Examination of Witnesses (Questions 60
WEDNESDAY 26 JUNE 2002
60. We have actually got that saving that was
promised, on opening this?
(Dr Thompson) It is on the budget, yes. I think, from
memory, it is £52 million less than the budgets would have
been, had we gone on with the old system.
61. The £50 million saving, even though
apparently you gave them £25 million extra?
(Dr Thompson) That is absolutely right, yes.
62. So you are still saying it is over £50
million, despite the increase?
(Dr Thompson) Yes.
(Mr Normington) We said we would do that.
63. I am a school governor, and one came very
concerned to my surgery only last Friday. You are the people who
hold the purse-strings, and you have just explained how you have
faced real problems in adjusting your huge budget. Many of these
school governors are volunteers, with huge financial problems,
in their perspective, and are really angry at what they are reading
and seeing. Do you not understand how difficult it makes life
for the voluntary school governor, doing the best for their school,
who learns about £1.3 billion; they are desperate for just
enough money for another teacher?
(Mr Normington) I do understand that, because I have
experienced it directly several times, and you can tell from the
discussion that we have just had, it is very, very difficult to
explain why it has happened to a school governor in that position.
And I do understand that. I do try to explain it, and sometimes
it works, but there is a long gap between the explanation we have
given and the experience of a school governor. I hang on to the
point that is true, which is that the money that we have, that
Parliament has voted for schools, is going to schools and is being
spent by schools; but underspends are not principally on schools
64. It has no effect at all, to discuss it with
a governor who is a governor of a school in a very difficult area,
for whom that money would make a huge difference to the life of
the children at that school. And I think, quite honestly, you
ought to send these people, these middle managers, whoever they
are, and the budget that you want to improve, into a governing
body meeting, actually to sit with them and understand the pain
of the decisions which they have to take, without all the expertise
that you have got in your Department?
(Mr Normington) I do understand that. I have been
to school governor meetings, so that I have experienced that myself,
and, of course, a lot of our staff are school governors as well.
So we do know that, we do get that back. All we can do is go on
trying to explain it. But £1.3 billion is a lot of money.
We did reallocate some of it at Budget time, and most of the reallocation
was to schools; it was a reallocation of money, that was not originally
voted for schools, to schools. So I can show them that we are
now trying to make sure that if there are genuine underspends
they are reallocated in that way, and they should feel the benefits
of that, in terms of more support. And two areas of money were
more money for capital and more money to support behaviour, truancy
and to tackle street crime; those were two particular priorities.
65. Can I just say, I think this illustrates,
at a very specific level, the whole need of a Department, and
not just Ministers, to be more in touch with and more accountable
to those people who work in the school system; and I take the
schools, and we could take FE and we could take higher education.
The dialogue between the Department and those people who, in effect,
are delivering for you on the ground, has got to be to use a phrase
that I do not think is particularly good, `transparent', but there
has to be a human dialogue going on. You have been very open with
us, in saying that you have been to a school governors meeting;
unfortunately, of course, there are thousands of them going round
and for every one that you attend or are at. So somehow and I
just hope, can you give us any way in which the Department, in
future years, will begin to address the need for a better dialogue,
a better relationship with those people delivering, and that is
not just the teachers, it is the governors, it is the school caretakers,
it is the college principals, all those people, who are actually
delivering the service?
(Mr Normington) I am personally absolutely committed
to trying to take us further down that road, of talking and explaining
and listening to the people who are on the receiving end of what
we do, and actually are the ones on whom we depend; my predecessor
did a lot in that direction, and I have been trying to build on
that. And the only answer to it is that there are 4,000 people
in the Department for Education and Skills, and there are millions
and millions in the education system. It is absolutely true that,
when you sit down with a group of school governors and have a
sensible discussion with them, I learn a lot, and so do they,
and actually the relationship is immeasurably improved; if we
can repeat that ten thousand times we will really make a change.
And we have to have the ambition that we can actually make an
impact, by at least getting some school governors together, by
getting headteachers together, by getting groups of teachers together;
we have done a lot in that area, but it is still not recognised,
you still meet lots of people who have never met anybody from
Chairman: I want to move on to closer scrutiny
of the Departmental Report and Estimates. John, would you like
to open, on that?
66. Just two very quick questions, Mr Normington.
In previous Departmental Reports, it is a small point, but individual
civil servants' names and telephone numbers have been included;
and it appears that they are not in the latest, the points of
contact for the public. In this age of greater accountability
and transparency, can you explain why that is the case?
(Mr Normington) I cannot, actually; you can, can you,
(Dr Thompson) Yes. The simple reason is the strictures
that were placed upon us, including by ourselves, to keep the
thing brief; and we have no possible objection to the names and
contact details of Departmental staff being available.
67. But a few lines, giving telephone numbers,
it is not going to add much to the weight of a Report, is it?
(Mr Normington) We will make sure that they are in
next year. Nobody reads the Departmental Report though.
68. We do, Mr Normington.
(Mr Normington) You do, sorry. I do, you do, but the
public who want to contact us probably do not.
69. But it will be put right next year?
(Mr Normington) It will be put right, I promise.
70. Fine. Very quickly, resource accounting.
There are those who believe that the advent of resource accounting
is going to give you a lot more, how can I put it, that it is
going to improve the quality of information that you are going
to be able to supply the Government with, with regard to helping
them to run the Department generally and achieve policy objectives.
What changes are you making with regard to the way you operate,
in order to take advantage of this new resource accounting ?
(Dr Thompson) Let me start with a slightly cautionary
note. Resource accounting, in respect of the Department for Education
and Skills, does not make a huge impact on the way in which our
expenditure appears, or in the way in which the details of our
management information and financial information appear to us.
With the sole exception of the student loans area, most of our
budgets look rather as they did under the old cash regime; now
that is neither here nor there, in one sense. We are going to
be making use of the information that we are generating for resource
accounts purposes, to report to our Board on a monthly basis about
the financial performance of the Department, and we will be putting
that next to information about the performance of the Department
against its various targets, so that we can draw the appropriate
relationships. And this is part of some work that I have been
undertaking in the last few months, with a view to having a new
system, starting up in April 2003; at the moment, we are in a
transitional stage of using the resource accounts information
on a monthly basis, which you get at the Executive Board, to report
on where we are, and it relates, indeed, to the questions that
you were raising earlier on, about underspends. So we are working
to improve the use to which we put our financial management information;
and resource accounting has made a difference, but not a big difference,
in that regard.
71. To what extent do you think it will make
a difference with regard to underspend?
(Dr Thompson) Resource accounting; it will not make
a huge difference in respect of underspends. The principle of
resource accounting, as you will understand, means that the expenditure
scores when the consumption takes place, not when the cheque leaves
the building. But, in the sense that we are already working very
much with current expenditure, in most of our arrangements, because
most of our arrangements are either direct, current payments to
providers of services, or grant payments to major NDPBs, it is
not going to make a great deal of difference to the way the profiles
72. But it will improve the quality of the information?
(Dr Thompson) It will.
73. This was all imposed by the Treasury, was
it; it was inspired?
(Dr Thompson) It was inspired by the Treasury, yes,
it was inspired by the Treasury back in the early nineties.
74. With regard to resource accounting , do
you welcome it, it is a big improvement?
(Dr Thompson) It is a modest improvement, as I think
I have tried to explain; it has not made a huge difference to
the way in which we look at the consumption of resources in the
Department for Education and Skills. Across Government, in other
Departments, where there are big internal Departmental capital
programmes, it makes a massive difference to the way they look
at their expenditure, and it will improve their systems, it has
already caused them to improve their systems and brought very
good benefits for them.
75. This Committee is always interested in what
is a good idea somewhere else; it comes down as red tape and bureaucracy
when it actually hits the people that implement. So I wondered
if it was a bit of a taste of your own medicine, in the sense
(Dr Thompson) I do not think it is felt like that
in the Department.
Chairman: Right. To carry on in this vein, David
76. Can I come back to the question of the Standard
Spending Assessment, and earlier you told us the variation between
the different numbers for local authorities, between about 3 per
cent and 10 per cent. What do you think is a reasonable level
(Mr Normington) I do not know, honestly, I think that
is too wide.
77. Less than 7 percentage points?
(Mr Normington) I think it would be. Actually, as
I explained, the Government has introduced damping to reduce that
variation; so I think the floor is at 4 per cent, at the moment,
to make sure that everybody has a 4 per cent uplift. I think that
is right. So that is a signal, in a sense. It depends why the
variation has occurred, and whether there is more confidence in
the formula that leads to that variation. I think that is the
right way to approach it. As we head for this very important next
few months, when we try to redraw the formula for education, it
is at that point that we will judge what factors it is right to
take into account which lead to that variation; and I mentioned
too, it is clearly right that there are some deprivation factors
and it is clearly right that there are some cost factors related
to living costs. How you measure those and how you ensure that
they are real is the big issue, as it has been for quite a long
time in local authority finance, it is the great issue.
78. The consultation paper will appear in the
next few weeks?
(Mr Normington) That is what I am expecting, yes.
79. Will it be before July 24, or soon after
(Mr Normington) I do not know, actually. I think my
briefing told me it was likely to be in the middle of July, and
I do not know more than that, the middle of July, but not a precise