Examination of Witnesses (Questions 120-139)|
CB, MR ANDREW
MONDAY 13 MAY 2002
120. Do you not have Departments coming to you
saying this is the plan in the Health Service or whatever in terms
of the broad brush shape of movement towards IT reducing unnecessary
admin, redistributing money towards front-line services?
(Mr Pinder) We have Departments coming forward with
proposals about how they might invest in services and they are
currently talking to the Treasury about that investment. As part
of that conversation, they will be talking about the improvements
they will deliver. I do not have in my organisation a collection
of the information from Departments.
121. May I ask about incentives and take-up?
There has been some talk that if we are making cost savings, which
you seem to be accepting but you do not know what the numbers
are, if we are going to make savings, then we should give incentives
and we put this to the Inland Revenue recently. Do you think that
is a good idea?
(Mr Pinder) It depends upon the target audience and
whether people have properly researched whether the incentives
will work. There have been attempts to have incentives in the
past where for examples Customs and Excise and Inland Revenue
have both given one-off amounts of money, £10, £50,
to encourage people to put a return on-line.
122. If we gave £5 to someone for applying
for a service on-line and we saved ten pounds, then we would be
saving the taxpayer £5 which we could spend somewhere.
(Mr Pinder) That is true.
123. If that were the case, would it be a good
(Mr Pinder) If that were the case, then I would absolutely
be in favour of that.
124. You do not think it would be a regressive
incentive which would just help the 70 per cent of the better
off, and people who were poor and not very good at this sort of
thing would end up having to pay more for the service.
(Mr Pinder) We would want to make sure that we provided
some help to other people to get their services on-line. I said
in an earlier answer that it is not just those people who are
directly on-line who benefit from getting a service on-line. The
use of intermediaries, for example people have the Citizen's Advice
Bureaux, accountants, lots of other organisations, can deliver
the benefits of an on-line service to someone even though they
personally are not on-line. We are very much in favour of working
with third parties who might become intermediaries to enable them
to do that.
125. There is a shortage of teachers in London.
Do you think one solution lies in providing virtual teachers?
You come in and there is a screen and there is an interactive
capability there. There is actually a physical person talking
to a class but he is sitting somewhere else, in Newcastle or somewhere.
He can see everybody through his modules or whatever and talk
to them. Do you think there is a role there? Do you think that
would be part of the cost-effective solution to delivering more
(Mr Pinder) I certainly think there is a role for
the increased use of IT in teaching. There is a large project
called Curriculum On-line which is aiming at doing just that.
The intention of the Department for Education and Skills is to
get the major elements of Curriculum On-line so that they can
deliver reduced teaching preparation time, it involves children.
126. What about GPs as well? You go into a booth
and sit there and the GP is on the screen, talking to youa
bit like News Night but not that horribleand you tell him
what is wrong with you and he or she gives you advice and then
refers you to the hospital. What about that? Are you looking at
(Mr Pinder) The Health Service are looking at a variety
of things at the moment in how they might improve the service.
There is a variation on what you just suggested which is NHS Direct,
where people do just that.
127. Yes, they phone up.
(Mr Pinder) They can phone up, but they can also visit
a website and put certain things in.
128. I am talking about face to face, having
an interview with someone, who may as well be there because you
do not have to visit them.
(Mr Pinder) There are some real opportunities in the
Health Service and elsewhere, particularly for bringing in a consultant
to have a face to face conversation.
129. I do not mean to be rude in any way, but
it seems to me from the answers to my questions, "Yes, it
sounds like it might be a good idea. We do not know the costs
or benefits. It may be some time before we do this sort of thing",
you are relaxed rather than the Czar pushing forward, whipping
people forward, saying get some more virtual nurses in or whatever
(Mr Pinder) I can assure you that I am anything but
relaxed. We are working quite hard with Departments to get them
to be innovative about these sorts of things. On the question
you specifically asked me there, about the Health Service, the
Health Service themselves are coming up with those ideas as well
as us coming up with those ideas. They have a very large number
of pilots working, where they are trying out lots of experiments
like that. The specific one you suggested, where a GP is on-line,
as far as I know is not one of those pilots. There are many technical
issues around why that may or may not be a good idea.
130. Yes, it is a difficult issue.
(Mr Pinder) Stepping towards that, there are situations
where there is a facility for patients themselves to go to NHS
Direct and feed in their symptoms and get some advice back. It
is a step towards that.
131. Yes, NHS Direct is excellent. Mr Barrett
mentioned some of the reasons why people are not going forward
to compete properly. Is it not because there is a perception in
the industry amongst medium-sized players in particular, that
it is all just a big stitch-up with the Government and these big
operators inside Government just find themselves around and other
people do not feel they can get into that? They stitch up the
Government and the Government do not have enough skills to break
out of that.
(Mr Barrett) The research we have done says that there
are some perceived barriers to doing business with Government.
Small- and medium-sized businesses do not know where to look for
opportunities. They believe that Government processes are over-bureaucratic;
the same as the large firms. They are also concerned that aggregationthe
issue you are referring todoes mean that they have less
opportunity to contribute. The work we are doing within the OGC
is to try to eliminate those barriers. As an example, one of the
things we published last year was some revised guidance we give
on financial assessment, which previously had insisted that companies
needed to provide three years' audited accounts before they were
considered for Government business. We have removed that requirement,
therefore making it easier for small start-up businesses to do
business with Government. There are some perceived barriers out
there, but I have not heard and the research we have done has
not indicated, that people think it is a stitch-up.
132. When we looked at it before, we found situations
where we have known of big computing companies, who have been
kicked out of local authority contracts through ineptitude, continuing
to get the lion's share of a lot of Government business whilst
small businesses have said they were not getting a look-in. I
was just wondering whether it was possible to mark it out in bite-sized
chunks to start with in terms of the business and, secondly, to
come face to face and try to reduce the cost hurdles to entering
the competitions, both in terms of time and complexity, in fact
enabling people to compete rather than saying these are the rules
and when people do preliminary investigations they think the project
slice is too big to take the risk and the administrative barriers
are too great and they get on with what they normally do. In particular
in a market which is moving very fast, it fragments into entrepreneurs
and the like, what the big players are betting on is that the
more lean-mean-hungry-machines cannot get access to the great
big Government monster because of these big lumps. What do you
think about that?
(Mr Barrett) We are doing work within our framework
contracts, S-CAT and GCat, to allow small- and medium-sized businesses
more opportunities to compete. You are quite right, the skills
and the innovation you get in small- and medium-sized business
are quite often not replicated in large firms. Having said that,
in a large Government requirement for a major IT project, you
have to have a financially stable company providing that and in
many cases there are very many good business reasons why you would
not want to put that with a small business. The Inland Revenue,
as an example, are about to re-compete their IT infrastructure.
They want companies with very strong balance sheets to provide
them with that service over the next seven to ten years.
133. Are there opportunities for pint-sized
chunks with lower risks? If you do ten and one in ten goes wrong,
you lose, but if overall that global piece of business was given
to someone else you might gain more than a 10 per cent cost efficiency
and overall you would make a profit.
(Mr Barrett) Yes.
134. Are there opportunities for breaking it
up and taking more risk yourself but getting more value?
(Mr Barrett) Yes. I would say there is within the
Civil Service a risk averse culture and people would not willingly
want to take that risk where they might do in the private sector.
There is a cultural issue here. We are producing a video on this
in the next few months in conjunction with the Small Business
Services in the DTI, which is trying to pose some of the questions
you have put to me to buyers, saying "Do not automatically
think that big is beautiful. There are definite advantages to
using small suppliers. Think seriously about your requirement
before you automatically decide to parcel it into the biggest
possible chunk you can. It might make your life somewhat easier
administratively, but you could be losing out on innovation, cost
and other reasons".
135. Are the incentives there for people making
those decisions or do they just want a quiet life because they
are on a straight salary?
(Mr Barrett) I do not think there are incentives there,
but what they would be looking at is whether the small supplier
can give better value for money, whether they can give us more
innovation, whether they can deliver better service than the bigger
players might be able to. There are several instances where I
am sure they would be able to.
136. Sir John, I think that my colleagues Mr
Osborne and Mr Davies have opened up a very interesting line of
questioning which I am not sure is adequately covered in this
report, but perhaps you can advise me whether I have missed something.
If we are talking about four million public servants, a huge workforce,
if it is indeed true that we are going to have this revolution
in how we are delivering public services to the public and that
by 2005 people will be able to do any transaction through the
internet, it is possible that we will not just stop the process
at the two million public servants who do not have any direct
interface with the public, we could take this process even further.
We are seeing that already with Operation NHS Direct. I suspect
that the implications of this on how many people we are employing
in the public sector and what we ask them to do and the cost implications
are absolutely enormous. I have been rather surprised at the rather
woolly answers we have been getting this afternoon. I would have
thought that if you are an e-envoy charged with delivering this
revolution, then this is the sort of information you might well
have at the end of your fingertips. Or am I being unfair?
(Sir John Bourn) How could the Chairman of the Committee
of Public Accounts ever be unfair; of course not. On the question
of financial savings, in the case studies in the supplementary
volume which accompanies our main report, there are examples of
the financial savings which in some cases have already been achieved,
in other cases they are in prospect and form part of the business
case for going ahead with the proposals. There are examples from
the ones which we had picked out as case studies on money savings;
some gathered in, others in prospect. On the broader question
of the impact on Civil Service employment of the changes, I think
myselfand this is a rather generalised judgementthat
the kind of thing we are likely to see is the kind of development
we saw in NHS Direct, when the Committee discussed that. It is
the use of technology which enables people to be used in other
ways. We saw there, how a number of nurses had left the National
Health Service because the conditions of employment did not fit
in with their family life and other commitments, but the coming
of NHS Direct enabled them to have jobs which used their nursing
skills in ways which were more easily compatible with the rest
of their lives. You had here an example of the technology, perhaps
eliminating some jobs, but also creating other jobs. Most of the
developments we are talking about now, are going to lead to that
kind of development. It will be different sorts of jobs; it is
fair to say sometimes more skilful jobs. There will be a release
of people from less skilled jobs. I do not expect it will be some
kind of cliff edge event between one financial year and another,
hundreds of thousands of people going. You will find a movement
in the kind of jobs and there will be fewer of the less skilled
jobs, but that will open up opportunities for other kinds of public
sector employment and it will be public sector employment which
is closer to the consumer and closer to the customer, as we found
with NHS Direct when we looked at it.
137. Without asking you to make any commitment
now, do you think this might be something you might look at more
closely in the future? For the present, do you think we should
be entitled to ask our witnesses today for more information on
(Sir John Bourn) That is quite feasible, although
the witnesses have pointed out that they are in a difficult position
in many ways because they have some overarching responsibility,
yet what people are really interested in is the specific cases.
It is out of the specific cases that you get a real feel. It is
absolutely right that more information is helpful. One of the
things we in the NAO will do is reflect about this session and
see in what way it can impact on our work.
138. Would the Treasury like to comment on this?
You have been listening to this debate which we have been having
for the last hour and three quarters. Do you have any comment
on the implications for Civil Service staffing of these reforms?
(Mr Molan) Indeed. We recognise that on-line service
delivery should reduce the time and resources consumed in manual
processing. What it is very difficult to do is to calculate or
estimate at an aggregate level what the potential savings are.
When cases come to the Treasury we look at them on a case by case
basis, look at the organisation, how the current services are
configured, what the scope for cost savings are in the longer
term, what levels of take-up are needed to achieve those. We look
at those individually and challenge Departments to tell us what
they are doing to develop take-up strategies, where their cost
base is and how they might seek to reduce that cost base over
time. We are quite early in that process and it is quite difficult
to aggregate the lessons from all those individual discussions
to give an aggregate picture. What we are doing is to press Departments,
as they come for resources to invest in e-projects, to articulate
what the benefit realisation plan is, otherwise Ministers are
reluctant to give them money because we are not simply giving
them money to create capability, we see this as a way of improving
business processes and extracting benefits in the longer term.
139. This information is being gathered in Whitehall,
although at an early stage.
(Mr Molan) That is correct; through the last spending
review, the current spending review. It is at a relatively early
stage where we think we are making progress in terms of getting
Departments to think more critically about this issue.