot
just their two companies, of coursethere were 100,000 unfilled
vacancies, mostly for young graduates: not for graduates who necessarily
had degrees in ICT but who were capable of being trained to fill
those vacant positions. More interestingly, perhaps, that if young
women graduates could be persuaded to take the industry rather
more seriously, or find it more attractive, then that problem
would be more than half solved. Now, will that feature as a priority
for the Department? It strikes me that 100,000 unfilled vacancies
of pretty well-paid, potentially highly skilled jobs, is a very
(Sir Michael Bichard) It is a priority for the Department.
It is something which the Skills Task Force have identified. It
is something that we have identified as a priority; a first priority
for the University for Industry. One of the reasons for setting
up a Learning and Skills Council, which will be employed next
year, is to ensure that the training which takes place in the
workplace reflects business needs. We particularly have in mind
IT as being one of those skills shortages which the Learning and
Skills Council needs to address. So it is already a priority.
We assume it will be an urgent priority and part of the discussions
on spending. I cannot guarantee you that this is going to be a
PSA target at the end of the day, but it will be discussed.
132. I do not necessarily want it as a PSA target.
We just want the problem solved. Apparently, the kind of training
that industry is talking about is the shortest, 12 weeks. Is it
not the kind of thing which we would have to directly enforce,
as training people in universities have to deal with?
(Sir Michael Bichard) I talked earlier about the increase
in further education places. 700,000 were to be achieved by 2001-02.
One of the priorities there that we see is IT, and we see no reason
why we should not be able to produce some of those courses, 12
weeks as you say. They ought to be a key component of those 700,000
extra places to make a real impact. The money is there for that.
What we need to ensure is that FE colleges deliver that. One of
the ways of doing that is to make sure that we target the investments
on the FE colleges that really can deliver competently, particularly
in this area. So right across the board we are looking at every
possible way of ensuring that that real skills gap is bridged.
133. Including devices for bringing employers
and potential employees together within the Employment Service,
or stimulating solutions coming forward from the private sector?
(Sir Michael Bichard) Of course the Employment Service
has a really important part to play. Partnerships are beginning
to emerge between the Employment Service and private sector, which
are very, very happening. All of those things are happening on
IT. Let us not forget that we also have this problem at the other
end of the continuum with basic skills. All of the same points
Mr St Aubyn
134. Public Service Agreements are really about
delivering output targets. Nevertheless, do you think the amount
of money going in is critical to their achievement? Would a 1,
2, 5 per cent settlement increase in resources going into these
agreements have a significant impact on their success in achieving
(Sir Michael Bichard) Again, I have never been known
knowingly to throw away money so, yes, of course, more money helps,
does it not. On the other hand, I think I said that in most public
services too often we speak as if money is the answer to all of
our problems. Very often it is ensuring that you are delivering
efficiently, being more focused on the outputs, and you are working
effectively across boundaries. Those sorts of things can make
a huge difference to how well you spend your resource. In reality,
you are probably talking about 1 or 2 per cent between a really
good settlement and a rather disappointing settlement. You can
make 1 or 2 per cent in the way you use the resources. Now, on
behalf of Education and Employment, you can be guaranteeing, we
will argue (very eloquently, I hope) and quite aggressively, but
let us never forget that there are other ways of ensuring that
resources are used effectively.
(Mr Shaw) There are different types of PSA. Within
the current PSAs related to three-year-olds' participation and
class sizes of fives, sixes and sevens, these are very resource
related as to the provision of capital for the class size and
places and teachers for the three-year-olds. When it comes to
attainment at age 11, there is much more a mixture of resources
that come outside class: the working together on the literacy
hours, the issues on the timetable, working with parents. So some
of the PSA targets directly relate to money. With others there
is a whole variety of factors. On literacy, very much the aim
has been to engender all of those operating together, to deliver
the step change that has happened so far; and the step change
which is on course to deliver in 2001.
135. I am glad you mentioned class sizes. Sir
Michael, you are obviously in the business of delivering the class
size pledge, where the costs have not gone up by a few per cent.
The cost seems to have gone up more by a factor of 600 per cent.
It has gone up from the original estimates of the Department,
which were £100 million, and I gather the most recent estimates
of the cost of delivering this pledge is going to be £620
million. Do you agree that there are serious concerns about whether
value for money is being achieved? No-one is questioning the desirability
of delivering the pledge, but a six-fold increase in the cost
of that pledge appears to suggest at least a level of incompetence
either in the original estimates or delivering the pledge. What
do you think it is?
(Sir Michael Bichard) I do not recognise the increase
from 100 million to 600 million. I do not believe this is an example
of incompetence. It is a brilliantly delivered commitment, delivered
ahead of time and well managed. You can argue about whether or
not reducing class sizes for five, six, seven-year-olds is a desirable
thing to do or not. That is a political argument and judgments
have to be made about that. The evidence, such as it is, does
suggest that smaller class sizes for very young children does
have an effect on the quality of learning upon the literacy and
numeracy standards at that age. The evidence suggests that it
is not as critical with older children. The Government took a
decision on that evidence to make this a commitment, a manifesto
priority, which had a fair amount of public support. What we have
done is to halve the number of children in infants classes of
over 30 in one year, the last year, from 356,000 to 177,000.
136. For the record then, the estimates given
by Ministers at the beginning of this Parliament, of delivering
the class size pledge, that it would only cost £100 million
rather than their latest estimate of £620 million: those
estimates were not derived by any calculations made by the Department
for Education and Employment. Is that correct?
(Ms Williams) May I make an observation here. Much
of the 620 million figure that you have mentioned is capital expenditure.
It is one-off expenditure to build extra classrooms. The on-going,
the inherent costs of attaining the pledge, are in the order of
137. But the cost estimated throughout the lifetime
of this Parliament, was it not originally estimated at just £100
million for delivering this pledge?
(Ms Williams) I am not competent to say.
(Mr Shaw) When the Comprehensive Spending Review took
place two years ago, there was a thorough piece of work which
led to £620 million being the figure that came out of the
Comprehensive Spending Review for expenditure over a three-year
period. That was from detailed work which took place, leading
to the benefits that Sir Michael was talking about.
138. Do you think that the knock-on effectthat
as the number of primary school teachers seems to have gone up
the number of secondary teachers appears to have gone down; and
not because of the fact of lower class sizes in the first three
years but higher class sizes in the later yearsdo you think
that has been a price worth paying to deliver this pledge?
(Sir Michael Bichard) If you look at the statistics,
the average size of primary classes has fallen from 27.5 to 27.1
pupils, a 0.4 reduction. The average size of classes has fallen
overall from 24.8 to 24.7. The only increase has been in the average
size of secondary schools from 21.9 to 22 pupils, a 0.1 increase.
If you take into account the evidence that I paraded earlier,
that class sizes are not so important at secondary level; if you
take into account the fact that teacher ratio in secondary schools
is 17.1, six lower than they are in primary schools; this year
secondary schools have received somewhere between £30,000
and £50,000 per school which, if they devote to teaching
resources, which they can do, (it is a matter for them), would
reduce the secondary school ratio by 0.4: then it brings the whole
thing into perspective.
Mr St Aubyn: I will take that as a yes. Thank
139. New Deal targets and employment policies
are very much a key priority for Treasury; one of the key apples
in the eye, as it were. Does the DfEE have any influence at all
over the targets that are set for employment in getting people
into work and New Deal, or are they all set for you by Treasury?
(Sir Michael Bichard) They certainly are not set by
the Treasury. They may be the apple of the eye of Treasury but
they are even more so for us and the people who deliver it. We
are determined to deliver our targets. The negotiations on an
annual basis between the Department and the Treasury on Employment
Service targets generally are always robust; and they ought to
be because ending up with the right target you need to have a
robust negotiation. They are not set for us by the Treasury. We
propose the set of targets. We discuss them with the Treasury
and there will sometimes be some adjustment.