Examination of Witnesses (Questions 20
- 39)
THURSDAY 11 MAY 2000
SIR ANDREW
TURNBULL, MR
JOHN GIEVE,
MS MARGARET
O'MARA AND
SIR STEVEN
ROBSON
20. Is it now the case that the 600 targets
are still there but some are more operational than others, is
that right?
(Mr Gieve) That is clearly so. If you take a look
at the Treasury's list of PSA targets, some are top priorities
to do with the fiscal policy, the meeting of golden rule, others
are of a more operational nature about how quickly we answer Parliamentary
questions, what we are doing about excessive hours worked, and
so on. I do not think it is a mistake for us operationally to
set ourselves some sensible management targets and some service
delivery targets, obviously some are of more strategic importance
than others.
(Sir Andrew Turnbull) We had the example of New Zealand
quoted before. They made exactly the same separation as we are
now making between PSA targets at a high level and the SDAs, Service
Delivery Agreements. They have a different vocabulary, Strategic
Result Areas and Key Result Areas. However it is the same distinction
between trying to focus on the big picture and then the particular
ways in which you are pursuing those objectives. It is not that
we have abandoned 400 of these targets, we have made clear a hierarchy
within them.
21. There is a hierarchy of targets now, is
that right?
(Mr Gieve) We have not published our revised PSA or
agreed them finally, however that is what we are doing at the
moment.
22. Some are more operational. The other admission
of failure was, "The radical nature of the agreements and
their immediate impact on departments", which is what I was
thought they were supposed to have, have "inevitably led
to shortcomings". Why was that?
(Mr Gieve) You should probably have asked the Chief
Secretary yesterday. If you look through all of the PSAs, and
we have been doing that over the last year, you can see a number
of points where there were gaps or improvements could be made
to the measures, or we could, as we said before, draw a clearer
distinction between the strategic business objectives and the
targets for how they are delivered. That is what he was talking
about.
23. Can we move on to the sanctions? His predecessor
said, "There should be zero tolerance of failure sanctions
for the worst performance". That has not happened in detail
either, has it?
(Mr Gieve) As we said yesterday, I think that was
a description of the Government's approach to public services.
I think we are doing that through setting up a series of sharper
inspections through the services for education, through the service
for health, and so on, and through our best value arrangements
for local Government. Through these PSA targets for central Government
we are trying to make explicit what people should be achieving
and what they are committed to achieve and to make public whether
or not they are succeeding. That process is going on. What we
said yesterday was there is not a rule that if you break your
PSA target you lose all of your money. That was never on offer.
There are penalties on managers who fail to perform.
24. What is the penalty? What is the ultimate
penalty, if not withdrawal of budget?
(Mr Gieve) For a manager?
25. Yes.
(Mr Gieve) It is their personal careers. We are all
on performance pay, we can be removed. If you look at schools
which have failed, very often the head teachers are removed. That
is the penalty for the manager, that is the right sort of penalty,
you do not want to penalise the children by removing the budget.
26. A criticism by Sir Alan Bailey in a memorandum
to this Committee is, "To make future funding is even more
artificial, either the targets will be too lax or the department
will plainly argue the failure to meet them need not imply inefficiency".
Would you agree with that?
(Mr Gieve) As I said, I do not think I would put it
that way around. As I see this we are making very large allocations
of money to all of the main public services and what the PSAs
are doing is specifying, on an agreed basis, what they will try
and deliver for that money, making that public and making them
account. That is introducing a new pressure, as Steve Robson was
explaining, on managers and on politicians as managers to deliver.
Of course there are risks in any negotiation if you do not get
the right early decision, if you do set the right target, if you
do not set it tightly enough. This is a process where we will
improve with time, when we will see what is possible.
27. Let us look at your own targets, how many
do have you in the Treasury?
(Mr Gieve) I have not counted them up.
Chairman
28. I think we know the answer.
(Sir Andrew Turnbull) Thirty-three, and some managerial
targets.
Mr Fallon
29. How many have you met?
(Sir Andrew Turnbull) I do not know the exact figure.
We are certainly on track to meet most of the main policy targets.
30. You are marking your own exam here, are
you not?
(Sir Andrew Turnbull) No, we are not. If you take
the golden rule, the ONS publishes the figures, you mark the exam,
the analysts mark the exam. Measuring whether we are closing the
gap in productivity between the United Kingdom and other countries
is derived from OECD statistics and ONS statistic. We publish
this and then other people can draw conclusions about whether
we have passed the test. If we make a claim that is not substantiated
we will be criticised. By and large, in the macro-economic field
we are dealing with national statistics which are published every
year and we are judged against them.
31. Let us take one of your specific targets,
the PSA target for Inland Revenue and Customs Closer Working.
(Sir Andrew Turnbull) Are you talking about the Treasury's
targets or Customs targets? I am not answerable to all of the
Customs targets. Customs is not part of Treasury.
32. You measure all of the targets.
(Sir Andrew Turnbull) You being the Government.
33. If you let me finish my question. The target
for Closer Working between Customs and the Inland Revenue; the
assessment in the report says "met" the comment is,
"The high level summary action plan has been agreed by the
Paymaster General".
(Sir Andrew Turnbull) Yes.
34. That is the end of it. How are we to know
whether, in fact, that target is being effectively met? You have
just told us this has been agreed by your own Minister.
(Mr Gieve) I am not an expert on the details of that.
You can say, "I am not satisfied with that as a report, I
want to have a list of the ways in which Customs and the Inland
Revenue are working more closely." I do not know if you have
put that to the Inland Revenue and Customs. I hope they would
be able to come back with some concrete changes that they have
made. I agree with you, that just saying that the confidential
plan has been improved does not end the story and there are supplementary
questions to be asked.
35. This comes back to Mr Beard's point that
in New Zealand these contracts are overseen by an independent
body, the State Service Commission. Is there not a case for some
independent validation of whether these targets are met, otherwise
you are box-ticking your own exam?
(Mr Gieve) As Sir Andrew Turnbull says, the out-turn
on many of these targets is a question of fact where the Government
is not marking its own exam. That is true about inflation, it
is true about the fiscal out-turn, it is true about unemployment,
it is true about exam results, and so on. However, there is a
question about whether we should have an independent validator
checking up across the board. I think there is a case for that.
The Chief Secretary, as you know, set up a group with the Chairman
of the PAC and the NAO to look at the function of auditors in
central Government and that is one of the questions they will
be looking at, as to whether the Audit Office or the Audit Commission
should play a role in running a rule over these targets.
36. Would you accept that the case for that
is probably even stronger for your own department?
(Mr Gieve) I do not think that it is stronger for
the Revenue than it is for other departments, but I can see the
argument. I think it could be exaggerated, in the main on policy
targets it is a question of demonstrable fact whether you are
meeting them or not. There may be particular internal targets
and there may be a case for an independent validation.
Chairman
37. Just before we come off the point about
the PSAs, there is one minor technical detailed point. You mentioned
that your targets were thirty-three. You number up to thirty-three
and then you stop numbering. From there we count them at seventeen,
we made fifty altogether. To get the record right, we do not know
why you stopped numbering them after thirty-three, we have gone
on counting after that, is that accurately done? This is page
12 and 13 of your Government Expenditure Plans.
(Sir Andrew Turnbull) I am not sure I know the answer.
I think it is to do with the way in which the objectives were
set. The first nine objectives are about our policy outputs and
the thirty-three targets relate to that. We then get on to the
things which are internal, we have not numbered those and added
them together. You obviously have done. That is the distinction,
basically, between delivery of the nine main policy objectives
and then the two management objectives.
38. The answer to Mr Fallon's question about
numbers is fifty.
(Sir Andrew Turnbull) If you include the management
objectives, yes.
Mr Fallon
39. In your memorandum to us you described the
various policy frameworks that exist for some of your key areas,
you have them for fiscal rules that occurred, and all of the rest
of it, but you do not have policy frameworks in some other areas,
do you? You do not have a policy framework in social policy?
(Sir Andrew Turnbull) No, we do not have a framework
of the kind that is similar to the Bank of England relationship
but the PSA agreement was getting close to that.
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