Examination of Witnesses (Questions 60
TUESDAY 1 MAY 2001
BICHARD, KCB, MR
Mr Derek Foster
60. May I turn to employment policy for a moment?
The Treasury takes very close interest in employment initiatives,
very often making the announcements themselves although some would
say that the Chancellor really prefers to announce all the good
news in this Government, I would not say that. Have there been
any tensions between the department and those other departments
involved in employment initiative intervention or would you say
that the machinery has been working very well?
(Sir Michael Bichard) I would certainly say the machinery
has been working well and the results almost speak for themselves.
That seems to me to be the test. That is not trying to duck the
issue. There is always some creative tension when you are discussing
with other departments, certainly with the Treasury, the direction
of future policy. That must be so. That is good.
61. Dr Thompson is a poacher turned gamekeeper
or the other way round. Would you like to comment on that?
(Ms Thompson) I would endorse what Sir Michael has
just said. There are different perspectives in developing new
policies around the welfare to work area. I have been in the Treasury
and the DSS working on these areas and yes there are different
perspectives and creative tensions. Fundamental disagreements,
splits, nothing like that; no, I have genuinely no experience
Mr Derek Foster
62. On a rather more detailed issue, the Government
came to power criticising the claimants' cut and saying the ILO
count was the one which should be sharply focused upon. The Employment
Sub-Committee looked at this fairly closely and we agreed with
that. The Chancellor and perhaps the Secretary of State began
to fall into choosing the claimants' cut when the number of vacancies
by chance almost equalled the number of people on the claimant
count. We issued the report very strongly saying that it should
be placed within a different context. The Government now persist
in using the claimant count. Is there anything which can be done
(Sir Michael Bichard) I am not sure the Government
insist on using the claimants' count. The Government uses the
wide range of statistics which are available every month, the
claimant count, the ILO count, the number of people in employment,
wage and salary movements. What the Government is trying to do
is to provide a broad picture of the situation. To go to one to
the exclusion of the other or to the exclusion of the other three
or four does not give you that same picture.
63. I agree with that except that most of the
press releases hone in upon the headline "claimants' count"
that I am aware of.
(Sir Michael Bichard) I do not have that in front
of me. One has to say that the British public and the British
media over many, many years became wedded to the claimant count
as the measure and I suspect that is still how the media will
cover it. Maybe as that has happened Ministers have almost become
resigned to it, but let us be clear, we are presenting every month
a broad range of statistics which I think gives a balanced picture
of what is happening in the labour market and a much more balanced
picture than probably we ever had in the past. I would be as concerned
about the movement in the number of people in employment as I
would about any other statistics.
64. We are politicians around this side of the
table and some of you are politicians on that side of the table
though you may not admit to it. I fully understand why the Government
prefer the claimant count because it looks as though the problem
of unemployment is being solved and it is also quite easy to shift
the blame on the unemployed. The next unwritten answer is that
there are enough jobs to go round therefore the unemployed should
get up and take the vacancies which are there. The Government
came into power being very much against the whole of that kind
of attitude. All of their policy initiatives have been within
the frame of saying this is not the fault of the unemployed, there
are complex barriers as to why people do not take the jobs which
are there, they are not in the right place, they are not at the
right level, blah, blah, blah. There is a public atmosphere. We
talk now as though we have achieved full employment. When I was
at school, full employment was two per cent, 300,000 throughout
the whole of the country. The Government have committed themselves
to full employment in every region, but there is this ambivalence
and the headline is always the claimant count vis-a"-vis
(Sir Michael Bichard) The Government do not claim
that they have achieved full employment, indeed the Green Paper
we produced recently holds out the hope for full employment at
some time in the future if you define that in terms of employment
opportunities for everyone; actually not in the immediate future,
some time ahead. I do not think the Government are claiming that
they have achieved it. Certainly the Government have emphasised
better than I do the balance between rights and responsibilities
and an expectation that people who can will look for work, but
that has also been set in the context of employability. That is
that we are not forcing people to take any job, we are seeking
to increase levels of employability in the labour market. That
is the whole basis of New Deal and as we extend New Deal beyond
25-year olds it is more the basis of the whole of the employment
policy. I am not sure I can agree with you completely.
65. I did not expect you to. The Working Age
Agency, which is now to be called JobCentre Plus. Can you just
briefly tell us what the major administrative challenges of merging
the Employment Service and the Benefits Agency will be?
(Sir Michael Bichard) I think if Mr Lewis were here
he would say and he would want me to say that there has probably
not been a bigger challenge since the Second World War in terms
of changes to Government's delivery system. We are bringing together
here two very large organisations, or the whole of one and a major
part of the other, probably 80,000 staff involved. They have different
cultures, one very much focused on the labour market with a work
focus, the other more focused on benefit payments and support.
As we found when we merged employment and education, which was
actually a much smaller system, one of the most difficult things
was when you have two such different cultures. You couple to that
in this case some of the most complex IT systems that we have
in the public sector which have in the past caused their own problems,
particularly, because I used to be the person running it, in the
DSS and in the Benefits Agency. If you pull all of that together
and you add in a few flavoursome additionals like Social Fund,
you have a huge task on your hands. No-one should underestimate
Mr St Aubyn
66. David Normington mentioned earlier that
we have one of the most devolved systems in the world for school
budgets. Does not the experience we have seen in my constituency
of devolving the management of the school at King's College suggest
that this process has further to go? Do you not agree therefore
with moves to give more flexibility to schools over their structure
and support arrangements as well as over their funding?
(Mr Normington) As you probably know, the specific
Surrey example is mentioned in the Government's Green Paper
67. And we welcome the belated acknowledgement
by the department of our initiative.
(Mr Normington)as a potential model for improving
weak and failing schools. I suppose the answer is yes, that is
a possible route. The Green Paper, which is a consultative paper,
sets out a number of options for improving the way in which schools
are managed and increasing the types of management and the different
sorts of arrangements. The example in Surrey is a very interesting
one because it has grown out of a successful school. It is a school
which wants to go on and improve other schools. That seems to
me quite an interesting model.
68. This has been a longer session than you
expected because of the Division but I want to end on one or two
short points. Given the monitoring job this Committee does on
your department, we understand that there are going to be changes
in the Public Service Agreement targets and we wondered what those
were going to be and why you are changing them.
(Sir Michael Bichard) Following the last spending
(Sir Michael Bichard) I find it a difficult question
to answer. We discuss with the Treasury at each review what the
Public Service targets should be and clearly as things develop
so they change. For some of them we maintain the overall framework
but increase the level of the target. Sometimes there are changing
priorities which suggest that completely new issues should be
brought in. Is there something particular you want to focus on?
70. The word has come to us that there has been
a profound change in the qualitative nature of the targets, a
real change in the basis. Is that true?
(Sir Michael Bichard) I did not think it was. I thought
other people, including the Treasury, were beginning to realise
that it is best to have targets which are measurable. I thought
ours were better than most in that respect and maybe they are
a bit better now than they were the year before.
71. Steady as you go in terms of performance.
(Sir Michael Bichard) They are very challenging targets
and there are some changes but I did not think we were adopting
a different approach to them this year.
(Ms Thompson) There are some additional targets. There
is also a change in the structure of the arrangements which makes
it look more complicated than it is to the extent that the Treasury,
with departmental acceptance and agreement, thought that the original
1998 Public Service Agreement was much too big, it had much too
many detailed targets as a top tier. What they decided to do and
what has indeed happened was that there are now supporting subsidiary
service delivery agreement targets within the departmental PSA,
which pick up some of the things which may appear to have dropped
out of the top tier PSA. So there is a change in presentation
but there are also changes in the numerical values to make the
targets more challenging, and some changes of emphasis.
72. You do not know what is going to happen
to the structure of the department, but what about the annual
report? Have we seen the last annual report? What is the intention?
Is it to continue with annual reports as before?
(Ms Thompson) There will be changes in the annual
report. You will have noticed this time we have the departmental
estimate at the back of it taking up many, many pages of tables,
which is a development associated with the reforms around resource
accounting and budgeting. There will be further backward looking
departmental reports as well as forward looking reports embracing
and containing the estimates. You have not seen the last of it.
73. Sir Michael, you have shown no indication
today at all that you are demob happy, as they used to say. May
I give you one last opportunity? I understand that at your performance
at the Committee of Public Accounts on what you thought might
be the final performance but which proved to be the penultimate
performance, you made suggestions and when the election was not
called on 3 May they had another session and brought five permanent
secretaries back to look at the issues across the piece. Not many
permanent secretaries get such a fast reaction from a Select Committee.
In terms of the relationship you have had over the years with
this Committee, is it for you a beneficial experience coming before
this Committee or is the relationship a good one, a poor one?
We have been trying in this Committee to change. Only last week
we called witnesses back from our Early Years Inquiry to find
out what they thought of our inquiry. We asked them to take it
through and not just do the inquiry, put it on the shelf and leave
it. We are trying in quite innovative ways to change the nature
of the success in operation of Select Committees. I am not suggesting
you are demob happy but are there any words of wisdom which you
want to impart to the Committee?
(Sir Michael Bichard) I hope that from what I said
at my first valedictory at the PAC you will appreciate that I
do not say things just to placate the Committee because I was
fairly critical about the way in which the PAC operates. I do
think this Committee manages to engenderas I suppose to
some extent you would expect because it is not the PACa
different atmosphere. It is more of an exchange. It is constructive.
It does not have a feeling of being a bear pit and that is all
to the good. I think you are, if I may say so, trying some innovative
approaches. It is always difficult with a departmental report,
being honest as an official, because there is a huge amount of
briefing which one needs to consume to be in a position, however
much control you think you have of a department, to answer the
questions you might ask. That is just something we have to accept.
You need to understand also the amount of time that goes into
preparing for a meeting like this. At the end of the day you are
dependent upon the quality of support you get. I know this Committee
is quite fortunateI do not just say it looking in the corner.
Personallythis is an entirely personal viewI do
believe that there is room to have a look at how well supported
Select Committees across the piece are because it is not in our
best interest as officials coming here or going to another Select
Committee to find people who have not been well advised, well
supported and well briefed, because actually you tend not to focus
on the issues which really matter. There is nothing worse than
doing a lot of work and then going away and wondering why on earth
we focused on those issues which clearly are not at the core of
what matters to the department. If I may say, without being unduly
flattering, an entirely positive set of comments for this Committee
and I am hugely grateful for the courtesy with which you have
always treated me.
74. That is a very good note on which to end
our deliberations. Thank you and the best of wishes.
(Sir Michael Bichard) I may of course
be back in a different guise as head of an HE institution.
Chairman: May we wish you well in that new work.