Examination of Witness(Questions 66-79)|
THURSDAY 14 NOVEMBER 2002
66. Could I welcome Sir Michael Bichard as our
witness this morning. I am tempted to say once more meeting like
this because you are a regular attender at our sessions, for which
we are very, very grateful. The fact that we keep asking you back
means that we like what you say, or at least you challenge us
with what you say. I suppose we thought that now you are a free
man you might speak even more freely to us than you had been able
to before. Whichever inquiry we are on we seem to want to know
what you think about it. We are now doing an inquiry into targets,
measurements, league tables, all that kind of thing, government
by measurement. We want you to tell us your experience of working
that system, what you think about it and any alternative approaches
that may be helpful. I think you have something to say to us by
way of introduction.
(Sir Michael Bichard) I thought it might
be helpful if I just said a few words around targets and tables
and we can take the discussion from there. I am not going to go
through this line by line but basically what I am saying is that
I think targets and performance tables and measurements have an
important part to play in improving public services. That is because
they focus energy and effort and they enhance accountability but
both of them, I think, carry risks and dangers, which is obviously
why you are having this inquiry. I think it is important to learn
the lessons of experience. As far as targets are concerned those
lessons are, amongst others, that targets are best if they are
set by people who have actually been involved in delivering operations
and targets, and that is not always the case in government. I
think, and I am sure that you have come to this conclusion anyway,
that they should be small in number. I say that with the benefit
of experience having led the Benefits Agency for five years which
had 152 targets. It is quite difficult to focus 65,000 people
on 152 targets. I think that they should be largely outcome based
and certainly not about process. They should be measurable and
they should be expressed in terms of client needs. I think too
many public service targets do not address the client need and,
therefore, do not have much ownership from clients or from staff.
Obviously, and again it is a basic point, they should be stretching
but achievable. It is important because unrealistic targets do
not raise performance, they just demoralise people and sometimes
lead to poorer performance than you started out with. There are
several points around review which I think are quite important.
The way in which the targets are formulated needs to be regularly
reviewed because over a period of time any target can begin to
distort behaviour and over time any target can be manipulated.
I think the formulation of the targets needs to be regularly reviewed
and regularly refreshed. I think also the management of the targets
itself needs to be regularly policed and audited because especially
if you are linking targets to paying bonuses then there is an
incentive there for people to fiddle the targets to enhance their
salary, therefore there should be clear auditing arrangements.
We had serious problems with the Employment Service many years
ago when there was less than honest management of the target regime
that was in place at the time and the Chief Executive had to be
very brave in saying "This is not acceptable. We are going
to root this out and approach these in a totally honest way".
I think targets have got to cover all levels of delivery. It is
absolutely hopeless to set a national target and then just tell
local delivery units to go away and achieve those because they
have got no idea what that national target means in terms of their
performance, what they need to do to improve so that the national
target is achieved. I think you need the target set at all levels.
They should not be so detailed as to strangle any scope for creativity.
Once you get really detailed targets which prescribe precisely
how things should be done rather than what you are expecting the
outcome to be then I think you take away the scope for innovation
and creativity which seems to me to be one of the great keys to
public service reform and improved service delivery, which I actually
think is a major problem in this country at the moment. The lack
of creativity in public but also private sectors is a real issue.
The targets need to be owned by staff. That means you need to
involve staff in setting the targets. They need to be influenced
by clients and by the wider community, so consultation with staff
and community consultation is very important. Obviously they need
to be rigorously monitored and reviewed. I say "obviously"
but I think senior management can send very strong messages by
personally being involved in reviewing the performance against
targets and making it absolutely clear that the senior management
is committed to delivery. I think there are only two other points
to make, and they are more general points but they are really
rather important. I do not believe that targets can ever tell
the whole story. They are important, they can be a good focus,
but we should never believe that they can tell the whole story.
Some people say the problem with targets is that they deflect
attention from all the other things that are going on in an organisation.
There is that danger but without them I think people are unfocused
and tend to concentrate sometimes on the trivialities, the things
that matter to them personally which are not necessarily what
matters to the client and the organisation. On balance, again,
I think targets are a good thing but they cannot tell the story.
Finally on targets, and I know this is almost a waste of time
making the point, I do worry about the media response to performance
against targets. If I was in government I think I would be increasingly
cautious about setting explicit targets simply because I think
the media response to a target which is missed even by a small
amount is that this is a complete failure. I do not think in the
private sector and in the best parts of the public sector that
is how it would be perceived, and that is not how it should be
perceived. If you are setting stretching but achievable targets,
probably 50 per cent of the time you are going to miss them, hopefully
just, but you will achieve a great deal more than you would have
done if you had not set them. I think the media response to things
like literacy and numeracy targets, you will not be surprised
to hear me say it, saddens me. I do not want to say much on performance
tables, again I think there are advantages and disadvantages.
They are powerful but then weapons are powerful and they can do
good and they can do harm. I think they can encourage better bench
marking, a sense of competition, which I still think is important
in a largely monopolistic system. They do enable clients, customers,
citizens, whatever you want to call them, to ask questions and
I think we in the public service should be prepared to provide
answers to reasonable questions. On the other hand, it is quite
difficult for tables to take account of external factors. The
particular local social pressures are often not reflected in national
performance tables and they do not very effectively measure the
distance travelled by a delivery unit. It is too easy for those
delivering in areas which do not suffer deprivation to be always
at the top of the table and therefore feel pretty complacent,
but on many occasions they are not stretching themselves. Tables
can be demoralising for some because they do not reflect the pressures
under which they work and they can encourage complacency in others.
Of course they need to measure the things that matter and the
data on which they are basing these needs to be reliable. There
are advantages and disadvantages. I still believe that they have
a part to play in enhancing accountability. I think they have
played quite an important part in enabling people, parents not
least, to ask some questions which ten, 15, 20 years ago they
could not ask.
67. That is really very, very helpful. Thank
you for giving us the note too. I suspect all those issues we
shall want to pursue in so far as we have got time to do that.
Can I just pick up on the very last point you were talking about
because of your own particular experience. I have been reading
a letter that I have had from a primary school head teacher in
my constituency. She is a dynamic head, came into teaching mid
career, absolutely committed, all the school leadership qualifications
in sight, works in a primary school in an ex-pit village with
committed staff, gets brilliant OFSTED reports and then she writes
"Every year we get the SATs tables published and our school
is utterly demoralised again and it sets us back, all the stuff
we have done during the year". How do I write back to her?
(Sir Michael Bichard) I think you write back sympathetically.
I will not preface every answer with this but Members must appreciate
I no longer work in school based education, I am no longer in
government, I have not been for 18 months, and therefore the answers
that I give are personal answers.
68. That is what we want.
(Sir Michael Bichard) I would be sympathetic. I would
like to thinkI am not quite sure where the department is
on thisthat we could move to a position where league tables
reflect the value added because I think it is sad that some of
our really good schools operating in the most difficult circumstances
do not get a chance to shine because the kids are coming from
backgrounds which make it very difficult for them to deliver academically
as well as some other children. I would like us to be moving towards
added value, so I would rather you find out where the department
is in terms of that because there is work going on.
69. We have been talking about value added for
years and years and yet we still have the crude league tables.
(Sir Michael Bichard) I think you can have both. I
am not suggesting that value added should take over entirely but
I would like to see some value added statistics reflected. It
does take a long time to get to that point because you need a
long reliable run of data and, of course, until the early 1990s
we were not keeping data because people said you could not measure
what really mattered in education. The thing that one has to say
to head teachers sympathetically but firmly is that for a very
long time parents and others with an interest in the system had
no way of asking questions about performance of the school. It
is difficult in those circumstances but I think heads need to
be robust in answering those questions. I know how difficult it
is but if I were her I would be seeking over a period of time
to get the press and the community to fully understand the pressures
that she is facing so when the results came out particularly the
press were covering it in a mature and responsible way. Locally
I think that is possible, local press tend to support local schools
and are more likely to attack government and attack the fact that
there are performance tables. I do not think it is a lost cause
in trying to develop an understanding locally of the pressures
under which you are working and the value that you are adding
and the progress that you are making. I am sure that head over
a period of time has made progress and she should be putting that
into the public domain as well.
70. Thank you for that. I will try a letter
of that kind.
(Sir Michael Bichard) Give her my regards but preferably
not my mobile number!
71. I am interested in what you said about the
Employment Service and basically the cheating around targets.
We have had the recent report through the Guardian of the
cheating around SATs. Is it the case that if you have a target
regime cheating is endemic to it, or is it just the case, as you
said in your opening remarks, that we need better policing?
(Sir Michael Bichard) Human nature is human nature
and I think there will be some people with a large organisation
who will look to find ways of manipulating, if not cheating, targets
and therefore you do need to have systems in place which ensure,
in so far as is possible, that is extremely difficult and you
are checking up on it. I do not think there need to be sophisticated
audit checks but people need to know that checks are being made.
Nothing comes without risk, as I said at the beginning, so there
are risks. I do not think it is inevitable but sometimes we have
not put in place all the systems which are sufficient so we have
ourselves to blame. I think it can be policed adequately.
72. Let me ask one last thing before I hand
over. When I read you over the years and I listen to you today,
a sub-textnot a sub-text, a texta text always is
that there are people around government who do not really understand
how organisations work, they have never really done it. I suspect
that you have got your eye on some of the young scribblers in
Number 10 and you have probably got your eye on the Treasury.
When you wrote about this some time ago you were talking about
the PSAs, and of course that is code for the Treasury, and you
said "PSAs are an irrelevance to the best managed departments
and no more than an irritant to the rest".
(Sir Michael Bichard) I think they were, I do not
know what has happened in the current round, which is where I
am not as helpful as you would want me to be. Let me cover some
of those points. I have not complained about the "scribblers",
as you put it, at Number 10. I always worked pretty well with
them and I think they are high quality people, it is often a question
about getting them involved at an early enough stage. I do not
complain about that. What I do complain about very firmly is that
I do not think there are enough people at the centre of departments
who understand the issues that we are talking about today. I do
not believe that they have sufficient sensitivity and experience
of operational delivery, for example, to be able to set targets
of the kind that I have been talking about. Looking back on it,
it looks to me rather like a holding company which is almost entirely
populated with people who have never actually managed on the ground
and that is quite a dangerous situation. It is really the centre
of departmentsI am sure that all of this has changed dramatically
over the last 18 months since I last experienced itwhere
I have most concern. As far as the Treasury is concerned and PSAs,
my concern about PSAs in their early form was that they were almost
being presented as a substitute for business planning, that really
all you needed was a small set of targets, they were in the PSA
and you got your comprehensive spending money and then they were
reviewed. Unless they were, as I have put it, dropping out of
the business plan, unless you did the background work which enabled
you to focus down on this small number of key targets then many
of them were just cobbled together to buy off the Treasury. I
do not think that was an adequate response. The way in which they
were monitored thereafter was not as rigorous a system as I was
suggesting in my opening statement that you should have. As I
say, that may have changed but what I wanted to see in place was
in every department there to be a very focused business plan from
which would fall out your small number of PSA targets and your
business plan would be managed, monitored rigorously within the
department and the Treasury and the Cabinet Committee would monitor
rigorously your performance against your PSA targets. I think
a lot of the words were in place, a lot of the rhetoric was fine,
but I did not find that the process often matched the rhetoric.
Chairman: Very good, thank you.
Sir Sydney Chapman
73. Sir Michael, if I may say so you continue
to have a fascinating career. I remember you as Chief Executive
of Brent at one time, I think.
(Sir Michael Bichard) Thank you for reminding me of
that, Sir Sydney.
74. It is an area where I have the privilege
to represent but not in the same borough. In 1990 you were appointed
chief executive of the Benefits Agency.
(Sir Michael Bichard) Yes.
75. When were you appointed permanent secretary
to the Department of Employment?
(Sir Michael Bichard) Employment in 1995 and the joint
department at the end of 1995.
76. So you were not chief executive of the Benefits
Agency when these 152 targets were set?
(Sir Michael Bichard) Yes, I had 152 targets.
77. You had 152 targets?
(Sir Michael Bichard) Yes.
78. They were just presented to you, were they?
What I am fascinated to know from your great experience is can
you tell me a little more how targets are set. If we are going
to judge whether targets are a good thing or not we have got to
know if it is the politicians who take the lead in setting them
or the civil servants or whoever. What I am interested in is even
if it is the politicians or the civil servants there must be an
inbuilt incentive not to set the targets too rigorously or too
high, must there not?
(Sir Michael Bichard) I never found that a problem
in what was then the DSS. The arrangement thenwe are going
back several yearswas within the centre of the department
there was a group, a unit, whose responsibility it was to both
monitor the agency and negotiate with me, the agency, on targets.
It was there that I felt there was a lack of capacity or a lack
of understanding and therefore a desire to have as many targets
as you needed to cover everything that the agency was doing. Those
were then presented to politicians who would sign them off. I
think politicians, secretaries of state, should be involved ultimately
in agreeing those targets but it is very difficult for a secretary
of state to say "actually I think we should reduce the number
of targets. . .." I will leave it at that. I think one of
the problems when you have got 152 targets is not just that it
is difficult to focus your people on things that matter, you do
lose sight of the things that matter. If you take the old DSS
situation, for example, one of the key issues in managing that
was the priority between accuracy of payment and speed of payment.
There is a debate to be had as to what was the trade-off between
speed and accuracy because the faster you made the payments the
more likely it was that under an incredibly complicated system
they were going to be inaccurate. It is very difficult to have
that debate. There was a great drive from the centre of the department
to have accuracy times which were ratcheted up every year and
speed times that were ratcheted up every year because you just
could not have a target that was not better than the one you had
last year. It is that kind of situation that causes targets to
fall into disrepute in the end, I think, because the people on
the ground knew damn well that we could not deliver the income
support target in five days and do it to a degree of accuracy
in 95 per cent given the system that we had.
79. Targets are begat in this unit in the department,
does that unit consist entirely of civil servants or is there
any political input, say the minister's special advisor or whatever,
in that unit as well?
(Sir Michael Bichard) I think in most places there
would not be a special advisor involved at that stage. A special
advisor might well be involved in looking at the proposal that
goes to a minister and might say "this looks as if it is
a reduction in performance, that is going to be a bit difficult
for you", but not at the early stage of negotiation, no.