Examination of witnesses (Questions 140
TUESDAY 16 MAY 2000
and MS HELEN
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
(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
(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?
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
(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 Departmentalthough 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 stillI know you have made reductionstoo
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.
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
149. How many targets do you have in your Department
(Sir Michael Bichard) You are asking me about Public
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.
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
(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.
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
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.
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
(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 homepartly because the Permanent Secretary
has IT at homeit 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.
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