Select Committee on Education and Employment Minutes of Evidence



Examination of witnesses (Questions 140 - 159)

TUESDAY 16 MAY 2000

SIR MICHAEL BICHARD, MR PETER SHAW and MS HELEN WILLIAMS

  140. When you meet one of your New Deal targets, with which you have had considerable success, you must do some internal assessment on the reasons why you have been successful in meeting those targets. That is something which is often a subject for discussion on the Employment Sub-committee. How far do you make an assessment as to whether your success has been due to the Employment Service working effectively; a healthy jobs market; whether that is due to a healthier economy because of good economic performance or because of external factors; or any other estimates of the success of that programme? How does the estimate of that influence what you might put into your targets for the next round of bargaining?
  (Sir Michael Bichard)Those sorts of discussions, which makes the setting of the targets quite complicated, the first negotiation is not with the Treasury. The first negotiation is between me and the Employment Service Chief Executive. I have to take a judgment as to whether or not he has achieved his targets or not achieved his targets this year or last year because of the buoyant or less than buoyant labour market; because of changes in the way they are operating. Sometimes that is quite difficult. Last year the Employment Service achieved, for the first time in ten years, all of its major placing targets. The reasons for that were, let us be fair, a buoyant labour market, but also a very much more efficient operation. I take my hat off to the staff in the Employment Service and the Chief Executive there for raising their game. They are very much sharper now at analysing the data. They are very much quicker at taking action where they see problems arising. Their benchmarking performance in one district against another district is in a way that never used to be done. They are very much more innovative. One of the reasons why they have increased targets this year is because they have introduced ES Direct. They are using technology to get jobs to people or people to jobs. So there has been a bit of a buoyant labour market and a very much more efficient Employment Service. On the New Deal, some people do say that all these people would have found jobs anyway. The independent research that we have had from the National Institute of Economic and Social Research suggests that a half of the people who have been found jobs through New Deal would not have found jobs without the New Deal. That the reduction in the number of unemployed young people, which is now at its lowest level since the 1970s, that is probably 40 to 50 per cent attributable to the New Deal.

  141. I think we have, as a Committee, been very pleasantly impressed by the way in which the Employment Service has faced up to the challenges thrown at it. But I am very conscious, looking at the report, that this has put huge pressure on Employment Service staff. That seems to have been reflected, to some degree, possibly, in the sickness rates, which seem to be higher for Employment Service staff than for DfEE staff generally. Is that something that concerns you? Are there any particular factors you need to look at?
  (Sir Michael Bichard) It does concern us, although it has come down by a percentage point over the last year. It is 12 days. That compares with a departmental average of eight days. So it is high. As someone who used to run the Benefits Agency I am not complacent but I am not completely surprised. Being in the front line in the Benefits Office or the Employment Service is hard work and it is quite stressful on occasions. We have tried more and more to support staff but nonetheless it remains stressful. We need to carry on working at it. If you compare it to the figures the Institute of Personnel Development produced a few weeks ago, which showed across industry the days per year lost to sickness, these were 9.3. It is not off the map. One also needs to bear that figure in mind when you are talking about teacher absence, which is something around six days. You need to bear this in mind when looking across the economy. What they have built in it is a training programme to help with managers in these cases. They have been focusing on the long-term sickness and there has been an improvement of a day in the last two years. So it has come down from 13 to 12 in a couple of years, which is quite a marked change, but ES is not complacent about this at all.

Mr Derek Foster

  142. In another of our reports, what we would not want to see is management bearing down on unnecessary sickness, so that people who would end up being disabled by certain definition would be pushed out of employment. This is because one of the thrusts our report had was that employers should enable people to retain employment, because retention of disabled people is equally as important as the employment of disabled people. That is just a point.
  (Sir Michael Bichard) That balance is terribly important. We have often had discussions with unions within the Department. We need to bear that in mind. We are not in the business of forcing out people at all. We do need to support them. Sometimes it is helpful for people, when they have been on sick leave, to discuss with them, so that we can assess what we can do to help them.

  Chairman: Sir Michael, I am conscious that time is slipping away. The Committee is valuing this session. I am going to ask Members to lob in the questions that are close to their hearts. I know Gordon particularly wants to say something in terms of the issue of red tape in schools, and the fact that one of the things we pick up as we go to school visits is that there are so many initiatives that they have initiative fatigue. Teachers and heads particularly find it very difficult to cope. Lord Haskins has made some comments on this. Gordon, do you want to follow this up?

Mr Marsden

  143. The Chairman is absolutely right. It is not just Members of this Committee. Most Members of Parliament will feed back this anecdotal feeling from the head teachers. We now have the Haskins Report which makes some very specific recommendations to reduce bureaucratic demands. In fact, it is quite critical of the way that those demands have currently confused and bewildered head teachers. How are you going to respond to that report?
  (Sir Michael Bichard) I do acknowledge it and I do not dismiss it. I also speak to head teachers and teachers. They are usually fairly outspoken in telling me how they find it in the classroom or in the school. By no means do I dismiss this. We have 60 days technically to respond to the Haskins Report. The Secretary of State will be doing that, probably on 1 June, so I do not want to steal his thunder, but I would just say that we have already tried to put in some support through funding of 20,000 classroom assistants; support funding for small schools; issuing investment in computers for teachers and to schools; and within the Department—although I know it does not look like this to the real world - we have a star chamber which has to approve every piece of material that goes out to the school. Not all of the bureaucracy and the materials, of course, comes from the Department. Some of it comes from LEA. But, having said all that, I say to head teachers, when I meet them, "We have to crack this." We have not succeeded. We need to do more. Why is it particularly bad at the moment? I think this year is an exceptional year in that we have been introducing some very far-reaching and quite complex reforms. If you think about the performance threshold; if you think about the new system of reform of management in schools; if these things are going to have a credibility, and they are going to be introduced fairly, there is bound to be some degree of what teachers would call bureaucracy surrounding then. I think this is an exceptional year. What we are going to do in the future is that the Secretary of State is going to announce some ideas. But I think what we have already said, we believe we can simplify the funding arrangements. That is one of the things teachers and head teachers have been mad about. We have to train ourselves to a stated reduction in the amount of paper that is going out from the Department to schools.

  144. Do you accept that the central part of the problem is still—I know you have made reductions—too many head teachers being asked to put a considerable amount of time and effort into bidding for relatively small pots of money, which most of them will not see?
  (Sir Michael Bichard) I have felt worried about the bidding. That is why I have said that one of the things that we will be announcing is a simplification of the funding arrangements. That will make a big difference and it needs to be pretty radical. I hope that will be one of the things that will show the teaching force that we are serious.

Chairman

  145. Perhaps we need to send Chris Woodhead in to monitor the people who send out all these things to heads. Concentrate their minds a little bit.
  (Sir Michael Bichard) Their minds are concentrated. I do not need the minds of my staff concentrated. Their minds are concentrated and they will need to be even more concentrated, which is why I think something simple like we are going to reduce the amount of material that goes out from X to Y is probably needed. What we need to be careful about is the emphasis on electronic communication. We believe that we can improve some of this by having more communication electronically. We just need to be careful there that we do not get into the e-mail mire, where you are increasing the amount of material that teachers have to read because it is going on the e-mail. That is the e-mail problem. You have to be a bit canny in the targets you set.

  146. Sir Michael, I was rather teasing about Chris Woodhead. But there is a very important point that concerns this Committee. It certainly concerns me. The number of initiatives that your Department spins off. There are a lot of them, as we all know, and we can understand the reason for them. The objectives are ones that the Committee want to see realised. However, the fact of the matter is that we hear that so many of the initiatives are not being tracked. You have not got the research budgets to evaluate them. Is that true? That is the word. That many of the initiatives are not being tracked, not being put out through research contracts to evaluate their effectiveness.
  (Sir Michael Bichard) I do not think that is true. We put a lot of emphasis upon policy being more research based in the first place and better evaluated. Our research budget is now £10 million.

  147. So you have no shortage of resources for important research projects? There is no shortage?
  (Sir Michael Bichard) Research is close to my heart. I think we have focused our research much better over the last three or four years. More of our policy is now research based. All of our policies have to have an evaluation framework before we will invest in them. Peter and I said after the last Comprehensive Spending Review that we will not give the money for this policy unless you produce for us an evaluation framework with clear objectives and a clear plan for evaluating it, because if you cannot do that it is not worth investing in. One of the problems of the evaluation in the public sector sometimes is that if you spend five years evaluating something, you get the evaluation report and it is too late to use it for any useful purpose. One of the things on New Deal is that we have got a lot of evaluation material coming through all the time and we are responding to that. But I am not complacent. We can improve it still further. I am very pleased about the way it is happening.

  148. So you are the other end of the spectrum from Mr Woodhead? He does not seem to put very much value on research.
  (Sir Michael Bichard) What Chris says is that the educational research in this country has not always been well focused. We would agree with that. I would agree with that. Sometimes it has been too long-term. One of the things we have done is to set up an Educational Research Forum, on which I sit, which brings together all of the various research interests in education in this country and tries to ensure that the research is more relevant than it has been in the past, is better quality, and is produced in a timely fashion.
  (Mr Shaw) Just to add, the research budget in 1998-99 was just £5.5 million. It will double to ten and a half million by 2001-02. A lot of work has gone on with researchers, with the ESRC, about putting together the right sort of research programme, which includes research centres being set up. One is on the economics of education, another on the wider benefits of learning. There is a greater emphasis on longitudinal studies, so that we see the benefits of learning not just in this Parliament but over a longer period of time.

  Chairman: I hope you are not reinventing the wheel because we saw a wonderful longitudinal study at Bristol University.[4]

Mr Harris

  149. How many targets do you have in your Department overall?
  (Sir Michael Bichard) You are asking me about Public Service?

  150. No, the total number of targets, a ballpark figure. Is it tens, hundreds, thousands?
  (Sir Michael Bichard) The reason why I hesitated to answer is because you are setting targets at different levels within the organisation. I have no idea how many targets were set for particular staff. What I would agree, if I can take your point, is that we set too many targets.

  151. How many would be too many, would you say?
  (Sir Michael Bichard) It depends on the context. When I was Chief Executive of the Benefits Agency I had 162 targets. I thought that was too many because even if the 158 were met you had not performed four so you never got the performance bonus. That becomes a disincentive so you have to be careful about what are the targets and how many you are setting for any individual time or person.

  152. But 500 would be too many, would you say?
  (Sir Michael Bichard) The targets in the Public Service Agreements are about the right number.
  (Mr Shaw) When we put this together, we deliberately wanted to focus on the numbers of targets in the PSA, so there will inevitably be debate about what is the right number coming out of the year 2000 review. But they do operate on different levels. Within my organisation, which is the Finance and Analytical Services Directorate, we work against the background of these PSA targets, but it is quite right that in terms of what we contribute to the Department we have some targets. Then you cascade down so that individuals can see what they have to do.

  153. But is there not a danger that when you have hundreds of targets some of them are a bit silly. Sure Start. One target is to have 100 per cent of children in Sure Start areas, to have access to good quality play and early learning opportunities, helping progress with early learning when they get to school. You are either going to have nought per cent or 100 per cent of children in that area, because you are just creating that good quality play under Sure Start, which will mean notionally that 100 per cent of children have access, because it is quite clear that not every child is going to go but they have access. So you can get silly targets like that. What scrutiny do you ask the National Audit Office or the National Statistical Service to check whether some of the hundreds of the targets are not ludicrous?
  (Sir Michael Bichard) I can see the headline of the press: "Permanent Secretary says that some of the Sure Start targets are ludicrous", so I am not going to fall into that trap. But I will say to you that you can have too many targets and some of those targets can be silly and too input based. The worst sorts of targets are those which are not quantifiable and, therefore, not measurable. The Committee might like to have a look at Public Service targets across Government and compare the DfEE's public targets, where you will find that nearly all the public service targets are quantifiable and measurable.

  154. Would you name and shame?
  (Sir Michael Bichard) I would not dream of it. The serious answer to your question is that each year in our business plan we need to try and identify the key priorities of our Department. We get very exercised if that figure gets above 70 or 80 because once that happens you lose the focus. People cannot cope with large numbers of targets. They do not know where to put their energies. So, whenever you are setting targets, you need to keep it to a reasonable number. One of the things I do when I look at the directorate plans that come to me, because they produce their own business plans, is to ask questions if I see targets that are too many and if they are quantifiable or measurable. So, in a way, my office and I personally do check out the balance of targets and make sure they are measurable.

  Chairman: I will ask Stephen O'Brien to ask some questions about SSAs.

Mr O'Brien

  155. One of the most important points that has come across my desk since I have come into the House has been on a couple of your incentivisation and communication comments, the sense of unfairness when it comes to the way the SSA is formally operated, particularly with regard to shire counties. As you know, this has become very much an all-party matter. There are a number of all-party groups which are now coalescing to try and get a focus to this. I have talked to David Cracknell in Cheshire Council Education Services at some length on this. It is very important that it is having a major effect on all the schools, certainly in my constituency, and this is one of the things that is raised habitually: that there is a recognition of the observation process. That it is very real, it is very serious in terms of a potential effect on incentives, all the reforms that the parties are trying to push through. There are real pockets of deprivation even in what are perceived as a relatively prosperous leafy areas, such as in Winsford in my constituency, because of the day-to-day in terms of the way they are measured. So I would be very interested to have your comments on that. How much hope can we put forward to address this problem?
  (Sir Michael Bichard) Again, I will go into the details. This is something which someone with a career in local government is not likely to be entirely happy with within the current regime. I am not. I do not think anyone is happy with the current system. I think our task is to try to develop and design a system, and our task is to design and develop something which is better. This is one of the reasons why we will be having the Green Paper in the summer, which will be around local education authority expenditure. We need a system which creates regular transparency. We need a system which creates greater certainty for schools. We need a system which produces greater stability for schools. We need to take into account the changes to pupil numbers and other factors which happen year by year, which militate against fixed three-year settlements. However, we do need to set those in our objectives. The challenge, of course, is producing a system which does all of that, and which the majority of people regard as fairer than the system we have at the moment. This is one of the great conundrums of the public sector that we are grappling with at the moment. I hope we will have options in the summer. Whether or not the majority of local authorities or interested parties think it is better than the system we have at the moment, I could not yet say.
  (Ms Williams) We acknowledge and the Government as a whole acknowledges that there is a great deal of dissatisfaction with the current SSA system. We did look at ways in which we might reform SSA at the time of the last spending review, but there was no consensus on the way forward, which is partly why the Government set up this new review of the SSA system which is going to lead to a Green Paper this year. The challenge, as Sir Michael has said, is to produce a new formula for distributing grants which is not only fair between authorities, but accepted as fair. The other point that I would make is that authorities like Cheshire and other authorities who are at the bottom end of the funding, have benefited from the additional investment the Government has made for all authorities since it came into office. That may not be complete comfort because these authorities feel that their base level of funding is too low.

  Mr O'Brien: They are very much hoping that there is an acceleration process, because I think there is a real sense that it takes too long. Given that there is a real wish to try and follow behind some of the reforms that are coming through, there is this real sense of palpable unfairness and ultimately it is centred on the per capita spend per pupil when you look at the totals. So many of the statistics are measured by broader catchments. It is important that the starting point, I think, should be to look at it on a per capita spend basis. At least that would address the root cause of unfairness.

Chairman

  156. Sir Michael, there does seem to be two senses of unfairness out there. The first is with the SSA and your desire to reform it in a positive way. There is a feeling of discontent of the feeding into the process of change. There is also another figure of unfairness that because of the comprehensive spending review, you get your three year certainty in terms of your funding, but that does not seem to trickle down to the LEA or schools. You seem to still live in this annualised world of not really being sure what is going to happen from one year to the next. You are receiving the benefit of a three year run and they are not. That is the feeling that they seem to have. Is there any way that you can better reduce the complexity and share the benefits of the three year strategy?
  (Mr Shaw) It is a very important issue. In the CSR there were a number of figures that were announced over a three year period, but some of the other figures were announced over a period because they were not clear as to what the demand would be in terms of, for example, FE numbers and how they change, or on the employment programmes. So there is a balance to be struck between certainty over a three year period and being able to take account of changes in the market and also having the flexibility to respond to changing circumstances. This is clearly one of the issues that is going to be part of the discussions in the year 2000 Spending Review about what the total figures are for the next three year period, and what is successful to announce as part of the finite—

Mr O'Brien

  157. Can I just have an answer on my per capita spend basis? Is that one of the basic points of review, whether spending can be gauged much more on a per capita basis rather than the broad catchment measures that are currently used?
  (Sir Michael Bichard) I cannot second guess what is going to be in the Green Paper when it comes out, but you would be surprised, would you not, if the per capita spend option was not one we were considering? It is really the extent to which that dominates the ultimate arrangements.

Judy Mallaber

  158. As a Committee we have done a few reports that touch on the question of people being able to combine their various responsibilities at work and at home. Does the DfEE, as the department responsible for employment, consider that it ought to operate as a model employer in relation to this? What steps are you actively taking to make it easier for your employees to have methods of flexible working which will enable them to combine their responsibilities?
  (Sir Michael Bichard) We have recently had a round of conversations with staff about modernising government, but I suppose the issue which has come out at the top of the list of concerns is the one you raise. My response to that has been that we cannot just respond with a load of waffle and rhetoric, we ought to think about what practical things we can do to help staff. That is not to say that we are not doing anything already. There are more people working part-time and people working from home for the Department. If you improve the IT links of people working from home—partly because the Permanent Secretary has IT at home—it does help to move things along a bit. So we have done some things, but I think there is more that we can do. You have got to look at what it is that causes the stress and the overburden in work first of all, and sometimes it is not the most obvious things. One of the things that people say to us is that, "I have to go to meetings which just last too long." A lot of people coming from outside say that to us and we are looking at whether or not we cannot second guess for how long a meeting should go on for. I do not think that a meeting should go on for longer than an hour, unless it is a monthly board meeting with a lot of things on the agenda. Another problem that people are saying is, "I spend a vast amount of my time now ploughing through e-mails every morning and a lot of those e-mails I should not be getting, but I have to open them to find out what they are about." So, have we got the e-mail processing right? Are we using e-mail effectively? Some people are saying, "It would be helpful if you show a little bit of concern about those key points in our lives." One of my favourites is that I think we should give people time off on the day when their kids start school. Sometimes it is a question of just showing that you understand the domestic pressures, and giving a little bit of support at times like that. You have got to convince people that you are open to new ideas. Finally, I will introduce arrangements which I hope will make it more likely that we will get the resources from the cool spots in the Department and not the hot spots, because not all of the Department is under huge stress all of the time. What we are sometimes not very good at is getting the people quickly into those parts of the Department which are under stress and, therefore, the people there are working quite ridiculous hours. Those are some of the practical things that I want us to focus on, because if we do not get this right, not only will people's performance suffer, but we will have difficulty attracting the people that we want.

Mr Derek Foster

  159. On the point about evaluation that you raised earlier on, I am very glad to hear what you said, but the employment zones seem to be wrapped up prematurely without being properly evaluated and fundamentally checked, and then the roll-out of the ONE service, which I must say I wholly approve of, seems not to be properly evaluated before a decision was taken for rolling-out the full merger of the two departments.
  (Sir Michael Bichard) I think the second is a broad issue which we have not touched on. What our experience with ONE and with the New Deal has shown us is that you are unlikely to get the quality of service that people now expect if you continue to have these two organisations separate. You were unlikely to increase your efficiency and reduce your overheads if they were working separately. You were actually unlikely to improve your record on preventing fraud if the two organisations work separately. You are absolutely right to say that we have not got to the stage of finally evaluating the ONE project, but we were convinced that we had enough evidence to decide to go down this route of a merged agency. There is an awful amount of work to be done. How it is going to be rolled-out, and the extent to which it is going to be ONE or an adaptation of ONE, we could not get into that detailed work until we had announced the intention to move towards a merged agency. We could not involve the people without putting it in the press. That is the stage we are at. So I think we have evaluation that has been done convincingly and that this is the way forward.


4  "Children of the Nineties" - the Avon Longitudinal Study of Parents and Children (ALSPAC). Back

 
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