Examination of Witness(Questions 80-99)
THURSDAY 14 NOVEMBER 2002
80. It is entirely civil servants in the unit?
(Sir Michael Bichard) It depends on the department
but normally, yes. If one takes it forward to my experience in
the DfEE where I was on the other side, I was negotiating the
targets with the Employment Service and I hope, therefore, that
we were significantly more sensitive to operational needs there.
We were trying to introduce more people from outside the Civil
Service, so there were one or two people there who had experience
outside, but normally it would be civil servants.
81. I am sorry to pursue you on this but I have
not got to the crux of the matter myself, and maybe it is my not
very mega brain. Okay, the unit comes forward with a draft set
of targets, let us say,
(Sir Michael Bichard) There is a conversation which
will go on and the unit will then set a proposed set of targets
for the agency, the agency will say "we cannot possibly do
that" or "there are too many of them" or whatever,
and there is a negotiation that goes on, then this piece of advice
that will go up to the secretary of state, hopefully agreed, but
remember that the big agency chief executives report directly
to the secretary of state and therefore have the ability to send
up a dissenting note if they want.
82. Again, when you were permanent secretary
in the Department for Education and Employment, were you in at
the very beginning when the unit was formulating the targets or
did you come in half way through or at the end? Was there some
to-ing and fro-ing?
(Sir Michael Bichard) My recollection is in that department
what we tried to do was to have a strategic discussion at the
outset with the agency about what were the key target areas and
the agency staff and my staff in the department would then talk
about the detail and I would get involved at the end in a discussion
with the chief executive as to whether we had something which
we both felt was stretching but achievable. That would then go
up as advice to the secretary of state.
83. I think you were permanent secretary in
both the first and the second Comprehensive Spending Reviews.
Could you say something about that? I am interested to know how
the Comprehensive Spending Review came into being and I am looking
at it from one particular department, your department.
(Sir Michael Bichard) How it came into being or why
it came into being? I think it came into being because of a desire
to produce more stability in the financial process.
84. A three year period rather than a one year
(Sir Michael Bichard) A three year period rather than
a one year period. To some extent that has been successful. I
think it was probably in the second round that there was an attempt
to include targets to have an agreement, a Public Service Agreement,
explicitly and to publish that and then to monitor it. As I said,
I do not disagree with that. I think the Treasury is handing out
the money and it ought to be clear with the departments about
what the money is being spent on but that ought to come out of
a wider business planning process and those targets ought to be
about outcomes and they ought to be targets which you can influence
the delivery of. Certainly in the first Comprehensive Spending
Review a lot of the targets if you looked across government, if
you looked at the Treasury's targets as well, were pretty process
orientated, they were about doing things rather than achieving
things. If you take into account all of those caveats it is a
process which I do not disagree with. I do not think the monitoring
has been as strenuous as, I was going to say I would have liked
to have seen, I probably did not want to see as a permanent secretary,
but as I would have expected.
85. So you would agree with the Chancellor when
he said in the House in July 1998, obviously the time of the first
Comprehensive Spending Review: "The purpose of targets is
to ensure more resources are given directly to front line services"?
Would you entirely agree with that? Am I perhaps quoting him out
(Sir Michael Bichard) I do not know, I do not know
what the context was.
86. It was the first Comprehensive Spending
(Sir Michael Bichard) I do believe that if you are
going to devolve more resource and more responsibility to the
front line, wherever it is, then the performance of that front
line does need to be transparent, you do need to be able to hold
it to account. If that is what he meant then I agree with it.
I think it is very dangerous in a large system to be devolving
resources and responsibility and power to people without being
able to measure how effectively they are using it and how successful
they are being. If you look at the education system in the 1970s
and 1980s I think you have a perfect example there of huge amounts
of money being devolved to professionals without any real targets
and without any real way of measuring what was happening in the
system and it was a long time before we realised that on things
like literacy and numeracy the standards had actually gone through
the floor. I think targets and measurement are very important
as a step towards more devolution, I do agree with that.
87. Just before we lose that particular point,
I think 152 was the number that you
(Sir Michael Bichard) I may be wrong by one or two.
88. Let us say 152, just so we get an idea of
what you are saying. The argument is that there are too many targets.
What would be a reasonable number for an agency?
(Sir Michael Bichard) For the Employment Service we
tried to keep it below ten. If you have got 30,000, 40,000, 60,000
staff, how on earth do you communicate 152 targets? In a way what
you have to do is to focus in on what you think are the priorities
but then you leave yourself vulnerable to being told that you
have not given enough emphasis to one of the other targets.
89. If we were talking about a department and
not an agency?
(Sir Michael Bichard) I think roughly the same. We
had a business plan in the DfEEyou can get a copy of itand
again we tried to keep it to ten or a dozen priority targets for
90. It has been said that targets are a very
useful vehicle for initiating change, but the longer they go on
they become less useful, it is the law of diminishing returns.
Do you subscribe to that?
(Sir Michael Bichard) I do not believe that targets
as a process lose their impact but I did say that if you do not
refresh your targets then you are in danger of disorderly behaviour
and people will see them as just routine. It would be a very odd
world, would it not, if we had the same targets year on year on
year in any event because the pressures upon you and the priorities
are different so your targets should be different. I think they
do need freshening up from time to time.
91. You say that targets tend to be within departments?
(Sir Michael Bichard) Yes.
92. If I could use an example, and it is specialist
schools, if there is a proposal from the government, a quite reasonable
proposal, to meet government educational targets but the consequence
at local level is more increased traffic, which means the DETR
does not get its target of reducing car usage, how do you get
that cross-departmental target and avoid those unintended consequences?
(Sir Michael Bichard) You have got to identify what
are the priorities for cross-departmental working, what are the
priority issues, otherwise you just cannot manage this process.
There is a lot of strength in what you are saying and that is
one of the ways in which you can encourage cross-departmental
working, cross-sectoral working, is to have joint targets that
go across the boundaries, I think even more if those targets are
linked to reward which people can earn by working better with
other departments or with local authorities. There are some examples
of that but there are not that many. There is a package of things
that you could do to encourage that cross-departmental working:
joint budgets, joint targets, ministerial champions, all of those
things. They happen but I do not think they have gone as far as
I would like.
93. So if you are measuring a target and you
see unintended consequences happening as a result of work towards
that target, what do departments do about rectifying it, particularly
if that unintended consequence is somebody else's problem?
(Sir Michael Bichard) Is somebody else's problem?
94. Either the health service or another department.
(Sir Michael Bichard) The responsible thing to do
is to revisit the target and if it is a sufficiently significant
issue that you have identified to revisit it in year. You need
to be careful about that because if you set targets then people
expect to work to that target for the period that you have set
it. If it was a really significant issue you would need to revisit
it in the year, even if the problem is not yours but someone else's
in the system, certainly otherwise you must revisit it at the
end of the year and you should be discussing that with your partners.
That is the theoretical answer, is it not, really. Whether or
not that happens sufficiently is for others to decide.
95. It did not happen with you when
(Sir Michael Bichard) I do not think I have got any
specific examples where I can say to you that a target was not
revisited because it was causing problems for someone else but
not for us, so I cannot say that, but human nature being what
96. One of the things that has come up is the
number of bodies to measure targets. What do you think of the
monitoring process? Are there too many bodies looking at targets
at the moment?
(Sir Michael Bichard) I do not know whether I am as
concerned about the number of bodies, although there are a lot,
as I am about the bureaucracy that surrounds some of the processes.
Their work in terms of standards, regulation, should ultimately
be improving the delivery of service. Once you get to the point
where it gets in the way of improving that delivery of service
and stops people doing their real work then I think we have a
problem. In some cases that has been the case. I have a problem
with some standards inspectorates who have been more concerned
about blame than they have about learning and I think that brings
the process into disrepute. I have a slight concern about the
way in which government seems to find these inspection organisations
a good thing for others but not necessarily a good thing for itself.
I look with some amusement at the moment at the way in which everyone
is lauding the Comprehensive Performance Assessments which are
being used by the Audit Commission in local authorities. I was
actually rather impressed with the way in which the Audit Commission
had gone about that task and I would love to see the same thing
happening in government departments. If it is good for local authorities,
why is it not good for government departments?
97. CPAs for every government department.
(Sir Michael Bichard) Yes, published. I was saying
when I was in government, just so you do not think I am changing
my position, that we needed, and I was then suggesting the NAO
should do this, regular reports on the management performance
of government departments which were published and which were
discussed at inquiries like this. What we get actually are reports
on ad hoc issues, we never get a published report on the management
capacity of individual departments and their performance; you
do on local authorities now.
98. One final question which is that targets
tend to be about efficiency, about making sure that the departments
are actually delivering. If you want to move to public services
that have lots of choice that implies that you have inefficiencies
in the system. How do you square choice so, for example, all the
schools are full, the schools have a choice and not the parents?
How do you square inefficiency versus choice?
(Sir Michael Bichard) It is a very interesting point
and one I have thought more about recently. You are right, if
you are going to have that level of choice in the system then
there has got to be some spare capacity in the system, that is
how choice works, and therefore you have got to be prepared at
the outset to invest in some spare capacity in the system and,
therefore, you have got to have that policy strategic debate at
the outset. I am not sure I see it as tied closely to the issue
of targets, I think it is a major strategic issue.
99. Why did you leave?
(Sir Michael Bichard) I was not expecting that question
Chairman: Ian is a military man, he has a direct
way with him.